WEBVTT - Surveillance: Stimulus Talks With Kudlow 0:00:09.840 --> 0:00:12.960 Welcome to the Bloomberg Surveillance Podcast and I'm Tom Keene 0:00:13.480 --> 0:00:17.560 Jay Lee. We bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.480 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:27.360 Bloomberg dot com, and of course on the Bloomberg, on 0:00:27.360 --> 0:00:30.000 Bloomberg Television and on radio on police to say, it's 0:00:30.000 --> 0:00:33.159 an Ay cud Low National Economic Council Director, Larry. I 0:00:33.200 --> 0:00:36.200 appreciate your time this morning, sir, so thank you. Let's 0:00:36.200 --> 0:00:39.680 start with that stimulus conversation, the latest update, please, Larry, 0:00:39.720 --> 0:00:44.080 where are we well? The ball is not moving much 0:00:44.200 --> 0:00:46.960 right now. I mean, the two sides are still talking 0:00:47.800 --> 0:00:51.080 and the committee chairs in the Senate and House, the 0:00:51.120 --> 0:00:56.279 relevant committees, they're talking on a lot of these issues appropriations, 0:00:56.320 --> 0:00:58.920 small business, banking and so forth and so on. So 0:00:59.600 --> 0:01:02.040 there's a that's a good thing. On the other hand, 0:01:02.080 --> 0:01:05.959 there's still policy issues that divide the two times the 0:01:06.000 --> 0:01:09.959 two teams. UM President mentioned some of them last night. Uh, 0:01:10.120 --> 0:01:12.959 he doesn't want to bail out poorly run states and 0:01:13.000 --> 0:01:16.120 local governments and their pension funds and so forth, So 0:01:16.200 --> 0:01:20.600 that's an issue. There are other policy issues that remain unresolved. 0:01:20.959 --> 0:01:23.759 So it's very difficult. The clock is taking, as you know, 0:01:24.560 --> 0:01:28.039 be very difficult. Um, even if you had a deal 0:01:28.120 --> 0:01:30.560 the next few days, you've got to go through the 0:01:30.600 --> 0:01:32.840 committee print and then you've got to have votes in 0:01:32.880 --> 0:01:35.200 the House and the Senate. So it's not gonna be easy. 0:01:35.400 --> 0:01:38.039 I don't want to predict anything. I'm just saying, Uh, 0:01:38.080 --> 0:01:41.520 there's more agreement than there was a while back. There 0:01:41.520 --> 0:01:47.119 are still policy disagreements, UM, some numerical disagreements. So we'll 0:01:47.120 --> 0:01:50.120 see it's still up for grabs. Well, let's stop with 0:01:50.160 --> 0:01:53.520 numerical then we get to substance, Larry, what numerical disagreement 0:01:53.560 --> 0:01:59.520 is the right now? Well, I think that in specific areas. 0:01:59.600 --> 0:02:02.520 I mean, I'm not going to get involved in negotiating 0:02:02.840 --> 0:02:08.679 Jonathan this morning, but in specific areas there are numerical issues. Now. 0:02:08.720 --> 0:02:13.520 President Trump, for example, has said, for let's say the checks, 0:02:13.840 --> 0:02:17.800 the mailed out checks for economic assistance. Uh, he's willing 0:02:17.840 --> 0:02:20.880 to bid higher on that. He has no problem. Uh, 0:02:20.960 --> 0:02:23.119 he's willing to go with P p P for these 0:02:23.160 --> 0:02:27.760 small businesses, Uh, no problem. He's willing to help the airlines, 0:02:28.400 --> 0:02:32.000 no problem on that score. He's always been willing to 0:02:32.040 --> 0:02:35.400 do these things. He's willing to help the schools as 0:02:35.440 --> 0:02:39.440 they of course transition and renovate, to make school openings 0:02:39.840 --> 0:02:42.960 UH safe and you know, cover the health guidelines. He's 0:02:42.960 --> 0:02:45.480 willing to do that. He's not willing, though, to pour 0:02:45.600 --> 0:02:51.560 lots of money into various healthcare schemes that might benefit 0:02:51.600 --> 0:02:54.360 folks who are not US citizens. He has a big 0:02:54.400 --> 0:02:57.400 problem with that. I just mentioned some of the state 0:02:57.400 --> 0:03:00.919 and local issues and the pension issue, and there are 0:03:01.000 --> 0:03:04.440 other issues at stake. UM. One thing that's interesting that's 0:03:04.480 --> 0:03:08.840 come up UM in the in the Munition Secretary munition 0:03:08.960 --> 0:03:13.200 proposal called the Republican Proposal. We are very much we're 0:03:13.320 --> 0:03:17.640 keen on on shoring for all kinds of supply chains, 0:03:17.680 --> 0:03:22.280 including pharmaceuticals and related equipment. That's very dar and important, 0:03:22.639 --> 0:03:25.799 and we would like to reward companies that either come 0:03:25.840 --> 0:03:28.280 to the US for the first time or moved back 0:03:28.360 --> 0:03:32.120 from China or wherever. So we proposed investment tax credits. 0:03:32.240 --> 0:03:36.080 Apparently the other side doesn't like that. We've also proposed 0:03:36.080 --> 0:03:42.040 deductions for restaurant meals and other forms of hospitality and entertainment. 0:03:42.160 --> 0:03:45.720 Apparently the numbers there are sticking points, so I can't 0:03:45.760 --> 0:03:49.080 go through the entire list. I'm just gonna say, still issues. 0:03:50.360 --> 0:03:52.280 I think many people feel like we're just going around 0:03:52.280 --> 0:03:54.960 in circles at the moment, Larryous, we drift towards the election. 0:03:55.200 --> 0:03:57.680 One question that's being asked by by many, in fact, 0:03:57.760 --> 0:04:00.520 is whether both sides are negotiating and good faith. Now, 0:04:00.640 --> 0:04:02.280 of course you're not gonna say that about yourself, but 0:04:02.320 --> 0:04:03.720 I do want to do you think the other side 0:04:03.760 --> 0:04:06.000 is nicko shanning and good faith? Do you think speak 0:04:06.040 --> 0:04:08.480 Speaker Pelosi is negoshanning and good faithful? Or is this 0:04:08.600 --> 0:04:12.720 just political postering with Eleven Diace to go, Well, look, 0:04:13.280 --> 0:04:17.480 I'm not a political analyst. Uh. I don't do personal stuff. 0:04:17.520 --> 0:04:20.480 I can't get into everybody's said. I'm just gonna assume 0:04:20.960 --> 0:04:23.880 that we've been at this since July or mid July, 0:04:24.600 --> 0:04:26.800 that there is good faith at this point. I'm not 0:04:26.839 --> 0:04:30.800 even sure what that means. Look, there's very hard headed, 0:04:31.200 --> 0:04:36.160 experienced professional people engaged in the discussions. There are veterans, 0:04:36.279 --> 0:04:40.240 all right. Speaker Pelosi is a veteran. UH. Mr Mnusian 0:04:40.520 --> 0:04:43.000 is a terrific money man. He knows the budget story 0:04:43.279 --> 0:04:47.320 up and down, including taxes. UH. Senator McConnell is a 0:04:47.480 --> 0:04:51.960 very crafty, wiley veteran in these games. So they are engaged, 0:04:52.000 --> 0:04:55.360 they are talking, Jonathan, and I will ascribe how about this, 0:04:55.720 --> 0:04:58.280 I will ascribe good faith to all sides. I'm not 0:04:58.320 --> 0:05:00.599 going to pick away on that. Let just see that 0:05:00.800 --> 0:05:04.760 the President's done that for you. Sure. Well, Look the 0:05:04.760 --> 0:05:08.200 President said yesterday evening Nancy Pelosi doesn't want to approve 0:05:08.240 --> 0:05:11.280 anythink because she thinks it will help her politically. Not 0:05:11.360 --> 0:05:14.840 too well. I'll leave that to the president. That's his view. 0:05:14.880 --> 0:05:17.479 That's his view, and I don't have a I don't 0:05:17.480 --> 0:05:19.599 have I'm a policy guy, Jonathan, I don't have a 0:05:19.680 --> 0:05:22.600 view on that. I appreciate that. All I all I 0:05:22.640 --> 0:05:25.279 want to say is this. We are in a very 0:05:25.360 --> 0:05:28.520 very strong recovery. The v shape recovery is coming on 0:05:28.920 --> 0:05:32.360 very strong. We had phenomenal numbers yesterday on following on 0:05:32.480 --> 0:05:37.720 employment clients and rising existing home sales um. But there 0:05:37.720 --> 0:05:41.120 are areas of this economy that could benefit from assistance. 0:05:41.440 --> 0:05:45.000 I acknowledge that I don't think the recovery depends on assistance, 0:05:45.320 --> 0:05:49.600 but the p PP lending for small businesses would be 0:05:49.760 --> 0:05:53.279 very helpful. UH. President Trump took the lead awhile back 0:05:53.520 --> 0:05:58.680 on providing UH federal unemployment assistance by an executive order 0:05:59.080 --> 0:06:01.160 with a plus am the states. It would be very 0:06:01.240 --> 0:06:05.200 helpful if Congress appropriated that in some form a way. 0:06:05.360 --> 0:06:09.560 There's unspent funds all over the place from last Springs Bill. 0:06:10.360 --> 0:06:14.280 Why not repurpose that and legislated put it in you know, codified. 0:06:14.520 --> 0:06:17.359 It's not forever. It might be three months or six months. 0:06:17.400 --> 0:06:20.679 That could help Americans. We need the airlines. That could 0:06:20.680 --> 0:06:24.360 help the economy, put people back to work, get kids 0:06:24.360 --> 0:06:27.599 back to school. So I just, you know, sometimes thinks 0:06:27.760 --> 0:06:32.320 instead of these two thousand page bills with gargan numbers, 0:06:32.600 --> 0:06:37.039 why not just have you know, separate votes on specific items. 0:06:37.080 --> 0:06:41.920 That's the way appropriations used to be many decades. I 0:06:41.920 --> 0:06:43.800 have to have to say, you sound a lot more 0:06:43.839 --> 0:06:46.400 like a Senate Republican than you do a member of 0:06:46.400 --> 0:06:49.479 this administration, because that sounds like the position of Leader 0:06:49.560 --> 0:06:52.599 McConnell when you say the V shaped economy is coming 0:06:52.640 --> 0:06:55.839 on very strong. If I'm a Senate Republican right now, 0:06:56.160 --> 0:06:58.680 I'm wondering, Okay, if marries right, why do we need 0:06:58.720 --> 0:07:01.120 a two trillion dollar package? The V shaped recovery is 0:07:01.120 --> 0:07:06.159 coming along very strong? Why do we well, let me say. 0:07:06.440 --> 0:07:10.080 I have many many friends amongst center Republicans, and I 0:07:10.160 --> 0:07:13.280 speak at their breakfast at lunches all the time. But 0:07:13.440 --> 0:07:17.040 I am uh the NYC director for President Trump, who 0:07:17.120 --> 0:07:20.200 has given me a great opportunity, uh, and I'm doing 0:07:20.240 --> 0:07:22.680 my best to help him out on all these issues. 0:07:22.920 --> 0:07:26.120 So don't don't suggest that I'm on one side for another. 0:07:26.360 --> 0:07:30.160 By the way, well, Larry, you give me just the 0:07:30.160 --> 0:07:34.120 president's position, and at the moment, there is no deal 0:07:34.160 --> 0:07:37.480 life between the president's position. In mind, I support him entirely. 0:07:37.520 --> 0:07:41.160 I'm giving you his thoughts on why the numbers don't 0:07:41.160 --> 0:07:44.080 add up and why these policies don't yet work. That's 0:07:44.120 --> 0:07:46.160 the best I can do. I'm not going to predict 0:07:46.160 --> 0:07:49.840 an outcomes, Ouathan, Yes, maybe no, maybe. I mean, I'm 0:07:49.880 --> 0:07:51.720 not here to do that. I just give you a 0:07:51.800 --> 0:07:55.800 lay of the land, and I appreciate you doing that. 0:07:55.880 --> 0:07:57.680 Did lead the McConnell's how the White House not to 0:07:57.720 --> 0:08:01.320 accept a deal, I I am not aware of that. 0:08:01.560 --> 0:08:05.080 I am not aware of that, because reportedly he told 0:08:05.120 --> 0:08:07.720 colleagues that he had told the White House to exactly that, 0:08:07.800 --> 0:08:10.920 not to accept the deal. The president seems to according 0:08:10.920 --> 0:08:13.240 to Chief of Staff Mark Meadows that he can lean 0:08:13.280 --> 0:08:15.960 on Senate Republicans, and from where I'm sitting and where 0:08:15.960 --> 0:08:17.920 others are as well, it doesn't seem to be any 0:08:17.920 --> 0:08:19.960 evidence of that, Larry, Why the confidence that you can 0:08:20.040 --> 0:08:23.400 lean on Senate Republicans to possibile that big What I've 0:08:23.400 --> 0:08:28.160 heard from the President we are a long meeting Wednesday. 0:08:29.160 --> 0:08:32.440 What I've heard from Chief Meadows and what I've heard 0:08:32.480 --> 0:08:39.800 from Secretary Minution is that Leader McConnell and the GOP 0:08:40.120 --> 0:08:44.960 conference in this Senate would be willing to support a 0:08:45.120 --> 0:08:51.560 bill as long as it is a genuinely by partisan 0:08:51.679 --> 0:08:56.280 bill and that their asks are included. For example, we 0:08:56.360 --> 0:09:01.640 haven't talked about liability insurance. That is a controversial matter 0:09:02.000 --> 0:09:05.480 with the House team, but it's an important key ask 0:09:05.840 --> 0:09:10.000 for the Senate Republicans. If there's a genuinely bipartisan bill. 0:09:10.720 --> 0:09:13.640 Leader McConnell has said, uh, and I've heard it from 0:09:13.640 --> 0:09:17.760 the President Mark Meadows notion, Um, they go along with it. 0:09:17.880 --> 0:09:20.240 So I'll just leave it there. I can't speak for once, 0:09:20.280 --> 0:09:22.880 I can't speak for Mr McConnell, but I'm just saying 0:09:22.960 --> 0:09:27.240 that's what i've heard onlinability protection. Have you made any 0:09:27.240 --> 0:09:32.200 progress whatsoever in the last month with House Democrats. Jonathan, 0:09:32.280 --> 0:09:34.520 I'm not going to get involved in that sort of thing. 0:09:34.800 --> 0:09:37.080 You know. I can't do that. I'm not gonna again. 0:09:37.120 --> 0:09:39.040 We not, Larry. I mean, you've you've given me enough 0:09:39.160 --> 0:09:41.240 information so far on how the talks are going. I'm 0:09:41.240 --> 0:09:43.160 just trying to work out whether you've made any progress 0:09:43.160 --> 0:09:44.720 on that particular topic. And it seems to be a 0:09:44.760 --> 0:09:48.600 huge sticking point for negotiations. Because you're such a great 0:09:48.679 --> 0:09:51.240 journalist and I'd love to give you as much information 0:09:51.280 --> 0:09:56.920 as possible, but I cannot include you in the negotiations. Larry, 0:09:56.960 --> 0:09:59.400 what's the plan? B Once you walk away, You've seen 0:09:59.400 --> 0:10:02.679 this a million times. At some point you realize nothing 0:10:02.679 --> 0:10:07.960 gets done. Well, look, we have an election in what 0:10:08.200 --> 0:10:12.640 eleven days? Yeah, the clock is ticking. The clock is ticking. 0:10:13.400 --> 0:10:18.440 I mean, just mechanically, mechanically, it takes a while. You've 0:10:18.480 --> 0:10:22.120 got to vote in both houses. You might have to 0:10:22.160 --> 0:10:24.840 have a conference vote. Now, that could be done fast, 0:10:24.920 --> 0:10:27.679 but you know, we take it there too. Just writing 0:10:27.800 --> 0:10:31.840 up the legislative print of a two thousand plus page 0:10:31.880 --> 0:10:35.320 bill takes time. And then you have the issue of 0:10:35.360 --> 0:10:41.559 the operational executions. All right, Uh, I don't know that 0:10:41.559 --> 0:10:46.760 that could be done, mailing checks, re engaging the lending 0:10:46.800 --> 0:10:50.920 programs for small businesses. Um, we would do the best 0:10:51.000 --> 0:10:53.680 we can. Secretary Munition did a heck of a job 0:10:53.800 --> 0:10:57.120 last spring, but I don't know between now and the election, 0:10:57.800 --> 0:11:02.640 So those are still dangling in the air. Well, Larry, 0:11:02.679 --> 0:11:04.040 if you can't get it done now, and this is 0:11:04.080 --> 0:11:06.040 my final question, you've given us so much time this morning, 0:11:06.040 --> 0:11:08.360 and I appreciate that, thank you. It doesn't look like 0:11:08.360 --> 0:11:10.320 you've made a lot of progress on state aid. It 0:11:10.320 --> 0:11:12.480 doesn't look like you've made a lot of progression on 0:11:12.520 --> 0:11:15.280 liability protections. You can't confirm or tonight that right now. 0:11:15.960 --> 0:11:17.800 If you can't get us done in the next eleven days, 0:11:18.280 --> 0:11:23.079 why would you be able to get this done before January. Well, 0:11:23.520 --> 0:11:26.400 we're gonna take this a day at a time. The 0:11:26.400 --> 0:11:31.920 election results well undoubtedly bear heavilyer on this. And remember, 0:11:31.920 --> 0:11:34.400 of course, the Congress is still in session. There's a 0:11:34.400 --> 0:11:37.839 so called lane duck session that will come up. You've 0:11:37.840 --> 0:11:41.400 got a judicial vote coming I believe next week. With 0:11:41.480 --> 0:11:44.880 respect him, Miss Barrett, highly qualified, terrific candidate for the 0:11:44.920 --> 0:11:50.400 Supreme Court. So it's tricky business, and the clock is ticking, 0:11:50.520 --> 0:11:52.920 so we will see. I don't want to make any predictions. 0:11:53.120 --> 0:11:56.400 What I do know is this, Jonathan, the economy is 0:11:56.520 --> 0:12:01.319 running faster and hotter than almost any but he thought possible. 0:12:01.559 --> 0:12:06.040 And as President Trump said last night with great clarity, 0:12:06.120 --> 0:12:10.040 he is not going to allow tax hikes or regulatory hikes. 0:12:10.080 --> 0:12:14.679 He's for lowering taxes and regulation. He completely opposes a 0:12:14.840 --> 0:12:19.000 government takeover of healthcare. He completely opposes an end to 0:12:19.120 --> 0:12:23.199 oil and natural gas, which would be devastating for the economy. 0:12:23.480 --> 0:12:28.160 You've got economists, distinguished economists at the Hoover Institute, Stanford, 0:12:28.280 --> 0:12:31.320 who say those policy would lose ten percent of g 0:12:31.440 --> 0:12:35.480 d P five million jobs. Middle class families with the 0:12:36.720 --> 0:12:40.400 dollars their whole increase under Trump, which was a record increase. 0:12:40.800 --> 0:12:44.560 That's what the president opposes. He doesn't see a dark winner. 0:12:45.160 --> 0:12:50.440 He's he's an optimistic recovery and prosperity. Uh. The other 0:12:50.520 --> 0:12:54.120 team looks to me like very pessimism and a stagnation, 0:12:54.640 --> 0:12:58.680 uh decline scenario. Those came out in the debate last night, 0:12:58.880 --> 0:13:01.800 and I think that it's gonna bear heavily on November 0:13:01.800 --> 0:13:05.160 as results. Larry, if I was leading McConnell right now, 0:13:05.200 --> 0:13:07.360 here and you talk about the hot economy, I'd be 0:13:07.400 --> 0:13:09.480 asking why on earth do we need a two trillion 0:13:09.520 --> 0:13:11.680 dollar package. Larry, It's great to catch up with you 0:13:11.880 --> 0:13:13.599 as always, and I appreciate your time this morning and 0:13:13.600 --> 0:13:16.360 hopefully we can catch up on payrolls Friday after the election. 0:13:16.400 --> 0:13:20.360 Sir Larry Catlo, National Economic Council Director, A special thanks, 0:13:20.360 --> 0:13:28.400 of course, also to Bloomberg Radio listeners as well. So 0:13:28.480 --> 0:13:31.920 if you have any interest in hydrocarbons, any interest in 0:13:31.960 --> 0:13:34.880 the future of this great debate, not out to November, 0:13:34.960 --> 0:13:38.080 not out of the inauguration, but how about ten years, 0:13:38.480 --> 0:13:41.400 we have the correct guest for good conversation. We rip 0:13:41.480 --> 0:13:44.080 up the script with left Sony best Laws of course 0:13:44.120 --> 0:13:47.360 Wall Street we contributor and truly one of the world's 0:13:47.440 --> 0:13:51.360 experts on natural guests dynamics as well. SONA thank you 0:13:51.400 --> 0:13:55.440 so much for joining us. What is the political economics 0:13:55.480 --> 0:13:59.240 of the less oil? These two candidates were talking about? 0:13:59.600 --> 0:14:05.560 What is your timeline to What is really interesting is 0:14:05.640 --> 0:14:09.040 that the candidates are talking about it, but the markets 0:14:09.080 --> 0:14:13.880 are taking care of it themselves. You had the BPCO 0:14:14.120 --> 0:14:18.920 on recently, and also the way the market is going 0:14:19.040 --> 0:14:22.440 right now and the way people are behaving. Every utility 0:14:22.480 --> 0:14:26.800 company is increasing the share of it's renewable energy within 0:14:27.040 --> 0:14:32.080 its own energy um energy use. In the US, if 0:14:32.080 --> 0:14:37.320 you go to Texas, the largest growth sector in energy 0:14:37.480 --> 0:14:41.720 in Texas is in fact renewable energy, solar energy. You 0:14:41.840 --> 0:14:45.320 go into the Middle East, the largest investments that are 0:14:45.320 --> 0:14:48.800 going on in the Middle East in Saudi in u A, 0:14:49.440 --> 0:14:53.280 in solar. So the point that is really interesting that 0:14:54.000 --> 0:14:57.080 was missed last night was the fact that people are 0:14:57.120 --> 0:15:02.080 already investing in solar or inac in Windsor. I was 0:15:02.120 --> 0:15:05.680 in the Washington News Beer of Bloomberg with Spencer Abraham 0:15:05.840 --> 0:15:09.160 long ago and far away our Secretary of Energy for 0:15:09.280 --> 0:15:13.160 Bush the Younger, the day we discovered that America really 0:15:13.240 --> 0:15:18.200 doesn't have a national oil policy. Do we need one? 0:15:20.040 --> 0:15:22.840 You know, there there was a time when we needed 0:15:22.920 --> 0:15:27.280 an oil policy and energy policy when energy was such 0:15:27.320 --> 0:15:30.200 a huge part of the economy. Remember when we started, 0:15:30.280 --> 0:15:33.720 you know, when we actually did have an energy policy 0:15:33.760 --> 0:15:36.960 at one point, or we what we call energy policy, 0:15:37.200 --> 0:15:40.320 was when energy was more like fifteen percent of the economy, 0:15:40.360 --> 0:15:44.680 maybe ten percent. Today, the size of the energy sector, 0:15:44.840 --> 0:15:47.040 which is really the mainly the oil and gas sector 0:15:47.480 --> 0:15:52.080 in the US, is close to three, and so energy, 0:15:52.120 --> 0:15:55.280 while being very important, is not where it was compared 0:15:55.320 --> 0:15:58.320 to health sector, compared to technology, compared to the other 0:15:58.360 --> 0:16:01.720 sectors that have been growing. So it's not that we 0:16:01.760 --> 0:16:04.880 don't need energy to lubricate and to use our in 0:16:04.960 --> 0:16:09.400 our in our parts and in our manufacturing, but it 0:16:09.680 --> 0:16:14.280 is not exactly as important as it was at the 0:16:14.400 --> 0:16:17.600 period that you're talking about, and when I started working 0:16:17.600 --> 0:16:21.360 on energy in my career well after, let's talk about 0:16:21.360 --> 0:16:23.640 where you think we're going. Right now, we're producing about 0:16:23.640 --> 0:16:26.400 tamillion pounds of all a day in the United States. 0:16:26.400 --> 0:16:28.120 What do you think the trajectory is of all of 0:16:28.120 --> 0:16:30.120 this actually is over the next five to ten years. 0:16:31.720 --> 0:16:34.800 I think, as Vice President Biden said, it is going 0:16:34.840 --> 0:16:37.440 to be a transition. It has been a very slow transition. 0:16:37.560 --> 0:16:40.240 When I started again working on this transition, it was 0:16:40.280 --> 0:16:43.720 almost like twenty years ago, UM natural gas was taking 0:16:44.040 --> 0:16:46.320 um a little bit more share from oil, but it 0:16:46.400 --> 0:16:49.080 was pretty slow. As we've seen in the last two years, 0:16:49.120 --> 0:16:52.360 natural gas has taken a bigger share from coal and oil, 0:16:52.800 --> 0:16:55.960 and solar and wind are taking a bigger share from 0:16:56.000 --> 0:16:59.680 everything else. So the transition could could be a while. 0:17:00.520 --> 0:17:04.600 As you as we see the electric cars have been 0:17:04.640 --> 0:17:07.360 a little bit slower to come to market. Tesla obviously 0:17:07.400 --> 0:17:11.240 has been fabulous, and other cars are still having technical 0:17:11.240 --> 0:17:14.760 problems when they come in. But if you look at 0:17:14.800 --> 0:17:18.199 the economy moving forward, I would think that whether it 0:17:18.320 --> 0:17:21.280 is ten years or fifteen years or twenty five years, 0:17:21.560 --> 0:17:25.520 there will be a transition that with faster and faster 0:17:25.720 --> 0:17:29.199 growth towards uneibles as the technology that is helping with 0:17:29.240 --> 0:17:33.560 batteries help us move in that direction much faster. It's fun. 0:17:33.880 --> 0:17:38.520 Has the pandemic accelerated that shift? You know, the pandemic 0:17:38.560 --> 0:17:40.879 hasn't slowed it down the side. I think what is 0:17:40.920 --> 0:17:44.880 really interesting is that oil and gas got slowed down 0:17:44.920 --> 0:17:48.480 with the pandemic, right and generally the economy slowed down, 0:17:48.480 --> 0:17:51.240 which meant that you were using energy less. In fact, 0:17:51.359 --> 0:17:53.879 the President last night said that we have cleaned area, 0:17:53.880 --> 0:17:56.000 and the reason is because our economy is not a 0:17:56.080 --> 0:17:59.000 full capacity. Of course, air gets to be cleaner if 0:17:59.040 --> 0:18:01.760 you're not drive in as much and not using your factories. 0:18:02.240 --> 0:18:08.000 But but renewable energy investments have been going pretty close 0:18:08.040 --> 0:18:10.760 to schedule, maybe delayed a little bit, but much faster 0:18:10.960 --> 0:18:13.199 than the oil and gas investments that were in the 0:18:13.240 --> 0:18:17.520 works before COVID. That's a lot of this begs the 0:18:17.600 --> 0:18:20.440 question what we need the government to do here? If, 0:18:20.440 --> 0:18:22.639 as you say, that private companies are heading in this 0:18:22.760 --> 0:18:27.679 direction anyway, you know what the government could do is 0:18:27.840 --> 0:18:31.280 we had some we had a lot of support for 0:18:31.400 --> 0:18:35.320 cooling gas industry over the last twenty thirty years, and 0:18:35.359 --> 0:18:38.159 if some of that could also move more into the 0:18:38.760 --> 0:18:41.320 into the renewable energy, I think it would be really 0:18:41.359 --> 0:18:44.960 really helpful. Also in terms of the government having clear 0:18:45.000 --> 0:18:51.199 policies on on regulation and making it easier to invest 0:18:51.320 --> 0:18:56.480 in infrastructure and in energy, particularly renewable energy, could make 0:18:56.480 --> 0:18:59.440 it easier. As you know, the regulation that has had 0:18:59.480 --> 0:19:03.119 been and the looked around solar energy has been very confusing. 0:19:03.400 --> 0:19:05.800 It has been on off, on, off, on off, and 0:19:05.880 --> 0:19:08.960 it has affected consumers. So having something that is clear 0:19:09.320 --> 0:19:13.439 and long term would help the industry. Let's end on 0:19:13.480 --> 0:19:17.399 infrastructure more broadly. Four years ago, after the election, the 0:19:17.440 --> 0:19:19.680 Trump Trade, the so called Trump trade was all about 0:19:19.720 --> 0:19:23.440 infrastructure spending. Wasn't just about tax cuts, It's all about 0:19:23.480 --> 0:19:26.479 infrastructure spending. Then if started, it just did not happen. 0:19:27.240 --> 0:19:29.840 Why does it not happen in America? Why can't we 0:19:29.880 --> 0:19:34.000 make it happen. You know, I think, Um, it's interesting 0:19:34.040 --> 0:19:36.919 because two thousand eight it did not happen either, Right, 0:19:37.000 --> 0:19:39.679 there was a moment where we could have put some 0:19:39.760 --> 0:19:43.480 of the money that came into the economy, um, into 0:19:43.560 --> 0:19:46.399 the doctor. As you said, it didn't happen during the 0:19:46.480 --> 0:19:50.400 last four years. I'm actually more optimistic Jonathan about the 0:19:50.440 --> 0:19:53.280 next four years. I think this is a time where 0:19:53.359 --> 0:19:56.439 post COVID. COVID has had a lot of physical and 0:19:56.520 --> 0:19:59.280 psychological impact on people, but this might be the time 0:19:59.320 --> 0:20:03.840 where in fact, you have industry, you have the financial sector, 0:20:03.960 --> 0:20:07.560 and you have the government coming together to build infrastructure. 0:20:08.040 --> 0:20:10.399 And I think that some of the delays we could 0:20:10.600 --> 0:20:15.120 blame on on all kinds of things, but the biggest 0:20:15.160 --> 0:20:19.239 problems about infrastructure in our country is that, you know, 0:20:19.320 --> 0:20:22.520 sort of federal versus states issues and some of the 0:20:22.560 --> 0:20:26.119 regulation that has delayed infrastructure. And that could be something 0:20:26.160 --> 0:20:29.760 that the Democrats come together with the Republicans and health 0:20:29.800 --> 0:20:33.199 resolves so that our roads and bridges do catch up 0:20:33.280 --> 0:20:36.480 with the Chinese. I mean, it is really interesting how 0:20:36.600 --> 0:20:40.080 in the last especially post COVID, how the Chinese have 0:20:40.160 --> 0:20:44.440 continued with their infrastructure but also continued investing in their 0:20:44.640 --> 0:20:48.760 new financial structure. We're still in a financial structure which 0:20:48.840 --> 0:20:52.720 is the old mode. Whereas they're bringing in digital currency, 0:20:53.080 --> 0:20:56.800 they're bringing in um you know, clean energy, they're bringing 0:20:56.920 --> 0:21:00.159 in new infrastructure, they're being in new health policy. Is 0:21:00.440 --> 0:21:02.520 so I think it is time, if we want to 0:21:02.560 --> 0:21:05.240 be number one, to to bring all of those things 0:21:05.240 --> 0:21:08.480 together and to the forefront. It's interesting to me how 0:21:08.600 --> 0:21:10.960 much the rest of the world is waiting for the 0:21:11.080 --> 0:21:13.800 US to come out with some sort of fiscal support bill. 0:21:14.080 --> 0:21:17.280 How this affects Europe, it affects emerging markets. How much 0:21:17.320 --> 0:21:20.600 does the recovery in the developing world in particular hinge 0:21:20.840 --> 0:21:24.479 on the US passing fiscal stimulus. Well, I mean, if 0:21:24.520 --> 0:21:29.720 we have something like a tweet trillion UH fiscal stimulus, 0:21:29.760 --> 0:21:33.600 it will be large. It will impact other countries. But 0:21:33.800 --> 0:21:36.680 also what has happened over the last week or two 0:21:36.760 --> 0:21:39.800 in Washington with the World Bank IMF meetings, as you 0:21:39.840 --> 0:21:44.520 could see, was relatively i would say, hugely different than 0:21:44.560 --> 0:21:47.560 what tom Kin and I have experienced before with the 0:21:47.560 --> 0:21:50.520 i m F. We also have, in addition to the 0:21:50.640 --> 0:21:54.080 US stimulus, the IMF head and the chief economist of 0:21:54.080 --> 0:21:56.400 the I M S saying that countries should start borrowing 0:21:56.440 --> 0:21:58.680 a lot more. That is the exact opposite of the 0:21:58.720 --> 0:22:01.960 austerity plants that you had for the last twenty thirty 0:22:02.040 --> 0:22:04.520 years by the I m F. So if you put 0:22:04.560 --> 0:22:07.600 that together with our stimulus, I think it could be 0:22:07.640 --> 0:22:12.320 a very interesting period of higher growth in the economies 0:22:12.520 --> 0:22:16.200 of across the clock plus interest rates and in fact 0:22:16.200 --> 0:22:18.600 not go into a negative zone. And we might be 0:22:19.080 --> 0:22:21.720 going faster into a period of inflation with the kind 0:22:21.760 --> 0:22:24.480 of death that is getting accumulated and will continue to 0:22:24.480 --> 0:22:28.000 get accumulated. So we might have different problems on our 0:22:28.040 --> 0:22:31.400 hands very soon. I'm started very quickly here you are 0:22:31.600 --> 0:22:36.399 of Iran. Is President Biden's strategy with Iran the same 0:22:36.440 --> 0:22:42.359 as President Obama's? You know, I think that that countries 0:22:42.400 --> 0:22:46.280 are evolving. I'm not sure if his policy is the same. 0:22:46.960 --> 0:22:50.480 I think his policy is to engage just his life, 0:22:50.520 --> 0:22:53.640 like he said last night, with with the allies, so 0:22:53.760 --> 0:22:57.439 that the approach to Iran will be an approach that 0:22:57.960 --> 0:23:01.520 brings together all allies together and it's not just one 0:23:01.560 --> 0:23:06.560 country versus another country. And if you do bring it 0:23:06.680 --> 0:23:10.159 run back into society, into the normal society and the 0:23:10.240 --> 0:23:13.119 normal economy. I think that region could be in a 0:23:13.240 --> 0:23:17.480 much better place than it is today after bachelors. Always 0:23:17.520 --> 0:23:19.640 fantastic to catch up with you, Thanks for your time 0:23:19.800 --> 0:23:22.919 of Rock Creek Group and Bloomberg Wall Street Week contributor 0:23:28.040 --> 0:23:30.520 joining us now on this market. A lot to Childood 0:23:30.560 --> 0:23:32.760 j H C m C a fund manager, A lot 0:23:32.760 --> 0:23:35.399 of fantastic to catch up with you. As always, this 0:23:35.480 --> 0:23:38.800 credit market spread to tight treasury yehs a low, they 0:23:38.920 --> 0:23:41.720 been higher this week. Fixed income, it's been a huge 0:23:41.720 --> 0:23:44.800 trade through. Do you think it's gonna break anytime soon? 0:23:47.119 --> 0:23:49.840 Good morning? All Well, it's hard to tell whether it 0:23:49.920 --> 0:23:51.960 breaks or not, but you can't. I mean, this is 0:23:51.960 --> 0:23:54.840 a mistake. I think many people too. They're very short 0:23:54.920 --> 0:23:58.800 term oriented and if you think of running portfolios, they're 0:23:58.880 --> 0:24:02.560 they're like tankers you've hid, just shift them overnight. So 0:24:02.880 --> 0:24:05.560 will the market break? You know? I think the market 0:24:05.600 --> 0:24:09.399 is getting expensive and I do think if you dissect 0:24:09.520 --> 0:24:13.520 the credit market, its fortunes are closely tied to whether 0:24:13.560 --> 0:24:17.040 economic growth happens and what kind of a stimulus package passes. 0:24:17.440 --> 0:24:20.320