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Speaker 1: This is Bloomberg Surveillance. I'm not sury economy has sload.

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Speaker 1: I think that in this recovery all along, we've been

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Speaker 1: growing to two and a half percent in that range

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Speaker 1: when there's very little productivity growth. Actually too and half

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Speaker 1: the center wage growth is beginning to emerge. Is something

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Speaker 1: of a threat to the fetes in flesh and target.

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Speaker 1: The two thousand, sixteen seventeen economic outlook is somewhere between

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Speaker 1: a model long and garden variety of recession. Bloomberg Surveillance

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Speaker 1: your link to the world of economics, finance and investment

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Speaker 1: on Bloomberg Radio. Good morning everyone, Michael McKee and Tom

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Speaker 1: Keane testing shadows over economics, finance, investment in international relations.

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Speaker 1: This morning, Mickey Leavey joins us associated with the Shadow

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Speaker 1: Open Market Committee, Alan Meltzer, Carl Bruner V three Where

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Speaker 1: were you? How's an important time the Carnegie Rochester Symposiums.

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Speaker 1: Maybe a symposia plural. We'll find out for Mickey Levy

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Speaker 1: will do that here in a bit Bloomberg Surveillance this morning.

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Speaker 1: Bunch of by Cone at Resnick Accounting Tax Advisory to

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Speaker 1: minimize risk to capture value in private equity, Unique Cone

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Speaker 1: Resnick where forward thinking creates results. Find out how at

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Speaker 1: Cone Resnick dot com, O h N R e z

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Speaker 1: n I c K cons dot com. Mike, I'm looking

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Speaker 1: at yen Weaker. What are you looking at on the

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Speaker 1: Bloomberg screen? Uh, that's as good as anything actually at Yale.

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Speaker 1: It all points back to the dollar and expectations for

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Speaker 1: the FED, which collapsed on Friday at thirty one after

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Speaker 1: the jobs were ported in seemed to have been rebuilt

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Speaker 1: over the last. Our theory this morning, Mike, I want

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Speaker 1: you to bring in our esteem guests. Our theory this morning, folks,

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Speaker 1: has been the theory. The theme is the theory, the

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Speaker 1: lack of theory, or maybe the debate over what is

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Speaker 1: the most efficacious theory that is out there. Mike, we

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Speaker 1: got the highest of acolytes, John Faroh, the esteemed English

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Speaker 1: philosopher John Farrow said your show was so smart this morning,

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Speaker 1: and that's because Mickey Leavey darkened the door. And he

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Speaker 1: continues with us right now, Mike, bring in the giant

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Speaker 1: of Barrenburg Capital Markets and with us, uh and and

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Speaker 1: we can and we'll ask him about the Federal Reserve.

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Speaker 1: But that's too easy. We're gonna we're gonna actually make

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Speaker 1: him work for a living. Here he put together a

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Speaker 1: an analysis of the presidential candidates economic plans, and he

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Speaker 1: stopped laughing long enough to come in and explain to

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Speaker 1: us what he's figured out. Is there a candidate and

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Speaker 1: and I guess it gets a little easier now because

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Speaker 1: you were looking at more candidates at the time when

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Speaker 1: when you first put this together. Now there's only three left.

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Speaker 1: But is there a coherent plan out there? Well, Mike,

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Speaker 1: the answer to that is, um, all of the candidates left. Actually,

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Speaker 1: if you look at their official campaign platforms on their websites,

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Speaker 1: they all have plans. Um. Clinton is the most complete

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Speaker 1: because you know it was like written by the Washington establishment.

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Speaker 1: Um uh. Trump actually has a platform. It lacks some details,

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Speaker 1: but they all have plans. And if you really stand

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Speaker 1: back and think about it and cut through all the

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Speaker 1: media bluster and everything, Um, you know Clinton proposes a

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Speaker 1: larger scope of government in terms of more spending, more taxes,

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Speaker 1: and more regulations. Um. Sanders is an accentuation of that.

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Speaker 1: And and Trump, while there are a lot of blanks

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Speaker 1: in his platform, he you know, he favors you know,

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Speaker 1: lower a smaller scope of government. In terms of taxes, uh,

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Speaker 1: spending and less regulationship. But then you know that's just

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Speaker 1: the green Eye Shay study, and then you have to

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Speaker 1: get into these critical issues of you know, once somebody

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Speaker 1: becomes elected, there's a UM path towards legislation. So it's

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Speaker 1: not all completely well there. Yeah, and getting anything passed

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Speaker 1: by any of these candidates isn't gonna be easy in

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Speaker 1: the Congress that we have. But uh, why don't we

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Speaker 1: start with Bernie Sanders because he may not he's the

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Speaker 1: longer of the three shots right now. UM. He has

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Speaker 1: proposed a very large spending program that the Congressional Budget

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Speaker 1: Office suggests would put us very deeply into debt. Do

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Speaker 1: you see a way that it gets paid for or

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Speaker 1: that it it helps the economy? The answer to both

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Speaker 1: of your points there is no and no. UM dramatically

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Speaker 1: increases in spending. And keep in mind, when the Congressional

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Speaker 1: Budget Office does eventually score keep these, they do it

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Speaker 1: on a ten year projection. And sanders spending proposals are

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Speaker 1: extraordinarily high, and his the increase in tax burdens he

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Speaker 1: would place on UM businesses and individuals extraordinarily high. And

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Speaker 1: you have to assume they're gonna be even some modest feedback.

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Speaker 1: So his numbers just don't get. Is Donald Trump to

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Speaker 1: the left of Bernie Sanders unselected economic policy? No? Actually, Tom,

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Speaker 1: I can tell you one area where they agree, and

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Speaker 1: that is UM legalizing the importation of select pharmaceuticals from

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Speaker 1: from Canada. So that UM but no, no Trump. While

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Speaker 1: there are a lot of blanks in his UM official platform,

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Speaker 1: to his credit, he does propose UM actual corporate tax

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Speaker 1: reform with a broader base and lower rates, even though

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Speaker 1: he does not provide programmatic details on how to what

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Speaker 1: to do with all the deductions, credits, deferrals and the like.

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Speaker 1: And he also proposed a flat or tax um. You know,

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Speaker 1: I have studied this a lot, and just a critical

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Speaker 1: question is once somebody is elected, who shows up in

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Speaker 1: the White House? For example, for Trump, if you were

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Speaker 1: to get elected, I think it's a very low probability.

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Speaker 1: Who shows up the next day kind of a blustery

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Speaker 1: candidate we've seen, which says really erratic things that you

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Speaker 1: shake your head about, or a guy who's um, you know,

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Speaker 1: made a whole career negotiating and compromising in real estate.

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Speaker 1: For Clinton, who shows up? Somebody is who is further emboldened.

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Speaker 1: And I've studied her UM policies and her track record

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Speaker 1: over the years, and I tend to think UM in

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Speaker 1: many ways she would become more emboldened and would not

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Speaker 1: move back to the center for more platform is. There

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Speaker 1: was a very interesting piece tom yesterday the Washingt Post,

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Speaker 1: Jim tankers Lee looking at UH the fact that in

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Speaker 1: Washington one tends to come in and propose and compromise, etcetera.

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Speaker 1: Whereas Trump is used to a different kind of negotiation

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Speaker 1: in real estate, where somebody is a winner somebody is

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Speaker 1: a loser, and if you're the loser, you just declare

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Speaker 1: bankruptcy and walk away. And the US government can't do that, right,

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Speaker 1: And I think some of the points he's made about

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Speaker 1: about debt just shows a naivete about public policy formation

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Speaker 1: and being a policy leader in Washington. UM. Yeah, different

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Speaker 1: type of negotiation. But keep in mind, if you look

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Speaker 1: through even recent history, UH presidents often don't follow their platforms. UM.

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Speaker 1: Look at President Clinton campaigned against NAFTA and against welfare reform,

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Speaker 1: and then and then ended out voting and championing both

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Speaker 1: of them. President Bush UM in the in the year

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Speaker 1: two thousand, UM ran as an international isolationist and a

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Speaker 1: fiscal conservative and did the opposite. Um. The other question

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Speaker 1: one has to ask is what will be the process

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Speaker 1: of the composition of Congress matters. Uh. It's very important

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Speaker 1: because the chairs of the key committees, like the Ways

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Speaker 1: and Means Committee in the Houses, the Tax Writing Committee

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Speaker 1: and they and they become the gatekeeper the Senate Financial

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Speaker 1: Services Committee, both of those combined, these are extraordinarily important.

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Speaker 1: And I'll go with that, Mickeah, I think that's great.

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Speaker 1: But the fact is we've got a candidate who's in

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Speaker 1: search of a vice presidential candidate, Mike. Is anybody even

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Speaker 1: said I'll take the job. Yeah, they've been a couple

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Speaker 1: of people like Chris Christie Well suggested they would be available.

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Speaker 1: Michelle backwa John Tucker, are you available? He's not going

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Speaker 1: to raise my property tax? The Trump tax plan, UM

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Speaker 1: economists say would boost growth, uh, because you cut taxes

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Speaker 1: so severely, But it would also increase the deficit enormously,

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Speaker 1: which is more important to the economy and financial markets making. UM.

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Speaker 1: If the Ways and Means Committee, UM, whether it's stays

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Speaker 1: Republican or or or Democrats take control, would push back

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Speaker 1: on such severity and tax cuts. Remember the economy, the

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Speaker 1: environment for the public policy making process. We're not in

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Speaker 1: a crisis. The economy is growing at a disappointing rate,

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Speaker 1: but we're not in a crisis. We're not in a

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Speaker 1: financial crisis. So I think the Congress will be much

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Speaker 1: more deliberate on this. But could I add a crucially

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Speaker 1: important point that that nobody's paying attention to when we

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Speaker 1: when we think about the checks and balance. Thank you

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Speaker 1: for bringing that up. The theory of it. The theory

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Speaker 1: of it is, we have checks and balances between the

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Speaker 1: administrative the presidency, the congressional branch, and the judiciary. Now,

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Speaker 1: in practice, if we think about what everybody in financial

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Speaker 1: markets are are interested in, and and and and the

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Speaker 1: public is interested, there are pretty good checks and balances

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Speaker 1: between the Congress and and the White House on tax

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Speaker 1: and spending policies and fiscal policies. However, and I underline

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Speaker 1: the word however, there are very very very few checks

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Speaker 1: and balances to the president's power to regulate the economy.

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Speaker 1: Let me give you two examples. We gotta we gotta

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Speaker 1: hold that thought because we gotta take a quick break. Mickey,

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Speaker 1: Lady of baron Bury Bank will be back with us

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Speaker 1: Art will give you will talking some more about the

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Speaker 1: election ahead. But first we've got to check in with

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Speaker 1: Michael BarreR and get the latest world and national headlines. Michael, Mike, Tom,

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Speaker 1: thank you very much. It is primary every day in

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Speaker 1: West Virginia and Nebraska. It comes as a new poll

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Speaker 1: shows Democrat Hillary Clinton and Republican Donald Trump in a

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Speaker 1: tight race in three battle ground states. According to a

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Speaker 1: new quinnipe Act poll, Clinton has to Trump at forty

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Speaker 1: two percent in Florida and Pennsylvania. In Ohio, the presumptive

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Speaker 1: Republican presidential nominee has to the Democratic front runner at

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Speaker 1: tough talking Mayor Rodrigo d Rote has won the Philippines

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Speaker 1: presidential election. Impeachment proceedings against President jil Marus Seth have

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Speaker 1: resumed in Brazil after the Chief of the Lower House

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Speaker 1: has spended the receivings Yesterday. Global News twenty four hours

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Speaker 1: a day, powered by our journalists in more than a

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Speaker 1: hundred fifty news bureaus from around the world. Michael bar

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Speaker 1: Mike Tom, Michael Barr, thank you so much. Shoot is

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Speaker 1: up twelve earlier, up seven right now, the yield flat

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Speaker 1: one point seven six percent yen yon yon one o

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Speaker 1: nine twelve a week, or yen over the last six days.

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Speaker 1: From New York on Economics, Finance, Investment, Bloomberg Surveillance. Good morning.

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