WEBVTT - Abandon 'One Korea' Policy, Lefkowitz Says 0:00:05.800 --> 0:00:08.720 Welcome to the Bloomberg p m L Podcast. I'm pim Fox. 0:00:08.760 --> 0:00:11.520 Along with my co host Lisa Abramowitz. Each day we 0:00:11.640 --> 0:00:15.120 bring you the most important, noteworthy, and useful interviews for 0:00:15.200 --> 0:00:17.840 you and your money, whether you're at the grocery store 0:00:17.960 --> 0:00:20.720 or the trading floor. Find the Bloomberg p m L 0:00:20.840 --> 0:00:32.559 Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot Com. Right now, though, 0:00:32.640 --> 0:00:35.880 let's turn our attention to North Korea and the issues 0:00:35.920 --> 0:00:38.800 facing the Korean Peninsula. J Leftwitz is a former U 0:00:38.840 --> 0:00:41.640 S Special Envoy for Human Rights in North Korea and 0:00:41.720 --> 0:00:45.120 currently a leading partner at Kirkland and Ellis. J. Leftwitz, 0:00:45.200 --> 0:00:47.320 thank you very much for being with us. Good morning, 0:00:47.320 --> 0:00:50.120 How are you good. Maybe you could just begin by 0:00:50.159 --> 0:00:54.880 stating what many people do not know myself. Included, perhaps, 0:00:55.040 --> 0:00:58.720 is the current position of the United States government when 0:00:58.720 --> 0:01:02.760 it comes to a uni fied Korean Peninsula. Well, it 0:01:02.880 --> 0:01:06.479 has been basically the policy of the United States going 0:01:06.520 --> 0:01:09.760 all the way back to the Korean War, uh that 0:01:09.959 --> 0:01:13.520 we believe that there really should be one government on 0:01:13.600 --> 0:01:16.880 the peninsula of Korea. It should be a government led 0:01:16.920 --> 0:01:19.840 by what is really the the Republic of Korea, the 0:01:19.920 --> 0:01:25.759 democratic government that is currently based in Seoul, and the 0:01:25.880 --> 0:01:29.080 Korean War when it actually ended, didn't formally end there. 0:01:29.120 --> 0:01:32.880 There there's never really been a cessation of hostilities, and 0:01:32.920 --> 0:01:36.920 of course that's because the the Chinese have always insisted 0:01:37.000 --> 0:01:41.720 that everything above the thirty parallel be outside of the 0:01:42.000 --> 0:01:45.640 scope of influence of of what is South Korea, and 0:01:45.720 --> 0:01:47.920 so we've kind of been at a stalemate. But our 0:01:47.960 --> 0:01:52.240 official policy has always been that we support unification of 0:01:52.280 --> 0:01:55.720 the peninsula, and that's actually been the formal policy of 0:01:55.720 --> 0:01:58.920 of of South Korea as well. You know, Jay, I 0:01:59.480 --> 0:02:02.840 was listening reading through the recent oup ed piece that 0:02:02.920 --> 0:02:05.720 you published in the New York Times, were you were 0:02:05.760 --> 0:02:07.840 saying that as long as the US, this is my 0:02:07.880 --> 0:02:10.840 interpretation anyway, as long as the US continues with this 0:02:10.960 --> 0:02:15.400 policy and remains hard fixated on it, uh, it's going 0:02:15.440 --> 0:02:18.200 to be very difficult to get some kind of uh, 0:02:18.480 --> 0:02:22.840 meaningful concession from China that could actually make a difference 0:02:22.880 --> 0:02:25.440 in this whole situation and end it without a catastrophic 0:02:25.480 --> 0:02:29.239 type of event on the Korean Peninsula. I think that's 0:02:29.240 --> 0:02:31.960 the very accurate reading of of of my take here. 0:02:32.000 --> 0:02:34.040 I mean, look, there there are two there are two 0:02:34.080 --> 0:02:37.200 parties that were focused on here. We're focused principally on 0:02:37.320 --> 0:02:40.880 North Korea. And actually, to his credit, President Trump just 0:02:41.000 --> 0:02:45.000 signed into law in August second the uh bill called 0:02:45.040 --> 0:02:49.960 Countering America's Adversary through Sanctions, and that imposes new sanctions 0:02:49.960 --> 0:02:53.240 on Russia, North Korea, and Iran. And I think there's 0:02:53.240 --> 0:02:55.600 certainly a lot that we can do in terms of 0:02:55.760 --> 0:03:00.080 dealing with North Korea from a sanctioned perspective. But the 0:03:00.120 --> 0:03:02.840 fact is we've been dealing with this North Korean issue 0:03:02.960 --> 0:03:07.400 for decades. The Sixth Party took started in in two 0:03:07.440 --> 0:03:11.519 thousand and three, were now about fourteen years later, and 0:03:11.639 --> 0:03:15.720 they are marching inexorably towards not only having the nuclear 0:03:15.760 --> 0:03:19.160 weapons that they already have, but developing a delivery system 0:03:19.720 --> 0:03:23.480 that will have the ability to have ballistic missiles that 0:03:23.520 --> 0:03:26.680 are nuclear tipped hit the coast of the United States. 0:03:26.800 --> 0:03:29.600 And so what President Trump has said, which is corrected, 0:03:30.320 --> 0:03:33.639 we have to get China to engage here. But it's 0:03:33.760 --> 0:03:38.200 simple negotiation tactics that you need both carrots and sticks, 0:03:38.200 --> 0:03:41.080 and I think the most important carrot here is to 0:03:41.240 --> 0:03:45.280 let China know that we actually are not seeking to 0:03:45.440 --> 0:03:49.960 exert our influence or South Korea's influence over the northern 0:03:50.000 --> 0:03:54.320 part of that peninsula. It's not actually something that anybody 0:03:54.360 --> 0:03:57.720 believes is realistic at this stage. And yet as long 0:03:57.760 --> 0:04:01.680 as it remains our official stated policy, I think China 0:04:01.800 --> 0:04:06.640 believes that it is more to fear from a unified 0:04:06.680 --> 0:04:10.000 pen and flow with US influence in South Korea right 0:04:10.080 --> 0:04:13.400 on its weakest border then it has from this current 0:04:13.800 --> 0:04:17.880 unstable nuclear regime in North Korea. And if we could 0:04:17.880 --> 0:04:20.960 just allay those concerns that I think China would be 0:04:21.000 --> 0:04:25.320 incentivized to help solve the problem of North Korea. Jay, 0:04:25.400 --> 0:04:28.599 I'm sure that you have discussions with some people currently 0:04:28.600 --> 0:04:31.520 in government or I imagine that you have a sense 0:04:31.760 --> 0:04:34.599 of the dynamic there. Do you have a sense that 0:04:34.720 --> 0:04:40.000 anyone is seriously considering what you're talking about? And if so, 0:04:40.520 --> 0:04:43.839 what would they hope that China would give a sort 0:04:43.880 --> 0:04:47.440 of a reciprocation and that could possibly ameliorate the whole situation. 0:04:47.600 --> 0:04:52.080 So look, I have had quite a number of follow 0:04:52.160 --> 0:04:54.520 ups just in the last week from folks who are 0:04:54.560 --> 0:04:58.680 involved in in policy issues in the government. Uh, I 0:04:58.720 --> 0:05:01.480 don't want to reveal they are directly, and I also 0:05:01.520 --> 0:05:04.400 don't want to in any way suggest that the Trump 0:05:04.440 --> 0:05:09.080 administration is accepting my suggestions. But I think the Trump 0:05:09.120 --> 0:05:13.320 administration certainly recognizes that the path to a North Korea 0:05:13.760 --> 0:05:18.159 solution lies through China, and the challenges how to really 0:05:18.200 --> 0:05:20.440 get the Chinese to the table. And when you say, 0:05:20.480 --> 0:05:23.080 what would we be looking for, you know, it seems 0:05:23.080 --> 0:05:26.240 to me that the message to China is, look, if 0:05:26.320 --> 0:05:31.520 we allay your concerns about too much US influence up 0:05:31.720 --> 0:05:36.000 north of the Parallel, in return, we want you to 0:05:36.160 --> 0:05:40.600 deal with this regime. Now, China has enormous economic clout. 0:05:41.000 --> 0:05:44.159 They could literally shut all of the remaining lights in 0:05:44.279 --> 0:05:47.599 Pianyang out in forty eight hours if they wanted to, 0:05:47.920 --> 0:05:53.360 and they could presumably also uh change the regime um 0:05:53.400 --> 0:05:55.640 if they wanted to. And I think what we have 0:05:55.720 --> 0:05:57.600 to tell the Chinese is We're going to give you 0:05:57.800 --> 0:06:01.800 some time to do this, but if not, then here 0:06:01.839 --> 0:06:04.000 are the sticks. The sticks are we are going to 0:06:04.080 --> 0:06:06.440 have to protect U s citizens. We are going to 0:06:06.520 --> 0:06:10.359 have to think about putting short range missiles in the region, 0:06:10.480 --> 0:06:13.359 whether in Japan or South Korea. We're going to have 0:06:13.440 --> 0:06:17.560 to start building a missile defense system that is there 0:06:17.600 --> 0:06:20.880 to protect the United States of interest, and it has 0:06:20.960 --> 0:06:23.799 to be in the region to deal with North Korea, 0:06:23.839 --> 0:06:26.760 and of course China certainly doesn't want the United States 0:06:26.800 --> 0:06:28.800 to do that. So I think we need a set 0:06:28.839 --> 0:06:34.240 of carrots and sticks to have a productive negotiation. J Lefkowitz. 0:06:34.440 --> 0:06:37.400 Do we know what it is that North Korea wants? 0:06:37.760 --> 0:06:42.279 Has anyone asked them? I don't know that anybody knows 0:06:42.360 --> 0:06:45.400 what they want. You know, the problem with North Korea 0:06:45.560 --> 0:06:49.359 is it is really a cult of personality. It's probably 0:06:49.400 --> 0:06:56.799 the last true remaining stalinist authoritarian regime. They have concentration camps, 0:06:56.880 --> 0:07:01.719 they torture their own citizens, they routinely starve their own citizens. 0:07:01.839 --> 0:07:04.880 I mean, this is a cult of personality. It's not 0:07:05.200 --> 0:07:08.320 really a nation state. And the problem is when you're 0:07:08.320 --> 0:07:12.560 not dealing with true nation states that are functioning nation states, Uh, 0:07:12.600 --> 0:07:15.800 there isn't the same sense of responsibility to a citizen 0:07:15.920 --> 0:07:20.240 rate accountability. Um. And so I don't know that anybody 0:07:20.280 --> 0:07:24.960 knows what what what the Kim family really wants here, Jay, 0:07:25.040 --> 0:07:27.320 real quick, what do you think the chances are at 0:07:27.320 --> 0:07:31.600 this point of a violent resolution to the situation. I 0:07:31.640 --> 0:07:35.960 don't think we're likely to have a violent resolution in 0:07:36.000 --> 0:07:40.560 the short term. I think China certainly has has has 0:07:40.600 --> 0:07:43.680 made it clear to North Korea that at least short term, 0:07:43.800 --> 0:07:47.680 a true violent reaction would not be acceptable, and of 0:07:47.680 --> 0:07:50.680 course the United States would have to react with violence. 0:07:50.760 --> 0:07:54.280 If there were one South Korea, it would be in jeopardy. 0:07:54.320 --> 0:07:56.920 But I do think over the next year the United 0:07:56.960 --> 0:08:00.440 States of shores are going to be genuinely threatened, and 0:08:00.480 --> 0:08:02.880 so we can't leave it for a year from now 0:08:02.960 --> 0:08:05.720 to try to solve this problem. Jay Leftwitz, thank you 0:08:05.800 --> 0:08:08.800 so much for joining us. Truly a pleasure speaking with you. 0:08:08.960 --> 0:08:12.360 Jay Leftwitz was a former U S Special Envoy for 0:08:12.440 --> 0:08:15.640 Human Rights in North Korea under President Bush from two 0:08:16.040 --> 0:08:19.080 five to two thousand and nine. He is currently a 0:08:19.160 --> 0:08:22.720 leading partner at Kirkland and Ellis in New York, and 0:08:23.040 --> 0:08:25.320 we will continue to bring you coverage in this issue 0:08:25.320 --> 0:08:27.800 because it is one of the main concerns that a 0:08:27.840 --> 0:08:30.559 lot of policymakers have, at least at Brown with Pimp Fox. 0:08:30.600 --> 0:08:45.080 This is Bloomberg right now. We want to get more 0:08:45.160 --> 0:08:48.839 on this from Chris Strom, Justice Department reporter for Bloomberg, 0:08:48.960 --> 0:08:53.040 and Chris, you're listening. What was your biggest takeaway from this? Well, 0:08:53.880 --> 0:08:58.360 the biggest takeaway is that they aren't actually announcing anything 0:08:58.920 --> 0:09:03.680 new so much as they're saying that they're putting more 0:09:03.720 --> 0:09:10.319 emphasis on activities to identify leaguers and men prosecute them. Uh. 0:09:10.400 --> 0:09:14.560 They Session said that they've now had more referrals that 0:09:14.600 --> 0:09:17.520 they're going to investigate, and he said that the number 0:09:17.520 --> 0:09:22.400 of active investigations is higher now than it was at 0:09:22.400 --> 0:09:24.800 the end of the end of last year. Uh. The 0:09:24.840 --> 0:09:27.480 abomb administration was known for for being for having an 0:09:27.480 --> 0:09:32.800 aggressive posture towards towards leaguers. And uh, it seems that 0:09:32.880 --> 0:09:37.120 Sessions wants to try to even outdo the Obama administration. 0:09:37.240 --> 0:09:40.080 But you know, we'll still have to see how it 0:09:40.120 --> 0:09:43.280 plays out in the coming months. I mean, obviously Sessions 0:09:43.280 --> 0:09:44.840 has been under a lot of pressure to talk about 0:09:44.920 --> 0:09:47.960 leagues and that's what he's doing. Chris, just a question 0:09:48.000 --> 0:09:51.439 to you, because some Republican senators, I'm thinking, for example, 0:09:51.480 --> 0:09:55.439 of the Judiciary Chairman Chuck grass Lee back in July, 0:09:55.600 --> 0:09:58.640 he urged the leaker who had the information about the 0:09:58.640 --> 0:10:01.800 talks between Attorney Gen. Jeff Sessions in a Russian diplomat. 0:10:01.960 --> 0:10:04.960 He urged the leaker to actually leak the entire conversation. 0:10:05.480 --> 0:10:10.240 Is there any confusion amongst the Republican senators about what 0:10:10.480 --> 0:10:13.839 leaks are allowed and what aren't. Well, I mean, certainly 0:10:13.880 --> 0:10:17.679 there's hypocrisy in in in this world, and so uh 0:10:17.720 --> 0:10:22.360 you know, uh, one person's leaker is another person's patriot. 0:10:22.559 --> 0:10:25.840 You know. So it just depends on your your your 0:10:25.880 --> 0:10:28.720 politics and in your point of view. I mean even 0:10:28.720 --> 0:10:31.640 going back to um, you know, uh Trump when he 0:10:31.679 --> 0:10:36.280 was campaigning talking about uh, you know Russian, you know Russian, Uh, 0:10:36.320 --> 0:10:39.079 you know, hackers should should find Hillary Clinton's emails and 0:10:39.120 --> 0:10:42.640 leak them. I mean, you know, um, the idea that 0:10:42.920 --> 0:10:47.280 uh you know, some people support some leagues while they 0:10:47.280 --> 0:10:52.240 oppose other leagues. Um, you know, is you know frequently happens. Chris, 0:10:52.280 --> 0:10:55.080 you know, I'm struck by this coming just as we 0:10:55.160 --> 0:10:59.840 find out about the assembling of a grand jury for 0:11:00.120 --> 0:11:04.240 or Bob Mueller's team. He is the special prosecutor that 0:11:04.360 --> 0:11:08.080 was appointed to look into any connection with Russia and 0:11:08.200 --> 0:11:11.360 possible collusion with respect to the U. S. Election. And 0:11:11.360 --> 0:11:14.800 I'm wondering, you know, this raises the specter of even 0:11:14.840 --> 0:11:18.560 more leaks. And do you expect that the conversation will 0:11:18.600 --> 0:11:22.720 shift to what is classified? How how to determine these things? 0:11:22.840 --> 0:11:24.880 And do you expect the leaks to actually stop or 0:11:24.920 --> 0:11:28.760 just simply accelerate from here. Well, it's hard to know 0:11:28.800 --> 0:11:32.680 exactly how this is going to play out. Um Uh, certainly, Uh, 0:11:32.800 --> 0:11:34.960 there have been leaks that have been damaging to the 0:11:35.120 --> 0:11:39.480 to the Trump administration. Um that you know, appear to 0:11:39.480 --> 0:11:42.200 come from people who are who are who who feel 0:11:42.240 --> 0:11:44.719 that what Trump is doing is wrong and that they 0:11:44.720 --> 0:11:46.400 need to stand up. And the and the way that 0:11:46.440 --> 0:11:49.280 they are choosing to stand up is being uh, you know, 0:11:49.400 --> 0:11:54.640 whistleblowers by by leaking information. Um. Uh you know, with 0:11:54.640 --> 0:11:58.160 with Moller. You know, I think that the Trump administration 0:11:58.240 --> 0:12:01.320 seems to be trying to build a case to discredit 0:12:01.400 --> 0:12:04.920 what uh you know, what Maller is is finding, um 0:12:04.960 --> 0:12:08.439 by saying he has conflicts of interest and so um 0:12:08.679 --> 0:12:11.079 you know, to the degree that you've got you know, 0:12:11.120 --> 0:12:14.080 these competing these competing forces, I think that you're going 0:12:14.120 --> 0:12:17.559 to continue to see people, um, you know, leaking information 0:12:17.600 --> 0:12:20.480 to the media uh for what they see you know, 0:12:20.600 --> 0:12:25.920 is in there in their best interest and so. UM. 0:12:25.960 --> 0:12:29.080 But I wouldn't be surprised if if you do see uh, 0:12:29.120 --> 0:12:34.199 the administration come forward with some you know, new active cases. Um. 0:12:34.240 --> 0:12:38.000 But these cases take a while, they're they're hard to uh, 0:12:38.080 --> 0:12:41.040 they're they're they're hard to prosecute. That's why you don't 0:12:41.080 --> 0:12:46.520 have many examples of actually successful prosecutions. And so you know, 0:12:46.600 --> 0:12:49.760 any case that that the uh you know Sessions is 0:12:49.800 --> 0:12:51.319 working on is going to take a while to come 0:12:51.320 --> 0:12:55.480 to fruition. Is is there a way to I don't 0:12:55.520 --> 0:12:57.079 even know if it's relevant, but I mean, is there 0:12:57.080 --> 0:12:59.120 a way to to find what is a leaker? What 0:12:59.280 --> 0:13:03.640 is a whistle blow or and what is a confidential source? Well, 0:13:03.679 --> 0:13:08.600 there are there in the law. There there is definitions 0:13:08.679 --> 0:13:12.079 that um that you know apply when you're actually doing 0:13:12.280 --> 0:13:17.439 a leak investigation. And so um, if you're if you're 0:13:17.559 --> 0:13:21.000 somebody who's working inside government and you're not if you 0:13:21.559 --> 0:13:24.280 if you're working for the civilian side of government, the 0:13:24.320 --> 0:13:27.960 non national security side of government. There are specific steps 0:13:28.000 --> 0:13:30.480 that you can go through in order to be a 0:13:30.480 --> 0:13:33.360 whistle in order to be designated as a whistleblower and 0:13:33.520 --> 0:13:37.240 have a job protection. UM. Now, people have said that 0:13:37.280 --> 0:13:40.600 those uh steps are very difficult to follow and that 0:13:40.679 --> 0:13:43.240 you know, they're cumbersome, and that oftentimes when people come 0:13:43.280 --> 0:13:46.760 forward and they follow those steps, they get retaliated against 0:13:46.800 --> 0:13:49.400 in in their own agency. And so there's a disincentive 0:13:49.440 --> 0:13:53.240 to actually do that. So, um, but when you get 0:13:53.240 --> 0:13:55.600 into a leak investigation, you need to you know, look 0:13:55.600 --> 0:13:57.280 at the look at the facts that that are that 0:13:57.320 --> 0:14:00.760 are relevant to that investigation in order to find out 0:14:01.080 --> 0:14:04.680 you know what specifically, uh, you know what, what specific 0:14:04.760 --> 0:14:07.679 laws somebody violated and whether criminal charges can be can 0:14:07.679 --> 0:14:09.760 be brought against them. Chris, you know, I was really 0:14:09.800 --> 0:14:14.440 struck by the comments about media subpoenas. Did that ring 0:14:14.640 --> 0:14:19.560 something for you as being I don't know, something new? Yeah, 0:14:19.640 --> 0:14:22.320 that that caught me. Um. The idea that you know, 0:14:22.360 --> 0:14:24.560 he said that they are going to be reviewing the 0:14:24.600 --> 0:14:28.680 idea of subpoenaing news outlets is uh, it's something that 0:14:28.720 --> 0:14:31.440 I think, you know, we need to watch for. Um. 0:14:31.480 --> 0:14:34.720 You know, I wouldn't be surprised to see the Trump 0:14:34.760 --> 0:14:38.440 administration to try to, um, you know, go after some 0:14:38.520 --> 0:14:43.080 news outlets for uh publishing uh, you know, classified or 0:14:43.160 --> 0:14:46.360 or sensitive information. I want to thank you very much 0:14:46.400 --> 0:14:50.160 for joining us. Chris Strom is our Justice Department reporter 0:14:50.240 --> 0:14:54.720 for Bloomberg, giving us his thoughts and reaction to the 0:14:54.760 --> 0:14:58.480 comments from Attorney General Jeff A. Sessions today coming from 0:14:58.480 --> 0:15:12.920 the Justice Department. Thanks for every much well, today's non 0:15:13.000 --> 0:15:16.240 farm paywork report was better than estimated by a variety 0:15:16.320 --> 0:15:19.960 of economists. Joining us now is the former Deputy Secretary 0:15:19.960 --> 0:15:23.280 of Labor under President Obama, Chris Lou. He is currently 0:15:23.320 --> 0:15:27.000 a Senior Fellow at the University of Virginia Miller Center, 0:15:27.360 --> 0:15:30.160 and he can be followed on Twitter at Chris Lou 0:15:30.640 --> 0:15:34.280 forty four. Chris Lou forty four, tell us if you 0:15:34.400 --> 0:15:38.560 now have a new perspective after leaving the administration. Obviously, 0:15:38.760 --> 0:15:40.960 I'm wondering if you could explain to us what you 0:15:41.080 --> 0:15:44.480 have learned now that you are out of government about 0:15:44.520 --> 0:15:49.200 the politicization of these reports, because you know you did 0:15:49.200 --> 0:15:51.920 it when you were in when you were in the administration, 0:15:51.960 --> 0:15:54.080 that you know we take that, and of course the 0:15:54.160 --> 0:15:56.440 current administrat every administration does it. But is there a 0:15:56.440 --> 0:15:58.080 way to step back and say, all right, let's not 0:15:58.120 --> 0:16:01.400 play politics with the numbers. Let's not describe blame or 0:16:01.520 --> 0:16:04.840 or credit, just describe what's going on. I think that's 0:16:04.840 --> 0:16:09.479 a fantastic point number that we touted back in Republicans 0:16:09.560 --> 0:16:12.720 love saying or uh, I love poo pooing them, and 0:16:12.720 --> 0:16:14.520 and and the flip right now as you see it, 0:16:14.560 --> 0:16:17.920 going the other way, where numbers that President Trump is touting, 0:16:18.320 --> 0:16:21.480 Democrats often sort of say, uh, this is really glass 0:16:21.560 --> 0:16:24.440 half empty. I think what's fair to say about these 0:16:24.520 --> 0:16:28.040 numbers is that it's a solid growth two nine anything. 0:16:28.280 --> 0:16:31.400 Anytime you have a two before the number, that's a 0:16:31.560 --> 0:16:36.880 good sign. The constant here, and this runs across both administrations, 0:16:37.200 --> 0:16:39.520 is wage growth at two and a half percent. And 0:16:39.520 --> 0:16:42.680 while obviously any positive wage growth is a good thing, 0:16:42.960 --> 0:16:45.240 it's really not enough to make a meaningful difference in 0:16:45.280 --> 0:16:47.480 most people's lives. And this is one of the reasons 0:16:47.520 --> 0:16:51.680 why in the Obama administration we push for increases in 0:16:51.720 --> 0:16:55.120 the minimum wage, raising the overtime threshold, up skilling, which 0:16:55.120 --> 0:16:58.800 are good, sensible, I would argue, nonpartisan policies. So I 0:16:58.800 --> 0:17:01.080 think that's the constant rate. I'm are go ahead, well, no, Chris, 0:17:01.120 --> 0:17:03.880 because I was going to say that actually, in the 0:17:04.000 --> 0:17:08.240 lower salary jobs there actually has been more growth with 0:17:08.280 --> 0:17:12.080 respect to salaries as well as jobs being filled. It 0:17:12.119 --> 0:17:14.959 seems to be uh, you know, clearly there could be 0:17:14.960 --> 0:17:17.280 more growth there as well, but you know, there has 0:17:17.320 --> 0:17:20.240 been also very little growth at the high end, in fact, 0:17:20.359 --> 0:17:23.119 less growth at the higher ends, which is uh, it 0:17:23.119 --> 0:17:26.880 which suggests that there's something larger at play here. Well, 0:17:26.920 --> 0:17:29.480 it is something larger play. It reflects kind of the 0:17:29.560 --> 0:17:32.800 shifting of the economy right now, when you've got kind 0:17:32.800 --> 0:17:37.119 of um an outflux of manufacturing jobs in the United States, 0:17:37.160 --> 0:17:39.280 a lot of the folks that would have those jobs 0:17:39.359 --> 0:17:42.159 in rural areas have now moved to retail jobs, and 0:17:42.200 --> 0:17:44.840 so those salaries have been basically flat during this period 0:17:44.880 --> 0:17:46.959 of time. And again, looking a little bit more at 0:17:47.000 --> 0:17:50.639 these numbers. While again over all these were positive numbers, 0:17:50.640 --> 0:17:53.879 I look at construction manufacturing, which had gains, but they 0:17:53.880 --> 0:17:56.400 weren't big gains. I looked at retail, which was essentially 0:17:56.400 --> 0:17:59.399 flat and has lost about eighty thousand jobs over the 0:17:59.440 --> 0:18:02.119 last six and that's kind of a longer term trend 0:18:02.160 --> 0:18:04.679 that is going to continue with automation. And so again 0:18:04.760 --> 0:18:07.679 this is a positive job report, but as with anything, 0:18:07.720 --> 0:18:11.000 there are some issues in here. Chris, is there any 0:18:11.080 --> 0:18:13.720 data that you've been able to look at that describes 0:18:13.800 --> 0:18:17.720 the relationship between actually getting a job, holding a job, 0:18:17.840 --> 0:18:20.960 and the benefits such as healthcare, health insurance that would 0:18:20.960 --> 0:18:24.560 come with the job. Many people taking a position for 0:18:24.600 --> 0:18:27.760 those reasons as opposed to let's say, making money or 0:18:27.880 --> 0:18:31.600 or doing the particular work. Well, you're right, it's not 0:18:31.680 --> 0:18:35.600 just the that's a minimum wage. It's whether people have 0:18:35.720 --> 0:18:39.159 health care, how robust that healthcare is. Obviously, um the 0:18:39.240 --> 0:18:42.960 affordable character has played an important role in helping to 0:18:43.040 --> 0:18:45.680 lift up people. But more broadly, it's what are the 0:18:45.760 --> 0:18:49.560 retirement benefits. As larger companies have moved away from the 0:18:49.600 --> 0:18:53.560 traditional pension plans, the longer term security of employees is 0:18:53.720 --> 0:18:56.440 really at risk. And as you move more to a 0:18:56.440 --> 0:19:00.000 gig economy where people don't work for one employer, uh 0:19:00.480 --> 0:19:02.600 for the course of their lifetime or even at one time, 0:19:03.200 --> 0:19:06.920 it creates greater economic instability. And that's just not something 0:19:06.960 --> 0:19:09.040 we've really figured out a way to address quite yet 0:19:09.040 --> 0:19:11.800 in this country. You know, Chris, we had our own 0:19:11.880 --> 0:19:15.000 Carl Ricadona, chief US economist from Bloomberg Intelligence on earlier 0:19:15.000 --> 0:19:18.159 and he was saying that he does expect that wage 0:19:18.200 --> 0:19:21.280 growth will start to accelerate more later in the year 0:19:21.520 --> 0:19:25.800 if we still keep getting these two plus prints. Do 0:19:25.840 --> 0:19:29.720 you agree? Well, I hope so. And that's something that frankly, 0:19:29.760 --> 0:19:33.840 we thought would happen um years ago and during this recovery. Mean, 0:19:33.880 --> 0:19:37.040 when we got down in the five percent unemployment, and 0:19:37.080 --> 0:19:39.960 people kept saying, well, we're close to full full employment, 0:19:40.200 --> 0:19:42.320 we should start to see wage growth. That just doesn't happen, 0:19:42.320 --> 0:19:45.119 and it starts to suggest there may be broader issues 0:19:45.119 --> 0:19:47.560 going on in the economy, whether it's with automation, whether 0:19:47.640 --> 0:19:51.560 is globalization that may be having a powerful downward impact 0:19:51.680 --> 0:19:55.000 on wages. It also speaks more broadly as to whether 0:19:55.080 --> 0:19:57.960 the fet is being premature in raising interest rates and 0:19:58.040 --> 0:20:00.040 whether they ought to let this recovery go on a 0:20:00.080 --> 0:20:03.200 little bit longer. Of course, one of the big topics 0:20:03.320 --> 0:20:07.399 is immigration and the jobs that immigrate immigrants to the 0:20:07.480 --> 0:20:11.280 United States get when they arrive. Can you give us 0:20:11.320 --> 0:20:14.960 your thoughts about the trends that currently exist, what kinds 0:20:14.960 --> 0:20:19.040 of jobs they get, and whether these new policies will benefit, 0:20:19.080 --> 0:20:22.439 as the President has said, the American workers. Well, I 0:20:22.480 --> 0:20:24.440 think the bill that the President out of the other 0:20:24.520 --> 0:20:27.320 day is the wrong approach. And that's not just me 0:20:27.400 --> 0:20:29.639 saying that. That's the US Chamber of Commerce, that's the 0:20:29.680 --> 0:20:33.359 I T industry, it's Senators McCain and Graham. Uh. You know, 0:20:33.400 --> 0:20:35.320 we are in a period right now in the United 0:20:35.320 --> 0:20:38.640 States where population growth really is at its lowest since 0:20:38.720 --> 0:20:41.280 the Great depression. And that's not only because of low 0:20:41.359 --> 0:20:45.000 birth rates, it's because of more people retiring. And so 0:20:45.080 --> 0:20:47.560 we need more labor in this country. And yes, we 0:20:47.600 --> 0:20:50.679 need more high skilled labor. We need to replenish and 0:20:50.720 --> 0:20:54.159 revitalize the igh T industry in this country, but we 0:20:54.200 --> 0:20:57.200 need low skilled labored as well. And uh. Senator Lindsay 0:20:57.200 --> 0:20:59.680 Graham said it, well, in a state like South Carolina, 0:20:59.800 --> 0:21:03.000 you not only have high tech healthcare jobs, but you 0:21:03.040 --> 0:21:06.480 also have a retail, your food service, you have agriculture 0:21:06.520 --> 0:21:10.280 that all needs more people. And so artificially cutting in 0:21:10.320 --> 0:21:13.040 half legal immigration is not the right answer to creating 0:21:13.080 --> 0:21:16.159 economic growth. Chris lou thank you so much for joining us. 0:21:16.240 --> 0:21:18.800 Chris Leu is a senior fellow at the University of 0:21:18.840 --> 0:21:22.560 Virginia Miller Center. He was the Deputy Secretary of Labor 0:21:22.680 --> 0:21:25.760 under former President Barack Obama, and he comes to us 0:21:26.359 --> 0:21:42.800 from Virginia. Well, it is another day and another billionaire 0:21:42.800 --> 0:21:46.440 hedge fund manager is coming out to trash the E 0:21:46.600 --> 0:21:50.159 T F industry. Paul Singer, who's the billionaire founder of 0:21:50.200 --> 0:21:54.600 Elliott Management Corps, warned that quote passive investing is in 0:21:54.680 --> 0:21:58.639 danger of devouring capitalism, which may have been a clever 0:21:58.720 --> 0:22:01.640 idea and its infancy has grown into a blob which 0:22:01.720 --> 0:22:05.680 is destructive to the growth creating and consensus building prospects 0:22:06.240 --> 0:22:09.840 a free market capitalism. We'll here to defend the blob 0:22:09.920 --> 0:22:12.400 that is the E t F industry. Is our own 0:22:12.720 --> 0:22:15.120 Eric baltun As he is our senior et F analyst 0:22:15.200 --> 0:22:20.560 for Bloomberg Intelligence and Eric Um. First, I just want 0:22:20.600 --> 0:22:22.280 to I want to ask you, you know, I have 0:22:22.320 --> 0:22:24.280 a feeling that you do not think that E t 0:22:24.440 --> 0:22:28.200 F s are devouring capitalism. Is there anything about Paul 0:22:28.280 --> 0:22:32.520 Singer's argument that rang true with you? Yes, So there's 0:22:33.000 --> 0:22:35.119 there's a one hand in the other. So on one hand, 0:22:35.640 --> 0:22:38.840 Vanguard and black Rock, which are ultimately passive, that's they 0:22:38.880 --> 0:22:41.919 own almost all the passive assets, are the top in 0:22:41.960 --> 0:22:46.520 the top three holders of the sp companies. So they 0:22:46.520 --> 0:22:48.119 are becoming a bigger and bigger deal. And if we 0:22:48.160 --> 0:22:51.000 extrapolate the assets ten twenty years down the road, you 0:22:51.000 --> 0:22:53.919 could see a world where Vanguard alone owns thirty of 0:22:53.920 --> 0:22:56.280 the stock market. At that point, I think we would 0:22:56.840 --> 0:22:59.120 the government might step in at that point. But right now, 0:22:59.200 --> 0:23:01.280 let me give you some other context, which is to 0:23:01.320 --> 0:23:03.080 say that even though they're the top three in the 0:23:03.119 --> 0:23:06.080 top three holders of almost all the companies, they collectively 0:23:06.080 --> 0:23:09.439 only own about thirteen point five of the stock market. 0:23:09.720 --> 0:23:12.800 Because here's why people forget this. Mutual funds which e 0:23:12.880 --> 0:23:15.119 t f s are included in, are a minority owner 0:23:15.119 --> 0:23:18.760 of the stock market. The rest is households, institutions, pensions, 0:23:18.960 --> 0:23:22.920 all people who are active essentially. So you are definitely 0:23:22.960 --> 0:23:26.320 looking at a rise of passive within mutual funds, where 0:23:26.320 --> 0:23:29.280 you're having more and more people put their money passively 0:23:29.880 --> 0:23:31.880 um and I think that speaks to a bigger issue, 0:23:31.880 --> 0:23:34.880 which is that active has lost the hearts and minds 0:23:34.880 --> 0:23:37.000 of investors. And I think that's part of what you're seeing. 0:23:37.040 --> 0:23:40.280 You're seeing they feel threatened, they're they're losing. I'm sure 0:23:40.280 --> 0:23:42.240 he's getting calls from people saying, why don't I just 0:23:42.280 --> 0:23:44.080 put my money in the n sp y or or 0:23:44.320 --> 0:23:47.040