1
00:00:00,200 --> 00:00:03,360
Speaker 1: Hey, they're aud Loots listeners. It's Tracy Alloway.

2
00:00:03,000 --> 00:00:04,000
Speaker 2: And Jill Wisenthal.

3
00:00:04,280 --> 00:00:07,720
Speaker 1: We are very excited to announce that Audlots is going

4
00:00:07,800 --> 00:00:09,680
Speaker 1: to Washington That's right.

5
00:00:09,760 --> 00:00:11,560
Speaker 2: For the first time, we are going to do a

6
00:00:11,640 --> 00:00:16,439
Speaker 2: live public Odd Lots recording in our nation's capital. That's

7
00:00:16,440 --> 00:00:19,680
Speaker 2: going to be March twelfth in Washington, DC at the

8
00:00:19,760 --> 00:00:23,560
Speaker 2: Miracle Theater and guests will be announced in the coming days,

9
00:00:23,600 --> 00:00:25,960
Speaker 2: but in the meantime you can find a ticket link

10
00:00:26,000 --> 00:00:28,040
Speaker 2: at Bloomberg dot com, slash odd.

11
00:00:27,800 --> 00:00:45,320
Speaker 3: Lots, Bloomberg Audio Studios, Podcasts, Radio News.

12
00:00:46,920 --> 00:00:50,600
Speaker 2: Hello and welcome to another episode of the Odd Lots podcast.

13
00:00:50,760 --> 00:00:53,199
Speaker 1: I'm Jill Wisenthal and I'm Tracy Alloway.

14
00:00:53,320 --> 00:00:57,480
Speaker 2: Tracy, let's get back on the supply chain, shipping and

15
00:00:57,600 --> 00:00:58,639
Speaker 2: industrial policy.

16
00:00:58,680 --> 00:00:58,840
Speaker 4: Bee.

17
00:00:59,120 --> 00:00:59,720
Speaker 5: I love it.

18
00:01:00,040 --> 00:01:01,880
Speaker 1: I've been waiting for us to get back on that.

19
00:01:02,360 --> 00:01:06,080
Speaker 1: Although actually, okay, so I'm excited about this for two reasons.

20
00:01:06,280 --> 00:01:10,319
Speaker 1: One is I enjoy talking about supply chains and talking

21
00:01:10,360 --> 00:01:13,160
Speaker 1: about how goods are actually transported. And I think I've

22
00:01:13,160 --> 00:01:16,039
Speaker 1: told you before, I actually wanted to be a commodities

23
00:01:16,080 --> 00:01:19,920
Speaker 1: reporter because like there's this element of romanticism to shipping

24
00:01:20,080 --> 00:01:24,600
Speaker 1: actual things moving actual stuff around the world. But then secondly,

25
00:01:24,760 --> 00:01:27,679
Speaker 1: the reason I'm excited for this conversation is because this

26
00:01:27,800 --> 00:01:32,040
Speaker 1: is a rare example or instance of something that has

27
00:01:32,120 --> 00:01:33,400
Speaker 1: bipartisan support.

28
00:01:33,840 --> 00:01:37,560
Speaker 2: Yes, that's right. And so obviously during the last administration

29
00:01:37,720 --> 00:01:40,400
Speaker 2: we saw these things. Do is the Chips Act, do

30
00:01:40,560 --> 00:01:44,559
Speaker 2: is the Inflation Reduction Act, which primarily focused on energy,

31
00:01:44,600 --> 00:01:48,240
Speaker 2: a lot of alternative energy. There's been some question obviously,

32
00:01:48,360 --> 00:01:51,200
Speaker 2: with the changing of the guard in DC, are we

33
00:01:51,280 --> 00:01:54,400
Speaker 2: going to see some more like activist efforts to shore

34
00:01:54,520 --> 00:01:59,640
Speaker 2: up certain aspects of the US industrial capacity. There's a

35
00:01:59,640 --> 00:02:02,120
Speaker 2: lot of anxiety about that right now, but you know,

36
00:02:02,160 --> 00:02:05,480
Speaker 2: it's obviously an open question where that's going to go.

37
00:02:05,880 --> 00:02:07,480
Speaker 2: But one of the things that has come up in

38
00:02:07,520 --> 00:02:10,320
Speaker 2: some of our conversations that we haven't dived too deep

39
00:02:10,360 --> 00:02:14,440
Speaker 2: into it is American maritime capacity specifically, and it comes

40
00:02:14,520 --> 00:02:16,839
Speaker 2: up when we reference the Jones Act, and it comes

41
00:02:16,919 --> 00:02:20,359
Speaker 2: up when we talk about port automation, and we've talked

42
00:02:20,400 --> 00:02:23,080
Speaker 2: a little bit about icebreakers and things like that, and

43
00:02:23,120 --> 00:02:27,680
Speaker 2: how sort of atrophied US capacity has become. And so

44
00:02:27,760 --> 00:02:30,680
Speaker 2: then there's this question, like, you know, a what can

45
00:02:30,720 --> 00:02:33,200
Speaker 2: we do about it and be how urgent is there

46
00:02:33,360 --> 00:02:35,120
Speaker 2: a reason to rebuild this capacity.

47
00:02:35,320 --> 00:02:37,240
Speaker 1: I was kind of wondering how long it would take

48
00:02:37,280 --> 00:02:39,600
Speaker 1: for us to bring up the Genes Act in this conversation,

49
00:02:39,680 --> 00:02:43,000
Speaker 1: and the answer is about one or two minutes. But

50
00:02:43,120 --> 00:02:45,440
Speaker 1: I think this is it's a really interesting topic. From

51
00:02:45,480 --> 00:02:48,640
Speaker 1: an all blots perspective. We have done shipping episodes in

52
00:02:48,680 --> 00:02:51,480
Speaker 1: the past, and obviously everyone learned during the pandemic that

53
00:02:51,600 --> 00:02:55,680
Speaker 1: shipping costs are really important. But also I'm just interested

54
00:02:55,840 --> 00:02:59,399
Speaker 1: in this discussion from a sort of policy design perspective.

55
00:02:59,680 --> 00:03:03,160
Speaker 1: How do you go about actually designing something like this

56
00:03:03,360 --> 00:03:07,680
Speaker 1: that at first clients seems absolutely sprawling and complicated and

57
00:03:07,760 --> 00:03:09,480
Speaker 1: touching on all these different things.

58
00:03:09,720 --> 00:03:12,600
Speaker 2: Well, I'm excited to say we really do have the

59
00:03:12,720 --> 00:03:16,400
Speaker 2: two perfect guests for this conversation. We're going to be

60
00:03:16,440 --> 00:03:21,000
Speaker 2: speaking with Republican Senator Todd Young from Indiana and Democratic

61
00:03:21,080 --> 00:03:25,640
Speaker 2: Senator Mark Kelly from Arizona. Senator Kelly is a trained

62
00:03:25,760 --> 00:03:28,960
Speaker 2: merchant Marine. I see a class of eighty six the

63
00:03:29,000 --> 00:03:33,320
Speaker 2: Merchant Marine Academy. So, like I said, truly the perfect guests.

64
00:03:33,600 --> 00:03:36,400
Speaker 2: Senators Kelly and Young, thank you so much for coming

65
00:03:36,400 --> 00:03:37,080
Speaker 2: on Outlaws.

66
00:03:38,440 --> 00:03:39,320
Speaker 6: Thanks for having us.

67
00:03:39,560 --> 00:03:41,600
Speaker 4: Yeah, thank you. Joe and Tracy for having us on.

68
00:03:42,320 --> 00:03:45,360
Speaker 2: Why don't we just start what do you describe one

69
00:03:45,360 --> 00:03:48,880
Speaker 2: of you or both of you describe the existing state

70
00:03:49,000 --> 00:03:53,480
Speaker 2: of America's maritime capacity, and just like why it's something

71
00:03:53,520 --> 00:03:57,560
Speaker 2: that we need to in your views address it.

72
00:03:57,720 --> 00:03:59,960
Speaker 7: Joe, this is Mark Kelly. You know, just to start,

73
00:04:00,200 --> 00:04:04,440
Speaker 7: I would say, big picture, the state of our maritime

74
00:04:04,480 --> 00:04:08,320
Speaker 7: industry is really, really poor. I was in a brief

75
00:04:08,520 --> 00:04:12,760
Speaker 7: just yesterday with the Admiral, the four star admiral, Admiral Paparo,

76
00:04:13,400 --> 00:04:16,599
Speaker 7: who's the head of Indopaycom, and we're talking about the

77
00:04:16,600 --> 00:04:20,160
Speaker 7: Western Pacific, and he was talking about the Military Sealift

78
00:04:20,160 --> 00:04:24,800
Speaker 7: Command and how it is in bad shape materially and

79
00:04:24,880 --> 00:04:26,640
Speaker 7: also from a workforce perspective.

80
00:04:27,440 --> 00:04:30,360
Speaker 4: But when you consider where.

81
00:04:30,080 --> 00:04:33,000
Speaker 7: We were and where we are today. So when I

82
00:04:33,120 --> 00:04:35,880
Speaker 7: graduated from the US Merchantary Academy in nineteen eighty six,

83
00:04:35,960 --> 00:04:39,599
Speaker 7: as you mentioned, made about four hundred US flagged ocean

84
00:04:39,640 --> 00:04:42,599
Speaker 7: going vessels, and that was down, by the way, from.

85
00:04:42,640 --> 00:04:44,720
Speaker 4: Thousands after World War Two.

86
00:04:45,240 --> 00:04:49,760
Speaker 7: Today that number has fallen to eighty, so eighty US

87
00:04:49,880 --> 00:04:55,800
Speaker 7: flag vessels in international commerce flying the US flag. China,

88
00:04:56,680 --> 00:05:00,880
Speaker 7: you know, our peer or near peer adversary has five

89
00:05:01,000 --> 00:05:05,120
Speaker 7: thousand five hundred and most of the cargo that comes

90
00:05:05,400 --> 00:05:07,800
Speaker 7: to the United States can come on Chinese ships. So

91
00:05:08,680 --> 00:05:11,320
Speaker 7: if you remember what happened in twenty twenty one twenty

92
00:05:11,320 --> 00:05:15,640
Speaker 7: twenty two is supply chains and bottleneck at seaports, especially

93
00:05:15,640 --> 00:05:18,040
Speaker 7: on the West Coast. I mean, if China wants to

94
00:05:18,080 --> 00:05:22,360
Speaker 7: do that similar effect to US, they can.

95
00:05:22,920 --> 00:05:26,800
Speaker 4: On any day, President she could.

96
00:05:26,520 --> 00:05:30,760
Speaker 7: Say, hey, no Chinese ships take cargo to the United

97
00:05:30,800 --> 00:05:33,560
Speaker 7: States anymore, and it would essentially shut down our economy.

98
00:05:33,640 --> 00:05:36,839
Speaker 7: So this is a problem. It's a national security problem.

99
00:05:36,880 --> 00:05:37,640
Speaker 7: We got to fix it.

100
00:05:38,760 --> 00:05:40,040
Speaker 5: So how did this happen?

101
00:05:40,200 --> 00:05:44,000
Speaker 1: I mean, eighty US flagged vessels versus five thousand, five

102
00:05:44,080 --> 00:05:48,680
Speaker 1: hundred out of China is pretty stunning statistic. What are

103
00:05:48,720 --> 00:05:51,680
Speaker 1: the things that went into making I guess the US

104
00:05:51,800 --> 00:05:53,880
Speaker 1: less competitive when it comes to shipbuilding?

105
00:05:54,279 --> 00:05:55,479
Speaker 7: God, I don't know if you want to take that

106
00:05:55,600 --> 00:05:59,680
Speaker 7: or I could kin, yeah, I'll speak at a high level.

107
00:06:00,000 --> 00:06:03,800
Speaker 6: I mean, what we have seen over the years is China,

108
00:06:03,839 --> 00:06:08,159
Speaker 6: in a number of different sectors of the economy, they've

109
00:06:08,200 --> 00:06:14,080
Speaker 6: subsidized their activities in furtherance of national security and domestic

110
00:06:14,200 --> 00:06:21,080
Speaker 6: job creation and to master certain technologies and crafts so

111
00:06:21,120 --> 00:06:27,039
Speaker 6: that they can leverage those for geopolitical purposes and also

112
00:06:27,360 --> 00:06:32,719
Speaker 6: for commercial purposes to put other industries and other countries

113
00:06:32,760 --> 00:06:37,480
Speaker 6: out of business. So examples, one example would be semiconductors,

114
00:06:37,920 --> 00:06:40,920
Speaker 6: and it's not just the Chinese, many other Asian nations

115
00:06:41,120 --> 00:06:45,560
Speaker 6: understood back You could point to the nineteen eighties. They

116
00:06:45,640 --> 00:06:51,239
Speaker 6: understood that having some measure of control and expertise over

117
00:06:51,279 --> 00:06:57,040
Speaker 6: semiconductor technologies was important to their growth and also important

118
00:06:57,160 --> 00:07:02,239
Speaker 6: to their military using these technologygies, embedding them in different

119
00:07:02,360 --> 00:07:07,680
Speaker 6: military platforms, and so they invested in them. We instead,

120
00:07:07,760 --> 00:07:11,120
Speaker 6: we have a more efficient economic model that doesn't lead

121
00:07:11,200 --> 00:07:14,760
Speaker 6: to the sort of over investment and waste by our

122
00:07:14,800 --> 00:07:19,960
Speaker 6: capital markets and others that the Chinese do. We also

123
00:07:20,120 --> 00:07:25,280
Speaker 6: don't look at economic exchanges historically through a military lens.

124
00:07:25,720 --> 00:07:25,880
Speaker 4: Well.

125
00:07:25,880 --> 00:07:29,440
Speaker 6: The disadvantage of that is when other countries are subsidizing

126
00:07:29,480 --> 00:07:34,000
Speaker 6: their businesses, in this case shipbuilding, and we're not subsidizing,

127
00:07:34,120 --> 00:07:38,440
Speaker 6: they will undercut us on price, and given enough practice,

128
00:07:38,920 --> 00:07:43,200
Speaker 6: sometimes undercut us on quality. So we have gotten out

129
00:07:43,240 --> 00:07:46,520
Speaker 6: of the business, in the case of semiconductors, of making them,

130
00:07:46,560 --> 00:07:50,080
Speaker 6: and over time we became vulnerable the interruptions in the

131
00:07:50,120 --> 00:07:54,840
Speaker 6: supply chain, the interruption that we might experience in shipbuilding

132
00:07:55,080 --> 00:07:58,440
Speaker 6: our maritime industry that Mark just alluded to is one

133
00:07:58,480 --> 00:08:01,800
Speaker 6: we're trying to prevent. We don't want a situation, whether

134
00:08:01,840 --> 00:08:07,480
Speaker 6: it's a pandemic or a military conflict, in which we

135
00:08:07,840 --> 00:08:13,600
Speaker 6: are dependent on our chief adversary, China to move materiel

136
00:08:13,800 --> 00:08:17,080
Speaker 6: and personnel to other places, and on a day to

137
00:08:17,160 --> 00:08:21,240
Speaker 6: day basis, as our government leaders are making foreign policy,

138
00:08:22,000 --> 00:08:25,320
Speaker 6: we don't want to be coerced into making certain decisions

139
00:08:25,360 --> 00:08:29,080
Speaker 6: by the mere threat of Chinese interruption of our economy.

140
00:08:29,160 --> 00:08:31,920
Speaker 6: So that's why, at the highest level this is very

141
00:08:31,960 --> 00:08:36,640
Speaker 6: important and why some sort of government intervention is needed

142
00:08:36,640 --> 00:08:39,280
Speaker 6: because this, in the end is an economic security issue

143
00:08:39,520 --> 00:08:41,520
Speaker 6: and also a national security issue.

144
00:08:42,040 --> 00:08:45,720
Speaker 7: And Tracy to add on to that just a little,

145
00:08:45,880 --> 00:08:47,880
Speaker 7: in the nineteen eighties, we used to do this differently,

146
00:08:48,000 --> 00:08:51,680
Speaker 7: and before there was some more government involvement. We got

147
00:08:51,720 --> 00:08:55,640
Speaker 7: out of that kind of left the maritime industry totally

148
00:08:55,679 --> 00:08:58,080
Speaker 7: on its own, and it just decayed.

149
00:08:58,440 --> 00:09:01,480
Speaker 4: Over decades for the last forty years.

150
00:09:02,440 --> 00:09:06,800
Speaker 7: And you know, the other concern here about you know,

151
00:09:06,840 --> 00:09:10,320
Speaker 7: it's not only the number of ships, but you know,

152
00:09:10,360 --> 00:09:13,680
Speaker 7: the Chinese ships, the ocean going their ocean going vessels

153
00:09:13,760 --> 00:09:19,360
Speaker 7: fifty five hundred or so that they have requirements put

154
00:09:19,400 --> 00:09:20,720
Speaker 7: on them by the PLA Navy.

155
00:09:21,360 --> 00:09:24,440
Speaker 4: So these ships are you know.

156
00:09:24,440 --> 00:09:29,439
Speaker 7: Well equipped and configured to be what they need if

157
00:09:29,480 --> 00:09:32,160
Speaker 7: they were in a conflict with US. Now, we rely

158
00:09:32,400 --> 00:09:38,600
Speaker 7: on the Military Sealift Command for our initial capacity to

159
00:09:38,679 --> 00:09:44,160
Speaker 7: move combat equipment and troops in some cases troops overseas, but.

160
00:09:44,200 --> 00:09:45,640
Speaker 4: Those numbers are rather limited.

161
00:09:46,520 --> 00:09:49,240
Speaker 7: And the reason why you want a large maritime fleet

162
00:09:49,320 --> 00:09:52,880
Speaker 7: is not only you know, peace time to move you know, cargo,

163
00:09:53,080 --> 00:09:57,040
Speaker 7: and it's healthy for our economy and it also helps

164
00:09:57,320 --> 00:10:01,080
Speaker 7: us shipbuilding. But the other reason, as in time of conflict,

165
00:10:01,120 --> 00:10:05,560
Speaker 7: we might have to rely on this capacity of ocean

166
00:10:05,600 --> 00:10:09,720
Speaker 7: going merchant vessels to get combat power across the Pacific

167
00:10:09,880 --> 00:10:10,480
Speaker 7: or Atlantic.

168
00:10:10,679 --> 00:10:13,800
Speaker 6: Sorry, I was just going to build on Mark's point

169
00:10:13,960 --> 00:10:18,199
Speaker 6: and emphasize the capacity that Mark just alluded to. Is

170
00:10:18,440 --> 00:10:20,160
Speaker 6: what we're essentially trying to do is we're trying to

171
00:10:20,200 --> 00:10:24,720
Speaker 6: train more mariners, build more ships, and then create more

172
00:10:24,840 --> 00:10:29,559
Speaker 6: yard space in our existing yards and perhaps some older

173
00:10:29,640 --> 00:10:32,560
Speaker 6: yards that need to be refurbished, create more yard space

174
00:10:32,640 --> 00:10:38,680
Speaker 6: that can support additional military shipbuilding and repair during a

175
00:10:38,720 --> 00:10:51,000
Speaker 6: wartime situation.

176
00:10:56,000 --> 00:10:59,160
Speaker 2: It's interesting, you know, we're having this bipartisan conversation, and

177
00:10:59,200 --> 00:11:01,360
Speaker 2: you laid it out the sort of tension very well,

178
00:11:01,400 --> 00:11:05,160
Speaker 2: which is that sort of American economic philosophy has been

179
00:11:05,200 --> 00:11:09,600
Speaker 2: optimized for efficiency and profit. And obviously we're extraordinarily wealthy

180
00:11:09,640 --> 00:11:13,280
Speaker 2: as a country, probably enlarge part of that. But A

181
00:11:13,559 --> 00:11:18,679
Speaker 2: there's the geopolitical risks that emerge with losing basically the

182
00:11:18,720 --> 00:11:21,720
Speaker 2: ability to build stuff, and you mentioned semiconductors and ships,

183
00:11:21,760 --> 00:11:24,240
Speaker 2: and there's a lot of this and so A, you know,

184
00:11:24,480 --> 00:11:27,000
Speaker 2: you run the risk it's overseas, and then over time

185
00:11:27,360 --> 00:11:30,040
Speaker 2: perhaps they don't even need the subsidies anymore because they

186
00:11:30,080 --> 00:11:32,720
Speaker 2: just have years and years and years of practice getting

187
00:11:32,840 --> 00:11:36,120
Speaker 2: better and better at it. Do you see this sort

188
00:11:36,160 --> 00:11:39,760
Speaker 2: of framework, this sort of lens with which to view

189
00:11:39,840 --> 00:11:44,679
Speaker 2: economic policy is fundamentally changing in DC because we're trying

190
00:11:44,679 --> 00:11:48,000
Speaker 2: to sort of understand, you know, how much momentum and

191
00:11:48,080 --> 00:11:52,200
Speaker 2: continuity there will be for just this general notion of

192
00:11:52,600 --> 00:11:54,400
Speaker 2: what people call industrial policy.

193
00:11:55,200 --> 00:11:59,720
Speaker 6: I do. I believe a lot of minds have been

194
00:11:59,800 --> 00:12:06,120
Speaker 6: changed changed, and policy makers pensient for embracing these sorts

195
00:12:06,120 --> 00:12:10,720
Speaker 6: of policies has fundamentally changed. Mark was helpful to me

196
00:12:11,200 --> 00:12:13,360
Speaker 6: as we tried to push through the Chips and Science

197
00:12:13,360 --> 00:12:17,000
Speaker 6: Act dealing with the semiconductor challenges, and I think through

198
00:12:17,080 --> 00:12:20,120
Speaker 6: that exercise, many of us had to make what were

199
00:12:20,400 --> 00:12:23,959
Speaker 6: challenging arguments to colleagues about why we needed to bake

200
00:12:24,080 --> 00:12:30,280
Speaker 6: in a national security premium to the price of certain products,

201
00:12:30,960 --> 00:12:34,000
Speaker 6: knowing that if we didn't make them here have the

202
00:12:34,040 --> 00:12:37,120
Speaker 6: capacity to make them here in the future, there would

203
00:12:37,160 --> 00:12:40,840
Speaker 6: be national security consequences to that. And we've done that

204
00:12:41,120 --> 00:12:44,880
Speaker 6: on so many other technology areas in the past. The

205
00:12:44,960 --> 00:12:48,440
Speaker 6: only difference now is that we have an adversary that

206
00:12:48,960 --> 00:12:52,400
Speaker 6: does not really look at any commercial transactions through a

207
00:12:52,520 --> 00:12:57,120
Speaker 6: purely commercial lens. There's always a geopolitical or military overlay

208
00:12:57,200 --> 00:13:00,319
Speaker 6: to it. So we have to extend the long standing

209
00:13:00,720 --> 00:13:04,080
Speaker 6: philosophy to other areas of our economy in order to

210
00:13:04,120 --> 00:13:09,439
Speaker 6: protect our people. So if we continue to make the arguments,

211
00:13:09,520 --> 00:13:12,280
Speaker 6: I think more people in Washington will embrace what most

212
00:13:12,320 --> 00:13:18,080
Speaker 6: people across America already intuitively understand, which is yes. I

213
00:13:18,200 --> 00:13:21,000
Speaker 6: remember during the global pandemic when I tried to get

214
00:13:21,000 --> 00:13:25,160
Speaker 6: at Walmart and buy a consumer electronic and the shelves

215
00:13:25,200 --> 00:13:28,840
Speaker 6: were half empty. They understood why that was and why

216
00:13:28,880 --> 00:13:32,720
Speaker 6: it's hard to run a modern economy without more resiliency

217
00:13:33,360 --> 00:13:36,440
Speaker 6: and a little more just in case instead of just

218
00:13:36,559 --> 00:13:37,160
Speaker 6: in time.

219
00:13:38,640 --> 00:13:40,600
Speaker 1: So one of the things that comes up quite a

220
00:13:40,600 --> 00:13:44,280
Speaker 1: lot on this show is the importance of institutional knowledge. So,

221
00:13:44,559 --> 00:13:47,520
Speaker 1: you know, you can have people in DC agree that

222
00:13:47,559 --> 00:13:51,240
Speaker 1: the US should build, you know, more big and complicated things,

223
00:13:51,320 --> 00:13:55,480
Speaker 1: whether those are semiconductors or ships, but you actually need

224
00:13:55,520 --> 00:13:57,640
Speaker 1: people who know how to do that. And if we

225
00:13:57,800 --> 00:14:01,320
Speaker 1: haven't been building these things for decades, then there probably

226
00:14:01,360 --> 00:14:04,320
Speaker 1: aren't that many people around who have practical knowledge or

227
00:14:04,400 --> 00:14:07,000
Speaker 1: experience of how to do this. And in fact, I

228
00:14:07,000 --> 00:14:10,760
Speaker 1: don't think there's any major shipbuilder that is actually headquartered

229
00:14:10,800 --> 00:14:14,080
Speaker 1: in the US, although there are some subsidiaries. How do

230
00:14:14,120 --> 00:14:18,840
Speaker 1: you actually go about building up institutional knowledge for shipbuilding?

231
00:14:19,840 --> 00:14:23,200
Speaker 7: Tracy So, one of my classmates from the US Merchant

232
00:14:23,200 --> 00:14:25,400
Speaker 7: Many Academy in nineteen eighty six is a woman named

233
00:14:25,560 --> 00:14:30,360
Speaker 7: Jennifer Boykin. She's the president of Newport News Shipbuilding, And

234
00:14:30,440 --> 00:14:32,720
Speaker 7: before I was in this job, I remember going down

235
00:14:32,760 --> 00:14:33,720
Speaker 7: there to visit her.

236
00:14:33,640 --> 00:14:36,200
Speaker 4: And talking about some of the workforce issues.

237
00:14:36,240 --> 00:14:41,360
Speaker 7: She builds aircraft carriers and Virginia Class submarines. You know,

238
00:14:41,560 --> 00:14:45,280
Speaker 7: one of the pre eminent shipbuilders in the world. When

239
00:14:45,280 --> 00:14:49,320
Speaker 7: you consider just the capability of these vessels, a US

240
00:14:49,400 --> 00:14:51,920
Speaker 7: aircraft carrier or the Ford class aircraft carrier and the

241
00:14:52,000 --> 00:14:56,120
Speaker 7: Virginia class attack submarines are you know, there's nothing better.

242
00:14:56,240 --> 00:15:01,440
Speaker 7: So we can build really, really good and capable ships.

243
00:15:02,040 --> 00:15:04,800
Speaker 7: But one of the challenges, you know, the chief faces

244
00:15:04,880 --> 00:15:07,960
Speaker 7: is what you're talking about, is the workforce, you know,

245
00:15:08,080 --> 00:15:11,160
Speaker 7: constantly trying to find people that will do these jobs

246
00:15:11,200 --> 00:15:13,520
Speaker 7: and do them well and have the skills. Now, they

247
00:15:13,560 --> 00:15:18,560
Speaker 7: train a lot of their own people welders and pipe fitters, electricians,

248
00:15:19,360 --> 00:15:25,960
Speaker 7: but they often run into challenges and finding, you know,

249
00:15:26,240 --> 00:15:29,400
Speaker 7: people to go into these jobs, and when they need

250
00:15:29,560 --> 00:15:35,000
Speaker 7: people that are trained already, that ecosystem of shipbuilders doesn't

251
00:15:35,040 --> 00:15:38,480
Speaker 7: really exist anymore in the United States. So part of

252
00:15:38,520 --> 00:15:41,920
Speaker 7: the benefit of this and in the legislation itself, is

253
00:15:41,960 --> 00:15:47,880
Speaker 7: a strategy to provide help for training programs so to

254
00:15:47,920 --> 00:15:50,880
Speaker 7: build the workforce. You can think of this as kind

255
00:15:50,880 --> 00:15:53,680
Speaker 7: of a three legged stool. One of them be in

256
00:15:53,720 --> 00:15:58,359
Speaker 7: the shipyards, one of them being the US flag the vessels,

257
00:15:58,440 --> 00:16:03,600
Speaker 7: and the third being the and by supporting the schools

258
00:16:03,720 --> 00:16:06,240
Speaker 7: like the US Merchant Marine Academy and the state Maritime

259
00:16:06,280 --> 00:16:10,520
Speaker 7: Academies and also the you know, the schools that train

260
00:16:10,840 --> 00:16:17,160
Speaker 7: the unlicensed mariners, but then also programs to you know,

261
00:16:17,280 --> 00:16:23,000
Speaker 7: help shipyards find pipe fitters and train them, and welders

262
00:16:23,040 --> 00:16:28,280
Speaker 7: and electricians and all those trades will then grow this

263
00:16:28,600 --> 00:16:33,800
Speaker 7: entire ecosystem. So there's extra capacity of a workforce that

264
00:16:33,960 --> 00:16:37,720
Speaker 7: existing shipbuilders that build naval combatants can rely on.

265
00:16:38,400 --> 00:16:39,920
Speaker 4: And then that extends not only.

266
00:16:39,760 --> 00:16:43,480
Speaker 7: To the workforce, but to the companies that build the parts,

267
00:16:43,640 --> 00:16:48,120
Speaker 7: you know, pumps and pipes. If you grow that, there's

268
00:16:48,200 --> 00:16:52,960
Speaker 7: a more competitive economic environment, there's more availability in some

269
00:16:53,120 --> 00:16:57,920
Speaker 7: cases now when when they're buying, you know, a pump

270
00:16:58,040 --> 00:17:01,160
Speaker 7: or pipes, they might have only one or two vendors

271
00:17:01,200 --> 00:17:04,879
Speaker 7: that they can rely on. So the idea here is

272
00:17:04,960 --> 00:17:10,040
Speaker 7: by building the US merchant marine and the shipbuilding workforce,

273
00:17:10,440 --> 00:17:12,639
Speaker 7: we're also going to help our naval shipbuilding.

274
00:17:13,520 --> 00:17:15,800
Speaker 2: Well, this is actually just a good moment. Why don't

275
00:17:15,880 --> 00:17:19,280
Speaker 2: you describe what give us the outline of the Ships

276
00:17:19,320 --> 00:17:22,560
Speaker 2: for America Act. How much do you underspend, what does

277
00:17:22,600 --> 00:17:25,040
Speaker 2: it hope to achieve? What would the US industry look

278
00:17:25,119 --> 00:17:27,200
Speaker 2: like if all successfully implemented.

279
00:17:27,720 --> 00:17:31,000
Speaker 7: Well, it's a three hundred page piece of legislation.

280
00:17:32,160 --> 00:17:35,920
Speaker 4: It touches every aspect or nearly.

281
00:17:35,640 --> 00:17:38,800
Speaker 7: Every aspect of the maritime industry. I guess I'll just

282
00:17:38,840 --> 00:17:41,560
Speaker 7: start kind of in a random place here. Provide for

283
00:17:41,680 --> 00:17:45,800
Speaker 7: a maritime Security Advisor within the White House who would

284
00:17:46,240 --> 00:17:50,560
Speaker 7: lead an interagency maritime Security Board to make some whole

285
00:17:50,560 --> 00:17:54,720
Speaker 7: of government strategic decisions on how to implement a national

286
00:17:54,760 --> 00:17:59,320
Speaker 7: maritime strategy. It also establishes a Maritime Security Trust Fund

287
00:17:59,320 --> 00:18:04,200
Speaker 7: that would rein asked duties and fees that are paid

288
00:18:04,200 --> 00:18:11,000
Speaker 7: by the maritime industry into maritime security programs and infrastructure programs,

289
00:18:12,040 --> 00:18:14,359
Speaker 7: with the goal here of having two hundred and fifty

290
00:18:15,280 --> 00:18:17,879
Speaker 7: ocean going merchant vessels in ten years.

291
00:18:18,400 --> 00:18:21,360
Speaker 4: We would create a strategic commercial fleet program.

292
00:18:22,080 --> 00:18:25,480
Speaker 7: We would change or establish a rule making committee on

293
00:18:25,520 --> 00:18:29,720
Speaker 7: commercial maritime regulations and standards, and then we would do

294
00:18:29,800 --> 00:18:33,800
Speaker 7: things like requiring government funded cargo to move on US

295
00:18:33,880 --> 00:18:39,160
Speaker 7: flag vessels and require a portion of the cargo imported

296
00:18:39,160 --> 00:18:41,959
Speaker 7: from China to go on US flag vessels starting at

297
00:18:41,960 --> 00:18:46,960
Speaker 7: a later time. There's tax credits, there's Title eleven Federal

298
00:18:47,000 --> 00:18:51,680
Speaker 7: ship financing, there's shipbuilding financial incentive.

299
00:18:51,200 --> 00:18:52,679
Speaker 4: Programs in the legislation.

300
00:18:53,640 --> 00:18:56,879
Speaker 7: There's also a part of this it's about manufacturing and

301
00:18:56,920 --> 00:19:00,760
Speaker 7: innovation and coming up with the next generation of ships

302
00:19:00,800 --> 00:19:04,439
Speaker 7: and ship energy systems, and I could go on.

303
00:19:05,880 --> 00:19:08,840
Speaker 1: Yeah, the bill in its official format is actually three

304
00:19:08,920 --> 00:19:11,560
Speaker 1: hundred and forty four pages long, and I will confess

305
00:19:11,640 --> 00:19:12,959
Speaker 1: I did not read all of it.

306
00:19:13,040 --> 00:19:13,800
Speaker 2: Did you upload it?

307
00:19:15,000 --> 00:19:17,200
Speaker 5: I did not. That's a good idea, Actually I did.

308
00:19:17,640 --> 00:19:20,560
Speaker 1: One of the things I was wondering is, you know,

309
00:19:20,600 --> 00:19:24,520
Speaker 1: this is kind of a Devil's advocate question, but a

310
00:19:24,560 --> 00:19:27,119
Speaker 1: lot of the ACT, as you just outlined, is about

311
00:19:27,119 --> 00:19:31,600
Speaker 1: creating incentives to build ships through things like tax credits

312
00:19:31,760 --> 00:19:36,480
Speaker 1: or providing some subsidies for construction or training. Why can't

313
00:19:36,480 --> 00:19:39,760
Speaker 1: the US government just fund ships directly? If ships are

314
00:19:39,840 --> 00:19:44,480
Speaker 1: so important for national security and trade, why even try

315
00:19:44,520 --> 00:19:46,560
Speaker 1: to leave it to private capital to build?

316
00:19:47,840 --> 00:19:50,119
Speaker 4: Well, that's a good question.

317
00:19:50,160 --> 00:19:52,679
Speaker 7: I mean, I guess that's what China does, right, They

318
00:19:52,960 --> 00:19:55,639
Speaker 7: build them, you know, they put them out there on

319
00:19:55,680 --> 00:19:59,119
Speaker 7: the oceans. They really belong to the Chinese government in

320
00:19:59,119 --> 00:20:03,679
Speaker 7: a way. You know, we are a democracy, we're capitalist society.

321
00:20:03,920 --> 00:20:10,320
Speaker 7: We believe in private markets and private ownership, and we

322
00:20:10,400 --> 00:20:13,760
Speaker 7: believe in, you know, to some extent, maybe helping companies,

323
00:20:13,760 --> 00:20:16,840
Speaker 7: but eventually getting them to the point where they're on

324
00:20:16,880 --> 00:20:20,800
Speaker 7: their own. They're profitable, they're creating good paying jobs. These

325
00:20:20,840 --> 00:20:23,199
Speaker 7: are jobs often that you can raise a family on,

326
00:20:23,320 --> 00:20:25,960
Speaker 7: that do not require a four year degree. So these

327
00:20:25,960 --> 00:20:30,080
Speaker 7: are you know, great you know jobs that are you know,

328
00:20:30,119 --> 00:20:32,719
Speaker 7: provide an economic benefit not just to the people who

329
00:20:32,800 --> 00:20:33,400
Speaker 7: work them, but.

330
00:20:33,320 --> 00:20:35,679
Speaker 4: To our country, and they help us grow the economy.

331
00:20:36,160 --> 00:20:36,800
Speaker 4: I don't think the.

332
00:20:36,800 --> 00:20:42,320
Speaker 7: Government operating its own you know, fleet vessels to move

333
00:20:42,440 --> 00:20:47,119
Speaker 7: commercial cargo, you know, makes a ton of sense, because

334
00:20:47,160 --> 00:20:50,080
Speaker 7: this is this is an important part of our economy.

335
00:20:50,520 --> 00:20:54,040
Speaker 7: It's deteriorated over the years. But you know, what you're

336
00:20:54,080 --> 00:20:58,240
Speaker 7: suggesting would be really like a you know, wholesale pivot

337
00:20:58,280 --> 00:20:59,840
Speaker 7: to government owned industry.

338
00:21:00,560 --> 00:21:02,080
Speaker 2: Let me ask you another question. You know, we've done

339
00:21:02,119 --> 00:21:05,520
Speaker 2: a lot on industrial policy in the past, and one

340
00:21:05,560 --> 00:21:12,920
Speaker 2: of the preconditions or you know, industrial policy can fail easily,

341
00:21:12,960 --> 00:21:17,000
Speaker 2: and you can have cronyism, and you can have companies

342
00:21:17,040 --> 00:21:20,639
Speaker 2: overbuilding the government for mediocre products. And this is just

343
00:21:21,000 --> 00:21:23,919
Speaker 2: one of the pitfalls of anytime there's a lot of

344
00:21:24,119 --> 00:21:26,960
Speaker 2: public money going to something. But one way that this

345
00:21:27,040 --> 00:21:31,880
Speaker 2: gets addressed historically in some markets is this idea of

346
00:21:32,440 --> 00:21:36,800
Speaker 2: the domestic champion has to be competitive on the global market.

347
00:21:36,840 --> 00:21:39,080
Speaker 2: And so if you're a car company or a chip

348
00:21:39,119 --> 00:21:42,680
Speaker 2: company in China or something like. You know, you don't

349
00:21:42,680 --> 00:21:46,240
Speaker 2: have any guaranteed buyers overseas because the chip maker is

350
00:21:46,280 --> 00:21:49,560
Speaker 2: still competing with Texas Instruments or BYD is still competing

351
00:21:49,600 --> 00:21:53,120
Speaker 2: with Tesla. What are the mechanisms that you have in

352
00:21:53,160 --> 00:21:56,880
Speaker 2: place or that you envision to still have that sort

353
00:21:56,960 --> 00:22:00,640
Speaker 2: of market discipline so to speak, so that yes, there

354
00:22:00,680 --> 00:22:03,520
Speaker 2: is this public money going, but there is still this

355
00:22:03,680 --> 00:22:07,040
Speaker 2: element that, yeah, we want the ships to be really

356
00:22:07,160 --> 00:22:12,360
Speaker 2: good and competitive and competitively priced and to sort of win,

357
00:22:12,520 --> 00:22:14,440
Speaker 2: so to speak, so that we know we're getting value

358
00:22:14,480 --> 00:22:15,040
Speaker 2: from the spending.

359
00:22:15,680 --> 00:22:17,240
Speaker 4: Well, yeah, let me take that.

360
00:22:17,920 --> 00:22:21,800
Speaker 6: And frankly, this builds off of the previous question. First,

361
00:22:22,040 --> 00:22:25,440
Speaker 6: I've learned a lot and frankly thought a fair amount

362
00:22:25,560 --> 00:22:28,760
Speaker 6: about industrial policy in recent years through.

363
00:22:28,600 --> 00:22:29,440
Speaker 4: The Chips Act.

364
00:22:30,600 --> 00:22:35,480
Speaker 6: From a purely economic standpoint, there would be no difference

365
00:22:35,920 --> 00:22:41,960
Speaker 6: when it comes to direct payments to grantee companies that

366
00:22:42,119 --> 00:22:46,879
Speaker 6: are charged with building ships on behalf of both our

367
00:22:46,880 --> 00:22:53,920
Speaker 6: commercial industry and for future national security reasons. But administratively

368
00:22:54,600 --> 00:22:59,400
Speaker 6: you can cut down on any concerns over croniism or

369
00:22:59,480 --> 00:23:06,720
Speaker 6: waste by having a neutral arbiter. And despite some anomalies

370
00:23:06,920 --> 00:23:11,240
Speaker 6: over time. Our IRS is a pretty neutral arbiter. So

371
00:23:11,359 --> 00:23:17,480
Speaker 6: when you are funding this shipbuilding initiative through the tax code,

372
00:23:17,600 --> 00:23:21,639
Speaker 6: it does provide a neutral arbiter. Sometimes the downside to

373
00:23:21,720 --> 00:23:24,119
Speaker 6: that approach is that you end up funding through the

374
00:23:24,200 --> 00:23:29,760
Speaker 6: tax code more enterprises and certain enterprises the would otherwise fund.

375
00:23:29,800 --> 00:23:33,000
Speaker 6: So there are trade offs when you make decisions about

376
00:23:33,040 --> 00:23:38,600
Speaker 6: how you administer your industrial policy. That would be point one.

377
00:23:38,640 --> 00:23:44,560
Speaker 6: Point two about establishing market discipline is very important. If

378
00:23:44,600 --> 00:23:49,240
Speaker 6: you look at semiconductors, that market is incredibly distributed and

379
00:23:49,440 --> 00:23:53,000
Speaker 6: ramified all across the world. We will see for any

380
00:23:53,000 --> 00:23:58,240
Speaker 6: given semiconductor it going across international borders dozens and dozens

381
00:23:58,240 --> 00:24:02,679
Speaker 6: of times before it becomes assembled component. In the case

382
00:24:03,000 --> 00:24:05,920
Speaker 6: of ships, of course you're going to have components going

383
00:24:05,960 --> 00:24:09,680
Speaker 6: in and out of the country some but it's less distributed,

384
00:24:10,560 --> 00:24:14,679
Speaker 6: and it will be the job in the main of

385
00:24:14,760 --> 00:24:19,320
Speaker 6: our diplomats and of our private enterprises to sell our

386
00:24:19,400 --> 00:24:23,200
Speaker 6: ships into other markets. We need to open up other

387
00:24:23,359 --> 00:24:27,520
Speaker 6: markets through trade policy, something I'm also an advocate of

388
00:24:27,560 --> 00:24:31,280
Speaker 6: and will continue to argue for. In part, and this

389
00:24:31,359 --> 00:24:34,479
Speaker 6: is a rarely mentioned dimension of trade policy, but one

390
00:24:34,520 --> 00:24:36,760
Speaker 6: of the reasons we want to trade with the rest

391
00:24:36,760 --> 00:24:39,600
Speaker 6: of the world is to enforce a certain efficiency and

392
00:24:39,680 --> 00:24:43,320
Speaker 6: discipline on our own economy so that we will see

393
00:24:43,320 --> 00:24:47,560
Speaker 6: a deployment of resources efficiently and we can grow faster

394
00:24:47,840 --> 00:24:51,480
Speaker 6: and all become more wealthy. So I mean, that's how

395
00:24:51,520 --> 00:24:54,840
Speaker 6: this will be accomplished. But what we have right now

396
00:24:55,880 --> 00:25:02,639
Speaker 6: is we have a more concentrated shipbuilding industry in particular

397
00:25:02,680 --> 00:25:05,280
Speaker 6: countries because they see not only the commercial but also

398
00:25:05,359 --> 00:25:10,800
Speaker 6: the national security upside to excelling in shipbuilding. And it

399
00:25:10,840 --> 00:25:13,719
Speaker 6: will take some work from our government to open up

400
00:25:13,760 --> 00:25:16,360
Speaker 6: foreign markets for our ships down the road, so we're

401
00:25:16,359 --> 00:25:19,520
Speaker 6: not there yet. We can't wait for that, however. I mean,

402
00:25:19,560 --> 00:25:23,960
Speaker 6: we own three percent of the global commercial fleet right now.

403
00:25:24,560 --> 00:25:28,520
Speaker 6: China owns roughly one fifth of the world's fleet, and

404
00:25:28,640 --> 00:25:34,640
Speaker 6: they will, through their bulk carriers, move a far larger

405
00:25:34,680 --> 00:25:39,720
Speaker 6: proportion of American goods into the United States. So they've

406
00:25:39,760 --> 00:25:42,960
Speaker 6: got us at the end of a barrel, frankly, and

407
00:25:43,040 --> 00:25:46,960
Speaker 6: there is some urgency to us beginning this exercise now,

408
00:25:47,080 --> 00:25:51,720
Speaker 6: especially in light of many of our national security communities

409
00:25:51,800 --> 00:25:59,359
Speaker 6: predictions about Chinese misbehavior visa VI Taiwan or South China Sea,

410
00:26:00,200 --> 00:26:04,720
Speaker 6: which will require a maritime response from the United States,

411
00:26:05,160 --> 00:26:08,840
Speaker 6: and at this point in time, we just cannot move

412
00:26:09,440 --> 00:26:14,040
Speaker 6: enough material and enough of our soldier sailers and airmen

413
00:26:14,560 --> 00:26:17,440
Speaker 6: to win a fight. And that ought to send a

414
00:26:17,480 --> 00:26:20,360
Speaker 6: shiver down the spine of most Americans.

415
00:26:20,480 --> 00:26:24,760
Speaker 1: Since you brought up the broader trade landscape, would you

416
00:26:24,840 --> 00:26:28,360
Speaker 1: expect retaliation from China for this act? I think it's

417
00:26:28,400 --> 00:26:30,920
Speaker 1: fair to say at the moment the relationship between the

418
00:26:31,040 --> 00:26:34,680
Speaker 1: US and China is pretty freed given the ongoing trade war.

419
00:26:34,840 --> 00:26:37,680
Speaker 1: And one of the things this act proposes is creating

420
00:26:38,080 --> 00:26:42,480
Speaker 1: a commercial cargo preference, so that in fifteen years, ten

421
00:26:42,520 --> 00:26:45,520
Speaker 1: percent of all cargo that's imported into the US from

422
00:26:45,640 --> 00:26:49,880
Speaker 1: China will need to be imported on US flagged vessels.

423
00:26:50,280 --> 00:26:53,640
Speaker 1: And I imagine that China might not like that, right

424
00:26:53,760 --> 00:26:56,560
Speaker 1: We talked earlier about how they've been supporting their own

425
00:26:56,640 --> 00:27:00,960
Speaker 1: domestic shipbuilding industry, so clearly this is important to them.

426
00:27:01,320 --> 00:27:06,359
Speaker 1: Could they potentially respond in kind with their own restrictions.

427
00:27:07,760 --> 00:27:10,199
Speaker 7: Well, they could always do that, Tracy, But when you

428
00:27:10,240 --> 00:27:13,040
Speaker 7: think about ten percent is pretty modest. You know, we're

429
00:27:13,080 --> 00:27:17,359
Speaker 7: building our capacity. We're going to require you know, certain

430
00:27:17,400 --> 00:27:22,119
Speaker 7: cargo to be carried on US flag ships. Under you know,

431
00:27:22,200 --> 00:27:27,760
Speaker 7: this Act, but we can't be making industrial policy decisions

432
00:27:27,800 --> 00:27:30,000
Speaker 7: based on what we think the response from China is

433
00:27:30,000 --> 00:27:30,359
Speaker 7: going to be.

434
00:27:30,960 --> 00:27:31,480
Speaker 4: You know, if they.

435
00:27:31,400 --> 00:27:35,160
Speaker 7: Respond, we'll figure out up way forward and figure out

436
00:27:35,240 --> 00:27:39,560
Speaker 7: how do we you know, counter a response if it's unfair.

437
00:27:40,280 --> 00:27:41,240
Speaker 4: But right now.

438
00:27:41,040 --> 00:27:46,359
Speaker 7: When you you know, just consider the capacity that China

439
00:27:46,440 --> 00:27:50,879
Speaker 7: has in this industry five thousand, five hundred ocean going

440
00:27:51,359 --> 00:27:52,560
Speaker 7: merchant vessels and.

441
00:27:52,480 --> 00:27:53,320
Speaker 4: We have eighty.

442
00:27:53,520 --> 00:27:57,440
Speaker 7: We've got to turn this around. Like semiconductors, we didn't

443
00:27:57,440 --> 00:28:00,879
Speaker 7: get into the you know, details of why you know,

444
00:28:00,920 --> 00:28:05,520
Speaker 7: the semiconductor industry is so important, but the best semiconductors

445
00:28:05,800 --> 00:28:09,520
Speaker 7: are made in Taiwan company to call TSMC, and if

446
00:28:09,560 --> 00:28:11,760
Speaker 7: we lose access to those this is part of the

447
00:28:11,760 --> 00:28:15,359
Speaker 7: discussion we had today with our yesterday with Admiral Paparo.

448
00:28:15,600 --> 00:28:18,760
Speaker 7: If we lose access to semiconductor chips from Taiwan, we

449
00:28:18,800 --> 00:28:21,639
Speaker 7: could very quickly lose five to ten percent of our GDP.

450
00:28:22,240 --> 00:28:25,800
Speaker 7: Unemployment could go up ten percent in the United States

451
00:28:25,920 --> 00:28:29,040
Speaker 7: rather rapidly. So that's one of the reasons we wanted

452
00:28:29,040 --> 00:28:32,240
Speaker 7: to onshore you know, this capability. And you know, Todd

453
00:28:32,280 --> 00:28:35,639
Speaker 7: was the author of the bill that I worked on

454
00:28:35,800 --> 00:28:40,120
Speaker 7: with him. So, yeah, I think it's always possible we

455
00:28:40,160 --> 00:28:43,360
Speaker 7: could see a response from the Chinese. But that doesn't,

456
00:28:43,720 --> 00:28:45,120
Speaker 7: you know, mean we shouldn't do this.

457
00:28:45,440 --> 00:28:50,960
Speaker 6: Yeah, Tracy, we have to assume that the Chinese will,

458
00:28:51,560 --> 00:28:54,800
Speaker 6: you know, be upset. But what they aim to do,

459
00:28:55,080 --> 00:28:59,600
Speaker 6: and it's an intelligent thing to do, is by threatening

460
00:29:00,400 --> 00:29:06,400
Speaker 6: a response, because our economies remain interwoven. By threatening a response,

461
00:29:06,440 --> 00:29:10,600
Speaker 6: they want to deter us from making our own economy

462
00:29:10,680 --> 00:29:14,720
Speaker 6: more resilient. And as long as we remain vulnerable to

463
00:29:15,400 --> 00:29:21,000
Speaker 6: their provocative threats and activities, then our policymakers will have

464
00:29:21,120 --> 00:29:26,160
Speaker 6: to think about the economic cost and sometimes even military costs.

465
00:29:25,840 --> 00:29:27,680
Speaker 4: They'll impose on our country.

466
00:29:28,040 --> 00:29:31,240
Speaker 6: We have to get ourselves out of this predicament, and

467
00:29:31,640 --> 00:29:36,440
Speaker 6: why not do so by being consistent with something we've

468
00:29:36,480 --> 00:29:39,240
Speaker 6: told the Chinese and the rest of the world for generations,

469
00:29:39,240 --> 00:29:43,280
Speaker 6: which is the United States of America will be the

470
00:29:43,320 --> 00:29:47,760
Speaker 6: world's best friend and at times your best enemy. But

471
00:29:47,960 --> 00:29:52,440
Speaker 6: all we ask to ensure we remain friends is a

472
00:29:52,560 --> 00:29:58,120
Speaker 6: measure of reciprocity. It's a fundamental trading principle, and the

473
00:29:58,240 --> 00:30:03,960
Speaker 6: Chinese favor their own commercial vessels. The Chinese offer extensive

474
00:30:04,080 --> 00:30:07,880
Speaker 6: subsidies not only for their shipbuilding industry, but across the

475
00:30:07,920 --> 00:30:12,080
Speaker 6: board for industries they regard as strategic. So we're following

476
00:30:12,120 --> 00:30:16,320
Speaker 6: through with a long standing philosophy, and a key here

477
00:30:17,200 --> 00:30:19,840
Speaker 6: is that when we make these sorts of actions, we

478
00:30:19,920 --> 00:30:24,640
Speaker 6: do so in coordination with partners and allies. In this case,

479
00:30:25,240 --> 00:30:27,960
Speaker 6: in the last administration, the Secretary of the Navy and

480
00:30:28,000 --> 00:30:31,880
Speaker 6: the administration, we're able to unlock a significant investment which

481
00:30:31,880 --> 00:30:37,560
Speaker 6: I understand may be forthcoming in our Philadelphia Naval shipyard

482
00:30:37,600 --> 00:30:41,600
Speaker 6: from South Korea. So that's an illustration of how if

483
00:30:41,600 --> 00:30:44,600
Speaker 6: we start to get some buy in from other economies

484
00:30:44,760 --> 00:30:49,920
Speaker 6: and businesses and countries to our own shipbuilding exercise because

485
00:30:49,960 --> 00:30:53,239
Speaker 6: they too have a vested interest in our economic and

486
00:30:53,360 --> 00:30:57,600
Speaker 6: military strength, we can mitigate any blowback from China.

487
00:30:57,720 --> 00:31:01,000
Speaker 2: You sort of anticipated my next question, because one way

488
00:31:01,680 --> 00:31:05,720
Speaker 2: that you can sort of balance the goals for efficiency

489
00:31:05,880 --> 00:31:11,920
Speaker 2: and dynamic market economies alongside the national security concerns is

490
00:31:12,280 --> 00:31:15,280
Speaker 2: working with allies and countries that we trust in countries

491
00:31:15,440 --> 00:31:19,920
Speaker 2: in similar positions and et cetera. In your law, in

492
00:31:19,960 --> 00:31:24,480
Speaker 2: your proposed bill, what is the role for foreign companies

493
00:31:24,560 --> 00:31:29,440
Speaker 2: either building directly here or you know, us investment elsewhere,

494
00:31:29,560 --> 00:31:34,640
Speaker 2: but among friends, so to speak, in revitalizing this capacity,

495
00:31:34,800 --> 00:31:36,360
Speaker 2: how are allies treated?

496
00:31:36,960 --> 00:31:40,479
Speaker 7: Well, you know, we want our allies to work with

497
00:31:40,560 --> 00:31:43,160
Speaker 7: us here in the United States. You know there are

498
00:31:43,520 --> 00:31:49,360
Speaker 7: foreign shipbuilders that could build capacity here in shipyards and

499
00:31:49,400 --> 00:31:52,640
Speaker 7: be our partners. You know, that's built into the legislation.

500
00:31:53,520 --> 00:31:57,040
Speaker 7: So this could benefit our allies, and that's one of

501
00:31:57,080 --> 00:31:59,040
Speaker 7: our you know, strategic strengths as.

502
00:31:58,880 --> 00:32:02,360
Speaker 4: We actually have a China doesn't have that.

503
00:32:03,040 --> 00:32:07,560
Speaker 7: So when we develop this sort of policy, it's important

504
00:32:07,560 --> 00:32:10,400
Speaker 7: that we keep our allies in mind, and this legislation

505
00:32:10,560 --> 00:32:10,840
Speaker 7: does that.

506
00:32:27,320 --> 00:32:29,640
Speaker 1: One of the other things I'm sure people will be

507
00:32:29,680 --> 00:32:33,920
Speaker 1: curious about is the ultimate impact on cargo costs. And

508
00:32:33,960 --> 00:32:37,840
Speaker 1: as you mentioned, during the pandemic, we all experience the

509
00:32:37,880 --> 00:32:41,240
Speaker 1: frustration of not being able to buy toilet paper or

510
00:32:41,320 --> 00:32:45,000
Speaker 1: electronic goods or whatever because of empty shelves. And with

511
00:32:45,080 --> 00:32:47,960
Speaker 1: this Act, on the one hand, you're trying to expand

512
00:32:47,960 --> 00:32:52,400
Speaker 1: capacity with additional ships, which would presumably bring costs down.

513
00:32:52,720 --> 00:32:54,840
Speaker 1: But on the other hand, there are people out there,

514
00:32:55,400 --> 00:32:59,920
Speaker 1: I'm thinking specifically of Lars Jensen, shipping expert, who argue

515
00:33:00,120 --> 00:33:03,840
Speaker 1: that the ACT as currently designed would increase shipping costs

516
00:33:03,880 --> 00:33:08,040
Speaker 1: for US importers and exporters. And yeah, as we learned

517
00:33:08,080 --> 00:33:10,720
Speaker 1: during the pandemic, the cost of transporting goods is pretty

518
00:33:10,760 --> 00:33:14,920
Speaker 1: important to broader inflation. It feeds into almost everything, at

519
00:33:14,960 --> 00:33:17,640
Speaker 1: least when it comes to goods. How do you sort

520
00:33:17,680 --> 00:33:22,200
Speaker 1: of balance I guess, the additional costs of transitioning to

521
00:33:22,400 --> 00:33:26,400
Speaker 1: this new system versus ultimately trying to bring down prices.

522
00:33:27,200 --> 00:33:32,360
Speaker 6: Well, let me address that. From an economic standpoint. What

523
00:33:32,480 --> 00:33:37,880
Speaker 6: you want to establish is certainty in your economy, and

524
00:33:37,960 --> 00:33:41,160
Speaker 6: at the consumer level and the business level, you don't

525
00:33:41,200 --> 00:33:45,240
Speaker 6: want big spikes and then valleys and prices. That does

526
00:33:45,280 --> 00:33:50,520
Speaker 6: not lend itself to stability or confidence in the markets.

527
00:33:50,560 --> 00:33:53,680
Speaker 6: It makes it very difficult at the household level to

528
00:33:53,840 --> 00:33:59,040
Speaker 6: plan your expenditures. We I think all experienced a measure

529
00:33:59,080 --> 00:34:01,880
Speaker 6: of that during the pandemic, where some things were shooting

530
00:34:01,960 --> 00:34:05,040
Speaker 6: up and then other things were on discount, and it

531
00:34:05,080 --> 00:34:09,359
Speaker 6: became kind of an alternative universe. And the way we

532
00:34:09,400 --> 00:34:12,760
Speaker 6: aim to address prices, and you alluded to it, Tracy,

533
00:34:13,080 --> 00:34:16,360
Speaker 6: was by making sure we have more control under a

534
00:34:16,440 --> 00:34:19,560
Speaker 6: key uncertainty and the value chain, and that value chain

535
00:34:19,640 --> 00:34:24,400
Speaker 6: is the shipping of your products across an ocean and

536
00:34:24,440 --> 00:34:29,360
Speaker 6: that's at the export and import level, and so we

537
00:34:29,800 --> 00:34:34,160
Speaker 6: have control over that. Does that in the near term,

538
00:34:34,400 --> 00:34:40,480
Speaker 6: prior to a crisis lead to marginal premium on certain products.

539
00:34:40,520 --> 00:34:45,799
Speaker 6: It could, it could lead to a marginal increase. But

540
00:34:46,080 --> 00:34:49,080
Speaker 6: net net, you're not going to be experiencing those highs

541
00:34:49,400 --> 00:34:54,600
Speaker 6: and lows, and most importantly, you will not experience the

542
00:34:55,200 --> 00:35:01,160
Speaker 6: incredible cost of losing sovereignty, losing the ability to make

543
00:35:01,200 --> 00:35:05,680
Speaker 6: your own economic policies because of economic coercion a key

544
00:35:05,760 --> 00:35:10,160
Speaker 6: tactic of the Chinese Communist Party, or to be able

545
00:35:10,200 --> 00:35:14,200
Speaker 6: to defend your way of life through military force, because

546
00:35:14,239 --> 00:35:17,719
Speaker 6: you can't move the men and women to where they

547
00:35:17,760 --> 00:35:21,360
Speaker 6: need to go and the material and difficult circumstances. So

548
00:35:21,840 --> 00:35:27,200
Speaker 6: you know, as with other construction efforts, you know, we

549
00:35:27,360 --> 00:35:32,480
Speaker 6: build military jets here. For example, there wasn't a robust

550
00:35:32,640 --> 00:35:36,600
Speaker 6: enough consumer market in the United States to build fighter jets,

551
00:35:36,640 --> 00:35:42,160
Speaker 6: so we ask the taxpayers to front some investments so

552
00:35:42,280 --> 00:35:45,160
Speaker 6: we have the capacity to build it for a military

553
00:35:45,640 --> 00:35:48,440
Speaker 6: There's a dimension of that here as well.

554
00:35:48,520 --> 00:35:50,800
Speaker 2: I mean, I think this is a really important point.

555
00:35:50,840 --> 00:35:54,239
Speaker 2: It gets to this very sort of deep tension. Everyone

556
00:35:54,680 --> 00:35:59,000
Speaker 2: likes the idea of spare capacity, especially in the moment,

557
00:35:59,280 --> 00:36:02,520
Speaker 2: like a March twenty twenty, or a pandemic or a

558
00:36:03,200 --> 00:36:06,640
Speaker 2: theoretical war. On the other hand, you know in times

559
00:36:06,680 --> 00:36:08,480
Speaker 2: of peace or in times of health when there isn't

560
00:36:08,520 --> 00:36:11,560
Speaker 2: a pandemic, you know, it is a cost, and it's

561
00:36:11,640 --> 00:36:15,239
Speaker 2: very hard to quantify or sort of perhaps into it

562
00:36:15,440 --> 00:36:17,920
Speaker 2: the price that you're paying for this sort of you know,

563
00:36:18,400 --> 00:36:21,759
Speaker 2: potential black swan event. Just real quickly, because we didn't

564
00:36:21,800 --> 00:36:24,560
Speaker 2: touch on this, how much are you envisioning this would

565
00:36:24,600 --> 00:36:26,799
Speaker 2: cost to get to your goals? How much would be

566
00:36:26,840 --> 00:36:30,279
Speaker 2: actually allocated? And what are the funding mechanisms. I think

567
00:36:30,320 --> 00:36:33,120
Speaker 2: you mentioned some sort of trust fund, but just talk

568
00:36:33,239 --> 00:36:34,720
Speaker 2: us through the dollars aspect.

569
00:36:36,000 --> 00:36:38,480
Speaker 7: Well, this bill is paid for, I mean, it's paid

570
00:36:38,520 --> 00:36:44,800
Speaker 7: for within fees that are generated within our maritime industry.

571
00:36:44,920 --> 00:36:48,200
Speaker 7: So there's not a significant amount of like direct funding.

572
00:36:48,200 --> 00:36:50,480
Speaker 7: I don't think we have a score on it yet. Okay,

573
00:36:50,600 --> 00:36:54,680
Speaker 7: tax credits are paid for by fees that you know,

574
00:36:54,760 --> 00:36:57,640
Speaker 7: shipping companies you know, will be paying as they bring

575
00:36:57,719 --> 00:37:01,600
Speaker 7: cargo into the United States, tonnage fees and other programs

576
00:37:01,719 --> 00:37:05,040
Speaker 7: like that. So in some ways I'd say it's different

577
00:37:05,320 --> 00:37:08,239
Speaker 7: than the Chips and Science Act in that regard and

578
00:37:08,280 --> 00:37:10,440
Speaker 7: how these things are paid for.

579
00:37:10,920 --> 00:37:16,160
Speaker 1: How confident are you of pushing this proposal through because

580
00:37:16,320 --> 00:37:18,680
Speaker 1: you know, on the one hand, it has bipartisan support,

581
00:37:18,800 --> 00:37:21,120
Speaker 1: and there are a lot of things you can say

582
00:37:21,160 --> 00:37:23,960
Speaker 1: that about nowadays. But on the other hand, a lot

583
00:37:24,000 --> 00:37:26,360
Speaker 1: of the focus of the new administration seems to be

584
00:37:26,560 --> 00:37:30,440
Speaker 1: on dismantling various things or making things more efficient versus

585
00:37:30,560 --> 00:37:32,920
Speaker 1: actually building new stuff.

586
00:37:34,360 --> 00:37:37,320
Speaker 6: Well, I can as a Republican, I can tell you

587
00:37:37,600 --> 00:37:43,400
Speaker 6: that President Trump likes to build things. He likes beautiful things.

588
00:37:44,080 --> 00:37:49,520
Speaker 6: He likes to create jobs, manufacturing jobs. He especially likes

589
00:37:49,600 --> 00:37:55,799
Speaker 6: the opportunity to create more manufacturing jobs in the industrial Midwest,

590
00:37:56,160 --> 00:37:59,520
Speaker 6: a place that loves President Trump. And there will be

591
00:37:59,640 --> 00:38:04,920
Speaker 6: compos of these ships, if not additional shipyards brought to

592
00:38:05,000 --> 00:38:10,520
Speaker 6: bear on this national and economic security challenge. And he's

593
00:38:10,880 --> 00:38:15,239
Speaker 6: enlisted the help already in his national security team of

594
00:38:15,520 --> 00:38:20,879
Speaker 6: key individuals who are fully supportive of this effort, one

595
00:38:21,000 --> 00:38:24,839
Speaker 6: being a friend of Mark Kelly's, Mike Waltz, who is

596
00:38:24,880 --> 00:38:28,640
Speaker 6: now the National Security Advisor. He's bought into this vision

597
00:38:28,760 --> 00:38:32,040
Speaker 6: in the past as a member of Congress. Another is

598
00:38:32,600 --> 00:38:37,399
Speaker 6: Jerry Hendrix, who Mark also knows happens to be from

599
00:38:37,400 --> 00:38:41,560
Speaker 6: my state. Jerry is a supply chain expert with particular

600
00:38:41,640 --> 00:38:45,720
Speaker 6: expertise in shipbuilding and spent a career in the Navy,

601
00:38:45,840 --> 00:38:49,640
Speaker 6: and he's bought into this sort of vision. So we

602
00:38:49,719 --> 00:38:53,319
Speaker 6: have some key allies and surrogates who can help us

603
00:38:53,360 --> 00:38:57,560
Speaker 6: make the case. It's never easy during times like these,

604
00:38:57,640 --> 00:39:03,400
Speaker 6: when we Republicans, I think are rightly focused on fiscal responsibility,

605
00:39:03,480 --> 00:39:06,239
Speaker 6: which I don't want to suggest Mark doesn't care about either.

606
00:39:06,320 --> 00:39:11,120
Speaker 6: He does, but we are warm to making our military

607
00:39:11,200 --> 00:39:14,440
Speaker 6: more effective and this is an important way to do so.

608
00:39:14,960 --> 00:39:16,840
Speaker 7: And Tracy, I think there's going to be a tremendous

609
00:39:16,880 --> 00:39:19,600
Speaker 7: amount of enthusiasm for this legislation. It's the kind of

610
00:39:19,640 --> 00:39:23,040
Speaker 7: thing that works on both sides of the aisle. You know,

611
00:39:23,080 --> 00:39:28,800
Speaker 7: we all realize that China is an adversary. President Shei,

612
00:39:29,239 --> 00:39:32,680
Speaker 7: the Chinese president, has said things that are rather aggressive

613
00:39:32,880 --> 00:39:36,440
Speaker 7: in the past. We've got to rebuild this industry. We

614
00:39:36,480 --> 00:39:39,440
Speaker 7: are a maritime nation. We've got water on both sides.

615
00:39:39,960 --> 00:39:40,160
Speaker 4: You know.

616
00:39:40,200 --> 00:39:44,720
Speaker 7: The Chinese have this vision of being a worldwide naval

617
00:39:44,760 --> 00:39:48,759
Speaker 7: and maritime power. They're building more naval ships than we

618
00:39:48,840 --> 00:39:50,480
Speaker 7: are every single year.

619
00:39:50,600 --> 00:39:52,040
Speaker 4: They're building more submarines.

620
00:39:52,640 --> 00:39:54,880
Speaker 7: We've got to get this back on track, and this

621
00:39:55,000 --> 00:39:57,439
Speaker 7: legislation is going to be a part of the thing

622
00:39:57,480 --> 00:40:00,880
Speaker 7: that we need to do. A big part actually to

623
00:40:00,920 --> 00:40:04,239
Speaker 7: turn this well, since I'm a Navy guy, to turn

624
00:40:04,280 --> 00:40:05,720
Speaker 7: this like aircraft.

625
00:40:05,239 --> 00:40:08,319
Speaker 4: Carry around take some time. It's a big part of this.

626
00:40:08,680 --> 00:40:11,520
Speaker 7: But unfortunately I've got to go, so I want to

627
00:40:11,560 --> 00:40:12,279
Speaker 7: wrap this up.

628
00:40:12,160 --> 00:40:12,600
Speaker 4: Here with you.

629
00:40:12,640 --> 00:40:15,640
Speaker 7: I appreciate your interest in this. You know, Todd and

630
00:40:15,680 --> 00:40:18,080
Speaker 7: I have been working on this for some time. Todd

631
00:40:18,120 --> 00:40:22,480
Speaker 7: mentioned Mike Waltz originally when this started. It was because

632
00:40:22,520 --> 00:40:25,920
Speaker 7: we had a common interest in this topic. He's now

633
00:40:26,360 --> 00:40:29,960
Speaker 7: the President's National Security Advisor, so we know at least

634
00:40:30,000 --> 00:40:31,880
Speaker 7: in his office there's a lot of interest in getting

635
00:40:31,880 --> 00:40:36,120
Speaker 7: this done. So I'm incredibly excited about getting this across

636
00:40:36,120 --> 00:40:38,920
Speaker 7: the finish line. We're going to reintroduce this soon in

637
00:40:39,000 --> 00:40:42,240
Speaker 7: this Congress, and then Todd and I in the Senate

638
00:40:42,440 --> 00:40:47,600
Speaker 7: and Representative Kelly in the House and Representative Garymandi, We're

639
00:40:47,640 --> 00:40:50,200
Speaker 7: all going to work together to get more co sponsors

640
00:40:50,200 --> 00:40:52,360
Speaker 7: to go through the process of getting this across the place.

641
00:40:52,440 --> 00:40:55,920
Speaker 2: Life Senators Mark Kelly and Todd Young, thank you so

642
00:40:56,040 --> 00:40:59,279
Speaker 2: much for coming on online. There was fantastic Thanks.

643
00:40:59,040 --> 00:41:03,560
Speaker 7: For having us write it.

644
00:41:13,040 --> 00:41:17,000
Speaker 2: Tracy A. I really enjoyed that conversation. B You're gonna

645
00:41:17,000 --> 00:41:18,800
Speaker 2: make fun of me because of how boomer I'm getting.

646
00:41:18,920 --> 00:41:21,160
Speaker 2: Like when like when you just want to build the

647
00:41:21,160 --> 00:41:24,360
Speaker 2: big Yeah, like Senator Kelly starts like a Virginia Class

648
00:41:24,400 --> 00:41:26,799
Speaker 2: submarines and stuff like that. I get the hair on

649
00:41:26,840 --> 00:41:29,080
Speaker 2: my arm picks up. You know, I get excited about

650
00:41:29,120 --> 00:41:29,560
Speaker 2: stuff like that.

651
00:41:29,600 --> 00:41:30,520
Speaker 5: They are cool things.

652
00:41:30,640 --> 00:41:31,040
Speaker 4: You know what.

653
00:41:31,160 --> 00:41:34,200
Speaker 1: I was rewatching Pretty Woman the other day, Yeah, and

654
00:41:34,360 --> 00:41:37,200
Speaker 1: I realized I had an epiphany. It's actually it's all

655
00:41:37,200 --> 00:41:40,840
Speaker 1: about shipbuilding. Yeah, right, that one guy wants to build

656
00:41:40,840 --> 00:41:43,840
Speaker 1: ships and Richard Gear ultimately has it come to Jesus

657
00:41:43,960 --> 00:41:47,200
Speaker 1: moment and decides to build them with him rather than

658
00:41:47,200 --> 00:41:50,840
Speaker 1: dismantling the company. So you know, shipbuilding is part of

659
00:41:50,880 --> 00:41:51,719
Speaker 1: the American jury.

660
00:41:51,880 --> 00:41:55,279
Speaker 2: I mean it literally, it literally is. And you know,

661
00:41:55,480 --> 00:41:58,920
Speaker 2: I actually really liked this conversation for many reasons. But

662
00:41:59,040 --> 00:42:02,000
Speaker 2: one it's sort of like gets down to some core

663
00:42:02,320 --> 00:42:05,799
Speaker 2: economic philosophical questions. And I remember, I think it was

664
00:42:05,920 --> 00:42:09,480
Speaker 2: spring of last year we did that conversation with Christian

665
00:42:09,480 --> 00:42:14,560
Speaker 2: Parente about Alexander Hamilton's Treaty or Treatise on Manufactures and

666
00:42:14,680 --> 00:42:18,239
Speaker 2: this idea that I think there's two things. A that

667
00:42:18,320 --> 00:42:21,200
Speaker 2: a country that can't build things is a country whose

668
00:42:21,239 --> 00:42:24,200
Speaker 2: sovereignty is really in doubt. I think is a really

669
00:42:24,280 --> 00:42:26,640
Speaker 2: just like core idea, And it's interesting to hear them

670
00:42:26,760 --> 00:42:30,560
Speaker 2: articulate this. And then this idea that, yeah, the US

671
00:42:30,680 --> 00:42:35,080
Speaker 2: economy is largely governed, so to speak, by the profit

672
00:42:35,160 --> 00:42:40,040
Speaker 2: principle and maximum efficiency, and it's cheaper to ship goods

673
00:42:40,560 --> 00:42:46,000
Speaker 2: on foreign owned ships, particularly if foreign governments are subsidizing

674
00:42:46,120 --> 00:42:49,440
Speaker 2: those ships, which means it's a de facto subsidy to

675
00:42:49,560 --> 00:42:52,920
Speaker 2: American consumers. But then the idea of okay, well, if

676
00:42:52,960 --> 00:42:55,960
Speaker 2: that ultimately long term puts us in a position where

677
00:42:56,000 --> 00:42:58,799
Speaker 2: our sovereignty is threatened. It's not just ships, it's obviously

678
00:42:59,080 --> 00:43:02,480
Speaker 2: things like semi cans and really many other things, then

679
00:43:02,520 --> 00:43:04,879
Speaker 2: you have to think about what is the price you're

680
00:43:04,920 --> 00:43:09,000
Speaker 2: going to pay for avoiding some tail risk, which is

681
00:43:09,040 --> 00:43:10,120
Speaker 2: really hard to measure down the.

682
00:43:10,120 --> 00:43:12,439
Speaker 1: Road, There is certainly a tension there.

683
00:43:12,640 --> 00:43:12,879
Speaker 4: Yeah.

684
00:43:12,920 --> 00:43:16,359
Speaker 1: The other thing I would say is it's interesting to

685
00:43:16,400 --> 00:43:21,040
Speaker 1: me how much this lines up with very traditional Knesian economics,

686
00:43:21,120 --> 00:43:24,279
Speaker 1: right in the sense that Kines argued that there's a

687
00:43:24,360 --> 00:43:27,040
Speaker 1: role for government to smooth economic cycles.

688
00:43:27,120 --> 00:43:28,959
Speaker 5: Yes, and we're talking about.

689
00:43:28,640 --> 00:43:35,520
Speaker 1: An extremely cyclical industry that's famous for boombust periods, and so,

690
00:43:35,880 --> 00:43:38,960
Speaker 1: you know, coming at it from that perspective, the idea

691
00:43:38,960 --> 00:43:41,879
Speaker 1: of the government being a sort of like smooth the

692
00:43:41,920 --> 00:43:43,799
Speaker 1: cycle actor makes some sense.

693
00:43:43,920 --> 00:43:44,720
Speaker 5: Well, this is interesting.

694
00:43:44,760 --> 00:43:47,640
Speaker 2: I've been, you know, trying to read more about defense

695
00:43:48,160 --> 00:43:51,440
Speaker 2: history and about defense procurement, and this is one of

696
00:43:51,480 --> 00:43:54,520
Speaker 2: the arguments that the big defense giants have always made

697
00:43:54,520 --> 00:43:56,840
Speaker 2: in the past, which is, you know, you can't just

698
00:43:57,360 --> 00:44:00,800
Speaker 2: have their argument, and I find it there's some logic

699
00:44:00,840 --> 00:44:03,160
Speaker 2: behind it. You know, you can't just have big orders

700
00:44:03,200 --> 00:44:06,760
Speaker 2: come in during war and then all the orders go away,

701
00:44:07,880 --> 00:44:10,200
Speaker 2: you know, after the war is over, and then you know,

702
00:44:10,239 --> 00:44:13,279
Speaker 2: everyone gets a different job and the factories are dismantled

703
00:44:13,320 --> 00:44:16,799
Speaker 2: and stuff, because then, you you know, you lose that

704
00:44:16,920 --> 00:44:17,880
Speaker 2: institutional memory.

705
00:44:18,200 --> 00:44:21,160
Speaker 1: This is how the Jones Act happened. So after the

706
00:44:21,200 --> 00:44:23,560
Speaker 1: First World War, we had a surplus of ships, and

707
00:44:23,640 --> 00:44:26,279
Speaker 1: so everyone was like, well, we'll just restrict it to

708
00:44:26,440 --> 00:44:29,320
Speaker 1: US owned ships and everything will be fine. And then

709
00:44:29,560 --> 00:44:33,239
Speaker 1: you know, fast forward like one hundred years and we

710
00:44:33,280 --> 00:44:34,800
Speaker 1: don't have that surplus anymore.

711
00:44:35,400 --> 00:44:37,480
Speaker 2: This is a really good topic for us. We should

712
00:44:37,480 --> 00:44:38,040
Speaker 2: do more on this.

713
00:44:38,200 --> 00:44:39,680
Speaker 1: Do you like how I brought it full service?

714
00:44:39,800 --> 00:44:42,040
Speaker 5: Yes to the Jones well done? Yeah, thank you.

715
00:44:42,120 --> 00:44:44,080
Speaker 2: And one day we're going to do a Jones Act episode.

716
00:44:44,160 --> 00:44:45,400
Speaker 4: We will. There's a long.

717
00:44:45,280 --> 00:44:49,040
Speaker 2: Recurring joke that we've never done a Jones Act episode.

718
00:44:49,320 --> 00:44:50,400
Speaker 5: All right, shall we leave it there?

719
00:44:50,480 --> 00:44:51,200
Speaker 2: Let's leave it there.

720
00:44:51,400 --> 00:44:54,080
Speaker 1: This has been another episode of the All Thoughts Podcast.

721
00:44:54,160 --> 00:44:57,680
Speaker 1: I'm Tracy Alloway. You can follow me at Tracy Alloway.

722
00:44:57,400 --> 00:44:59,919
Speaker 2: And I'm Joe Wisenthal. You can follow me at the Stall.

723
00:45:00,480 --> 00:45:04,160
Speaker 2: Follow our guests Indiana Senator Todd Young, He's at Senn

724
00:45:04,320 --> 00:45:08,400
Speaker 2: Todd Young. Follow Senator Mark Kelly at sen Mark Kelly.

725
00:45:08,640 --> 00:45:11,680
Speaker 2: Follow our producers Kerman Rodriguez at Kerman Arman, dash Ol

726
00:45:11,680 --> 00:45:15,520
Speaker 2: Bennett at Dashbot and Kilbrooks at Kilbrooks. More odd Laws

727
00:45:15,560 --> 00:45:18,319
Speaker 2: content go to Bloomberg dot com slash odd Lots, where

728
00:45:18,320 --> 00:45:20,799
Speaker 2: we have transcripts, a blog, and a newsletter and you

729
00:45:20,800 --> 00:45:22,840
Speaker 2: can chat about all of these topics twenty four to

730
00:45:22,840 --> 00:45:26,800
Speaker 2: seven in our discord discord dot gg slash odlts.

731
00:45:27,080 --> 00:45:29,799
Speaker 1: And if you enjoy listening to odd Lots, if you

732
00:45:30,239 --> 00:45:33,160
Speaker 1: like Joe, get goosebumps when we talk about building big

733
00:45:33,200 --> 00:45:36,040
Speaker 1: ships then please leave us a positive review on your

734
00:45:36,080 --> 00:45:40,520
Speaker 1: favorite podcast platform. And remember, if you are a Bloomberg subscriber,

735
00:45:40,600 --> 00:45:43,040
Speaker 1: you can listen to all of our episodes.

736
00:45:42,640 --> 00:45:43,920
Speaker 5: Absolutely ad free.

737
00:45:44,080 --> 00:45:46,160
Speaker 1: All you need to do is find the Bloomberg channel

738
00:45:46,200 --> 00:45:48,879
Speaker 1: on Apple Podcasts and follow the instructions there.

739
00:45:49,280 --> 00:46:00,960
Speaker 5: Thanks for listening

740
00:46:06,840 --> 00:46:06,880
Speaker 7: In