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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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Speaker 1: Bloomberg Balance of Power podcast. Catch us live weekdays at

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Speaker 1: your podcasts, or watch us live on YouTube.

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Speaker 2: Happy Friday to everyone.

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Speaker 3: What a week it has been.

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Speaker 2: What a several weeks, honestly, and a lot seems to

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Speaker 2: have changed in just the last couple of weeks, because,

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Speaker 2: of course, it was just about what two and a

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Speaker 2: half weeks ago that the Fed cut rates by fifty

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Speaker 2: basis points out of concern about protecting the labor market,

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Speaker 2: not wanting to see it deteriorate further. And then today

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Speaker 2: we get a picture of strength in the labor market,

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Speaker 2: maybe not in all sectors. Manufacturing is a week spot,

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Speaker 2: but at lower unemployment rate, a blowout on non farm payrolls,

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Speaker 2: and the market now saying, all right, maybe the Fed's

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Speaker 2: not only not going to cut fifty basis points again

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Speaker 2: in November, not even pricing a full twenty five basis

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Speaker 2: point cut.

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Speaker 4: Well, there's nothing manic about this, obviously, knowing that we

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Speaker 4: had massive downward revisions on a series of reports throughout

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Speaker 4: the summer. Bloomberg Economics is already saying that October number

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Speaker 4: that's going to come right before the election, by the way,

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Speaker 4: may not look very good. And there's a lot of

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Speaker 4: noise in this report. So I'm curious with Catherine Edwards

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Speaker 4: thinks about this. She's back with us at the table

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Speaker 4: here in Washington, economic policy consultant and contributor to Bloomberg Opinion, Catherine,

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Speaker 4: thank you. Are we ever going to get this right?

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Speaker 4: How come we're so far off for better or worse

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Speaker 4: every month?

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Speaker 3: We just haven't been here before.

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Speaker 5: I mean, how many times have we come down from

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Speaker 5: historically high inflation without landing in a recession and get

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Speaker 5: interest rates down, keep unemployment right down. We're all in

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Speaker 5: some ways in uncharted waters, and so it's not surprising

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Speaker 5: to me.

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Speaker 3: I mean, we were going over the forecast this morning.

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Speaker 5: They ranged from seventy thousand to two twenty, and the consensus.

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Speaker 3: Was really just whatever was in the middle.

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Speaker 5: I think there's a lot that people don't know of

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Speaker 5: what the next six months looks like, and that's okay.

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Speaker 5: I mean, the economy itself told us this morning that

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Speaker 5: the labor market is strong. That's the most important takeaway.

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Speaker 2: Well, the last time you were here in the studio

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Speaker 2: with us, it was right before that FED rate decision,

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Speaker 2: when you were talking about a little bit of concern

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Speaker 2: you had in the labor market and your hope that

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Speaker 2: the FED would recognize that and perhaps go fifty, which

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Speaker 2: of course they did. So riddle me this then, Catherine,

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Speaker 2: do you still have that same concern today? Is there

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Speaker 2: something that's not in the headline data that you're paying

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Speaker 2: attention to.

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Speaker 5: Yes, the biggest concern in the US labor market right

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Speaker 5: now is hiring. Hiring rates are at where they were

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Speaker 5: kind of nine months into the two thousand and seven

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Speaker 5: two thousand and eight recession. So we have seen job

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Speaker 5: growth kind of stay low but positive, but we have

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Speaker 5: not seen hiring pick up, which means that if you

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Speaker 5: have a job, you might be safe in your job,

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Speaker 5: but if you're looking for a job, it is a struggle.

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Speaker 5: And that, for me, is what I am waiting for

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Speaker 5: to say that the labor market is truly out of

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Speaker 5: danger when employers start to hire again, start to hire

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Speaker 5: in good numbers. It's been falling for almost two years.

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Speaker 4: The Instant analysis on our blog this morning from end

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Speaker 4: to Curran was this is a holy jobs Batman moment.

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Speaker 4: What if you work in manufacturing though, or in the

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Speaker 4: auto sector, what does this market feel like?

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Speaker 6: Well?

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Speaker 5: I mean, I think there is good note there's always

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Speaker 5: good news for moving with the tailwind.

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Speaker 7: Right.

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Speaker 5: It's harder for manufacturing to do well when the rest

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Speaker 5: of the economy is doing poorly. It's easier for manufacturing

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Speaker 5: to do well when the rest of the economy is

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Speaker 5: doing well. And so although I would have liked manufacturing

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Speaker 5: numbers to be hired this morning, I think that they

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Speaker 5: have a lot, you know, more room to grow in

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Speaker 5: a positive direction if they're catching up with the labor

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Speaker 5: market as opposed to define an overall trend.

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Speaker 2: Well on the manufacturing point, that was something that is

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Speaker 2: being pointed to today by the Trump campaign, which put

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Speaker 2: out a statement, Kamala Harris and Joe Biden have built

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Speaker 2: back broke. This is a quote I'm reading here. Losing

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Speaker 2: thirty four thousand manufacturing jobs in this just the past

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Speaker 2: two months as foreign countries benefit from Harris's weak economic

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Speaker 2: Paul and Harris's open border policies have destroyed eight hundred

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Speaker 2: and twenty five thousand jobs for Native born Americans while

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Speaker 2: one point two million foreign born workers gained employment. Catherine,

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Speaker 2: I don't know if you have a reaction to that

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Speaker 2: specific statement, but immigration is a factor here, right.

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Speaker 3: Yeah, Well, let's peace through what could be factually correct there.

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Speaker 1: Vice.

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Speaker 5: Presidents don't have economic policies or much economic power to

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Speaker 5: speak of, so I don't particularly.

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Speaker 3: Like that characterization.

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Speaker 5: Presidents have even muted powers on their own. But that's,

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Speaker 5: you know, an election year that we don't think that.

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Speaker 5: We do not count the number of jobs by the

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Speaker 5: nativity of the person holding it. When we count the

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Speaker 5: number of jobs, we count the employer's industrial sector.

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Speaker 3: That is how we count jobs.

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Speaker 5: It comes off of the survey of employers. When we

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Speaker 5: count people through the household survey, we can look at

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Speaker 5: the composition of nativity. What that number, which I've seen

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Speaker 5: making the rounds on so many different platforms, is saying that,

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Speaker 5: you know, basically, the number of non native workers in

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Speaker 5: our economy is growing relative to the number of native

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Speaker 5: workers declining. But they're looking at the sixteen and older population.

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Speaker 5: So what all they've told you is that lots of

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Speaker 5: people are retiring and that the age composition of the

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Speaker 5: US workforce is changing. You in hand with the immigration

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Speaker 5: composition of the US workforce. And I don't think that

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Speaker 5: they're using that statistic accidentally. And that's what makes me

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Speaker 5: quite upset about it is I think that they know

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Speaker 5: what they're doing, and they know what they're counting, and

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Speaker 5: they know what's driving it, and they're just trying to

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Speaker 5: get people out there to hate immigrants. And I don't

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Speaker 5: think that you can have one in five American workers

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Speaker 5: we're not born here and somehow divide the labor market

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Speaker 5: of the good ones and the bad ones of the

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Speaker 5: people who were born here.

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Speaker 3: And who weren't.

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Speaker 4: What happens to the job market if we close.

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Speaker 5: The border, Well, in general workers are good and fewer

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Speaker 5: workers are bad. I think that's a good policy to

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Speaker 5: think of. In turn, the labor market, the economy is growing,

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Speaker 5: which means the need for the American for a workforce

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Speaker 5: is growing. And if we have not produced enough Americans

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Speaker 5: or have high enough labor force partis patient among Americans,

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Speaker 5: then we always as a country have looked to immigration

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Speaker 5: to fill that hole. Immigrants work at higher participation rates

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Speaker 5: than native born Americans. They have very good earnings trajectories,

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Speaker 5: and they've always been a part of our economy to

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Speaker 5: turn away from what has typically made us very strong

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Speaker 5: and resilient in the past, is I mean, it's not

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Speaker 5: just a bad choice, it's obviously a hateful choice because

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Speaker 5: it's not driven by what's good for the economy, but

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Speaker 5: what makes people upset.

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Speaker 2: Catherine. We just have about a minute left here. But obviously,

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Speaker 2: as we consider the rhetoric in this campaign, it brings

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Speaker 2: to mind election days. Two days out from the next

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Speaker 2: FED decision, we might not know who wins by the

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Speaker 2: time the Fed has to make a call. If you

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Speaker 2: had to make the call to day with this data

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Speaker 2: in hand, knowing the uncertainty that could be there, do

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Speaker 2: you think they go twenty five fifty?

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Speaker 3: Not at all.

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Speaker 5: I think that I would expect Powell to do what

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Speaker 5: he has done so far, which is to stay the course.

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Speaker 5: They telegraphed how much rate reduction they expected over the

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Speaker 5: course of the year, and to change course dramatically on

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Speaker 5: the heels of an election would be so much more

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Speaker 5: political than I would consider him to be capable of.

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Speaker 5: They made a plan that was priced into the labor market,

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Speaker 5: priced into business decisions, and to suddenly change course halfway

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Speaker 5: through and say, actually, we're not going to drop a

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Speaker 5: point in a half. We're going to stop right now

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Speaker 5: because we're scared. I think that they don't like surprising people,

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Speaker 5: and it's not a good time to surprise people.

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Speaker 2: All right, Catherine Edwards, Bloomberg opinion contributor and economists, thank

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Speaker 2: you so much for being here with us on this

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Speaker 2: job's day. As we consider how this does have political implications,

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Speaker 2: it's worth noting that this stronger print comes at a

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Speaker 2: time where polling is suggesting Kamala Harris is doing better

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Speaker 2: on the economy. In fact, a new American University poll

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Speaker 2: that pulled women specifically has just come out that finds

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Speaker 2: forty six percent trust Harris on the economy relative to

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Speaker 2: thirty eight percent for Trump. To address inflation, the numbers

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Speaker 2: are fifty one percent for Harris thirty seven percent for Trump.

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Speaker 2: So for more on how this factors into the political

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Speaker 2: scheme here and what kind of policies each of these

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Speaker 2: candidates could pursue, we bring in Kevin Brie, former US

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Speaker 2: Congressman for Texas and now spokesman for the Alliance for

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Speaker 2: Competitive Taxation. He of course used to share the House

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Speaker 2: wass and Means Committee as well. Congressman welcome back to

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Speaker 2: Bloomberg TV and Radio. It's good to have you. We

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Speaker 2: do want to get into tax policy, but if we

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Speaker 2: could just consider the economic landscape we find ourselves in

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Speaker 2: now and how this is playing in this cycle. Is

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Speaker 2: the economy no longer a winning argument for Donald Trump

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Speaker 2: and Republicans who are trying to use that as some

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Speaker 2: of their greatest leverage against Democrats.

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Speaker 8: Yeah, it is still, Kaylie. Good to see in Joe

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Speaker 8: you as well, So yeah, it is still a very

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Speaker 8: strong argument for President Trump and Republicans as a whole. Look,

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Speaker 8: you know, the forty year high in inflation has not

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Speaker 8: gone away. People are reminded of this almost daily. I

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Speaker 8: think it's difficult for the vice president to take credit

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Speaker 8: for a very good jobs report this month but then

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Speaker 8: not take blame for the inflation, crime, the border crisis,

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Speaker 8: everything else. That is a very unpopular administration, so politically

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Speaker 8: it's hard to do those gymnastics. I think many Americans

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Speaker 8: are eager to see that Trump economy return, mainly because

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Speaker 8: they saw wages in the first three years after tax

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Speaker 8: reform grow faster in those three years than and then

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Speaker 8: since we began recording that data, new job opportunities very

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Speaker 8: low poverty, income, inequality beginning to shrink. So I still

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Speaker 8: think the President has a strong lead there, but he's

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Speaker 8: got to make the case of what he'll do going forward.

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Speaker 4: Sounds to me, Congressman, that while the markets may be

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Speaker 4: celebrating all of this, nobody's talking about the R word

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Speaker 4: after this report today, that you might still be worried

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Speaker 4: about a hard landing and whether we see a recession

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Speaker 4: next year. Where's your head on that.

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Speaker 8: Yeah, So you know, when you get a report like this,

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Speaker 8: you know you were encouraged that perhaps the FED can

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Speaker 8: manage a soft landing, which I thought seemed very difficult

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Speaker 8: to do a year ago or more. I thought it

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Speaker 8: was almost inevitable. I still think with inflation, you know,

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Speaker 8: still it's lower, but it is still very real. And

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Speaker 8: I've noticed that in the last two economic stretches where

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Speaker 8: we had very high inflation, it took the US six

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Speaker 8: and eight years, respectively to really work themselves out of it,

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Speaker 8: in part because you know, the FED needed to make

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Speaker 8: really those consistent decisions to pour water on that inflation fire.

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Speaker 8: So this is one of those things you just can't

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Speaker 8: take for granted. It will go down, and look, I

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Speaker 8: look at the numbers on this port strike and what

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Speaker 8: the unions are getting ten percent pay raises per year,

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Speaker 8: plus perhaps blocking productivity and innovation that helps lower costs.

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Speaker 8: I worry about these agreements either costing jobs or being

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Speaker 8: a factor for future inflation.

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Speaker 2: Well, so all of that is going to weigh on

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Speaker 2: the minds of monetary policy makers, I'm sure, Congressman. There's

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Speaker 2: also the question of what fiscal policy is going to

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Speaker 2: look like in tax policy is a component we want

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Speaker 2: to talk to you about here. As I mentioned the

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Speaker 2: polling and how Harris is doing on the economy. In

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Speaker 2: our most recent swing state pole with Morning Consult, it

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Speaker 2: found that across the battleground she had an eleven point

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Speaker 2: advantage on who likely voters trust to help the middle class. She,

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Speaker 2: of course, has argued that what she wants to do

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Speaker 2: with tax policy would create more tax briefs for the

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Speaker 2: middle class and charge the wealthy and big business their

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Speaker 2: fair share. How do you, now, sir, given your role

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Speaker 2: with the Alliance for Competitive Taxation, make the case that

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Speaker 2: what Trump is proposing would indeed be good for the

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Speaker 2: middle class.

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Speaker 8: Yeah, so I will tell you this. I think President

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Speaker 8: Trump focused on extending the tax cuts and Jobs Act

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Speaker 8: that was proven to be remarkably strong in paycheck growth,

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Speaker 8: in job growth, certainly in growth the US economy and

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Speaker 8: our competitiveness overseas. You know, if Vice Harris raised the

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Speaker 8: corporate to twenty eight percent, we will fall to second

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Speaker 8: worst among our foreign competitors, certainly at a huge disadvantage

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Speaker 8: to China, and more importantly back home here. You know,

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Speaker 8: a new report by the Lanes for Competitive Taxation shows

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Speaker 8: that if she's able to raise the corporate rate back

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Speaker 8: up to twenty eight percent, the Americans on average will

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Speaker 8: lose over six hundred dollars in wages. In some of

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Speaker 8: the swing steat swing states like Ohio and Pennsylvania, you

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Speaker 8: will see lost wages total between two and a half

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Speaker 8: and three trillion dollars billion dollars, major increases for working families.

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Speaker 8: So I still think President Trump has a stronger economic plan,

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Speaker 8: and he's got to make sure he's clear about is

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Speaker 8: he using terrorists for leverage to gain fair trade practices

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Speaker 8: or is he going to go across the board, which

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Speaker 8: I'm growing each day a little more skeptical about.

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Speaker 4: Congressman, how nuanced is this debate going to be? You know,

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Speaker 4: a couple of months ago, we were talking about simply

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Speaker 4: extending what everyone has come to call the Trump era

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Speaker 4: tax cuts. But since then, any number of exceptions have

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Speaker 4: been put forth by the former president. No taxes on tips,

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Speaker 4: no taxes on overtime, no taxes on Social Security. He

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Speaker 4: even wants to restore salt. And I wonder, having been

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Speaker 4: actually in charge of the Ways and Means Committee when

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Speaker 4: all of this stuff took place, Congressman, if that changes

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Speaker 4: the debate now that you're making all of these exceptions,

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Speaker 4: what does that mean for the final product? Does salt

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Speaker 4: need to be paid for? Does tips and overtime need

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Speaker 4: to be paid for?

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Speaker 7: Yeah? I will tell you.

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Speaker 8: I think both campaigns are writing checks that I'm not

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Speaker 8: sure Congress can cash. Whether it's new spending on or

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Speaker 8: Vice President hair or child tax credit for housing, for

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Speaker 8: extending the very generous Affordable Care Act premium subsidies or assault,

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Speaker 8: or as you mentioned with President Trump, with tips, over time,

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Speaker 8: social Security and salt. These are huge ticket items on

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Speaker 8: top of simply extending the current very pro growth tax code,

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Speaker 8: that too is about a four trillion dollar cost as well.

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Speaker 8: So Congress is not going to have the space, fiscal

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Speaker 8: space or political space to do all of that, and

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Speaker 8: so I think it makes the policy debate, you know,

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Speaker 8: even more intense in Congress next year. I still think

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Speaker 8: at the end of the day, in a divided government,

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Speaker 8: both parties are going to have to find a way

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Speaker 8: for it. I think it starts with the middle class

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Speaker 8: tax cuts in a big way, the small business tax cuts,

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Speaker 8: and items like the child tax credit or both support

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Speaker 8: at least keeping the current level. But at the end

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Speaker 8: of the day, both parties are going to have to

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Speaker 8: find their way through the promises and huge expenses to

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Speaker 8: get this sort of back into the right place.

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Speaker 4: He knows about this Share of the Ways and Means

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Speaker 4: Committee in the House. Former Congressman Kevin Brady. Great to

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Speaker 4: see you, sir, Houston. Looking nice today with the climate

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Speaker 4: of Calcutta, not a cloud in the sky. Come see

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Speaker 4: us when you're back here in the nation's capital. We'd

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Speaker 4: love to see you, Congressman and Kayley. That really gets

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Speaker 4: to the heart of what we're talking about here when

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Speaker 4: it comes to debt and deficits.

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Speaker 2: Absolutely, and we'll continue those conversations right here on Bloomberg

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Speaker 2: TV and radio.

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Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Can

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Speaker 1: just Live weekdays at noon Eastern on Applecarplay and enroun

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Speaker 1: Oto with the Bloomberg Business app. You can also listen

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Speaker 1: live on Amazon Alexa from our flagship New York station,

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Speaker 1: Just Say Alexa Play Bloomberg eleven.

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Speaker 4: Thirty Welcome, indeed to the Friday edition of Balance of Power.

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Speaker 4: You made it to the threshold of the weekend, and

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Speaker 4: we're glad to have you here on Bloomberg Radio, on

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Speaker 4: the satellite, and on YouTube, where you can always find

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Speaker 4: us by searching Bloomberg Business News Live. Simple as that

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Speaker 4: you'll find our live feed there with yes, a lot

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Speaker 4: of talk about jobs today, a White House that seems

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Speaker 4: to be very pleased with the last twenty four hours

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Speaker 4: in the news cycle, and by extension, a Harris campaign.

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Speaker 4: As we just heard from Charlie, non farm payrolls up

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Speaker 4: two hundred and fifty four thousand. The estimate was one

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Speaker 4: hundred and fifty k, unless, of course, you follow Anna

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Speaker 4: Wong on the terminal, you know this was an ipoper yesterday.

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Speaker 4: Anna Wong, of course, Bloomberg Economics chief US economist out

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Speaker 4: yesterday with a number at two hundred and seventy k.

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Speaker 4: The preliminary estimate for a September jobs gain with the

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Speaker 4: headline again this was yesterday. Why September payrolls may print

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Speaker 4: surprisingly high. She's sitting here right now on this job's day.

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Speaker 4: Good to see you, Anna, Thanks for coming in. So

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Speaker 4: how come you knew something nobody else did?

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Speaker 9: Well?

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Speaker 10: You know, I think the NFP report is very it's

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Speaker 10: very tricky to interpret because pays non farm pay payrolls,

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Speaker 10: because it's driven a lot by statistical.

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Speaker 3: Things.

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Speaker 10: For example, it's driven by whether you can forecast the

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Speaker 10: birth and death factor that BILS uses, whether you can

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Speaker 10: count how much multiple jobs holders are there, how many

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Speaker 10: part time jobs holder are there. So our forecast was

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Speaker 10: driven by the observation that these statistical errors and would

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Speaker 10: be boosting the month headline numbers, although I personally think

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Speaker 10: that the truth is a much lower number. Really help

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Speaker 10: come because that's not the reality you see on the ground.

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Speaker 10: And also, as I said, we forecast the statistical error right,

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Speaker 10: and the statistical error in these reports are huge. We

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Speaker 10: estimate that we should be mentally adjusting down these non

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Speaker 10: farm PAYIL numbers by about ninety thousand, So that would

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Speaker 10: mean that in fact, job growth for is really hanging

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Speaker 10: around more like below one hundred and fifty thousand.

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Speaker 4: Does that mean we're in for some revisions again.

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Speaker 10: For some So I think the revisions would come very late,

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Speaker 10: so in twenty twenty six. Actually, yes, we do expect

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Speaker 10: that the downward revisions for this year would be for

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Speaker 10: the entire year. This year would be about one million

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Speaker 10: by the time it's over. So yeah, we just need

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Speaker 10: to mentally adjust down the monthly number.

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Speaker 4: Well, but again, you know, the Labor Department has a

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Speaker 4: couple of smart people around there, right, They put their

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Speaker 4: green visors on and they come up with this number

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Speaker 4: every month. How come Bloomberg Economics can see so much

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Speaker 4: further beyond what the Labor Department is seeing right now?

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Speaker 10: Well, Joe, I think a lot of traders on Wall

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Speaker 10: Street can also see this. I mean, I think the

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Speaker 10: idea is that it's important to forecast anomalies and statistical properties.

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Speaker 10: And I mean our job is to forecast what's printed,

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Speaker 10: not what's the reality.

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Speaker 4: Yeah, okay, yeah, so the market's smarter than labor. Is

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Speaker 4: it a matter of updating our models here? Can the

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Speaker 4: government do a better job?

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Speaker 10: Well, I think the people working at BLS are very

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Speaker 10: smart and very conscientious. They're just following statistical procedure which

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Speaker 10: they have been using for decades, right, And these statistical

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Speaker 10: procedure tends to create a lag in real time when

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Speaker 10: you have a turning point in that business cycle. I

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Speaker 10: still think that currently the labor market overall is pretty

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Speaker 10: soft and overall is cooling, and you know, once you

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Speaker 10: adjust for those legging factors, that's that's the trend that

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Speaker 10: we should be observing.

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Speaker 4: You're talking this morning about a rising unemployment rate as well,

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Speaker 4: at least by the end of next year, five percent,

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Speaker 4: that's in the cards for this economy, right, What would

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Speaker 4: that tell us about the state of the job market

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Speaker 4: at that point? Are we still talking about a soft landing?

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Speaker 8: Yeah?

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Speaker 10: So I think five percent would be a gray area

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Speaker 10: where economists would tend to argue that maybe it's not

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Speaker 10: a recession because the Saw rule would suggest that after

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Speaker 10: the unemployment rate breach the point five percentage point increase

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Speaker 10: over a twelve month period, it should rise for another

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Speaker 10: or two percent, and that would be more consistent with

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Speaker 10: five point five percent unemployment rate. But I think at

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Speaker 10: five percent, most Americans would feel terrible about.

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Speaker 4: This job market. We get one more job support before

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Speaker 4: the election, don't we?

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Speaker 10: Yes, this is going to be and that one I

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Speaker 10: think would be weak. Really, yes, that one of the

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Speaker 10: election on the eve of it, on Friday, right before election,

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Speaker 10: but there's a question of whether the voters would have

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Speaker 10: a lot of voters would have voted by that. It's

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Speaker 10: really this pairal report that would influence a lot of.

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Speaker 4: Is the one that tells Yes, you'll hear people talking

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Speaker 4: about how it was politically motivated. I'm sure at the

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Speaker 4: LS at.

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Speaker 1: Some point here.

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Speaker 4: But that's why we talked to Anna Wong, because she

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Speaker 4: knows more than just about anybody here in the Capitol. Anna,

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Speaker 4: great to see you, Thank you, congrats on the number.

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Speaker 4: She might not have won the prices right, but she

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Speaker 4: would have come a lot closer than most people. Two

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Speaker 4: seventy Anna Wong, Bloomberg Economics Chief US Economist. It's one

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Speaker 4: of the top stories that we're following today, coinciding, of course,

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Speaker 4: with the end of this doc workers strike. I shouldn't

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Speaker 4: say the the suspension of the dock workers strike. That

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Speaker 4: was forty five thousand workers, and there was a lot

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Speaker 4: of concern about how that would show up in the

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Speaker 4: October payroll numbers. Maybe have skirted that one as well,

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Speaker 4: that they still have to work out the issue of

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Speaker 4: automation now having handled the pay issue. One of the

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Speaker 4: other stories, as I mentioned that, we've been following quite

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Speaker 4: a lot here at Bloomberg, and not certainly on the

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Speaker 4: political programs as much is the need the thirst for power.

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Speaker 4: You know, Microsoft turn a lot of heads last month

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Speaker 4: when it announced this deal with Constellation Energy. Remember this,

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Speaker 4: we talked about it to restart part of the three

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Speaker 4: Mile Island nuclear power plant in Pennsylvania to power its

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Speaker 4: data centers. That's the whole game right now. If we're

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Speaker 4: going to have generative AI, you need a lot of

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Speaker 4: data centers and they need a lot of power, and

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Speaker 4: the grid at the moment doesn't have all the power

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Speaker 4: that is needed. And there's more where this came from.

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Speaker 4: Oracle is designing a data center that would be powered

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Speaker 4: by three small all modular nuclear reactors. We heard about

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Speaker 4: that from Larry Ellison in the earnings call just two

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Speaker 4: weeks ago. And Google is now working on large scale

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Speaker 4: data centers. They say we'll suck up more than one

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Speaker 4: gigawatt of power, and so again they use these small

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Speaker 4: modular nuclear reactors remember this, they're called SMRs to provide

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Speaker 4: the juice. How quickly though these companies can get these

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Speaker 4: new sources up and running as a question, regulations are

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Speaker 4: a question, and we wanted to talk with an expert.

441
00:22:30,359 --> 00:22:33,640
Speaker 4: Glad to say. We're joined by Catherine Hamilton, chair at

442
00:22:33,720 --> 00:22:36,520
Speaker 4: thirty eight North Solutions, which is a clean energy and

443
00:22:36,560 --> 00:22:39,520
Speaker 4: technology consulting firm. She is an expert on the grid

444
00:22:40,200 --> 00:22:43,800
Speaker 4: and his host of the Energy Gang podcast. Catherine, I've

445
00:22:43,800 --> 00:22:46,639
Speaker 4: been looking forward to talking with you because this story

446
00:22:47,040 --> 00:22:50,240
Speaker 4: just seems to get louder every day. Is just broadly

447
00:22:50,280 --> 00:22:52,280
Speaker 4: to start off, is nuclear the answer?

448
00:22:53,440 --> 00:22:53,680
Speaker 11: Oh?

449
00:22:53,720 --> 00:22:55,360
Speaker 12: I wish I could tell you there was only one

450
00:22:55,400 --> 00:22:58,480
Speaker 12: answer to this issue, but no, Luckily we have a

451
00:22:58,520 --> 00:23:02,600
Speaker 12: lot of different solutions. The grid is a complex beast

452
00:23:02,960 --> 00:23:06,000
Speaker 12: that needs a lot of updates. And yet yes we

453
00:23:06,040 --> 00:23:08,840
Speaker 12: can use nuclear, but it's not the only solution. Luckily,

454
00:23:08,880 --> 00:23:10,600
Speaker 12: we have a lot of other things that can bring

455
00:23:10,960 --> 00:23:13,600
Speaker 12: to the four to deploy. And I will tell you

456
00:23:13,680 --> 00:23:17,840
Speaker 12: this also, in addition to AI, we have increased manufacturing,

457
00:23:17,920 --> 00:23:21,639
Speaker 12: we have increased electrification. So demand is growing and load

458
00:23:21,800 --> 00:23:24,640
Speaker 12: is growing everywhere. And I want to tell you this

459
00:23:24,680 --> 00:23:26,960
Speaker 12: is not the first time this has ever happened. You

460
00:23:27,080 --> 00:23:30,440
Speaker 12: probably before your time in the nineteen seventies, we got

461
00:23:30,480 --> 00:23:33,600
Speaker 12: air conditioning and the utilities had to build new power plants.

462
00:23:33,960 --> 00:23:36,040
Speaker 12: In the eighties, when I started working at a utility,

463
00:23:36,080 --> 00:23:38,439
Speaker 12: we had increased demand and we had to be really

464
00:23:38,440 --> 00:23:42,920
Speaker 12: innovative with ice storage, with new ways of thinking about

465
00:23:43,080 --> 00:23:46,480
Speaker 12: rate structures, the time of use, with demand response, and

466
00:23:46,520 --> 00:23:48,639
Speaker 12: we were able to get that done. But for the

467
00:23:48,680 --> 00:23:51,800
Speaker 12: last couple of decades, demand has not grown and so

468
00:23:51,880 --> 00:23:54,960
Speaker 12: now we're in a position where the utility muscle for

469
00:23:55,040 --> 00:23:59,159
Speaker 12: innovation it's gone a little slack. But luckily we have

470
00:23:59,280 --> 00:24:02,800
Speaker 12: innovation that's been greatly democratized, and we can talk about

471
00:24:02,800 --> 00:24:04,800
Speaker 12: what all those innovations are on the grid because I

472
00:24:04,800 --> 00:24:06,679
Speaker 12: think we do have the tools to be able to

473
00:24:06,680 --> 00:24:08,359
Speaker 12: handle this well.

474
00:24:08,400 --> 00:24:11,000
Speaker 4: It's kind of the point where we're talking about high

475
00:24:11,080 --> 00:24:15,200
Speaker 4: tech companies wanting to build data centers on the site

476
00:24:15,320 --> 00:24:17,840
Speaker 4: of a nuclear power plant because it checks a couple

477
00:24:17,920 --> 00:24:22,040
Speaker 4: of boxes. It's not just this uninterrupted supply. It's also clean,

478
00:24:22,760 --> 00:24:25,200
Speaker 4: so to speak. And many of these companies have made

479
00:24:25,280 --> 00:24:28,280
Speaker 4: climate pledges and it allows them to fulfill all of

480
00:24:28,320 --> 00:24:30,119
Speaker 4: these goals. What else do you see?

481
00:24:31,080 --> 00:24:31,320
Speaker 6: Yeah?

482
00:24:31,359 --> 00:24:34,320
Speaker 12: Absolutely, Plus, if you build where there was an old manufacturer,

483
00:24:34,640 --> 00:24:38,240
Speaker 12: another nuclear plant, that that was originally there. You also

484
00:24:38,280 --> 00:24:40,840
Speaker 12: have all the interconnection, so that's a huge issue too,

485
00:24:40,920 --> 00:24:43,119
Speaker 12: is making sure you can actually connect to the power plant.

486
00:24:43,520 --> 00:24:45,600
Speaker 12: So let's take a look at a few other technologies,

487
00:24:45,720 --> 00:24:50,040
Speaker 12: so geothermal, geothermal, next generation technologies. There are hundreds of

488
00:24:50,040 --> 00:24:53,400
Speaker 12: gigawatts of ability to install geothermal and with these new

489
00:24:53,440 --> 00:24:57,880
Speaker 12: technologies closed loop that can produce both heat and power.

490
00:24:58,960 --> 00:25:03,399
Speaker 12: We have other kinds technologies that can go anywhere, so

491
00:25:03,440 --> 00:25:05,560
Speaker 12: you don't have to find a resource anymore. You can

492
00:25:05,600 --> 00:25:08,960
Speaker 12: really install geothermal anywhere. So let's look at geothermal. Let's

493
00:25:08,960 --> 00:25:12,000
Speaker 12: look at hydropower. Right now, only three percent of our

494
00:25:12,080 --> 00:25:15,280
Speaker 12: dams are producing electricity. That doesn't mean we need ninety

495
00:25:15,280 --> 00:25:17,639
Speaker 12: seven percent of the dams to be producing, but we can.

496
00:25:17,960 --> 00:25:22,480
Speaker 12: We can build another fifty gigawatts of plants with facilities

497
00:25:22,520 --> 00:25:24,840
Speaker 12: that are already installed. And then there are all these

498
00:25:24,880 --> 00:25:30,280
Speaker 12: new transmission technologies, grid enhancing technologies, there are advanced conductoring technologies.

499
00:25:30,720 --> 00:25:32,960
Speaker 12: And then what we don't want to forget is the

500
00:25:33,080 --> 00:25:36,440
Speaker 12: demand side. So a lot of people think you build

501
00:25:36,440 --> 00:25:39,440
Speaker 12: a power plant, you take it the electrons through the line,

502
00:25:39,440 --> 00:25:41,520
Speaker 12: and you serve a load. And this is just a load.

503
00:25:41,800 --> 00:25:44,240
Speaker 12: You know what customers are no longer just load and

504
00:25:44,320 --> 00:25:47,160
Speaker 12: AI centers are the same. AI centers can also serve

505
00:25:47,160 --> 00:25:50,800
Speaker 12: as a resource so distributed energy resources so behind the

506
00:25:50,800 --> 00:25:55,440
Speaker 12: meter assets, whether it's solar or storage microgrids, can all

507
00:25:55,480 --> 00:25:58,399
Speaker 12: be helpful in feeding the grid as well. So we

508
00:25:58,480 --> 00:26:00,840
Speaker 12: have to look at solutions all the way from the supply

509
00:26:00,960 --> 00:26:03,600
Speaker 12: side to the demand side, and AI centers are starting

510
00:26:03,600 --> 00:26:05,119
Speaker 12: to do that too. A lot of companies that are

511
00:26:05,160 --> 00:26:07,960
Speaker 12: developing AI centers are looking at how do we build

512
00:26:08,000 --> 00:26:10,800
Speaker 12: plants that can take one hundred percent renewable energy, that

513
00:26:10,880 --> 00:26:14,200
Speaker 12: can do liquid cooling, heat recovery, batch some of these

514
00:26:14,240 --> 00:26:17,440
Speaker 12: operations so that we can really get not only get

515
00:26:17,480 --> 00:26:19,360
Speaker 12: every electron we can off of the grid, but also

516
00:26:19,480 --> 00:26:20,679
Speaker 12: provide resources back.

517
00:26:20,560 --> 00:26:23,560
Speaker 4: To the grid on the meter. There'll be another great

518
00:26:23,600 --> 00:26:25,679
Speaker 4: name for a grid podcast. These things just hit me

519
00:26:25,720 --> 00:26:30,359
Speaker 4: as you say them. You've talked about hydro producer Matt

520
00:26:30,400 --> 00:26:32,120
Speaker 4: is asking why don't we just put all of these

521
00:26:32,200 --> 00:26:35,320
Speaker 4: data centers along the Mississippi River. We'll have an AI

522
00:26:35,400 --> 00:26:37,639
Speaker 4: corridor that runs right through the middle of the country.

523
00:26:37,680 --> 00:26:39,200
Speaker 4: I see it. You seem to like that idea.

524
00:26:40,080 --> 00:26:42,280
Speaker 12: That's a great idea. You'll also find a lot of

525
00:26:42,280 --> 00:26:46,160
Speaker 12: new manufacturing plants for energy storage technologies and other new

526
00:26:46,200 --> 00:26:49,880
Speaker 12: manufacturing that the Inflation Reduction Act and the Infrastructure Bill

527
00:26:50,119 --> 00:26:52,840
Speaker 12: kind of promoted. Those are all going up and down

528
00:26:53,000 --> 00:26:56,240
Speaker 12: the Ohio and other rivers. And yes, we have resources

529
00:26:56,320 --> 00:26:59,040
Speaker 12: right there, old Army Corps facilities that can be repowered

530
00:26:59,280 --> 00:27:02,159
Speaker 12: and reuse and made fish friendly to ensure that we

531
00:27:02,200 --> 00:27:04,199
Speaker 12: get the electrons we need to those facilities.

532
00:27:04,880 --> 00:27:07,560
Speaker 4: Yeah, all right, Matt, you hear that your million dollar

533
00:27:07,640 --> 00:27:10,480
Speaker 4: idea has been approved. So I guess you know, when

534
00:27:10,480 --> 00:27:13,080
Speaker 4: we step back from this, there's everybody's talking about nuclear

535
00:27:13,760 --> 00:27:16,120
Speaker 4: and Catherine, you keep telling me that this is all

536
00:27:16,160 --> 00:27:19,280
Speaker 4: of the above. Is that the conversation we're supposed to be.

537
00:27:19,240 --> 00:27:22,240
Speaker 12: Having, we are supposed to be having that, and the

538
00:27:22,320 --> 00:27:25,040
Speaker 12: key is we need some policy support on that. So,

539
00:27:25,160 --> 00:27:29,000
Speaker 12: for example, for geothermal, we have had zero demonstration dollars

540
00:27:29,080 --> 00:27:31,040
Speaker 12: put towards geothermal. It's been a bit of a step

541
00:27:31,160 --> 00:27:33,280
Speaker 12: child in all of the funding that came out of

542
00:27:33,320 --> 00:27:37,200
Speaker 12: the last the Infrastructure Bill. For example, hydropower didn't get

543
00:27:37,240 --> 00:27:39,800
Speaker 12: much love in the Inflation Reduction Act either, and on

544
00:27:39,840 --> 00:27:43,199
Speaker 12: the demand transmission, the Transmission Investment Tax Credit fell out

545
00:27:43,240 --> 00:27:45,439
Speaker 12: of the Inflation Reduction Act. So there's some things we

546
00:27:45,480 --> 00:27:48,840
Speaker 12: still need in policy, and we need state regulators to

547
00:27:48,920 --> 00:27:51,399
Speaker 12: also say, all right, let's figure out how we can

548
00:27:51,400 --> 00:27:53,440
Speaker 12: get the demand side to be part of the equation.

549
00:27:53,600 --> 00:27:57,080
Speaker 12: So we don't just model and plan our utilities based

550
00:27:57,119 --> 00:27:59,080
Speaker 12: on I'm going to build a big power plant. I'm

551
00:27:59,080 --> 00:28:01,240
Speaker 12: going to mortgage it and have the consumers pay for

552
00:28:01,280 --> 00:28:04,560
Speaker 12: it instead, like, let's have the consumers participate so their

553
00:28:04,560 --> 00:28:07,200
Speaker 12: costs don't go up too well.

554
00:28:07,440 --> 00:28:10,240
Speaker 4: So, Catherine, what about the utilities? What about the next

555
00:28:10,320 --> 00:28:12,600
Speaker 4: terras and the dominions? Because I see a story here.

556
00:28:12,760 --> 00:28:17,480
Speaker 4: Texas's top electricity regulator has a message for big tech.

557
00:28:17,520 --> 00:28:19,800
Speaker 4: If you want to build AI data centers next to

558
00:28:19,840 --> 00:28:22,960
Speaker 4: power plants, you may also need to build the power

559
00:28:23,000 --> 00:28:26,719
Speaker 4: plant too. What does the future grid or the future

560
00:28:26,840 --> 00:28:28,320
Speaker 4: utility look like with that in mind?

561
00:28:29,160 --> 00:28:31,480
Speaker 12: Yeah, it's super interesting because Texas is its own market

562
00:28:31,560 --> 00:28:33,639
Speaker 12: as it is in a lot of ways. They have

563
00:28:33,720 --> 00:28:37,119
Speaker 12: resource adequacy. There's this much more real time market than

564
00:28:37,160 --> 00:28:38,760
Speaker 12: it is in a lot of other places and a

565
00:28:38,760 --> 00:28:41,320
Speaker 12: lot of other planning processes. So yes, they look at

566
00:28:41,320 --> 00:28:43,800
Speaker 12: resource adequacy. Do we have enough to meet the demand?

567
00:28:44,120 --> 00:28:45,920
Speaker 12: And if we don't, let's figure out who's going to

568
00:28:45,960 --> 00:28:49,840
Speaker 12: build it. A lot of other states, utilities are incentivized

569
00:28:49,840 --> 00:28:53,160
Speaker 12: to build big things and then get cost allocation and

570
00:28:53,160 --> 00:28:56,720
Speaker 12: a guaranteed rate of recovery for their customers. But I

571
00:28:56,760 --> 00:28:59,320
Speaker 12: think some of the best models are, for example, cooperative

572
00:28:59,400 --> 00:29:01,640
Speaker 12: utility in rural settings. And I will tell you I

573
00:29:01,640 --> 00:29:04,280
Speaker 12: live in Virginia and our data center is being built everywhere,

574
00:29:04,520 --> 00:29:06,440
Speaker 12: and I'm served by an electrical co op, and the

575
00:29:06,480 --> 00:29:08,880
Speaker 12: co op says, all right, in order to serve all

576
00:29:08,880 --> 00:29:10,960
Speaker 12: these data centers, we have to be creative, and we

577
00:29:11,040 --> 00:29:13,520
Speaker 12: can because our number one issue is.

578
00:29:13,600 --> 00:29:14,720
Speaker 13: Cost to our customers.

579
00:29:14,760 --> 00:29:17,000
Speaker 12: We're a cooperative, we don't have to give a rate

580
00:29:17,040 --> 00:29:19,320
Speaker 12: to return to a shareholder. So instead we're going to

581
00:29:19,320 --> 00:29:22,840
Speaker 12: look at how do we aggregate all of these behind

582
00:29:22,880 --> 00:29:27,000
Speaker 12: the meter, you know, energy storage facilities. How do we

583
00:29:27,040 --> 00:29:29,280
Speaker 12: aggregate all this? How do we use this to help

584
00:29:29,280 --> 00:29:31,280
Speaker 12: support our data centers so we don't have to put

585
00:29:31,320 --> 00:29:33,560
Speaker 12: a lot of money into building something. You know, maybe

586
00:29:33,560 --> 00:29:35,400
Speaker 12: we're going to end up building a natural gas plant,

587
00:29:35,440 --> 00:29:38,000
Speaker 12: which would be maybe the worst option, right because it's

588
00:29:38,120 --> 00:29:42,080
Speaker 12: producing more fossil fuels. So I think in more greenhouse gases,

589
00:29:42,120 --> 00:29:44,400
Speaker 12: I think you will see a lot of changes in

590
00:29:44,440 --> 00:29:49,280
Speaker 12: the way the utilities hopefully are incentivized. And the good

591
00:29:49,280 --> 00:29:53,120
Speaker 12: news is corporates want this, they want zero carbon energy.

592
00:29:54,000 --> 00:29:55,960
Speaker 4: See this is why you talk to an expert. I've

593
00:29:55,960 --> 00:29:59,160
Speaker 4: been really looking forward to this conversation. Catherine Hamilton, thirty

594
00:29:59,200 --> 00:30:02,560
Speaker 4: eight North Solutions. Keep this in mind next time you

595
00:30:02,600 --> 00:30:05,920
Speaker 4: hear about the SMRs Catherine, thank you. I'm Joe Matthew.

596
00:30:06,040 --> 00:30:07,200
Speaker 4: This is Bloomberg.

597
00:30:10,880 --> 00:30:14,400
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch

598
00:30:14,480 --> 00:30:17,400
Speaker 1: us live weekdays at noon Eastern on Eppo, CarPlay and

599
00:30:17,400 --> 00:30:20,520
Speaker 1: then Rounto with the Bloomberg Business app. Listen on demand

600
00:30:20,600 --> 00:30:24,720
Speaker 1: wherever you get your podcasts, or watch us live on YouTube.

601
00:30:27,040 --> 00:30:29,080
Speaker 2: Just across the river in northern Virginia, I was getting

602
00:30:29,080 --> 00:30:32,400
Speaker 2: a lot of reports this week of lines at Costco

603
00:30:33,280 --> 00:30:35,520
Speaker 2: doing this, no paper goods.

604
00:30:35,200 --> 00:30:37,120
Speaker 4: Paper goods, water bottles being.

605
00:30:36,960 --> 00:30:39,239
Speaker 2: Loaded up onto cars. I was getting photos of this.

606
00:30:39,480 --> 00:30:41,960
Speaker 2: It's not members of my family. It's not just the toilet, paper,

607
00:30:42,000 --> 00:30:46,320
Speaker 2: paper towels, water bottles. Apparently this was a concern because

608
00:30:46,320 --> 00:30:48,640
Speaker 2: there was a strike that was affecting every port along

609
00:30:48,640 --> 00:30:51,480
Speaker 2: the East Coast and the Gulf Coast as well. Tens

610
00:30:51,480 --> 00:30:53,600
Speaker 2: of thousands of workers walking off the job with the

611
00:30:53,640 --> 00:30:56,800
Speaker 2: potential to snarl supply chains, got a lot of people

612
00:30:56,840 --> 00:31:00,120
Speaker 2: freaked out given the experience everyone had just a few

613
00:31:00,360 --> 00:31:03,360
Speaker 2: years ago during the height of the pandemic. None to

614
00:31:03,360 --> 00:31:06,400
Speaker 2: worry though, at least until January fifteenth, because there is

615
00:31:06,440 --> 00:31:07,200
Speaker 2: a wage agreement.

616
00:31:07,240 --> 00:31:10,320
Speaker 4: Joe, there's going back worry about to begin with ninety

617
00:31:10,360 --> 00:31:12,400
Speaker 4: percent of the toilet papers made here. I heard that

618
00:31:12,440 --> 00:31:16,560
Speaker 4: from Tyler Kendall. Okay, still still sorry, I had to digress.

619
00:31:16,640 --> 00:31:20,440
Speaker 2: The longshoremen have reached an agreement with the Maritime Alliance

620
00:31:20,480 --> 00:31:23,120
Speaker 2: for a sixty one and a half percent raise over

621
00:31:23,160 --> 00:31:24,960
Speaker 2: the course of the next six years, less than they

622
00:31:24,960 --> 00:31:27,680
Speaker 2: were looking for originally, but of course also above the

623
00:31:27,760 --> 00:31:30,440
Speaker 2: offer that the Alliance had made right before the workers

624
00:31:30,440 --> 00:31:30,920
Speaker 2: went on straight.

625
00:31:31,000 --> 00:31:35,360
Speaker 4: Yeah, that's a monster payhike for the highest rate, certainly,

626
00:31:35,400 --> 00:31:38,480
Speaker 4: But the question about automation remains right, workers want to

627
00:31:38,520 --> 00:31:42,840
Speaker 4: have language. They guarantees no automation. You might have heard

628
00:31:42,920 --> 00:31:46,080
Speaker 4: Kevin Ready refer to that actually banning innovation, I think

629
00:31:46,160 --> 00:31:48,320
Speaker 4: is how he put it. So this remains controversial. It's

630
00:31:48,320 --> 00:31:51,320
Speaker 4: going to be maybe even a tougher component to hammer

631
00:31:51,320 --> 00:31:54,680
Speaker 4: out here, but it's smooth sailing until November fifth, and

632
00:31:54,680 --> 00:31:56,840
Speaker 4: that's the point in this conversation, isn't it.

633
00:31:57,080 --> 00:31:59,440
Speaker 2: Yeah, by the time this is once again a concern

634
00:31:59,600 --> 00:32:02,000
Speaker 2: in midja January will be just a few days out

635
00:32:02,000 --> 00:32:05,680
Speaker 2: from the next president imagine being inaugurated. The question is

636
00:32:05,720 --> 00:32:09,040
Speaker 2: how does this potentially impact or not who that next president.

637
00:32:08,720 --> 00:32:09,280
Speaker 14: Is likely to be.

638
00:32:09,400 --> 00:32:11,280
Speaker 4: See what the panel thinks. They're back with us for

639
00:32:11,320 --> 00:32:13,920
Speaker 4: the Friday edition. Rick Davis and Jeanie Shanzy no Bloomberg

640
00:32:14,000 --> 00:32:18,600
Speaker 4: Politics contributors. She is, of course political science professor Iona University.

641
00:32:19,040 --> 00:32:22,080
Speaker 4: Rick Davis partner at Stone Court Capital. Thanks to both

642
00:32:22,080 --> 00:32:23,840
Speaker 4: of you for being here. Genie, I'll start with you

643
00:32:23,880 --> 00:32:26,320
Speaker 4: as our Democrat. This is being framed as a big

644
00:32:26,360 --> 00:32:30,080
Speaker 4: win for Kamala Harris, the benefits of incumbency no strike,

645
00:32:30,160 --> 00:32:33,080
Speaker 4: at least for now. But we've got a lot of

646
00:32:33,120 --> 00:32:37,360
Speaker 4: things going on here as well, including rising oil prices

647
00:32:37,400 --> 00:32:40,040
Speaker 4: based on what's happening in the Middle East. Would it

648
00:32:40,080 --> 00:32:42,360
Speaker 4: be smart for Kamala Harris to celebrate this today?

649
00:32:44,080 --> 00:32:46,320
Speaker 15: First of all, you guys are making me very nervous.

650
00:32:46,360 --> 00:32:48,240
Speaker 15: I feel like I too must run the costco. And

651
00:32:48,280 --> 00:32:51,200
Speaker 15: then you reminded me the strike is over, so I

652
00:32:51,320 --> 00:32:54,480
Speaker 15: really can't go back to that, you know, coupled with

653
00:32:54,560 --> 00:32:57,560
Speaker 15: the jobs report, what happened with the strike is very

654
00:32:57,720 --> 00:33:02,080
Speaker 15: very good news for the Kamala Harris's campaign and of

655
00:33:02,080 --> 00:33:03,760
Speaker 15: course for the US economy.

656
00:33:03,760 --> 00:33:05,480
Speaker 6: More importantly, you.

657
00:33:05,440 --> 00:33:08,560
Speaker 15: Know that said I would not go out and celebrate

658
00:33:08,640 --> 00:33:11,520
Speaker 15: that as we look at the voters that she needs

659
00:33:11,520 --> 00:33:12,200
Speaker 15: to appeal to.

660
00:33:12,240 --> 00:33:13,560
Speaker 6: The undecided voters.

661
00:33:14,080 --> 00:33:17,080
Speaker 15: These are people who are deeply concerned about being able

662
00:33:17,120 --> 00:33:19,560
Speaker 15: to put food on their table, gas in their cars.

663
00:33:19,920 --> 00:33:21,960
Speaker 6: These are people concerned about inflation.

664
00:33:22,160 --> 00:33:24,640
Speaker 15: So as much as there is good news, I think

665
00:33:24,680 --> 00:33:28,040
Speaker 15: the message from Harris has got to be we continue

666
00:33:28,080 --> 00:33:30,760
Speaker 15: to understand and feel the pain you have felt for

667
00:33:30,800 --> 00:33:33,920
Speaker 15: a long time. Now things are getting better and by

668
00:33:33,920 --> 00:33:37,280
Speaker 15: the way, the poll numbers suggest that, and we are

669
00:33:37,320 --> 00:33:38,880
Speaker 15: still working hard on your behalf.

670
00:33:39,000 --> 00:33:42,800
Speaker 6: So no celebrations quite yet. She's got to wait for

671
00:33:42,880 --> 00:33:43,640
Speaker 6: something like that.

672
00:33:45,160 --> 00:33:47,560
Speaker 2: Well, especially Rick, when you consider one of the things

673
00:33:47,600 --> 00:33:50,000
Speaker 2: Genie just mentioned that people are worried about being able

674
00:33:50,080 --> 00:33:53,640
Speaker 2: to fill their car with gas. Pump prices potentially could

675
00:33:53,640 --> 00:33:55,680
Speaker 2: be on their way higher if oil futures are to

676
00:33:55,680 --> 00:33:58,440
Speaker 2: be believed, which of course have spiked this week given

677
00:33:58,440 --> 00:34:00,920
Speaker 2: the ongoing conflict in the Middle East. Is that actually

678
00:34:01,000 --> 00:34:03,600
Speaker 2: the worst headache of them all for Kamala Harris and

679
00:34:03,640 --> 00:34:05,360
Speaker 2: the administration that she's affiliated with.

680
00:34:06,840 --> 00:34:08,799
Speaker 16: Yeah, it just depends upon how much. I mean, there

681
00:34:08,840 --> 00:34:11,759
Speaker 16: have been moderate increases and decreases all year long. This

682
00:34:11,800 --> 00:34:14,200
Speaker 16: has not really been a year where the economy has

683
00:34:14,200 --> 00:34:17,279
Speaker 16: been framed on gas prices. Frankly, I think families are

684
00:34:17,280 --> 00:34:19,600
Speaker 16: more concerned about what are egg costs than a gallon

685
00:34:19,640 --> 00:34:23,600
Speaker 16: of gas. But the reality is that any bad news

686
00:34:23,600 --> 00:34:28,279
Speaker 16: in the economy is a notch against this current administration

687
00:34:28,360 --> 00:34:31,000
Speaker 16: and obviously that flows down to Kamala Harris. So what

688
00:34:31,040 --> 00:34:33,000
Speaker 16: she wants is more news like today, you know, great

689
00:34:33,080 --> 00:34:37,080
Speaker 16: jobs report, low unemployment. You know, she wants to see

690
00:34:37,120 --> 00:34:39,760
Speaker 16: those interest rates coming down. I mean that the macro

691
00:34:39,920 --> 00:34:44,400
Speaker 16: economic drivers that families will experience between now and election

692
00:34:44,520 --> 00:34:47,200
Speaker 16: day will be influential at the end of the day

693
00:34:47,280 --> 00:34:50,400
Speaker 16: with how they vote. But the mood is still pretty sour,

694
00:34:50,520 --> 00:34:52,000
Speaker 16: so they see it take up in a couple of

695
00:34:52,200 --> 00:34:54,839
Speaker 16: cents on their gas price and they might like start

696
00:34:54,880 --> 00:34:56,759
Speaker 16: thinking about what it was like a couple of years ago,

697
00:34:56,800 --> 00:34:59,560
Speaker 16: and that would be bad news for the Kamala Harris campaign.

698
00:35:00,520 --> 00:35:03,359
Speaker 4: Well, I wonder what we think is good news here? Rick, Yes,

699
00:35:03,400 --> 00:35:05,200
Speaker 4: the jobs report. I get that, but in terms of

700
00:35:05,280 --> 00:35:09,000
Speaker 4: the dock workers strike, the administration's fingerprints are all over this.

701
00:35:09,120 --> 00:35:11,120
Speaker 4: The Chief of Staff, Jeff Science, was on the phone

702
00:35:11,160 --> 00:35:13,279
Speaker 4: yesterday morning at five point thirty in the morning with

703
00:35:13,520 --> 00:35:17,400
Speaker 4: the shippers. Julie Sue, the acting Labor Secretary, actually went

704
00:35:17,480 --> 00:35:20,040
Speaker 4: up to New Jersey to try to close the deal.

705
00:35:20,480 --> 00:35:24,040
Speaker 4: Does that rub off on Kamala Harris in this situation

706
00:35:24,160 --> 00:35:26,680
Speaker 4: or did we simply dodge a bullet that most of

707
00:35:26,680 --> 00:35:27,920
Speaker 4: the country didn't even know about.

708
00:35:29,280 --> 00:35:32,560
Speaker 16: Yeah, I don't see how this administration thinks being the

709
00:35:32,560 --> 00:35:37,399
Speaker 16: most pro union presidency is somehow anuring benefit to them,

710
00:35:37,480 --> 00:35:40,600
Speaker 16: especially with white working class voters outside the cities. I mean,

711
00:35:40,680 --> 00:35:43,640
Speaker 16: those folks are going for Trump, and so the more

712
00:35:43,680 --> 00:35:46,200
Speaker 16: they talk about this, you know, we've just gotten them

713
00:35:46,239 --> 00:35:48,480
Speaker 16: a huge increase and.

714
00:35:48,600 --> 00:35:49,440
Speaker 11: You know, their pay.

715
00:35:50,680 --> 00:35:53,040
Speaker 16: Most of these places are not where they are located

716
00:35:53,160 --> 00:35:57,160
Speaker 16: or not competitive their East coast West coast sites where

717
00:35:57,440 --> 00:36:00,200
Speaker 16: a lot of these dock workers are are doing in

718
00:36:00,200 --> 00:36:03,600
Speaker 16: their trade, and so they're not going to affect themselves

719
00:36:03,640 --> 00:36:06,480
Speaker 16: the election. But the message is kind of in reverse

720
00:36:06,520 --> 00:36:09,920
Speaker 16: to Republicans, Hey, we're doing this for union members and

721
00:36:09,960 --> 00:36:11,880
Speaker 16: you're on your own. You know, we didn't do a

722
00:36:11,920 --> 00:36:14,799
Speaker 16: thing for you to try and increase your pay, and

723
00:36:14,880 --> 00:36:17,440
Speaker 16: so I think it has a chance of backfiring on them.

724
00:36:17,440 --> 00:36:19,960
Speaker 16: I don't think it's helped them to date. The more

725
00:36:19,960 --> 00:36:22,200
Speaker 16: they talk about union jobs, the less they're talking about,

726
00:36:22,280 --> 00:36:25,279
Speaker 16: you know, Middle America and what they're doing. And I

727
00:36:25,320 --> 00:36:28,560
Speaker 16: think it's counterintuitive to think that that is somehow helping

728
00:36:28,560 --> 00:36:30,000
Speaker 16: them amongst working class voters.

729
00:36:32,360 --> 00:36:35,200
Speaker 2: Well, I've certainly seen a lot of as Rick raised

730
00:36:35,200 --> 00:36:37,719
Speaker 2: the price of eggs earlier advertisements here in the DC

731
00:36:37,960 --> 00:36:41,600
Speaker 2: area about prices being higher. In the voice that is

732
00:36:42,239 --> 00:36:45,200
Speaker 2: vocalizing a lot of that is the Democratic candidate for

733
00:36:45,280 --> 00:36:47,719
Speaker 2: Senate in Maryland, Angela Alsobrooks. We, of course in this

734
00:36:47,760 --> 00:36:51,720
Speaker 2: area have been inundated by commercials from Larry Hogan, her opponent,

735
00:36:51,719 --> 00:36:52,960
Speaker 2: and from Ulster Brooks herself.

736
00:36:53,000 --> 00:36:53,359
Speaker 3: We got.

737
00:36:53,480 --> 00:36:56,560
Speaker 2: It's constant, and I don't think that will change in

738
00:36:56,600 --> 00:36:59,200
Speaker 2: the next step four and a half weeks. But Genie,

739
00:36:59,239 --> 00:37:01,640
Speaker 2: we did get news in the also break also Brooks

740
00:37:01,719 --> 00:37:05,919
Speaker 2: race today former President Barack Obama endorsing her. I don't

741
00:37:06,000 --> 00:37:09,600
Speaker 2: think this is a surprise to anyone, but he noted

742
00:37:09,680 --> 00:37:12,000
Speaker 2: in the ad control of the Senate could come down

743
00:37:12,040 --> 00:37:14,239
Speaker 2: to Maryland, So vote for Angela also Brooks as we

744
00:37:14,280 --> 00:37:16,439
Speaker 2: consider the control of the Senate and how that race

745
00:37:16,480 --> 00:37:19,800
Speaker 2: could be influential, as are the others that we're watching.

746
00:37:19,800 --> 00:37:22,200
Speaker 2: How are you feeling now, given everything we just talked

747
00:37:22,200 --> 00:37:25,160
Speaker 2: about about the trajectory of the economy, things that we

748
00:37:24,960 --> 00:37:26,880
Speaker 2: may be working a bit more in favor of a

749
00:37:26,920 --> 00:37:30,400
Speaker 2: Democratic administration. What does that mean for other Democratic incumbents

750
00:37:30,440 --> 00:37:31,040
Speaker 2: down the ballot.

751
00:37:32,880 --> 00:37:35,400
Speaker 15: Yeah, and of course we feel the pain when we

752
00:37:35,440 --> 00:37:38,040
Speaker 15: are inundated with the commercials of all the people in

753
00:37:38,080 --> 00:37:40,960
Speaker 15: the swing states who have been feeling, you know, inundated

754
00:37:41,040 --> 00:37:44,560
Speaker 15: with campaign ads after campaign ads. You know, I think

755
00:37:44,600 --> 00:37:48,799
Speaker 15: Barack Obama's endorsement of Alsal Brooks was not unexpected. They

756
00:37:48,840 --> 00:37:52,239
Speaker 15: are hoping that it drums up enthusiasm for her and

757
00:37:52,280 --> 00:37:53,280
Speaker 15: get out the vote.

758
00:37:53,840 --> 00:37:54,879
Speaker 6: She's in a tough race.

759
00:37:54,960 --> 00:37:58,920
Speaker 15: Larry Hogan remains a particularly powerful voice in Maryland and

760
00:37:58,960 --> 00:38:03,280
Speaker 15: a particularly tractive candidate. But of course Democrats are deeply

761
00:38:03,400 --> 00:38:07,280
Speaker 15: concerned that they may lose Montana, and so also Brooks

762
00:38:07,320 --> 00:38:09,960
Speaker 15: would be very important in that case. They are also

763
00:38:10,080 --> 00:38:13,200
Speaker 15: spending big, as you've talked a lot about in Texas,

764
00:38:13,239 --> 00:38:15,120
Speaker 15: to try to see if they can push that even

765
00:38:15,160 --> 00:38:18,800
Speaker 15: further towards the Democrats. That still is an uphill battle,

766
00:38:18,800 --> 00:38:20,839
Speaker 15: but the numbers look a little better there, and they're

767
00:38:20,880 --> 00:38:24,160
Speaker 15: also spending in Florida, so they feel like they've got

768
00:38:24,200 --> 00:38:27,520
Speaker 15: the money to do that. And you know, this is

769
00:38:27,560 --> 00:38:32,279
Speaker 15: critically important because whoever takes the House, we're talking about

770
00:38:32,280 --> 00:38:35,440
Speaker 15: the Senate, but the House in particular is really up

771
00:38:35,480 --> 00:38:38,319
Speaker 15: for grabs this time. And if Donald Trump wins and

772
00:38:38,360 --> 00:38:42,160
Speaker 15: he is facing a Democratic led House under Hakeem Jeffries,

773
00:38:42,400 --> 00:38:44,200
Speaker 15: it is going to be very hard for him to

774
00:38:44,200 --> 00:38:46,640
Speaker 15: do what he wants to do on everything from taxes

775
00:38:46,640 --> 00:38:51,080
Speaker 15: to immigration and likewise Kamala Harris if Republicans retain it.

776
00:38:51,160 --> 00:38:54,560
Speaker 15: So these down ballot races are critical, and of course

777
00:38:54,560 --> 00:38:58,480
Speaker 15: for those in particular we've been watching New York and California.

778
00:38:58,760 --> 00:39:00,600
Speaker 15: We don't get a lot of the ten usually in

779
00:39:00,600 --> 00:39:04,240
Speaker 15: New York and California on the national stage because loose states.

780
00:39:04,280 --> 00:39:07,040
Speaker 15: But in the case of the House, these races down

781
00:39:07,080 --> 00:39:09,360
Speaker 15: ballot matter an awful lot this time around.

782
00:39:10,400 --> 00:39:12,520
Speaker 4: I just wonder when the ads start to cancel each

783
00:39:12,560 --> 00:39:14,960
Speaker 4: other out here. Rick, you live around the Capitol, and

784
00:39:15,040 --> 00:39:17,880
Speaker 4: picking up on what Kaylee just mentioned, you know, you

785
00:39:17,920 --> 00:39:20,040
Speaker 4: sit down with Missus Davis to watch The Wheel of

786
00:39:20,080 --> 00:39:22,560
Speaker 4: Fortunate at night, you're going to see in every commercial

787
00:39:22,560 --> 00:39:25,920
Speaker 4: break and add from also Brooks and then immediately following

788
00:39:26,239 --> 00:39:30,440
Speaker 4: an opposition ad, an opo ad from Larry Hogan. It

789
00:39:30,480 --> 00:39:33,280
Speaker 4: gets to the point where it's just noise for people

790
00:39:33,280 --> 00:39:35,480
Speaker 4: who want to get back to their TV program? Is

791
00:39:35,480 --> 00:39:36,640
Speaker 4: it a turnoff? Does it work?

792
00:39:38,160 --> 00:39:38,359
Speaker 13: You know?

793
00:39:38,600 --> 00:39:41,279
Speaker 16: I think it does impact. I'm a firm believer in

794
00:39:41,719 --> 00:39:46,160
Speaker 16: broadcast advertising. Still, obviously that doesn't even account for all

795
00:39:46,239 --> 00:39:49,319
Speaker 16: the digital advertising we're inundated with for those of us

796
00:39:49,320 --> 00:39:51,279
Speaker 16: who get a lot of our news on the web.

797
00:39:51,880 --> 00:39:55,000
Speaker 16: And so yeah, well, first of all, you don't want

798
00:39:55,000 --> 00:39:57,279
Speaker 16: to go naked, right, So the only thing worse than

799
00:39:57,280 --> 00:40:00,200
Speaker 16: that is if your opponent is running an enormous out

800
00:40:00,200 --> 00:40:03,359
Speaker 16: of advertising and you're not up. So part of it

801
00:40:03,440 --> 00:40:07,400
Speaker 16: is prescriptive in that regard, But the bottom line is

802
00:40:07,680 --> 00:40:11,080
Speaker 16: voters do glean information from that. There's not that much

803
00:40:11,120 --> 00:40:14,320
Speaker 16: reporting on these kinds of like senate and house races,

804
00:40:14,360 --> 00:40:16,520
Speaker 16: as Genie mentioned, and so you got to get it

805
00:40:16,560 --> 00:40:20,719
Speaker 16: sometimes from the advertising. And this is where creative advertising

806
00:40:20,760 --> 00:40:22,760
Speaker 16: really matters. I mean, some of these ads are actually

807
00:40:22,760 --> 00:40:25,120
Speaker 16: pretty good and you go, oh, Gee, that was interesting.

808
00:40:26,600 --> 00:40:28,600
Speaker 16: I'd say the vast majority I've seen, at least in

809
00:40:28,640 --> 00:40:32,040
Speaker 16: this area put me to sleep. So every now and

810
00:40:32,080 --> 00:40:33,320
Speaker 16: then I get to go to New York and I

811
00:40:33,320 --> 00:40:35,240
Speaker 16: get to see all these little load ads and stuff

812
00:40:35,239 --> 00:40:36,719
Speaker 16: like that, and I think, oh, these are much better

813
00:40:36,760 --> 00:40:37,520
Speaker 16: than when I get home.

814
00:40:40,120 --> 00:40:42,480
Speaker 2: Well in New York, Genie, I do want to mention

815
00:40:42,520 --> 00:40:45,320
Speaker 2: the reporting we got yesterday in regard to one Congressman

816
00:40:45,360 --> 00:40:47,839
Speaker 2: who is in one of these areas that could make

817
00:40:47,920 --> 00:40:51,960
Speaker 2: or break the majority. Mike Lawler, the incumbent Republican in

818
00:40:52,040 --> 00:40:55,440
Speaker 2: photos from college in blackface when he was dressing up

819
00:40:55,520 --> 00:40:58,440
Speaker 2: as Michael Jackson. Just given the competitive nature of New

820
00:40:58,520 --> 00:41:02,200
Speaker 2: York and his district in particular, what does that do.

821
00:41:04,000 --> 00:41:04,200
Speaker 7: You know?

822
00:41:04,560 --> 00:41:05,920
Speaker 6: He was twenty years old.

823
00:41:06,640 --> 00:41:09,160
Speaker 15: I am not sure that this is going to make

824
00:41:09,200 --> 00:41:11,680
Speaker 15: a huge difference. It is of course negative press for

825
00:41:11,800 --> 00:41:14,719
Speaker 15: Mike Lawler. We know him well up here in the

826
00:41:14,760 --> 00:41:17,880
Speaker 15: Hudson Valley. He also, by the way, has expressed interest

827
00:41:17,920 --> 00:41:20,360
Speaker 15: and potentially running for governor, and he's been in a

828
00:41:20,480 --> 00:41:24,520
Speaker 15: very attractive candidate for Republicans. Mandre Jones likewise, who is

829
00:41:24,800 --> 00:41:27,960
Speaker 15: opposing him. I am not sure how it will play.

830
00:41:28,000 --> 00:41:30,319
Speaker 15: I don't think it's going to play big. He's not

831
00:41:30,440 --> 00:41:33,120
Speaker 15: the only Republican in New York who's you know, facing

832
00:41:33,160 --> 00:41:37,040
Speaker 15: ethics challenges. We've also got d Esposito and because we

833
00:41:37,040 --> 00:41:39,640
Speaker 15: don't want to leave the Democrats aside, of course, Eric

834
00:41:39,680 --> 00:41:42,400
Speaker 15: Adams in New York City, so you know, as usual

835
00:41:42,400 --> 00:41:44,280
Speaker 15: in New York has to be the home of ethical,

836
00:41:44,360 --> 00:41:47,239
Speaker 15: ethically challenged polls, and here we have it in this

837
00:41:47,320 --> 00:41:51,160
Speaker 15: race almost up and down the ballot, unfortunately, and by partisan,

838
00:41:51,200 --> 00:41:52,120
Speaker 15: I should add.

839
00:41:53,160 --> 00:41:56,360
Speaker 2: That's a very fair point. Genie Shanzano and Rick Davis,

840
00:41:56,360 --> 00:41:58,799
Speaker 2: our signature political panel, thank you so much for joining

841
00:41:58,880 --> 00:42:00,880
Speaker 2: us here on the early edition a Balance of Power.

842
00:42:04,080 --> 00:42:07,400
Speaker 1: You're listening to the Bloomberg Balance of Power podcast ken

843
00:42:07,600 --> 00:42:11,160
Speaker 1: just live weekdays at noon Eastern on Applecarplay and Enrounoo

844
00:42:11,280 --> 00:42:14,040
Speaker 1: with the Bloomberg Business app. You can also listen live

845
00:42:14,120 --> 00:42:17,319
Speaker 1: on Amazon Alexa from our flagship New York station, Just

846
00:42:17,400 --> 00:42:19,960
Speaker 1: Say Alexa play Bloomberg eleven thirty.

847
00:42:22,160 --> 00:42:24,520
Speaker 4: It's the Friday edition of Balance of Power. I'm Joe

848
00:42:24,560 --> 00:42:27,920
Speaker 4: Matthew indeed, alongside Kaylee Lines here in the Nation's Capital

849
00:42:28,000 --> 00:42:30,040
Speaker 4: with our eyes of course on Israel. There are so

850
00:42:30,040 --> 00:42:33,719
Speaker 4: many questions about what might happen over this weekend as

851
00:42:33,840 --> 00:42:38,880
Speaker 4: Israel calculates a potential and expected promised frankly, a response

852
00:42:39,280 --> 00:42:42,840
Speaker 4: to Iran. But Kaylei, it's not just Iran we're talking about.

853
00:42:42,880 --> 00:42:45,840
Speaker 4: Israel continues air strikes now in southern leven on the

854
00:42:45,920 --> 00:42:48,560
Speaker 4: fact they are urging civilians in more than twenty towns

855
00:42:48,560 --> 00:42:52,439
Speaker 4: and villages across the border to evacuate. We talked about

856
00:42:52,560 --> 00:42:57,680
Speaker 4: cross border incursions limited groups of troops, but the air

857
00:42:57,719 --> 00:42:59,920
Speaker 4: strikes are really what's been doing the damage.

858
00:43:00,040 --> 00:43:01,960
Speaker 2: And we've gotten reporting from the New York Times and

859
00:43:02,000 --> 00:43:04,680
Speaker 2: a number of other media outlets about the strike, specifically

860
00:43:04,680 --> 00:43:09,280
Speaker 2: that we saw overnight targeting the potential successor of Hassan Estralla,

861
00:43:09,320 --> 00:43:12,640
Speaker 2: of course, the assassinated leader of HESBLA, as well as

862
00:43:12,640 --> 00:43:14,759
Speaker 2: other figures. At the same time, though, as we're still

863
00:43:14,760 --> 00:43:19,160
Speaker 2: seeing this activity in southern Lebanon outside of Beirut, Aron's

864
00:43:19,200 --> 00:43:23,080
Speaker 2: foreign minister visiting Beirut and saying we will back a ceasefire.

865
00:43:23,560 --> 00:43:24,200
Speaker 3: The question is.

866
00:43:24,200 --> 00:43:26,080
Speaker 2: Whether Israel is going to get on board with that

867
00:43:26,120 --> 00:43:29,600
Speaker 2: after it resoundedly rejected the ceasefire proposal put forward by

868
00:43:29,600 --> 00:43:31,839
Speaker 2: the US and other allies just last week.

869
00:43:31,920 --> 00:43:34,200
Speaker 4: Yeah, and of course we talk about the idea of

870
00:43:34,239 --> 00:43:38,600
Speaker 4: a ceasefire in Gaza. Wants to see these basically take

871
00:43:38,640 --> 00:43:41,040
Speaker 4: place at once, and I cannot imagine that's something that

872
00:43:41,080 --> 00:43:42,520
Speaker 4: Benjamin Etna who is looking for.

873
00:43:42,920 --> 00:43:44,640
Speaker 2: Yeah, well, so that's what we want to get into now.

874
00:43:44,680 --> 00:43:46,800
Speaker 2: As we turn to the voice of Michael O'Hanlon, he

875
00:43:46,880 --> 00:43:50,359
Speaker 2: is Brookings Institution Senior Fellow and director of Research in

876
00:43:50,400 --> 00:43:53,880
Speaker 2: the Foreign Policy Program. Welcome to Balance of Power. Michael.

877
00:43:53,920 --> 00:43:56,160
Speaker 2: Great to have you here on Bloomberg TV and Radio.

878
00:43:56,239 --> 00:43:59,640
Speaker 2: What is your expectation as to what happens next here?

879
00:43:59,719 --> 00:44:02,400
Speaker 2: Knowing Joe Biden yesterday admitted that it is up for

880
00:44:02,480 --> 00:44:07,640
Speaker 2: discussion that Israel hit Iran energy infrastructure. Now Iran seems

881
00:44:07,640 --> 00:44:09,719
Speaker 2: to be the one signaling that they would like to

882
00:44:09,760 --> 00:44:13,440
Speaker 2: see de escalation here. Is that de escalation likely to happen?

883
00:44:14,800 --> 00:44:18,880
Speaker 14: Readings Not very likely, although you could imagine off ramps,

884
00:44:18,920 --> 00:44:22,240
Speaker 14: but it probably would take a different personality than Benjamin

885
00:44:22,360 --> 00:44:25,080
Speaker 14: Netan Yahoo, given where he is in his thinking and

886
00:44:25,200 --> 00:44:27,440
Speaker 14: where this whole war is. As we near the one

887
00:44:27,520 --> 00:44:30,480
Speaker 14: year anniversary of the terrible tragedy of last October seventh,

888
00:44:30,920 --> 00:44:34,600
Speaker 14: it's pretty clear Israel will respond about as you just said,

889
00:44:34,800 --> 00:44:37,600
Speaker 14: I think the most minimal kind of response you could

890
00:44:37,719 --> 00:44:40,640
Speaker 14: envision would be a beefed up version of what Israel

891
00:44:40,680 --> 00:44:43,880
Speaker 14: did back in April, when Iran launched three hundred plus

892
00:44:44,080 --> 00:44:45,600
Speaker 14: missiles and drones at Israel.

893
00:44:45,960 --> 00:44:49,080
Speaker 11: Again, like this time, almost all were intercepted, and.

894
00:44:49,120 --> 00:44:53,800
Speaker 14: Israel sent back some limited strikes against air defense capabilities

895
00:44:53,880 --> 00:44:58,040
Speaker 14: around the Iranian nuclear enrichment facility, partly as a message

896
00:44:58,040 --> 00:44:59,759
Speaker 14: to Iran to say, you know, we could have hit

897
00:44:59,800 --> 00:45:02,160
Speaker 14: the enrichment facilities if we had wanted to, and maybe

898
00:45:02,200 --> 00:45:04,560
Speaker 14: we will next time. So I still think there's a

899
00:45:04,640 --> 00:45:07,759
Speaker 14: chance that Israel will go after the underground facilities. It

900
00:45:07,800 --> 00:45:11,080
Speaker 14: would require some of the same kind of successive bomb

901
00:45:11,200 --> 00:45:14,960
Speaker 14: jackhammering that we saw kill Nasrala in Lebanon, because Israel

902
00:45:15,000 --> 00:45:17,719
Speaker 14: doesn't have a weapon powerful enough to just get down

903
00:45:17,760 --> 00:45:20,520
Speaker 14: to those facilities in one fell swoop. But there's a

904
00:45:20,520 --> 00:45:22,759
Speaker 14: good chance that Israel could take out the Iranian air

905
00:45:22,800 --> 00:45:25,640
Speaker 14: defense network and then go ahead and do that. It's

906
00:45:25,640 --> 00:45:28,120
Speaker 14: a long flight for any of the aircraft involved, but

907
00:45:28,120 --> 00:45:30,359
Speaker 14: I wouldn't rule that out. But it's more likely, as

908
00:45:30,480 --> 00:45:33,359
Speaker 14: again you said a few minutes ago, that Israel will

909
00:45:33,400 --> 00:45:36,719
Speaker 14: do something that's big but different than that, and probably

910
00:45:36,760 --> 00:45:41,560
Speaker 14: targeting oil and energy and money the Iranian regime's ability

911
00:45:41,560 --> 00:45:44,360
Speaker 14: to keep itself afloat, especially at a time when sanctions

912
00:45:44,360 --> 00:45:47,960
Speaker 14: evasion has become more rampant and Iran's earning more money

913
00:45:47,960 --> 00:45:50,360
Speaker 14: than we really wanted them to under the Joint Comprehensive

914
00:45:50,360 --> 00:45:52,439
Speaker 14: Plan of Action. Of course, the US hasn't really even

915
00:45:52,480 --> 00:45:55,319
Speaker 14: responded or returned to that framework, but it's still there

916
00:45:55,320 --> 00:45:58,680
Speaker 14: with other countries. And Israel could say, listen, if sanctions

917
00:45:58,719 --> 00:46:00,719
Speaker 14: won't work, how about bomb and we can do the

918
00:46:00,719 --> 00:46:03,360
Speaker 14: same sort of thing. But then that invites a response

919
00:46:03,440 --> 00:46:06,080
Speaker 14: by Iran to shut down the Strait of horror, moves

920
00:46:06,120 --> 00:46:09,719
Speaker 14: to shipping in general, and or at least to complicate

921
00:46:09,760 --> 00:46:13,880
Speaker 14: shipping through the Persian Gulf. And so I think Israel

922
00:46:13,920 --> 00:46:16,520
Speaker 14: would actually be wise to look for an off ramp,

923
00:46:16,560 --> 00:46:17,640
Speaker 14: but I don't think they will.

924
00:46:19,120 --> 00:46:21,960
Speaker 4: Why then, Michael used brute force in the form of

925
00:46:22,000 --> 00:46:26,560
Speaker 4: bunker busting, bombs or whatever would get the Israeli military

926
00:46:26,760 --> 00:46:30,040
Speaker 4: down to that level underground where the nuclear facilities are.

927
00:46:30,080 --> 00:46:33,200
Speaker 4: Why not use a cyber attack as we saw with

928
00:46:33,280 --> 00:46:36,520
Speaker 4: stucks Net. That is something that Iran might not even

929
00:46:36,520 --> 00:46:37,520
Speaker 4: acknowledge publicly.

930
00:46:38,800 --> 00:46:41,120
Speaker 14: Well, if you could do it, sure, but as you'll recall,

931
00:46:41,160 --> 00:46:43,239
Speaker 14: stucks Net was based partly on good luck. I think

932
00:46:43,239 --> 00:46:45,919
Speaker 14: somebody left a thumb drive in a parking lot and

933
00:46:46,280 --> 00:46:49,560
Speaker 14: that allowed us to or took a thumb drive maybe

934
00:46:49,560 --> 00:46:51,680
Speaker 14: that we had deposited in a parking lot, and put

935
00:46:51,719 --> 00:46:55,000
Speaker 14: it into a machine, and then sucks Net was unleashed,

936
00:46:55,000 --> 00:46:57,840
Speaker 14: and then the whole world found out because it spread

937
00:46:57,880 --> 00:47:02,200
Speaker 14: further than intended. Also only took down their centrifuges for

938
00:47:02,920 --> 00:47:05,839
Speaker 14: a few months, and you could say, well, maybe that's

939
00:47:05,840 --> 00:47:08,840
Speaker 14: good enough, except that Iran is now so close to

940
00:47:08,880 --> 00:47:12,040
Speaker 14: a nuclear weapon that I think slowing them down for

941
00:47:12,080 --> 00:47:15,160
Speaker 14: a few months in something they can probably recover from

942
00:47:15,200 --> 00:47:19,040
Speaker 14: after that would not be seen as ample. And moreover,

943
00:47:19,120 --> 00:47:21,520
Speaker 14: I doubt very much Israel has the access to those

944
00:47:21,560 --> 00:47:24,960
Speaker 14: machines that we managed to buy, you know, trick and

945
00:47:25,000 --> 00:47:28,000
Speaker 14: buy guy find our way to according to public reports,

946
00:47:28,080 --> 00:47:29,200
Speaker 14: you know, a dozen years ago.

947
00:47:29,400 --> 00:47:30,879
Speaker 11: So I don't think we have a stuck in that option.

948
00:47:30,920 --> 00:47:32,160
Speaker 11: I don't think Israel does either.

949
00:47:33,239 --> 00:47:34,399
Speaker 4: Well.

950
00:47:34,520 --> 00:47:36,319
Speaker 2: Well, of course we've had Joe and I have had

951
00:47:36,320 --> 00:47:38,680
Speaker 2: a lot of conversations in recent days as we've considered

952
00:47:38,680 --> 00:47:41,399
Speaker 2: this question around Iran's nuclear facilities. Of whether that would

953
00:47:41,440 --> 00:47:44,279
Speaker 2: mean they rush to actually make a weapon, not just

954
00:47:44,320 --> 00:47:46,880
Speaker 2: develop the components of that. What the consequence could be

955
00:47:47,520 --> 00:47:50,480
Speaker 2: that Iran does in response to that. There's also the question, Michael,

956
00:47:50,520 --> 00:47:52,960
Speaker 2: and that's especially relevant to our audience here at Bloomberg,

957
00:47:53,000 --> 00:47:55,879
Speaker 2: about the straight of horror moves and whether Iran could be,

958
00:47:56,360 --> 00:47:59,680
Speaker 2: if attack severely enough, on the cusp of making a

959
00:47:59,680 --> 00:48:03,320
Speaker 2: decision to choke off the export of energy from the golf.

960
00:48:03,360 --> 00:48:06,360
Speaker 2: We've certainly seen oil prices with their biggest weekly spike

961
00:48:06,760 --> 00:48:09,600
Speaker 2: since October of twenty twenty two this week, potentially out

962
00:48:09,640 --> 00:48:12,400
Speaker 2: of concern for that. Do you think that is actually

963
00:48:12,400 --> 00:48:13,400
Speaker 2: a warranted concern?

964
00:48:14,400 --> 00:48:17,560
Speaker 14: Yes, I think it's certainly one that has double digit

965
00:48:17,600 --> 00:48:21,280
Speaker 14: probabilities associated with it. Whether it's ten percent, twenty or fifty,

966
00:48:21,320 --> 00:48:23,640
Speaker 14: I don't know, but I think there is a decided

967
00:48:23,719 --> 00:48:27,440
Speaker 14: chance that Israel will attack Iran's oil economy, and that

968
00:48:27,560 --> 00:48:30,919
Speaker 14: Iran will respond not by attacking Israel again, which it's

969
00:48:30,960 --> 00:48:34,279
Speaker 14: proven itself relatively incapable of doing, at least with this

970
00:48:34,400 --> 00:48:38,080
Speaker 14: missile approach, but instead by trying to hurt the whole

971
00:48:38,080 --> 00:48:41,600
Speaker 14: world economy and hurt the United States and the process. Now,

972
00:48:41,600 --> 00:48:43,880
Speaker 14: they might you know Benjaminyal, who probably would like to

973
00:48:43,880 --> 00:48:47,240
Speaker 14: see Donald Trump elected. I'm not sure the Iranian leadership

974
00:48:47,239 --> 00:48:49,919
Speaker 14: wants that, and so to throw the world economy into

975
00:48:49,960 --> 00:48:52,239
Speaker 14: a tizzy a few weeks before at US election, you

976
00:48:52,320 --> 00:48:54,640
Speaker 14: have to think through the effects on American politics if

977
00:48:54,640 --> 00:48:57,160
Speaker 14: you're in Iran shoes. But I think there's a decided

978
00:48:57,280 --> 00:48:59,680
Speaker 14: chance that yes, they would in fact take that approach.

979
00:49:00,040 --> 00:49:03,200
Speaker 14: Would it be permanent, No, The Saudis could build more

980
00:49:03,239 --> 00:49:05,640
Speaker 14: pipelines over their territory and go by land.

981
00:49:06,160 --> 00:49:07,080
Speaker 11: We could go in and.

982
00:49:07,040 --> 00:49:09,640
Speaker 14: Try to clear out whatever Iran was doing in the

983
00:49:09,640 --> 00:49:12,680
Speaker 14: Persian Gulf by way of laying minds and using fast

984
00:49:12,680 --> 00:49:15,440
Speaker 14: attack boats against ships and whatever else. I don't know

985
00:49:15,480 --> 00:49:17,960
Speaker 14: that we would succeed perfectly, but you know we've escorted

986
00:49:18,000 --> 00:49:21,000
Speaker 14: ships in the Persian Gulf before, so you could imagine

987
00:49:21,320 --> 00:49:23,480
Speaker 14: ways to recover from this, But it would probably take

988
00:49:23,800 --> 00:49:26,880
Speaker 14: a few weeks or maybe longer, and even after that

989
00:49:26,960 --> 00:49:29,080
Speaker 14: point you might have a state of low grade ongoing

990
00:49:29,120 --> 00:49:31,759
Speaker 14: hostilities with some chance of oil tankers still being hit

991
00:49:31,920 --> 00:49:35,040
Speaker 14: even once we've reopened things. So I think Iran might

992
00:49:35,160 --> 00:49:37,840
Speaker 14: very well consider that approach. You know, it works against

993
00:49:37,840 --> 00:49:40,759
Speaker 14: their interests as well, so part of it depends on

994
00:49:40,760 --> 00:49:43,120
Speaker 14: how hard Israel strikes them. If Israel really shuts down

995
00:49:43,120 --> 00:49:45,920
Speaker 14: the Iranian oil economy, then Iran has no reason to

996
00:49:45,920 --> 00:49:47,840
Speaker 14: tolerate the rest of the world using the strait of

997
00:49:47,840 --> 00:49:51,600
Speaker 14: horror moves. But if Israel takes out five percent, leaving

998
00:49:51,680 --> 00:49:55,080
Speaker 14: ninety five percent still effectively as hostage, then maybe Iran

999
00:49:55,560 --> 00:49:58,480
Speaker 14: doesn't go that route and maybe does continue with the

1000
00:49:58,560 --> 00:49:59,680
Speaker 14: call for a ceasefire.

1001
00:50:01,120 --> 00:50:06,120
Speaker 4: Spending time with Michael o'halen from Brookings, I was really

1002
00:50:06,200 --> 00:50:09,120
Speaker 4: struck by a piece of reporting in the Washington Post.

1003
00:50:09,160 --> 00:50:11,000
Speaker 4: I wanted to ask you about here, Michael. Maybe we

1004
00:50:11,600 --> 00:50:16,280
Speaker 4: haven't fully understood the amount of damage that Iran brought

1005
00:50:16,360 --> 00:50:20,320
Speaker 4: to Israel in this most recent attack. Turns out, based

1006
00:50:20,400 --> 00:50:25,160
Speaker 4: on videos that have been verified by the Post, at

1007
00:50:25,239 --> 00:50:29,040
Speaker 4: least two dozen long range Iranian ballistic missiles broke through

1008
00:50:29,800 --> 00:50:34,200
Speaker 4: Israeli and Allied air defenses on Tuesday night, striking or

1009
00:50:34,280 --> 00:50:38,799
Speaker 4: landing near at least three military and intelligence installations. Did

1010
00:50:38,840 --> 00:50:41,560
Speaker 4: Iran do a better job than they were first given

1011
00:50:41,600 --> 00:50:42,040
Speaker 4: credit for.

1012
00:50:43,080 --> 00:50:45,760
Speaker 14: That's an excellent question, and you're right that the Post

1013
00:50:45,760 --> 00:50:48,920
Speaker 14: has done good reporting and that the Israelis have understandably

1014
00:50:48,920 --> 00:50:51,040
Speaker 14: been quiet about this. They don't want Iran to think

1015
00:50:51,080 --> 00:50:55,680
Speaker 14: that they've been successful. Clearly, if if there was enough damage,

1016
00:50:55,680 --> 00:50:58,560
Speaker 14: don there'd be no doubting it because all sorts of

1017
00:50:58,640 --> 00:51:03,160
Speaker 14: commercial satellites would have the damage by now, and so

1018
00:51:02,520 --> 00:51:05,680
Speaker 14: I have to suspect that the damage was not that severe.

1019
00:51:06,680 --> 00:51:09,160
Speaker 14: But you're right, there's a big difference between a dozen

1020
00:51:09,960 --> 00:51:14,280
Speaker 14: getting through and zero, and back in April, by all reports,

1021
00:51:14,360 --> 00:51:18,920
Speaker 14: basically zero got through. It does seem that very few

1022
00:51:19,080 --> 00:51:23,560
Speaker 14: people were hurt, regardless of whether some buildings were damaged.

1023
00:51:23,600 --> 00:51:26,440
Speaker 14: But you're right to raise that distinct possibility. And we

1024
00:51:26,480 --> 00:51:31,239
Speaker 14: really don't have firm understanding of whether the intercept probability

1025
00:51:31,840 --> 00:51:34,800
Speaker 14: was nine ninety nine percent.

1026
00:51:35,680 --> 00:51:36,760
Speaker 11: It's still an open question.

1027
00:51:39,160 --> 00:51:41,360
Speaker 2: Michael. There is a new Big Take piece out on

1028
00:51:41,360 --> 00:51:43,440
Speaker 2: the Bloomberg terminal that can be found on the terminal

1029
00:51:43,560 --> 00:51:47,400
Speaker 2: or online, and the headline reads as follows, Widening Midi's

1030
00:51:47,440 --> 00:51:52,200
Speaker 2: conflict shows limit of US leverage with Israel. The essential

1031
00:51:52,239 --> 00:51:54,439
Speaker 2: thesis of the piece here, Michael, is that the US

1032
00:51:54,480 --> 00:51:57,960
Speaker 2: can only do so much to actually influence the outcomes,

1033
00:51:58,200 --> 00:52:03,240
Speaker 2: and what the Israeli government does is the US desire

1034
00:52:03,320 --> 00:52:06,520
Speaker 2: to see things ease in the region. Anything that they're

1035
00:52:06,560 --> 00:52:10,040
Speaker 2: frankly telling the net Yahoo government consequential at this point

1036
00:52:10,120 --> 00:52:11,040
Speaker 2: or does it not matter?

1037
00:52:12,560 --> 00:52:13,600
Speaker 11: It's an excellent question.

1038
00:52:13,960 --> 00:52:15,880
Speaker 14: I don't know if the United States has had major

1039
00:52:16,080 --> 00:52:19,400
Speaker 14: leverage in any crisis over Israel since nineteen fifty six,

1040
00:52:19,800 --> 00:52:21,879
Speaker 14: the sus crisis. It's the last one where I can

1041
00:52:21,920 --> 00:52:24,840
Speaker 14: really feel or to say that the United States essentially

1042
00:52:24,880 --> 00:52:27,799
Speaker 14: carried the day, maybe in the seventy three Middle East War,

1043
00:52:27,880 --> 00:52:31,000
Speaker 14: but Israel wanted our help in a sense, at least initially,

1044
00:52:31,360 --> 00:52:33,440
Speaker 14: and then we needed We put pressure on them to

1045
00:52:33,520 --> 00:52:35,520
Speaker 14: agree to a ceasefire sooner than they wanted, but we

1046
00:52:35,560 --> 00:52:38,480
Speaker 14: still had their back, and their overall goals were not

1047
00:52:38,520 --> 00:52:42,560
Speaker 14: fundamentally different from what they achieved. And so in that regard,

1048
00:52:42,640 --> 00:52:45,080
Speaker 14: I think it's been a half century at least, maybe

1049
00:52:45,239 --> 00:52:48,799
Speaker 14: longer since we've really been able to coerce Israel into

1050
00:52:48,840 --> 00:52:51,719
Speaker 14: a plan of action that we preferred. And the last

1051
00:52:51,719 --> 00:52:54,160
Speaker 14: time it was really even tried by the United States

1052
00:52:54,160 --> 00:52:58,319
Speaker 14: except through browbeating and persuasion, was the first Bush administration

1053
00:52:58,560 --> 00:53:03,239
Speaker 14: suspending loan guarantees when the Israelis continued with occupation development

1054
00:53:03,480 --> 00:53:06,600
Speaker 14: no excuse me, you know, with housing development in the

1055
00:53:06,640 --> 00:53:09,920
Speaker 14: occupying territories, especially in the West Bank. And so it's

1056
00:53:09,960 --> 00:53:13,480
Speaker 14: been thirty plus years since anybody really even tried to

1057
00:53:13,680 --> 00:53:18,279
Speaker 14: use more than just nice words to persuade Israel to

1058
00:53:18,280 --> 00:53:21,560
Speaker 14: do something that we wanted them to do. You know,

1059
00:53:21,760 --> 00:53:24,879
Speaker 14: I can go through other cases. George W. Bush shut

1060
00:53:24,880 --> 00:53:27,719
Speaker 14: down a Rocky air space according to public accounts, when

1061
00:53:27,719 --> 00:53:30,520
Speaker 14: the Israelis wanted to think about bombing Iran back in

1062
00:53:30,560 --> 00:53:33,880
Speaker 14: two thousand and four or five six, when we control

1063
00:53:33,920 --> 00:53:37,319
Speaker 14: the Rocky air space, and at that time we told

1064
00:53:37,360 --> 00:53:38,880
Speaker 14: them no, and they had to take that for an

1065
00:53:38,920 --> 00:53:42,399
Speaker 14: answer because we were essentially the occupying power formally in

1066
00:53:42,440 --> 00:53:45,279
Speaker 14: that zone. We don't have control over a Rocky air

1067
00:53:45,320 --> 00:53:47,759
Speaker 14: space anymore. My whole point, you can see is that

1068
00:53:47,840 --> 00:53:50,440
Speaker 14: I don't know how often we have been able to

1069
00:53:50,480 --> 00:53:53,160
Speaker 14: tell Israel what to do as a sovereign nation, and

1070
00:53:53,200 --> 00:53:54,520
Speaker 14: we usually haven't even tried that.

1071
00:53:55,160 --> 00:53:56,520
Speaker 11: I do think we should try harder.

1072
00:53:56,560 --> 00:53:58,960
Speaker 14: I would withhold some of the two thousand pound bombs

1073
00:53:58,960 --> 00:54:01,440
Speaker 14: they've been using in Gaza, for example. But for the

1074
00:54:01,480 --> 00:54:03,920
Speaker 14: most part, this is not news. This is not something

1075
00:54:03,960 --> 00:54:06,160
Speaker 14: that just happened with Biden and net and Yahoo.

1076
00:54:07,520 --> 00:54:10,960
Speaker 4: Michael Rasashana ends tonight. What does that mean for this weekend.

1077
00:54:12,800 --> 00:54:16,879
Speaker 14: Well, one more reason why your earlier prediction that something

1078
00:54:16,960 --> 00:54:19,960
Speaker 14: might be brewing is probably correct, and I wouldn't be

1079
00:54:19,960 --> 00:54:23,040
Speaker 14: surprised at all, but this would happen sooner rather than later.

1080
00:54:23,840 --> 00:54:27,239
Speaker 14: But Israel also can take its time, you know, and

1081
00:54:28,000 --> 00:54:30,040
Speaker 14: I would rate the odds of something happening in the

1082
00:54:30,040 --> 00:54:32,600
Speaker 14: next week as more than fifty to fifty, but maybe

1083
00:54:32,640 --> 00:54:33,480
Speaker 14: not ninety ten.

1084
00:54:35,960 --> 00:54:39,480
Speaker 2: All right, Michael O'Hanlon, great to have you on this Friday. He,

1085
00:54:39,560 --> 00:54:42,480
Speaker 2: of course is Brookings Institution Senior Fellow and director of

1086
00:54:42,560 --> 00:54:45,759
Speaker 2: Research in the Foreign Policy Program. Really appreciate and of

1087
00:54:45,800 --> 00:54:48,200
Speaker 2: course Joe on a day in which we're talking about

1088
00:54:48,200 --> 00:54:51,400
Speaker 2: potentially an economic victory for Kamala Harris and this administration

1089
00:54:51,440 --> 00:54:53,920
Speaker 2: in the form of a stronger jobs report, we do

1090
00:54:54,000 --> 00:54:57,000
Speaker 2: also have to consider inflationary pressures that could readgnite as

1091
00:54:57,040 --> 00:54:59,200
Speaker 2: we talk about this conflict in the Middle East and

1092
00:54:59,280 --> 00:55:02,520
Speaker 2: oil prices that are now seven dollars a barrel higher

1093
00:55:02,520 --> 00:55:04,719
Speaker 2: on this Friday than they were when this week start.

1094
00:55:04,680 --> 00:55:08,120
Speaker 4: Another two percent today West Texas above seventy five dollars

1095
00:55:08,160 --> 00:55:11,160
Speaker 4: a barrel. What does that mean for gas prices at

1096
00:55:11,160 --> 00:55:13,759
Speaker 4: the end of October? If this hasn't been resolved yet.

1097
00:55:17,520 --> 00:55:21,040
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch

1098
00:55:21,120 --> 00:55:24,160
Speaker 1: us live weekdays at noon Eastern on Apocarplay and then

1099
00:55:24,200 --> 00:55:27,680
Speaker 1: Froudoto with the Bloomberg Business app. Listen on demand wherever

1100
00:55:27,719 --> 00:55:33,040
Speaker 1: you get your podcasts, or watch us live on YouTube.

1101
00:55:33,320 --> 00:55:35,680
Speaker 4: It says we dig deeper into the world of politics

1102
00:55:35,680 --> 00:55:39,480
Speaker 4: here on the Friday edition of Balance of Power, with

1103
00:55:39,600 --> 00:55:45,360
Speaker 4: a political cycle that has been so ridiculous it calls

1104
00:55:45,400 --> 00:55:48,799
Speaker 4: for a psychologist. And I'm not just trying to make

1105
00:55:48,920 --> 00:55:52,719
Speaker 4: jokes here. Is this campaign the death of truth? There's

1106
00:55:52,760 --> 00:55:54,560
Speaker 4: a question that a lot of people have been asking,

1107
00:55:54,840 --> 00:55:59,760
Speaker 4: got fake news from Russian bots, misinformation from Iran getting

1108
00:55:59,800 --> 00:56:03,840
Speaker 4: on to our social media AI bots are making videos

1109
00:56:04,480 --> 00:56:07,279
Speaker 4: that we can't tell are real or not. And then

1110
00:56:07,280 --> 00:56:12,440
Speaker 4: of course the candidates themselves saying things that, well, I

1111
00:56:12,480 --> 00:56:16,040
Speaker 4: wouldn't be up to me to call them lies, but

1112
00:56:16,120 --> 00:56:22,840
Speaker 4: maybe embellishments, maybe challenging the truth. Think about this whole

1113
00:56:22,840 --> 00:56:26,080
Speaker 4: conversation about Springfield, Ohio. They're eating cats and dogs and

1114
00:56:26,400 --> 00:56:29,280
Speaker 4: routing up the geese. Until you talk to the people

1115
00:56:29,320 --> 00:56:32,960
Speaker 4: in Springfield, it turns out that's not happening. And I'm

1116
00:56:33,000 --> 00:56:35,400
Speaker 4: reaching for this one example. Don't worry, We'll get to

1117
00:56:35,440 --> 00:56:38,680
Speaker 4: both sides here. Remember jd Vance called out on this

1118
00:56:38,719 --> 00:56:41,400
Speaker 4: when he did a bunch of Sunday morning shows, in

1119
00:56:41,440 --> 00:56:44,360
Speaker 4: this case on CNN, when he talked about creating stories

1120
00:56:44,400 --> 00:56:46,640
Speaker 4: to make a point. Let's go back to listen.

1121
00:56:47,400 --> 00:56:51,560
Speaker 7: Can you affirmatively say now that that is a rumor

1122
00:56:51,719 --> 00:56:58,640
Speaker 7: that has no base basis with evidence, Dana.

1123
00:56:58,760 --> 00:57:02,000
Speaker 17: The evidence is the first hand account of my constituents

1124
00:57:02,000 --> 00:57:04,680
Speaker 17: who are telling me that this happened. And by the way,

1125
00:57:05,000 --> 00:57:07,480
Speaker 17: I've been trying to talk about the problems in Springfield

1126
00:57:07,520 --> 00:57:10,279
Speaker 17: for months and the American media ignored it. If I

1127
00:57:10,360 --> 00:57:14,440
Speaker 17: have to create stories so that the American media actually

1128
00:57:14,520 --> 00:57:17,600
Speaker 17: pays attention to the suffering of the American people, then

1129
00:57:17,680 --> 00:57:20,240
Speaker 17: that's what I'm gonna do, Dana, because you guys are

1130
00:57:20,280 --> 00:57:23,080
Speaker 17: completely letting Kamala Harris coast.

1131
00:57:24,120 --> 00:57:27,840
Speaker 4: If I have to create stories, It's been echoing ever

1132
00:57:27,920 --> 00:57:33,800
Speaker 4: since he said it. Daniel Efron specializes in the psychology

1133
00:57:34,000 --> 00:57:37,840
Speaker 4: behind the way we interpret these messages because a lot

1134
00:57:37,840 --> 00:57:41,520
Speaker 4: of times, hey, let's be honest, voters like to be

1135
00:57:41,640 --> 00:57:47,160
Speaker 4: lied to, and other times voters can justify I won't

1136
00:57:47,200 --> 00:57:49,960
Speaker 4: call it a lie, but maybe an embellishment or a

1137
00:57:50,000 --> 00:57:55,160
Speaker 4: mistruth if it seems to codify something that they already believe.

1138
00:57:55,600 --> 00:57:59,800
Speaker 4: That's where Daniel's work comes in. He's Professor of organization

1139
00:57:59,840 --> 00:58:03,240
Speaker 4: will Behavior at the London Business School, social psychologist and

1140
00:58:03,280 --> 00:58:06,360
Speaker 4: with us now live on Bloomberg. Daniel, I'm so happy

1141
00:58:06,360 --> 00:58:08,000
Speaker 4: that you could join us. I have a lot of

1142
00:58:08,080 --> 00:58:10,160
Speaker 4: questions about your work, and I know that you've done

1143
00:58:10,400 --> 00:58:13,320
Speaker 4: very specific research on this. You've been writing about it

1144
00:58:13,360 --> 00:58:16,040
Speaker 4: for years as a matter of fact. But let me

1145
00:58:16,120 --> 00:58:19,120
Speaker 4: start with the big question. Is this campaign the death

1146
00:58:19,160 --> 00:58:21,840
Speaker 4: of truths?

1147
00:58:21,960 --> 00:58:23,960
Speaker 13: Thanks so much for having me on the program, Joe.

1148
00:58:25,000 --> 00:58:28,800
Speaker 13: You know people are often concerned about is everyone just

1149
00:58:28,880 --> 00:58:33,720
Speaker 13: believing all these falsehoods, misinformation, fake news? Why do people

1150
00:58:34,000 --> 00:58:37,160
Speaker 13: sometimes believe this stuff? Yeah, that's an interesting, important and

1151
00:58:37,280 --> 00:58:39,600
Speaker 13: important question. In my work, I look at something a

1152
00:58:39,600 --> 00:58:42,920
Speaker 13: little different, as you've alluded to. I'm interested in why

1153
00:58:42,960 --> 00:58:46,560
Speaker 13: people would tolerate falsehoods even when they.

1154
00:58:46,400 --> 00:58:47,480
Speaker 11: Get they're false.

1155
00:58:48,240 --> 00:58:50,760
Speaker 13: And the issue is, I see, it is not so

1156
00:58:50,960 --> 00:58:55,120
Speaker 13: much that people don't care about the truth anymore. It's

1157
00:58:55,200 --> 00:58:58,400
Speaker 13: that people are capable of thinking about the truth in

1158
00:58:58,440 --> 00:59:01,400
Speaker 13: different ways. We're all capable this, regardless of what side

1159
00:59:01,440 --> 00:59:04,040
Speaker 13: of the isle we're on, and the issue is that

1160
00:59:04,240 --> 00:59:08,840
Speaker 13: we define truth differently depending on who's telling the falsehoods.

1161
00:59:10,960 --> 00:59:13,280
Speaker 4: Well, you've actually done some real research in this area,

1162
00:59:13,320 --> 00:59:15,120
Speaker 4: which is it's great that you're with us to talk

1163
00:59:15,160 --> 00:59:18,360
Speaker 4: about this. And I'm referring back to a piece you

1164
00:59:18,400 --> 00:59:20,880
Speaker 4: wrote in The New York Times in twenty eighteen, how

1165
00:59:20,920 --> 00:59:23,840
Speaker 4: little Things have changed? And you write, wittingly or not,

1166
00:59:24,040 --> 00:59:27,680
Speaker 4: mister Trump's representatives have used a subtle psychological strategy to

1167
00:59:27,720 --> 00:59:32,640
Speaker 4: defend his falsehoods. They encourage people to reflect on how

1168
00:59:32,640 --> 00:59:36,160
Speaker 4: the falsehoods could have been true. And so Daniel sat

1169
00:59:36,240 --> 00:59:39,640
Speaker 4: down with more than twenty seven hundred Americans and asked

1170
00:59:39,640 --> 00:59:41,720
Speaker 4: them throughout by the way, from both sides of the

1171
00:59:41,760 --> 00:59:46,040
Speaker 4: political spectrum, to read a series of claims that they

1172
00:59:46,080 --> 00:59:50,360
Speaker 4: were told were false. They were false. What did you

1173
00:59:50,440 --> 00:59:51,680
Speaker 4: learn from these interviews?

1174
00:59:51,760 --> 00:59:52,120
Speaker 10: Daniel?

1175
00:59:53,520 --> 00:59:54,040
Speaker 11: That's great.

1176
00:59:54,160 --> 00:59:59,000
Speaker 13: So yeah, I do experiments where I randomly assign people

1177
00:59:59,040 --> 01:00:02,640
Speaker 13: to read about alsehoods in different conditions. The experiment you're

1178
01:00:02,680 --> 01:00:08,600
Speaker 13: alluding to was inspired by Trump's inauguration in twenty sixteen.

1179
01:00:08,640 --> 01:00:11,520
Speaker 13: You remember Sean Spicer went on TV and claimed it

1180
01:00:11,560 --> 01:00:13,560
Speaker 13: was the largest inauguration ever.

1181
01:00:13,840 --> 01:00:16,120
Speaker 11: In person or remotely right, And.

1182
01:00:16,080 --> 01:00:19,080
Speaker 13: Then the next day newspapers published side by side photographs

1183
01:00:19,120 --> 01:00:21,800
Speaker 13: showing that at the same time of day, Obama's inauguration

1184
01:00:21,840 --> 01:00:25,120
Speaker 13: a few years earlier had been bigger. Now it was

1185
01:00:25,160 --> 01:00:29,080
Speaker 13: instructive to see how members of the Trump administration respond

1186
01:00:29,200 --> 01:00:32,840
Speaker 13: to this. At some point they stopped defending the literal

1187
01:00:32,880 --> 01:00:35,880
Speaker 13: truth of that claim that the inauguration was the biggest,

1188
01:00:36,160 --> 01:00:39,600
Speaker 13: and they started saying or implying things like, well, the

1189
01:00:39,640 --> 01:00:43,480
Speaker 13: inauguration would have been bigger if the weather had been nicer,

1190
01:00:43,800 --> 01:00:46,760
Speaker 13: or it would have been bigger if security hadn't been

1191
01:00:46,800 --> 01:00:51,000
Speaker 13: so tight. Psychologists refer to these as counter factuals, where

1192
01:00:51,040 --> 01:00:54,120
Speaker 13: you kind of mentally undo reality and you think about

1193
01:00:54,120 --> 01:00:57,800
Speaker 13: how things could have turned out differently. Now, logically, these

1194
01:00:58,200 --> 01:01:02,400
Speaker 13: counterfactuals don't bring falls any closer to the truth, but

1195
01:01:03,120 --> 01:01:07,800
Speaker 13: psychologically they can make the falsehoods feel a little bit truthier,

1196
01:01:07,920 --> 01:01:11,680
Speaker 13: let's say. And we find in this and many other

1197
01:01:11,760 --> 01:01:15,560
Speaker 13: experiments that when you invite people to imagine that a

1198
01:01:15,600 --> 01:01:19,080
Speaker 13: falsehood could have been true if circumstances had been different,

1199
01:01:19,600 --> 01:01:22,840
Speaker 13: they think the falsehood is a little less unethical to tell.

1200
01:01:23,040 --> 01:01:25,600
Speaker 13: They're less inclined to want to punish the person who

1201
01:01:25,640 --> 01:01:29,080
Speaker 13: tells it. And this is particularly true if you like

1202
01:01:29,200 --> 01:01:31,440
Speaker 13: the person who's telling the falsehood, like if it's a

1203
01:01:31,440 --> 01:01:32,400
Speaker 13: politician that you.

1204
01:01:32,360 --> 01:01:37,560
Speaker 4: Support, isn't that right? Virtually everyone you talk to recognize

1205
01:01:37,600 --> 01:01:40,840
Speaker 4: the claims as being false. But as you just said

1206
01:01:40,880 --> 01:01:44,160
Speaker 4: and wrote quite well in The New York Times in

1207
01:01:44,200 --> 01:01:46,640
Speaker 4: this piece, a little imagination can apparently make a lie

1208
01:01:46,760 --> 01:01:50,840
Speaker 4: feel truthy enough to give the liar a bit of

1209
01:01:50,880 --> 01:01:54,280
Speaker 4: a pass. Now we've got lies, and of course the

1210
01:01:54,400 --> 01:01:56,920
Speaker 4: lying liars who tell them, forgive me, Daniel, but we

1211
01:01:57,000 --> 01:01:59,560
Speaker 4: also have sometimes embellishments.

1212
01:01:59,680 --> 01:01:59,880
Speaker 10: Right.

1213
01:02:00,200 --> 01:02:03,760
Speaker 4: Politicians love telling stories. They've been around the world and back.

1214
01:02:03,800 --> 01:02:05,560
Speaker 4: And in the case of Tim Walls, this came to

1215
01:02:05,600 --> 01:02:07,880
Speaker 4: a head during the debate just a couple of nights

1216
01:02:07,920 --> 01:02:10,400
Speaker 4: ago here, and I'd love to bring you back to

1217
01:02:10,440 --> 01:02:12,880
Speaker 4: that moment. This, of course, is Kamala Harris's running mate,

1218
01:02:12,880 --> 01:02:14,960
Speaker 4: and he had claimed to be in Hong Kong at

1219
01:02:15,040 --> 01:02:18,840
Speaker 4: the time of Tieneman. Turns out he was not, and

1220
01:02:18,880 --> 01:02:20,919
Speaker 4: he was called out on this during the debate. Here's

1221
01:02:20,960 --> 01:02:21,680
Speaker 4: how he handled it.

1222
01:02:22,360 --> 01:02:25,160
Speaker 14: Just to follow up on that, the question was can

1223
01:02:25,200 --> 01:02:27,440
Speaker 14: you explain the noterepancy?

1224
01:02:27,640 --> 01:02:29,240
Speaker 9: All I said on this was is I got there

1225
01:02:29,280 --> 01:02:32,200
Speaker 9: that summer and misspoke on this, so I will just

1226
01:02:33,000 --> 01:02:38,120
Speaker 9: that's what I've said. So I was in Hong Kong

1227
01:02:38,200 --> 01:02:41,840
Speaker 9: and China during the democracy protest went in and from

1228
01:02:41,880 --> 01:02:44,560
Speaker 9: that I learned a lot of what needed to be

1229
01:02:44,600 --> 01:02:45,520
Speaker 9: in governance.

1230
01:02:47,160 --> 01:02:50,360
Speaker 4: Okay, awkward at best, but I wonder, Daniel, if you

1231
01:02:50,400 --> 01:02:53,200
Speaker 4: can dig into the psychology behind this politicians who want

1232
01:02:53,200 --> 01:02:57,000
Speaker 4: to embellish their record that might make a supporter feel

1233
01:02:57,040 --> 01:03:00,960
Speaker 4: better about them, maybe codify feeling that they already have.

1234
01:03:01,040 --> 01:03:02,120
Speaker 4: Is there some parallel here?

1235
01:03:03,240 --> 01:03:03,560
Speaker 10: Sure?

1236
01:03:03,880 --> 01:03:06,920
Speaker 13: So in my recent studies, my colleagues and I find

1237
01:03:07,200 --> 01:03:12,000
Speaker 13: that when you support a political candidate, you start caring

1238
01:03:12,040 --> 01:03:16,600
Speaker 13: more about whether what they're saying speaks to a larger truth,

1239
01:03:16,720 --> 01:03:19,120
Speaker 13: is making a general point that you think is true,

1240
01:03:19,560 --> 01:03:22,600
Speaker 13: as opposed to caring about whether what they say is

1241
01:03:22,720 --> 01:03:28,440
Speaker 13: literally and precisely true. So another thing that Tim Walls

1242
01:03:28,440 --> 01:03:30,720
Speaker 13: has said is that he's been to China thirty times.

1243
01:03:31,800 --> 01:03:34,760
Speaker 13: His campaign later walked that back and said that it's something.

1244
01:03:34,560 --> 01:03:35,840
Speaker 11: Closer to fifteen.

1245
01:03:36,400 --> 01:03:39,439
Speaker 13: So I haven't studied this exact example in my lab,

1246
01:03:39,480 --> 01:03:42,360
Speaker 13: but the prediction I would make from our research is

1247
01:03:42,400 --> 01:03:46,560
Speaker 13: that if you're a Wall's opponent, you would say he

1248
01:03:46,640 --> 01:03:49,800
Speaker 13: said it was thirty, but it's actually fifteen.

1249
01:03:49,920 --> 01:03:51,960
Speaker 11: That's a lie, that's very dishonest. That's wrong.

1250
01:03:52,560 --> 01:03:55,320
Speaker 13: And if you're a Wall supporter, you might say something like, look,

1251
01:03:55,400 --> 01:03:58,120
Speaker 13: is it thirty, is it fifteen? Is it two? I mean,

1252
01:03:58,200 --> 01:04:01,120
Speaker 13: let's not get pedantic here. The sheets to China, bind

1253
01:04:01,160 --> 01:04:04,480
Speaker 13: shed it's informed his policy and.

1254
01:04:06,160 --> 01:04:06,640
Speaker 11: Of the Aisle.

1255
01:04:06,920 --> 01:04:10,320
Speaker 13: An example that I have studied in my lab. If

1256
01:04:10,360 --> 01:04:15,880
Speaker 13: you think back to Senator Katie Britt's response to Joe

1257
01:04:15,880 --> 01:04:19,000
Speaker 13: Biden State of the Union address some months ago. She

1258
01:04:19,080 --> 01:04:24,120
Speaker 13: was criticizing Biden's immigration policies, and she told a very

1259
01:04:24,200 --> 01:04:27,680
Speaker 13: upsetting story about a woman she had met who had

1260
01:04:27,720 --> 01:04:32,520
Speaker 13: been sex trafficked, ostensibly by Mexican drug cartels. And Britt said,

1261
01:04:32,600 --> 01:04:34,680
Speaker 13: you know, he wouldn't be okay with this. You remember this,

1262
01:04:34,880 --> 01:04:36,600
Speaker 13: She said, we wouldn't be okay with this happening in

1263
01:04:36,600 --> 01:04:37,560
Speaker 13: a third world country.

1264
01:04:37,560 --> 01:04:38,880
Speaker 11: This is the United States of America.

1265
01:04:39,040 --> 01:04:39,320
Speaker 15: Okay.

1266
01:04:39,880 --> 01:04:43,440
Speaker 13: So I had a Democrat and Republican participants watch a

1267
01:04:43,520 --> 01:04:47,520
Speaker 13: video clip of Brit making these remarks, and then they

1268
01:04:47,520 --> 01:04:52,040
Speaker 13: were shown actual fact chats from Fox News, PolitiFact, other

1269
01:04:52,120 --> 01:04:56,320
Speaker 13: sources saying, well, it's true that Britt met someone who

1270
01:04:56,400 --> 01:04:58,840
Speaker 13: had been sex traffic, but some of the details were wrong.

1271
01:04:59,320 --> 01:05:03,080
Speaker 13: This didn't happen at the border, It didn't happen because

1272
01:05:03,120 --> 01:05:05,720
Speaker 13: of Mexican drug cartels. Cartels were not involved, and it

1273
01:05:05,720 --> 01:05:09,120
Speaker 13: actually happened during the George W. Bush administration. So then

1274
01:05:09,160 --> 01:05:13,360
Speaker 13: I asked Democrats and Republicans how dishonest are BRIT's remarks

1275
01:05:13,720 --> 01:05:19,200
Speaker 13: and why. Democrats say it's very dishonest because she's making

1276
01:05:19,320 --> 01:05:23,280
Speaker 13: up facts. This none of this stuff isn't true. Republicans

1277
01:05:23,280 --> 01:05:26,320
Speaker 13: say it's not so dishonest because, look, she may have

1278
01:05:26,400 --> 01:05:30,080
Speaker 13: chosen the wrong story, but this stuff happens all the time.

1279
01:05:30,520 --> 01:05:34,360
Speaker 13: The issue she's talking about is true. So again, whether

1280
01:05:34,400 --> 01:05:37,400
Speaker 13: you're a Democrat or a Republican, if you support someone

1281
01:05:37,440 --> 01:05:40,439
Speaker 13: that's telling you falsehoods, you might not care so much

1282
01:05:40,520 --> 01:05:44,000
Speaker 13: if you think the falsehoods speak to a broader truth.

1283
01:05:44,480 --> 01:05:46,400
Speaker 13: And this is what I meant earlier when I said

1284
01:05:46,480 --> 01:05:49,360
Speaker 13: that it's not that people don't care about truth, it's

1285
01:05:49,360 --> 01:05:52,520
Speaker 13: that they may just define truth differently depending on who's

1286
01:05:52,560 --> 01:05:53,040
Speaker 13: lying to them.

1287
01:05:54,240 --> 01:05:58,040
Speaker 4: Ah, the alternate facts. I've got less than a minute, Daniel.

1288
01:05:58,040 --> 01:05:59,640
Speaker 4: I don't mean to set you up to cut you off,

1289
01:05:59,680 --> 01:06:03,000
Speaker 4: but don't we love to be lied to voters love

1290
01:06:03,040 --> 01:06:05,160
Speaker 4: to be lied to. Is that not part of the story.

1291
01:06:06,160 --> 01:06:07,280
Speaker 11: Well again, I don't.

1292
01:06:07,120 --> 01:06:09,720
Speaker 13: Know that people are seeing all of these falsehoods as

1293
01:06:09,840 --> 01:06:10,600
Speaker 13: as lies.

1294
01:06:10,720 --> 01:06:12,480
Speaker 4: That is what I want you to tell me, what

1295
01:06:12,560 --> 01:06:15,240
Speaker 4: I want to hear. That's the point, Daniel, Make me happy.

1296
01:06:16,240 --> 01:06:17,120
Speaker 11: Yeah, I look.

1297
01:06:17,480 --> 01:06:20,520
Speaker 13: I think when voters want to hear falsehoods, they define

1298
01:06:20,520 --> 01:06:24,680
Speaker 13: dishonesty in different ways. And you know whether it's reasonable

1299
01:06:24,760 --> 01:06:28,760
Speaker 13: to care about details or whether it's reasonable to care

1300
01:06:28,920 --> 01:06:31,680
Speaker 13: about the gist, the broader picture of what someone's saying.

1301
01:06:31,880 --> 01:06:35,000
Speaker 13: We're all capable about caring about both. The problem is

1302
01:06:35,040 --> 01:06:37,720
Speaker 13: we're just maybe a little hypocritical and how we apply

1303
01:06:38,000 --> 01:06:39,040
Speaker 13: those standards.

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Speaker 4: Love talking to you, Daniel Fron. I do this in

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Speaker 4: person sometimes. He's the professor of organizational behavior at London

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Speaker 4: Business School. Maybe I'll come over there and see a

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Speaker 4: social psychologist. How about James, let's get a residence psychologist

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Speaker 4: for Balance of Power for the next four weeks. I

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Speaker 4: need one today. Thanks for listening to the Balance. It's

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Speaker 4: a power podcast. Make sure to subscribe if you haven't already,

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Speaker 4: at Apple, Spotify or wherever you get your podcasts, and

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Speaker 4: you can find us live every weekday from Washington, DC

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Speaker 4: at Noontimeeastern at Bloomberg dot com.