WEBVTT - All Eyes Swivel To Washington As Trump Tweets, Ryan To Exit 0:00:05.800 --> 0:00:08.360 Welcome to the Bloomberg p m L Podcast. I'm Pim 0:00:08.400 --> 0:00:11.440 Fox along with my co host Lisa Bramowitz. Each day 0:00:11.480 --> 0:00:15.000 we bring you the most important, noteworthy, and useful interviews 0:00:15.040 --> 0:00:17.520 for you and your money, whether you're at the grocery 0:00:17.560 --> 0:00:20.560 store or the trading floor. Find the Bloomberg p m 0:00:20.680 --> 0:00:33.159 L Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot Com. 0:00:33.159 --> 0:00:37.040 All Eyes on Washington, d C. On a number of fronts, 0:00:37.200 --> 0:00:39.400 I want to start with the latest House Speaker Paul 0:00:39.520 --> 0:00:42.159 Ryan has announced that he will not seek re election 0:00:42.360 --> 0:00:46.400 in November. We are expecting to hear comments from him. 0:00:46.440 --> 0:00:49.479 He's going to make a statement and we will be 0:00:49.520 --> 0:00:52.680 clearing that live as well as the question and answer 0:00:52.760 --> 0:00:55.920 session after that. Here to give us a sense of 0:00:56.000 --> 0:01:00.760 what the context is around Paul Ryan's uh decision not 0:01:00.800 --> 0:01:05.240 to seek reelection is Marty Shanker, chief content officer for Bloomberg. 0:01:05.319 --> 0:01:09.000 Marty put this in a perspective to us, why now, Well, 0:01:09.040 --> 0:01:12.520 it's interesting timing. About a month ago there was a 0:01:12.560 --> 0:01:15.760 Politico magazine piece which suggested that Ryan was not going 0:01:15.800 --> 0:01:18.520 to stand for re election, which the people around him 0:01:18.640 --> 0:01:23.960 vigorously denied. And so now a month later it's true. Um, 0:01:24.000 --> 0:01:26.880 I think Paul Ryan has basically decided that this is 0:01:26.920 --> 0:01:29.160 a I mean, you never wanted the speaker job to 0:01:29.200 --> 0:01:32.080 begin with. You sort of took it out of uh 0:01:32.240 --> 0:01:35.680 dedication to the Republican Party. And it's a very really 0:01:35.720 --> 0:01:38.800 tough job. He's by a lot of measures, he's done 0:01:38.840 --> 0:01:41.640 a really good job, especially in fundraising. A lot of 0:01:41.640 --> 0:01:44.640 people were concerned about his ability to raise funds for 0:01:44.640 --> 0:01:49.920 Republicans in the context of his predecessor Bayner, but he's 0:01:49.920 --> 0:01:53.560 actually outraised him by quite a bit. Okay, I just 0:01:53.600 --> 0:01:55.920 want to push back a little bit because a lot 0:01:55.920 --> 0:01:59.920 of people are suggesting that Paul Ryan is not going 0:02:00.080 --> 0:02:04.720 to seek reelection because his chances of winning are increasingly slim, 0:02:05.000 --> 0:02:08.160 and that this sort of is a harbinger moment for 0:02:08.200 --> 0:02:11.480 the Republican Party and sort of seeks uh sort of 0:02:11.480 --> 0:02:15.560 sets the stage for a Democratic win in the midterms. Well, 0:02:15.600 --> 0:02:20.680 one of the UH inside Washington prognosticators right after Ryan's 0:02:20.680 --> 0:02:24.720 announcement this morning, moved the district Paul Ryan's district in 0:02:24.760 --> 0:02:30.520 Wisconsin too likely Republican from solid Republican, So at least 0:02:30.520 --> 0:02:34.200 in that view, UH, he he may have had a 0:02:34.280 --> 0:02:36.560 more difficult time, but he will still expected to be 0:02:36.600 --> 0:02:40.160 re elected, and now his departure makes it less likely 0:02:40.240 --> 0:02:44.440 that's going to remain a Republican seat. So you know, yeah, 0:02:44.520 --> 0:02:47.360 he may have he may have had a more difficult time, 0:02:47.400 --> 0:02:50.919 but he won by I think a seventy percent margin 0:02:51.000 --> 0:02:53.080 last time around, and I think it was pretty safe 0:02:53.120 --> 0:02:56.080 seat if he wanted to take to keep it. Hey, Marty, 0:02:56.120 --> 0:02:57.720 I want to pick up on something having to do 0:02:57.800 --> 0:03:01.120 with the Republican Party. And you mentioned, you know, his 0:03:01.240 --> 0:03:05.520 success at fundraising for the Republican Party. What kind of 0:03:05.600 --> 0:03:11.560 Republican party does he leave behind for his successor to manage, well, 0:03:11.919 --> 0:03:15.640 like it or not, it's a Trump Republican Party. And 0:03:15.880 --> 0:03:19.800 as you know, I mean, many people both in the 0:03:19.840 --> 0:03:23.120 moderate wing of the Republican Party and Democrats certainly have 0:03:23.200 --> 0:03:26.520 been very critical the leadership of the Republicans for not 0:03:26.600 --> 0:03:29.560 being more vocal in their opposition to some of the 0:03:29.600 --> 0:03:33.840 policies that Donald Trump is pursuing. Um. That said, they're 0:03:33.880 --> 0:03:38.560 inexcellably tied to this president, and UM it becomes even 0:03:38.600 --> 0:03:41.960 more interesting in the context of the Mueller investigation. That's 0:03:41.960 --> 0:03:43.960 exactly where I wanted to go with this. I mean, 0:03:44.480 --> 0:03:49.400 one speculation is that how speaker Ryan is stepping aside, 0:03:49.480 --> 0:03:52.160 or at least announcing his plans to do so, in 0:03:52.320 --> 0:03:55.840 order to take a harder stance on President Trump. Do 0:03:55.880 --> 0:03:58.840 you think that there's any merit to that? No? Okay, great, 0:03:58.880 --> 0:04:02.000 and asked an answer, Um, no, but I really don't 0:04:02.040 --> 0:04:06.600 think I you know, Uh, Paul Ryan has said that 0:04:07.040 --> 0:04:10.000 the Special Prosecutor Mueller should be kept in the job 0:04:10.320 --> 0:04:14.520 and complete his his inquiry. Um. He hasn't had a 0:04:14.680 --> 0:04:19.280 full throated criticism of Donald Trump's comments on it. Uh. Probably, 0:04:20.040 --> 0:04:22.400 you know, Democrats would like him to be more vocal. 0:04:22.480 --> 0:04:25.480 But I do not think he's making this decision so 0:04:25.520 --> 0:04:27.880 that he's now free to talk about it. I don't 0:04:27.920 --> 0:04:31.000 think you'll be seeing any real profiles and courage out 0:04:31.000 --> 0:04:35.320 of this guy. Um. That said, this has coming at 0:04:35.320 --> 0:04:38.159 an interesting point. It's an inflection point in the Mueller 0:04:38.240 --> 0:04:42.880 investigation and certainly in President Trump's anger toward Mueller as 0:04:42.920 --> 0:04:46.800 well as uh Rod Rosenstein. And I'm just wondering, you know, 0:04:47.480 --> 0:04:51.200 does this sort of have implications for the GOP's willingness 0:04:51.240 --> 0:04:56.280 to push forward or criticize, or say censure President Trump 0:04:56.320 --> 0:05:00.240 for any consequences that might emerge from firing Rosenstein. Well 0:05:00.000 --> 0:05:03.400 as a very practical matter of the fact that he's 0:05:03.400 --> 0:05:07.000 not running for re election means that if Donald Trump 0:05:07.040 --> 0:05:12.560 were to fire Rosenstein, Mueller, Sessions, etcetera. It would if 0:05:12.640 --> 0:05:17.080 it did, and it would create a constitutional crisis. Paul 0:05:17.160 --> 0:05:20.200 Ryan could just basically throw away any political implications to 0:05:20.240 --> 0:05:24.520 a stance on that move. Uh So it would as 0:05:24.520 --> 0:05:28.120 a practical matter, free him from many political considerations. Then 0:05:28.120 --> 0:05:32.839 it would just become essentially a moral, conscious decision on 0:05:32.960 --> 0:05:36.440 his part of what standy takes um in in the 0:05:36.520 --> 0:05:41.400 constitutional crisis that wouldn't ensue from that. We're speaking with 0:05:41.600 --> 0:05:44.840 Marty Schenker, he is our chief content officer for Bloomberg 0:05:44.920 --> 0:05:48.320 as we await comments and a statement from Paul Ryan, 0:05:48.360 --> 0:05:52.040 current Speaker of the House, representative of the Wisconsin First 0:05:52.400 --> 0:05:55.240 and he will be announcing that he will not seek 0:05:55.240 --> 0:05:58.800 a re election for that position. We're also going to 0:05:58.880 --> 0:06:01.800 be bringing you live cover to Mark Zuckerberg, chief executive 0:06:02.000 --> 0:06:06.200 of Facebook, second day of his two day testimony before Congress. 0:06:06.560 --> 0:06:08.560 Um and Marty, I'm sorry to keep harping on the 0:06:08.600 --> 0:06:10.680 Republican Party because that you know, they're the ones who 0:06:10.720 --> 0:06:15.440 are going to be left after Paul Ryan exits in January, UM, 0:06:15.560 --> 0:06:18.880 the rating for the president has actually gone up, right. 0:06:18.920 --> 0:06:21.720 I mean we're talking about his favorable rating has climbed 0:06:21.760 --> 0:06:28.000 eight percentage points since before the election. Uh, in terms 0:06:28.040 --> 0:06:32.320 of Republicans, and I'm wondering what positions we can expect 0:06:32.360 --> 0:06:37.320 the Republicans to take as a result that the Speaker 0:06:37.440 --> 0:06:39.240 Ryan is no longer going to be there to put 0:06:39.240 --> 0:06:42.040 on the brakes or even add any kind of institutional 0:06:42.160 --> 0:06:47.240 or traditional Republican UH perspective. Well, you still have Mitch 0:06:47.320 --> 0:06:50.680 McConnell as a Senate leader, and he in some ways 0:06:50.720 --> 0:06:54.560 speaks for the Republican Party. And in Congress in general, 0:06:55.440 --> 0:06:58.320 you have McCarthy and Scalise who are still the you know, 0:06:58.400 --> 0:07:01.000 the whip and the number two person in the House 0:07:01.080 --> 0:07:04.679 who has been maybe going to take Speaker Ryan's position 0:07:04.800 --> 0:07:09.400 if the working theory is that McCarthy will try to 0:07:09.440 --> 0:07:13.880 do that. Actually he sought that position before Ryan, uh 0:07:13.920 --> 0:07:17.000 and could not garner enough votes, and then that's when 0:07:17.000 --> 0:07:19.720 they turned to Paul Ryan as a unifying force for 0:07:19.760 --> 0:07:24.040 the Republican Party. So it's probably he's the front runner, 0:07:24.080 --> 0:07:27.160 but he's by no means a short thing. And there 0:07:27.240 --> 0:07:31.360 are very fervent Trump supporters in the House who may 0:07:31.560 --> 0:07:37.000 think that it's time for a truly pro Trump Republican 0:07:37.160 --> 0:07:40.440 to take the leadership in the House. Don't forget the 0:07:40.480 --> 0:07:44.000 mid terms are in November, well before Paul Ryan leeds office. 0:07:44.040 --> 0:07:48.520 So um, it'll be a completely different context when the 0:07:48.640 --> 0:07:51.240 decision it will have to be made, whether in fact 0:07:51.320 --> 0:07:54.520 it will be majority leader or minority leader of the 0:07:54.520 --> 0:07:57.640 House when that time comes. All right, So we're right 0:07:57.680 --> 0:08:01.320 now completely focused on Paul Ry. In about a half 0:08:01.360 --> 0:08:05.560 an hour ago, we were completely focused on the relationship 0:08:05.920 --> 0:08:09.680 between the US and Russia over Syria and some kind 0:08:09.680 --> 0:08:13.160 of impending missile attack that President Trump is promising via 0:08:13.240 --> 0:08:17.200 Twitter on Syria in response to the chemical attacks. Where 0:08:17.200 --> 0:08:20.080 are we with that? Has everybody just simply forgotten about that? 0:08:20.240 --> 0:08:23.760 Has this sort of turmoil complicate matters if at all? Well? 0:08:23.800 --> 0:08:25.960 I don't. I don't know that the political elements of 0:08:26.000 --> 0:08:28.800 Paul Ryan's decision not to run for re election has 0:08:28.840 --> 0:08:32.240 any impact at all on Syria, But the markets certainly 0:08:32.240 --> 0:08:37.040 haven't forgotten about it. Um, it's interesting that the markets 0:08:37.080 --> 0:08:43.120 haven't actually gone cataclysmically panicked over this. There's obviously a 0:08:43.160 --> 0:08:46.960 negative reaction, but it's not hug Why is that surprising 0:08:46.960 --> 0:08:49.000 to you. Well, I mean, you know, when you have 0:08:49.080 --> 0:08:52.840 a president of the United States via Twitter essentially saying 0:08:53.000 --> 0:08:55.760 we're going to take military action in an area of 0:08:55.760 --> 0:08:59.280 the world where the Russians and the Iranians personnel who 0:08:59.320 --> 0:09:03.199 have warned a ends doing that, it's could be very unsettled. 0:09:03.360 --> 0:09:06.240 You'd wonder why the SMP down only four tens of 0:09:06.240 --> 0:09:09.120 a percent, why it's down only ten points, and why 0:09:09.200 --> 0:09:12.840 oil is only up less than less. My theory is 0:09:12.880 --> 0:09:15.720 that the markets are looking at this in some ways 0:09:15.800 --> 0:09:19.080 like the tariffs issue, that yes, there's a lot of 0:09:19.120 --> 0:09:22.160 bluster and a lot of strong talk, but ultimately that 0:09:22.280 --> 0:09:25.320 he might walk this back. My own personal theory is 0:09:25.360 --> 0:09:30.120 that there are there could very likely be a conversation 0:09:30.200 --> 0:09:32.880 between Donald Trump and Vlader air Putin. They spoke very 0:09:32.920 --> 0:09:36.840 recently in the last couple of weeks that might actually 0:09:36.960 --> 0:09:40.200 bring bring us back from the brink of military action. 0:09:40.679 --> 0:09:44.040 I mean, that would be consistent with the way Donald 0:09:44.080 --> 0:09:47.760 Trump likes to operate. Threaten, gets concessions, and back off. 0:09:48.120 --> 0:09:50.200 You know, there's sort of an interesting twist here with 0:09:50.320 --> 0:09:52.760 the United Kingdom coming out and saying that they're not 0:09:52.880 --> 0:09:56.920 sure that the Syrian government did wage a chemical attack 0:09:57.160 --> 0:09:59.520 at all, and that they're not going to cooperate with 0:09:59.559 --> 0:10:02.360 the u US until they have better evidence. How does 0:10:02.400 --> 0:10:04.839 that factor into that, Well, that's pretty interesting coming from 0:10:04.840 --> 0:10:07.640 the UK, who are not even sure that the nerve 0:10:07.720 --> 0:10:15.080 agent that was used to attack the UK espionage victim 0:10:15.200 --> 0:10:19.679 uh was really from Russian origin. So, you know, I 0:10:20.120 --> 0:10:23.320 just think that's political rhetoric. But it might just be 0:10:23.360 --> 0:10:25.600 political rhetoric. But that means that the US does not 0:10:25.760 --> 0:10:28.360 have the UK on its side, and any kind of 0:10:28.400 --> 0:10:31.120 altercation in Syria, even as France says that they're going 0:10:31.160 --> 0:10:34.040 to go alongside the US, that from a strategic standpoint 0:10:34.080 --> 0:10:38.280 is significant. Yes, it makes it much less politically acceptable. 0:10:38.320 --> 0:10:41.040 I guess in a global context for Donald Trump to 0:10:41.080 --> 0:10:45.000 take union ladder reaction in Syria, Um, I think the 0:10:45.120 --> 0:10:49.640 real danger is the Russian response. Right, If the US 0:10:50.000 --> 0:10:53.960 was to take military action and in some way involves 0:10:54.200 --> 0:10:57.679 Russian troops that are on the ground, it could escalate 0:10:57.679 --> 0:10:59.560 in a way that no one really wants but no 0:10:59.600 --> 0:11:04.760 one can control. So it's a very dangerous situation in Syria. 0:11:04.880 --> 0:11:08.439 And if Donald Trump decides to go forward without allies, 0:11:08.880 --> 0:11:11.920 it becomes even more dangerous. Well, in the danger also 0:11:11.960 --> 0:11:15.240 becomes as you mentioned, that Iran has proxies if indeed 0:11:15.280 --> 0:11:19.840 it does have actual military forces in Syria, and that 0:11:20.440 --> 0:11:25.000 Moscow and Vladimir putin visiting with the head of Iran 0:11:25.240 --> 0:11:30.400 in Turkey just last week, I believe in Turkey and 0:11:30.880 --> 0:11:35.320 ally of the United States. Yes, it's very complicated, um 0:11:35.640 --> 0:11:38.079 as we all know. And there's also a report from 0:11:38.120 --> 0:11:40.920 ap earlier this morning that a high level delegation of 0:11:41.000 --> 0:11:46.040 Russian officials have arrived in Syria. Now is that a 0:11:46.240 --> 0:11:51.640 kind of shield situation or it's suggestive of the Russians 0:11:51.640 --> 0:11:54.319 are really doubling down on their commitment to a side, 0:11:54.480 --> 0:11:56.319 you know. And and just to sort of add a 0:11:56.320 --> 0:11:59.400 complication to this whole backdrop are the sanctions that the 0:11:59.520 --> 0:12:03.000 US has placed on Russia, Russia calling it uh ageing 0:12:03.400 --> 0:12:06.840 economic war on them. And you are seeing the assets 0:12:06.880 --> 0:12:10.320 in Russia plunge, the ruble continuing to lose value versus 0:12:10.400 --> 0:12:13.960 the dollar. Uh. You saw you know, bond yield spike up, 0:12:14.040 --> 0:12:17.600 and they canceled a bond auction because they didn't want 0:12:17.600 --> 0:12:20.280 to try to raise money in this environment. Not just wondering, 0:12:20.280 --> 0:12:23.160 I mean how much does that sort of up the 0:12:23.240 --> 0:12:28.760 anti here and sort of raise the possibility of military conflict. Well, 0:12:29.120 --> 0:12:31.640 you know, I do think that when in the context 0:12:31.679 --> 0:12:36.120 of the world stage, the way the US can truly 0:12:36.280 --> 0:12:40.040 pressure Russia is not through foreign diplomacy, not through the UN, 0:12:40.440 --> 0:12:46.160 but on economic sanctions. Um Vladimir Putin enjoys great popularity 0:12:46.240 --> 0:12:50.800 within the among the Russian people, but a weakening ruble, 0:12:50.880 --> 0:12:54.040 if it's over an extended period of time, will cause 0:12:54.120 --> 0:12:57.720 real economic pain, and that is the way to get 0:12:58.040 --> 0:13:02.800 Russians change their behavior. Most foreign policy experts say sanctions 0:13:02.880 --> 0:13:06.640 are the really only effective way of changing their baby 0:13:07.080 --> 0:13:09.520 and taking a look at, for example, of the my 0:13:09.640 --> 0:13:13.760 Sex ten, which is the stock exchange in Russia actually 0:13:14.040 --> 0:13:18.000 higher today, up about nine tenths of a percent adjusted, 0:13:18.920 --> 0:13:21.199 and indeed, right, yeah, trying to get your money out, 0:13:21.240 --> 0:13:37.400 that's a different, different story. Let's bring in Billy House, 0:13:37.400 --> 0:13:41.160 a congressional reporter for Bloomberg News. Billy, I want to 0:13:41.200 --> 0:13:44.280 just touch on that first. Did that strike you as 0:13:44.320 --> 0:13:46.160 well as sort of the most noteworthy thing he said? 0:13:47.200 --> 0:13:50.160 That was very noteworthy, especially when you have some of 0:13:50.200 --> 0:13:53.440 his own House Republican colleagues, led by Devin Junior as 0:13:53.480 --> 0:13:56.320 the House Intelligence Chairman, working right now to try to 0:13:56.360 --> 0:14:02.360 hold both Uh rosen Stain and Sessions in contempt. So, uh, 0:14:02.600 --> 0:14:04.440 Paul Ryan can say that, and he said he's had 0:14:04.480 --> 0:14:07.520 assurances that Mueller would not be attacked or fired by 0:14:07.559 --> 0:14:10.679 the White House. Let's let's see what happens. Though he's 0:14:10.679 --> 0:14:14.719 a lame duck. Now, what does this? What? What does 0:14:14.800 --> 0:14:18.120 this due to the race for his position? And given 0:14:18.160 --> 0:14:20.880 that we've got the mid terms between now and when 0:14:20.880 --> 0:14:24.440 the next Congress takes take session, that's a good question. 0:14:24.520 --> 0:14:27.920 I mean, right now it's been all whispers between the 0:14:28.000 --> 0:14:31.000 number two House Republican and Kevin McCarthy and the number 0:14:31.040 --> 0:14:35.320 three Steve Scalise. But with Paul Ryan leaving this early 0:14:35.480 --> 0:14:38.320 are announcing he will be leaving this early on. I 0:14:38.360 --> 0:14:41.680 think only Tip O'Neill, ever, UH was the last one 0:14:41.720 --> 0:14:44.320 to not be forced out or to go out in 0:14:44.400 --> 0:14:47.960 some scandal um. It leaves a lot of other potential 0:14:48.720 --> 0:14:52.120 candidates time to start seeing what kind of chips they 0:14:52.120 --> 0:14:55.560 could collect or call in, and so perhaps names like 0:14:55.640 --> 0:15:00.000 House Freedom coccas Chairman Mark Meadows, a friend of Trump's 0:15:00.400 --> 0:15:03.240 or even Jim Jordan's or others who may be more 0:15:03.280 --> 0:15:06.880 moderate might have time to build some sort of coalitions. 0:15:06.920 --> 0:15:08.840 I think a lot of people on Wall Street are 0:15:08.840 --> 0:15:12.040 trying to figure out, Okay, well, how does this affect policy? 0:15:12.240 --> 0:15:17.400 How will this directly feed into implications for any cutbacks 0:15:17.440 --> 0:15:21.600 in social programs to reduce the deficit, or any ability 0:15:21.640 --> 0:15:24.520 to pass infrastructure planning? Can do you have any insight 0:15:24.640 --> 0:15:28.240 into that? I think, first of all, that was gonna 0:15:28.280 --> 0:15:31.880 all be very difficult anyway in an election year. Uh, 0:15:32.760 --> 0:15:36.200 the Republicans have lost special elections dating back to two 0:15:36.240 --> 0:15:40.520 thousand eleven on just stating they wanted to vouchize Medicare 0:15:40.560 --> 0:15:42.600 and that sort of thing. But now that we have 0:15:42.680 --> 0:15:46.320 a lame duck speaker and he may think there is 0:15:46.320 --> 0:15:48.120 a lot of good will that would help him get 0:15:48.160 --> 0:15:52.440 that those policies through, I'm more inclined to believe that 0:15:52.520 --> 0:15:55.560 he's now a lame lame duck and none of that 0:15:55.600 --> 0:16:00.640 will happen. So who emerges the leader during this period 0:16:00.680 --> 0:16:03.360 between the now and the election of a new one. 0:16:04.240 --> 0:16:09.240 I think we have uh multiheaded monster for the next 0:16:09.320 --> 0:16:13.120 few months where nobody's actually leading. All right, Billy House, 0:16:13.160 --> 0:16:14.800 thank you so much for joining us, and good luck 0:16:14.840 --> 0:16:17.760 with all the future coverage as we continue to monitor 0:16:18.000 --> 0:16:22.160 who is going to take over house speaker Paul Ryan's position, 0:16:22.520 --> 0:16:26.200 as well as the implications for policy and the ongoing 0:16:26.320 --> 0:16:43.960 Moler investigation. Thank you here just give us a sense 0:16:44.080 --> 0:16:46.280 of what we should be focused on from what we've 0:16:46.320 --> 0:16:48.720 heard so far. As Paul Sweeney, US director of Research 0:16:48.960 --> 0:16:53.800 and senior Media and Internet analyst for Bloomberg Intelligence, Paul, how, 0:16:53.880 --> 0:16:56.880 how is Mark Zuckerberg fired on day two? I think 0:16:56.880 --> 0:16:59.560 he's generally doing a pretty good job here. You know, 0:16:59.640 --> 0:17:01.160 over at past a couple of days, the stock is 0:17:01.200 --> 0:17:03.960 actually traded fairly well, So I think, uh, he hasn't 0:17:04.000 --> 0:17:06.320 done any damage here. And um, you know, I think 0:17:06.359 --> 0:17:10.200 the big challenge for Mark here over these two days 0:17:10.280 --> 0:17:13.240 is too you know. Number one, you know clearly acknowledge 0:17:13.320 --> 0:17:16.120 that Facebook now has a handle on the full scope 0:17:16.200 --> 0:17:18.879 of what the issues are here as it relates to data. 0:17:18.920 --> 0:17:21.879 And I think you know, that realization didn't really occur 0:17:21.960 --> 0:17:23.720 really into the last couple of months, I think in 0:17:23.840 --> 0:17:26.959 terms of the scope of their responsibility here. Um, So 0:17:27.359 --> 0:17:29.000 I think he needs to get that across. I think 0:17:29.000 --> 0:17:31.320 he is getting that issue across. And then the second issue, 0:17:31.520 --> 0:17:36.439 maybe more importantly is that Facebook is equipped um to 0:17:36.640 --> 0:17:40.320 deal with these issues. Um, And you know. Most importantly 0:17:40.400 --> 0:17:44.240 that they do not need to uh incur regulatory oversight 0:17:44.359 --> 0:17:46.960 by Congress or any other body. I think that's one 0:17:47.000 --> 0:17:50.399 of the big issues that Facebook and you know, tech 0:17:50.600 --> 0:17:53.200 and social media and the internet, um, you know, trying 0:17:53.240 --> 0:17:56.159 to forcedall as long as possible. Paul Swiney, this shares 0:17:56.160 --> 0:17:58.600 a Facebook. They're down about six tenths of a percent. 0:17:58.720 --> 0:18:01.359 What a reference in particular report that was put together 0:18:01.400 --> 0:18:04.000 by Deloitte, and they worked with Facebook in order to 0:18:04.040 --> 0:18:06.400 do this. This goes back to two thousand and fourteen. 0:18:06.520 --> 0:18:11.280 But for reference, uh, they said that Facebook has enabled 0:18:11.400 --> 0:18:16.280 more than two hundred billion dollars of economic activity and 0:18:16.440 --> 0:18:20.480 four and a half million jobs around the world. Can 0:18:20.520 --> 0:18:24.439 you like in Facebook to the Internet itself? And that 0:18:25.480 --> 0:18:29.359 perhaps that is why this is such a interesting and 0:18:29.400 --> 0:18:35.359 focused piece of information, because so many businesses live on 0:18:35.400 --> 0:18:39.520 Facebook as if Facebook were the Internet. Yeah, it's um, 0:18:39.560 --> 0:18:43.399 you know again, Facebook has over two billion users on 0:18:43.440 --> 0:18:46.840 a monthly basis on a global scale there obviously everywhere, 0:18:46.960 --> 0:18:50.880 with the notable exception of China, uh, you know, and 0:18:51.000 --> 0:18:53.720 so they are truly you know, touching you know, so 0:18:53.800 --> 0:18:56.400 many households, so many lives in so many different ways 0:18:56.400 --> 0:19:00.560 that the social media hum of which Facebook is a 0:19:00.600 --> 0:19:03.680 larger social media platform, has really become one of the 0:19:03.760 --> 0:19:07.400 main um utilities of the Internet at large. It used 0:19:07.400 --> 0:19:10.520 to be simply, uh, you know, search was probably the 0:19:10.640 --> 0:19:14.440 utility that people utilize the most on the Internet. Um, 0:19:14.480 --> 0:19:17.080 but it's really I think social has become you know, 0:19:17.160 --> 0:19:19.399 kind of the key aspect. And so I guess I 0:19:19.440 --> 0:19:21.600 was getting out here with the economic effect is it's 0:19:21.640 --> 0:19:24.760 not just sharing you know, family photos and details of 0:19:24.800 --> 0:19:28.200 what you did on your vacation. It is perhaps two 0:19:28.359 --> 0:19:32.000 people who do not know each other enjoying, let's say, 0:19:32.000 --> 0:19:36.200 playing bridge online and through an app that they join 0:19:36.600 --> 0:19:40.879 through Facebook. They then are able to play bridge with 0:19:40.920 --> 0:19:46.600 each other. That becomes an economic relationship for not only Facebook, 0:19:47.080 --> 0:19:50.879 but also for the companies that are building those specific apps. 0:19:50.920 --> 0:19:55.720 And Mark Zuckerberg reference Zinga for example, the online game creator. 0:19:55.800 --> 0:19:58.280 Is that an accurate description? It is? It is an 0:19:58.320 --> 0:20:01.359 accurate description, and and so you know, and it's something 0:20:01.400 --> 0:20:04.159 that you know, I'm not sure. Um. A lot of 0:20:04.200 --> 0:20:06.719 the regulators, a lot of the politicians, the folks asking 0:20:06.760 --> 0:20:09.560 the congressman, asking the questions over the past few days, 0:20:09.560 --> 0:20:12.159 a couple of days, you know, fully appreciate that, and 0:20:12.200 --> 0:20:14.959 I think that is one of the reasons that whenever 0:20:15.040 --> 0:20:19.200 there's discussion about, uh, you know, a regulation of the 0:20:19.240 --> 0:20:22.399 Internet coming from Congress, uh, that is what people that 0:20:22.480 --> 0:20:24.920 is one of the main pushbacks, which is the Internet 0:20:24.920 --> 0:20:27.840 and social media have created so much opportunity for people 0:20:27.880 --> 0:20:31.280 and so many jobs and so much uh economic growth 0:20:31.320 --> 0:20:33.359 that you know, this is the last thing this industry 0:20:33.440 --> 0:20:36.520 needs is regulatory oversight. But now what's happened in the 0:20:36.600 --> 0:20:40.000 last couple of months is just the privacy issue has 0:20:40.080 --> 0:20:42.720 really reared. It's it's u ugly head here. And we've 0:20:42.760 --> 0:20:45.680 seen privacy regulations out of the EU over the years, 0:20:45.960 --> 0:20:48.160 and they're getting stricter and stricter all the time, affecting 0:20:48.200 --> 0:20:51.399 companies like Facebook, and Facebook wants to forestall anything like 0:20:51.440 --> 0:20:53.840 that happening here in the States. All right, thank you 0:20:53.920 --> 0:20:57.199 very much of Paul as Sweeney. Paul Sweeney our director 0:20:57.240 --> 0:21:16.199 of North American research for Bloomberg Intelligence. So we've been 0:21:16.240 --> 0:21:19.560 listening to Mark Zuckerberg testified before the House Energy and 0:21:19.680 --> 0:21:23.400 Commerce Committee. He was answering questions from A. Doris Matsui, 0:21:23.800 --> 0:21:29.919 the congresswoman of Democratic congresswoman from California representing Sacramento, and 0:21:30.560 --> 0:21:33.480 one of the issues had to do obviously with the 0:21:33.600 --> 0:21:37.040 privacy controls that are afforded to people who actually use 0:21:37.119 --> 0:21:41.240 a Facebook and the ability of commercial organizations, whether they 0:21:41.240 --> 0:21:46.639 be businesses or indeed political organizations, to actually access that 0:21:46.720 --> 0:21:50.280 information and then target information that would be directed to 0:21:51.200 --> 0:21:55.199 to specific interests that they might have. I want to 0:21:55.200 --> 0:21:58.760 bring in our own Shia ovid Are Bloomberg Technology Gadfly 0:21:59.040 --> 0:22:02.560 columnists to give us a little bit more detail about 0:22:03.040 --> 0:22:06.240 the congressional hearings, and as Shira, I just want to 0:22:06.280 --> 0:22:10.080 note that I believe that there is a quote from 0:22:10.240 --> 0:22:17.240 uh from one of the gad fly commists meaning you yes, 0:22:17.640 --> 0:22:21.920 that says Facebook will keep failing users trust as long 0:22:22.080 --> 0:22:27.439 as its business is based on unrestrained hoover ng of 0:22:27.680 --> 0:22:34.159 as much user data as possible. UM does anything that 0:22:34.280 --> 0:22:40.160 Mark Zuckerberg said that you heard contradict that. I don't 0:22:40.280 --> 0:22:45.199 think so, and in part because he rather gracefully avoided 0:22:45.359 --> 0:22:50.080 directly tackling that question. So what Mark now been saying 0:22:50.080 --> 0:22:55.320 for two days is essentially, UM, people own all the 0:22:55.440 --> 0:22:57.760 data that they put out there on Facebook, and they 0:22:57.800 --> 0:23:02.240 have complete control over where and how it's shared, which 0:23:02.280 --> 0:23:05.840 is not really true. So, look, the business model of 0:23:05.880 --> 0:23:12.560 Facebook is based on um collecting information from what people 0:23:13.000 --> 0:23:17.040 voluntarily put on their Facebook pages and things that people 0:23:17.040 --> 0:23:20.679 are not really aware that Facebook is also getting from you, 0:23:20.720 --> 0:23:24.600 including um, almost every web page you visit, the apps 0:23:24.600 --> 0:23:27.720 on your phone, the location as you carry your phone 0:23:27.720 --> 0:23:31.560 with you across the world, UM, information on what you 0:23:31.600 --> 0:23:35.199 purchase in stores that advertisers are taking with them to 0:23:35.320 --> 0:23:38.320 target ads. And this it also includes. And this was 0:23:38.400 --> 0:23:42.919 interesting because Doris Matt suey Uh, the congressman from California, 0:23:42.960 --> 0:23:47.480 mentioned what happens afterwards. In other words, you may own 0:23:47.520 --> 0:23:51.320 your data, but once your data is used by a 0:23:51.400 --> 0:23:55.240 commercial interest, you really don't have any It's it's a canard, 0:23:55.320 --> 0:23:58.920 this issue about ad ownership. Nothing that has happened to 0:23:58.960 --> 0:24:01.280 Facebook in the last two days or three weeks of 0:24:01.680 --> 0:24:08.320 controversy has changed its ability and willingness to collect large 0:24:08.320 --> 0:24:13.479 amounts of activity and information on Americans and you and 0:24:13.600 --> 0:24:15.760 people around the world and use that to target auts. 0:24:15.840 --> 0:24:18.159 And that's the central problem with Facebook is that it's 0:24:18.200 --> 0:24:22.240 business model is dependent on its ability to have relatively 0:24:22.520 --> 0:24:25.800 unrestrained data collection. Okay, so on a scale from one 0:24:25.840 --> 0:24:28.479 to ten, ten being best and one being worst. How 0:24:28.480 --> 0:24:32.840 would you grade yesterday's performance of Mark Zuckerberg and I'm sorry, 0:24:32.880 --> 0:24:34.960 ten is the best? Yeah, ten's the best. I would 0:24:35.000 --> 0:24:38.359 say it was about an eight. What about today? It's 0:24:38.400 --> 0:24:42.399 it's less good today. It seems like a the questions 0:24:42.400 --> 0:24:45.200 are more partisan and pointed today and they're a little 0:24:45.280 --> 0:24:50.080 less polite. Um. And Zuckerberg looks visibly tired, which is 0:24:50.119 --> 0:24:53.640 probably reasonable given the day he had six hours. Yeah, 0:24:53.640 --> 0:24:56.439 he took the break, now, you know that's sorry, Right, 0:24:56.480 --> 0:25:00.360 we waved off the break yesterday. Today he took it. Um. 0:25:00.520 --> 0:25:02.240 You know. One thing that I'm struck by is as 0:25:02.280 --> 0:25:05.000 this is going on, and some might call political theater, 0:25:05.040 --> 0:25:07.080 others might call it, you know, an informational session, whatever 0:25:07.119 --> 0:25:09.040 you want to however you want to characterize it. With 0:25:09.040 --> 0:25:12.920