WEBVTT - Former World Bank President David Malpass Talks Economic Policy

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<v Speaker 1>Big conversation about policy over China. Joining us now to

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<v Speaker 1>discuss as the former World Bank President David moultpas, David,

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<v Speaker 1>good morning. It's going to see as always good morning.

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<v Speaker 1>Everybody has the spread between sound economic policy and the

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<v Speaker 1>kind of campaign promises that get you elected. Has it

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<v Speaker 1>ever been wider?

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<v Speaker 2>Well, there's a huge fight over what we should do

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<v Speaker 2>in which way should we should go. So that's a

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<v Speaker 2>wide divide from the market standpoint. I think they take

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<v Speaker 2>it with a grain salt and say we're going to

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<v Speaker 2>figure out a way to get through this. So bottom

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<v Speaker 2>line comes out to earnings. You know, we know that

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<v Speaker 2>old game, how do you make money within a within

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<v Speaker 2>a volatile environment? And I think the markets are showing

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<v Speaker 2>they're able to do that. Plus they've got the FED

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<v Speaker 2>put behind them. We have to realize what's going on.

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<v Speaker 2>As markets get dicey, the FED steps in and so

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<v Speaker 2>that changes really the value of everything and addresses what

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<v Speaker 2>Lisa is talking about the on the bond yield.

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<v Speaker 1>Before we get to the economic bank, drop, just want

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<v Speaker 1>to spend a bit of time talking about specific policies.

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<v Speaker 1>Can we talk about Nippon Steele. Nippon Steele to us

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<v Speaker 1>is a great example of where we are right now

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<v Speaker 1>in this country. It feels like there's a big divide

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<v Speaker 1>between doing the right thing and doing the kind of

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<v Speaker 1>thing that gets you elected. Nippon Steele, We're talking about

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<v Speaker 1>a Japanese ally looking to take over a US company,

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<v Speaker 1>and no one on the campaign trail wants to entertain

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<v Speaker 1>it because they know if they do, they won't win

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<v Speaker 1>the election in November. How problematic is that because that

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<v Speaker 1>doesn't feel isolated, that feels like policy across the country.

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<v Speaker 2>Yeah, and it's a excuse me, a change in the

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<v Speaker 2>US direction of inviting foreign investment into the US. But

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<v Speaker 2>it's a Biden administration really pushing that. I've been disappointed

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<v Speaker 2>in that they're the ones with the hand on the

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<v Speaker 2>steering wheel right now and moving away from inviting foreign investment.

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<v Speaker 2>But let me change gears. There's a giant problem in

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<v Speaker 2>the world with the playing field not being level, and

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<v Speaker 2>so this is going to be a fight that goes

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<v Speaker 2>into future years, and it's both parties trying to figure

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<v Speaker 2>out where the US wants to be in that fight.

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<v Speaker 2>So I think there's got to be a lot of

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<v Speaker 2>work done on what do we want in terms of

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<v Speaker 2>foreign investment? Into the US and into certain sectors and industries, David.

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<v Speaker 3>When it comes to nip on steel, the Biden administration

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<v Speaker 3>is taking this approach because they were pushed there, and

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<v Speaker 3>they were pushed there by Trump, who in January of

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<v Speaker 3>this year said I would block that deal. Then Biden

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<v Speaker 3>Harris had to come out and basically get behind Trump

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<v Speaker 3>because it's an election year. Don't you think that the

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<v Speaker 3>former president is also an individual that, if given this choice,

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<v Speaker 3>would block that decision.

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<v Speaker 2>He's got views and he's a leader, and so what

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<v Speaker 2>you're basically saying is Biden is following the leader and

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<v Speaker 2>Vice President Harris is following the leader. That's not a

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<v Speaker 2>good position for the US to be in if it's

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<v Speaker 2>trying to lead in the world. That's one of the

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<v Speaker 2>problems going on in the world is the vacuum of

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<v Speaker 2>leadership from the US and the world is really to

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<v Speaker 2>look at that in each of the forum, what are

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<v Speaker 2>we going to do when the US is not really

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<v Speaker 2>showing where it's going to go.

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<v Speaker 3>I love to also get your thoughts on one policy

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<v Speaker 3>proposal Trump continuously talks about, so Republicans, when Kamala Harris

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<v Speaker 3>came out, was talking about price gouging across the board

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<v Speaker 3>for groceries. Republicans were all saying, she's a communist. This

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<v Speaker 3>is price controls. What's the difference between that and capping

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<v Speaker 3>interest rates on credit cards, which was a Bernie Sanders

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<v Speaker 3>policy proposal. Now Trump's saying they should do it too.

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<v Speaker 2>I'm not in favor of all of of those, but

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<v Speaker 2>price controls, as described by VP Harris, we're sweeping, and

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<v Speaker 2>that's just not a good answer to what you're going

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<v Speaker 2>to do about inflation. You've got to have some answer

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<v Speaker 2>that talks about more production, and that's what President Trump did.

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<v Speaker 2>I think that's the better approach. If VP Harris is

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<v Speaker 2>asked about inflation the next time, I hope she doesn't

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<v Speaker 2>talk about the middle class, and maybe she can just say, look,

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<v Speaker 2>I'm going to try to have our economy, the private

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<v Speaker 2>sector of the United States produce a lot more. That's

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<v Speaker 2>the way to deal with inflation. And she's just not

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<v Speaker 2>saying that. She's got the government pushed into the middle

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<v Speaker 2>of every part of the US markets.

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<v Speaker 4>You said that the US needs leadership and clear leadership

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<v Speaker 4>in terms of what his positions are in certain places.

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<v Speaker 4>I'm just wondering, do you have a clear sense of

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<v Speaker 4>how to weigh national security versus letting fare and free

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<v Speaker 4>trade and business. What that looks like under Trump, I

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<v Speaker 4>don't know.

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<v Speaker 2>Under Trump, I know that issue. So starting in the

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<v Speaker 2>nineteen eighties, there was a big push in discussion of

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<v Speaker 2>whether what was industrial policy, how far did you want

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<v Speaker 2>to go? There was the beginnings of SCIFIUS, the Committee

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<v Speaker 2>on Foreign Investment in the United States. I was at

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<v Speaker 2>the Treasury Department at the time and substantially involved in that,

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<v Speaker 2>and there was lots of discussion of what is our

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<v Speaker 2>national security and within the US government, how do we

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<v Speaker 2>balance the various interests. So the Treasury Department is the

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<v Speaker 2>chair of the SCIPHIUS, and that keeps a balance between

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<v Speaker 2>the Commerce Department, which wants to export and wants to

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<v Speaker 2>not or tended to, and the Defense Department, which often

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<v Speaker 2>wanted to block. And so that kind of debate has

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<v Speaker 2>been with US for a long time. It needs to

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<v Speaker 2>be really worked out among leaders within the US as

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<v Speaker 2>the decisions come down. In the nineteen eighties, it was

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<v Speaker 2>Fairchild Semiconductor, it was France's investment in the US, in

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<v Speaker 2>Japan's investment in the US that were really causing political

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<v Speaker 2>tensions in the US. So it's not such a new

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<v Speaker 2>thing now, it's just got to be discussed really from

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<v Speaker 2>this standpoint of what's our national interest, there's.

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<v Speaker 4>Also a sense of knowing who our friends are. What

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<v Speaker 4>does front shoring mean when we try to change up

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<v Speaker 4>our supply chain. Donald Trump recently said that if Deer

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<v Speaker 4>leaves the US and moves some of its production to Mexico.

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<v Speaker 4>This he said, I'm just notifying John Dear right now.

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<v Speaker 4>If you do that, we're putting a two hundred percent

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<v Speaker 4>tariff on everything that you want to sell into the

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<v Speaker 4>United States. Do you have a clear sense of who

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<v Speaker 4>our friends are under Donald Trump versus under Kamala Harris.

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<v Speaker 2>Well, we know that to Trump, it's going to be

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<v Speaker 2>American workers. So and he's going to use more tools

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<v Speaker 2>and tools more strongly stated than what the Biden Harris

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<v Speaker 2>administration has been doing. So that's the big challenge of

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<v Speaker 2>how do you really enter a world negotiation where the

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<v Speaker 2>trading system is broken, the foreign investment system is really

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<v Speaker 2>broken because in part because China is not following the

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<v Speaker 2>rules and is the intellectual property problem is still with us.

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<v Speaker 2>And so we see in each of these areas there's

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<v Speaker 2>got to be a balancing. I'm back to the same thing.

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<v Speaker 2>What's the nation interest and how do we do the

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<v Speaker 2>best job for workers in the US.

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<v Speaker 3>Well, well LEASA is talking about is Mexico. So is

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<v Speaker 3>Trump basically trying to ditch the USNCA that he negotiated

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<v Speaker 3>under his first term.

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<v Speaker 2>I know what he negotiated was a very strong agreement.

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<v Speaker 2>It's not being fully implemented and Mexico has walked away

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<v Speaker 2>from some of the principles of that. So as you

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<v Speaker 2>look at it, these are living, breathing documents. You get

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<v Speaker 2>the best negotiation you can that was twenty eighteen, and

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<v Speaker 2>then try, but you try to get Mexico to stay

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<v Speaker 2>on course. But think how much has changed in Mexico

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<v Speaker 2>in these last six years of a government that really

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<v Speaker 2>was anti business. Was the first act of AMLO, the

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<v Speaker 2>current or just departed Mexican President Lopez Obrador, was to

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<v Speaker 2>stop the airport that was being constructed. They needed that

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<v Speaker 2>airport because of the expansion going on in Mexico, but

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<v Speaker 2>he said, I don't like those contracts, and it just

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<v Speaker 2>ended it. So we've got a partner to the south

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<v Speaker 2>within the us MCA that's gotten major problems. So there

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<v Speaker 2>has to be real discussion in the US of how

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<v Speaker 2>do we interact with Mexico when they've been leaning towards China.

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<v Speaker 1>It's a big to do list, David Mauntpas, We've got

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<v Speaker 1>a lot to talk about. Hopefully we talked before the

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<v Speaker 1>election once again in the next month or so. Thanks you,

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<v Speaker 1>so good to see everybody. Good to see you, Sir

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<v Speaker 1>David mauntpass there. The former World Bank President