1 00:00:02,520 --> 00:00:08,000 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:07,960 --> 00:00:08,760 Speaker 2: Nor Rubini. 3 00:00:08,840 --> 00:00:12,280 Speaker 1: No, it joins these wonderful books, all that he's done 4 00:00:12,320 --> 00:00:16,279 Speaker 1: for me over the years, going way way back pre 5 00:00:16,400 --> 00:00:19,520 Speaker 1: crisis is well, let me just get bitcoined out of 6 00:00:19,520 --> 00:00:21,599 Speaker 1: the way. I don't always time on it. We've had 7 00:00:21,640 --> 00:00:25,919 Speaker 1: not one but two of our guests emphatically stayed Rubini's right, 8 00:00:26,079 --> 00:00:28,920 Speaker 1: it's going to ten thousand. It's a bit dark going 9 00:00:28,960 --> 00:00:31,480 Speaker 1: down from sixty thousand to ten thousand. 10 00:00:32,960 --> 00:00:36,640 Speaker 3: I think it doesn't matter. I don't make predictions. It 11 00:00:36,680 --> 00:00:40,319 Speaker 3: could go significantly low, where could stay where it is. 12 00:00:41,000 --> 00:00:43,320 Speaker 3: But the point is that you know Bitcoin is down 13 00:00:43,360 --> 00:00:46,000 Speaker 3: from his peak by fifty percent. The other top ten 14 00:00:47,000 --> 00:00:51,280 Speaker 3: cryptocurrences are down between sixty to ninety percent. You know, 15 00:00:52,040 --> 00:00:55,000 Speaker 3: millennia coin and the trump coiner are down ninety seven 16 00:00:55,120 --> 00:00:58,800 Speaker 3: ninety nine percent, even worse than fart Coin is done 17 00:00:58,840 --> 00:00:59,880 Speaker 3: only ninety five. 18 00:01:00,760 --> 00:01:05,160 Speaker 2: Mean, well, you know it's a traded currency, so. 19 00:01:05,760 --> 00:01:08,760 Speaker 3: And you know the NFT index is down ninety five 20 00:01:08,760 --> 00:01:11,839 Speaker 3: percent from the peak. So it was a bubble as burst. 21 00:01:11,959 --> 00:01:16,800 Speaker 3: Whether it be Coong goes much lower and out. Who cares? 22 00:01:17,600 --> 00:01:19,960 Speaker 4: You were saying that you've just come off three weeks 23 00:01:19,959 --> 00:01:23,280 Speaker 4: of travel A where were you and B what did 24 00:01:23,280 --> 00:01:23,640 Speaker 4: you learn? 25 00:01:24,560 --> 00:01:24,760 Speaker 2: Well? 26 00:01:24,760 --> 00:01:30,360 Speaker 3: I spent a good amount of time between Saudi Arabia, Israel, Dubai, 27 00:01:30,400 --> 00:01:33,880 Speaker 3: and Abu Dhabi. I would say that foremost on people's 28 00:01:33,920 --> 00:01:36,640 Speaker 3: mind was the question of whether there will be another 29 00:01:36,720 --> 00:01:41,520 Speaker 3: conflict between Israel, US on one side, and Iran, debated 30 00:01:41,560 --> 00:01:44,040 Speaker 3: in Israel, in Saudi, throughout the Gulf. We don't know 31 00:01:44,120 --> 00:01:47,120 Speaker 3: the negotiations. I would say the Israeli view is that 32 00:01:47,240 --> 00:01:50,960 Speaker 3: probably it's not just a niche about nuclear bomb but 33 00:01:51,000 --> 00:01:55,680 Speaker 3: also about the missiles, but stick missiles and the original proxies. 34 00:01:56,320 --> 00:01:59,280 Speaker 3: While Trump may just cut the deal on the on 35 00:01:59,320 --> 00:02:01,760 Speaker 3: the nuclear bomb alone, that will live israally in a 36 00:02:01,800 --> 00:02:03,840 Speaker 3: weaker position. But we'll see what are going to be 37 00:02:04,040 --> 00:02:05,520 Speaker 3: the results of those negotiations. 38 00:02:06,120 --> 00:02:09,880 Speaker 4: Other than geopolitics, there's been a move just kind of 39 00:02:09,880 --> 00:02:12,840 Speaker 4: feeling that the US maybe has lost a little bit 40 00:02:13,000 --> 00:02:16,400 Speaker 4: of its exceptionalism. There are other opportunities to invest outside 41 00:02:16,400 --> 00:02:18,600 Speaker 4: of the US. We've seen that over the last six 42 00:02:18,639 --> 00:02:21,720 Speaker 4: to twelve months. Is that something you sense in your travels? 43 00:02:22,200 --> 00:02:23,480 Speaker 2: Oh? Yes or no? 44 00:02:24,760 --> 00:02:27,800 Speaker 3: What I feel is people say we don't like the 45 00:02:27,880 --> 00:02:30,840 Speaker 3: US in public, and then they invest in the US. 46 00:02:30,880 --> 00:02:34,600 Speaker 3: I mean throughout the Gulf, whether it's Saudis or Emiratis 47 00:02:34,720 --> 00:02:38,400 Speaker 3: or Kataris, there's an alternative to the United States. 48 00:02:38,480 --> 00:02:39,639 Speaker 2: And I think for a good reason. 49 00:02:39,720 --> 00:02:42,600 Speaker 3: You know, I've argued that, actually I'm a techno optimist 50 00:02:42,639 --> 00:02:44,160 Speaker 3: that US potential growth but at the end of this 51 00:02:44,240 --> 00:02:47,240 Speaker 3: decade is going to be four percent, not two. And 52 00:02:47,280 --> 00:02:50,200 Speaker 3: if you had American exceptionalism when growth was two percent 53 00:02:51,000 --> 00:02:54,320 Speaker 3: and the SMP was returning to twelve percent including the 54 00:02:54,320 --> 00:02:57,480 Speaker 3: dividends for twenty years and as like sixteen percent, if 55 00:02:57,480 --> 00:02:59,440 Speaker 3: growth is even only three litt alone three and a 56 00:02:59,440 --> 00:03:02,720 Speaker 3: half and four, then returns have to be even higher. 57 00:03:02,880 --> 00:03:04,919 Speaker 3: So yeah, and the short term there is now volatility, 58 00:03:04,960 --> 00:03:06,840 Speaker 3: but that's short time volatility. If you look in the 59 00:03:06,840 --> 00:03:09,320 Speaker 3: medium term with three four percent growth and will be 60 00:03:09,360 --> 00:03:12,200 Speaker 3: there because of technology in US is number one together 61 00:03:12,240 --> 00:03:14,680 Speaker 3: with China in all of the indices of the future. 62 00:03:14,680 --> 00:03:17,079 Speaker 3: It's not just say either about fifteen other ones. Then 63 00:03:17,120 --> 00:03:19,639 Speaker 3: American exceptionally is not over actually is going to be 64 00:03:19,720 --> 00:03:22,400 Speaker 3: reinforced over time. And there is no other place to 65 00:03:22,400 --> 00:03:25,320 Speaker 3: invest in the United States because China is risky and 66 00:03:25,440 --> 00:03:27,440 Speaker 3: uninvestable for a lot of good reasons. 67 00:03:27,800 --> 00:03:31,200 Speaker 1: Nor Robini. I'm with this fossed bulletproof academics. Whatever your 68 00:03:31,240 --> 00:03:37,080 Speaker 1: political view is, it's truly outstanding international economics. Nor Robini 69 00:03:37,840 --> 00:03:41,000 Speaker 1: On tariffs, I'm reading the Morgan one volume, and William 70 00:03:41,040 --> 00:03:45,280 Speaker 1: McKinley Trump is fixated on the gilded Age and the 71 00:03:45,360 --> 00:03:48,800 Speaker 1: benefits of tariffs. I don't buy it for a minute. 72 00:03:48,840 --> 00:03:53,480 Speaker 1: And I'm looking for McKinley's buffalo pivot where politicians walk 73 00:03:53,600 --> 00:03:56,920 Speaker 1: back the talk. Are we going to see in twenty 74 00:03:57,000 --> 00:04:02,560 Speaker 1: twenty six tariff reduction by the president in some manner 75 00:04:02,680 --> 00:04:03,800 Speaker 1: like a buffalo pivot? 76 00:04:04,520 --> 00:04:07,640 Speaker 3: Oh, it already happened in twenty and twenty five, and 77 00:04:07,640 --> 00:04:10,240 Speaker 3: it's going to be more of it in twenty twenty six. 78 00:04:10,280 --> 00:04:13,520 Speaker 3: You know, on April second, he announced average effective tariffs 79 00:04:13,600 --> 00:04:18,040 Speaker 3: of thirty percent, as opposed to the pre April psycond 80 00:04:18,040 --> 00:04:21,279 Speaker 3: liberation they three percent. But I said right away that 81 00:04:21,400 --> 00:04:23,760 Speaker 3: market discipline is going to force him to check it 82 00:04:23,800 --> 00:04:26,280 Speaker 3: out and back down. And two weeks into that announcement, 83 00:04:26,720 --> 00:04:29,960 Speaker 3: NASDAK was done. Twenty percent, s MP fifteen ten, new 84 00:04:30,000 --> 00:04:33,520 Speaker 3: treasure yieldware up eighty business points III spread up one 85 00:04:33,560 --> 00:04:34,240 Speaker 3: hundred and fifty. 86 00:04:34,400 --> 00:04:36,320 Speaker 2: The dollars had to go free fall and he. 87 00:04:36,360 --> 00:04:38,520 Speaker 3: Panicked, and he panic it started to do trade deal, 88 00:04:38,600 --> 00:04:41,200 Speaker 3: and he gave the job to Scott Besson. And guess 89 00:04:41,240 --> 00:04:44,520 Speaker 3: what the average US started right now is not thirty percent. 90 00:04:44,520 --> 00:04:48,799 Speaker 3: It's fourteen and falling. Because there is an inflation affordability crisis, 91 00:04:49,040 --> 00:04:52,360 Speaker 3: and every day they cut back the tariffs on aluminum, on. 92 00:04:52,440 --> 00:04:53,839 Speaker 2: Coffee, in hoko and whatever. 93 00:04:54,040 --> 00:04:57,640 Speaker 3: They're desperate and therefore they already chickened out in twenty 94 00:04:57,680 --> 00:05:00,719 Speaker 3: five because the market forced them do more of it 95 00:05:01,040 --> 00:05:03,720 Speaker 3: this year because that of course mid them election and 96 00:05:03,760 --> 00:05:06,480 Speaker 3: they need to try to boost the economy and reduced inflation, 97 00:05:06,600 --> 00:05:08,640 Speaker 3: so taffies are going down, not up. 98 00:05:09,400 --> 00:05:13,880 Speaker 4: Has the whole terror of discussion in ourial maybe permanently 99 00:05:13,960 --> 00:05:17,800 Speaker 4: or at least an intermediate term negatively impact just trade 100 00:05:18,480 --> 00:05:22,160 Speaker 4: the US between various partners or is this something that 101 00:05:22,200 --> 00:05:23,279 Speaker 4: everybody can just get past? 102 00:05:23,320 --> 00:05:25,120 Speaker 2: Do you think you. 103 00:05:25,080 --> 00:05:28,080 Speaker 3: Know there's been some short and volatility, there's been some 104 00:05:28,120 --> 00:05:30,520 Speaker 3: shrinkages of our inputs from the rest of the world. 105 00:05:31,160 --> 00:05:33,839 Speaker 3: My view is actually the US trade and current account deficit, 106 00:05:34,360 --> 00:05:37,479 Speaker 3: regardless of tariffs, it's going to widen because from a 107 00:05:37,560 --> 00:05:40,880 Speaker 3: macro point of view, the trade balance is not Experts 108 00:05:40,880 --> 00:05:44,080 Speaker 3: MANUS imports, it's savings MANUS investment in US is in 109 00:05:44,080 --> 00:05:46,320 Speaker 3: the middle of an investment boom driven by I in 110 00:05:46,360 --> 00:05:49,000 Speaker 3: techologes of the future. It's like an emerging market. Ifan 111 00:05:49,120 --> 00:05:51,920 Speaker 3: oil or something where you have an investment boom and 112 00:05:51,960 --> 00:05:55,120 Speaker 3: your domestic private and public savings are lower, then you 113 00:05:55,160 --> 00:05:58,039 Speaker 3: have a current round deficit. So our current investment is 114 00:05:58,040 --> 00:06:00,440 Speaker 3: going to become larger, not smaller. Even if you had 115 00:06:00,480 --> 00:06:03,960 Speaker 3: thirty percent tariffs, that's a microvill and it doesn't matter 116 00:06:04,040 --> 00:06:10,760 Speaker 3: because the info capital equity investment to finance it, FDIBC, startups, 117 00:06:10,760 --> 00:06:12,920 Speaker 3: you name it, porfol investment is going to finance that. 118 00:06:13,160 --> 00:06:16,000 Speaker 3: So not only American exception is not over. The exorbitant 119 00:06:16,000 --> 00:06:18,520 Speaker 3: privilege of the US dollar is not over, and even 120 00:06:18,560 --> 00:06:20,440 Speaker 3: the weakness of the dollar is only short term. Over 121 00:06:20,480 --> 00:06:22,880 Speaker 3: the midium time we four percent growth, the dollar's going 122 00:06:22,920 --> 00:06:24,560 Speaker 3: to be much stronger and the uros going to be 123 00:06:24,640 --> 00:06:25,200 Speaker 3: much weaker. 124 00:06:25,240 --> 00:06:28,159 Speaker 1: Are you predicting an advancing dollar from here? Does it 125 00:06:28,240 --> 00:06:29,920 Speaker 1: have to weaken down and then we get a bit 126 00:06:30,000 --> 00:06:30,280 Speaker 1: on the. 127 00:06:30,240 --> 00:06:33,080 Speaker 3: Dollar listen in the next few months, weekend more depending 128 00:06:33,120 --> 00:06:35,720 Speaker 3: on relative market policy. But I'm asking myself, I suppose 129 00:06:35,720 --> 00:06:37,760 Speaker 3: you are twenty thirty. At the end of this decade, 130 00:06:37,800 --> 00:06:40,640 Speaker 3: the US grow the four and euroson is stuck at 131 00:06:40,640 --> 00:06:44,400 Speaker 3: one percent real interest rates real it depends on real 132 00:06:44,440 --> 00:06:47,320 Speaker 3: growth rates just because the time the US to be 133 00:06:47,400 --> 00:06:48,240 Speaker 3: well below party. 134 00:06:48,480 --> 00:06:51,240 Speaker 1: This questionnaire was brilliant and I got this in Are 135 00:06:51,279 --> 00:06:57,520 Speaker 1: we stealing investment from other parts of American enterprise with 136 00:06:57,800 --> 00:07:01,719 Speaker 1: all this money going into aichechedlogy and data centers? 137 00:07:02,520 --> 00:07:03,359 Speaker 2: No, I don't think so. 138 00:07:04,120 --> 00:07:06,159 Speaker 3: I don't think so, because, first of all, to bel 139 00:07:06,160 --> 00:07:10,720 Speaker 3: all AI data centers, there's supply chains of construction, of 140 00:07:10,920 --> 00:07:16,600 Speaker 3: equipment of everything, cooling, heating system, you name it, the chips, 141 00:07:16,720 --> 00:07:19,680 Speaker 3: supply chains and so on, and you know, and these 142 00:07:19,760 --> 00:07:24,040 Speaker 3: booming capex is maintaining economic growth strong, and that's going 143 00:07:24,120 --> 00:07:26,480 Speaker 3: to be good for the economy and for many other sectors. 144 00:07:26,760 --> 00:07:29,600 Speaker 3: And secondly, it's not just the hyper skilled mark seven 145 00:07:29,640 --> 00:07:32,560 Speaker 3: and doing investment AI. If you have any SMP five 146 00:07:32,640 --> 00:07:35,840 Speaker 3: hundred firm today and you don't have an AI strategy, 147 00:07:36,040 --> 00:07:38,920 Speaker 3: you're dead because you could be disrupted by a competitor, 148 00:07:39,280 --> 00:07:42,440 Speaker 3: or by tech firm, or by whatever. So everybody's trying 149 00:07:42,480 --> 00:07:44,760 Speaker 3: to play with AI. Now we're not yet seeing the 150 00:07:44,840 --> 00:07:48,240 Speaker 3: significant increases in productivity growth. We see them at the 151 00:07:48,280 --> 00:07:50,560 Speaker 3: macro level, by the way, but we don't see them. 152 00:07:50,400 --> 00:07:51,200 Speaker 2: For every firm. 153 00:07:51,640 --> 00:07:55,840 Speaker 3: But profit margins for every SMP five underd firm has increased. 154 00:07:55,920 --> 00:07:59,320 Speaker 3: The real revenues for all SMP five hundred firms have 155 00:07:59,360 --> 00:08:02,480 Speaker 3: gone up since ACTIVET has been launched by fifteen percent, 156 00:08:02,560 --> 00:08:04,960 Speaker 3: so five percent per year. So there are these signs 157 00:08:04,960 --> 00:08:09,000 Speaker 3: that there is this increasing productivity growth across the economy. 158 00:08:09,040 --> 00:08:11,840 Speaker 3: So everybody has to have an AI strategy. So everybody's 159 00:08:11,880 --> 00:08:14,680 Speaker 3: doing capecs. It's not just a mayoproscalar story. 160 00:08:15,200 --> 00:08:17,640 Speaker 4: No real can this economy grow at four percent as 161 00:08:17,640 --> 00:08:19,520 Speaker 4: you suggest, with no immigration? 162 00:08:19,880 --> 00:08:24,360 Speaker 2: Do we need an immigration policy that allows population growth? 163 00:08:24,680 --> 00:08:27,000 Speaker 3: Well, we need it because we have a bottleneck of 164 00:08:27,120 --> 00:08:32,640 Speaker 3: skill labor. You know, TSMC is building a factory in Arizona. 165 00:08:33,000 --> 00:08:35,120 Speaker 3: I spoke with people in Taiwana. I said, we don't 166 00:08:35,160 --> 00:08:38,040 Speaker 3: have the skilled worker in Arizona. So that hundreds or 167 00:08:38,040 --> 00:08:41,880 Speaker 3: thousands of engineers of TSMC going there initially for a 168 00:08:41,920 --> 00:08:42,320 Speaker 3: few months. 169 00:08:42,400 --> 00:08:44,319 Speaker 2: Now they left to be there for a few years. 170 00:08:44,320 --> 00:08:47,719 Speaker 3: So you need a more intelligent immigration policy with more 171 00:08:47,840 --> 00:08:50,880 Speaker 3: H one B visa so that skill workers can work 172 00:08:51,040 --> 00:08:53,880 Speaker 3: in the United States. But even if we had net 173 00:08:53,920 --> 00:08:57,240 Speaker 3: migration that was closed to zero. I think they increases 174 00:08:57,280 --> 00:08:59,920 Speaker 3: in productivity growth driven. But the clouds of the future, 175 00:09:00,280 --> 00:09:02,520 Speaker 3: and AI is one of the fifteen of them. Everybody's 176 00:09:02,520 --> 00:09:05,040 Speaker 3: obsessed with. AII is just one piece of the story. 177 00:09:05,080 --> 00:09:07,760 Speaker 3: That are fifteen other sectors where there's a PRODUCTI growth 178 00:09:07,760 --> 00:09:09,880 Speaker 3: because of the technology of the future. So that's going 179 00:09:09,960 --> 00:09:13,120 Speaker 3: to lead to an increasing producty growth regardless of job grades. 180 00:09:13,200 --> 00:09:15,320 Speaker 3: That's why there is a gap between GDP and jobs 181 00:09:15,520 --> 00:09:18,520 Speaker 3: because there's a booming productivity growth. So that's what's already happening. 182 00:09:18,640 --> 00:09:20,840 Speaker 3: We don't have the workers who are cutting back on 183 00:09:20,880 --> 00:09:24,160 Speaker 3: that migration. We are deporting people, and growth is actually 184 00:09:24,320 --> 00:09:26,400 Speaker 3: accelerating rather than necelerating. 185 00:09:26,679 --> 00:09:29,080 Speaker 1: Nor Rabini with the folks who welcome all of you 186 00:09:29,120 --> 00:09:33,400 Speaker 1: across the nation, we welcome you worldwide as well, from 187 00:09:33,640 --> 00:09:39,240 Speaker 1: Istanbul to Tehran to Tel Aviv and then on Italy, 188 00:09:39,400 --> 00:09:43,120 Speaker 1: which is normal. Rubini out of a suitcase in his childhood, 189 00:09:43,280 --> 00:09:46,520 Speaker 1: you have a perspective over world new world like no 190 00:09:46,600 --> 00:09:51,359 Speaker 1: one I know because of your tumultuous childhood, and you're superior, 191 00:09:51,679 --> 00:09:54,079 Speaker 1: brilliant academics and Piconian. 192 00:09:55,160 --> 00:09:55,880 Speaker 2: And others. 193 00:09:56,720 --> 00:10:00,400 Speaker 1: How do you see America after this second term of 194 00:10:00,480 --> 00:10:04,560 Speaker 1: President Trump, do we go back to the processes for 195 00:10:04,600 --> 00:10:07,680 Speaker 1: example you had serving in the White House with Bill Clinton? 196 00:10:07,720 --> 00:10:10,240 Speaker 1: Do we go on to a new populism? How do 197 00:10:10,280 --> 00:10:12,040 Speaker 1: you see us after Trump? 198 00:10:12,760 --> 00:10:14,680 Speaker 3: You know, I think that Trump is going to be 199 00:10:14,840 --> 00:10:18,600 Speaker 3: more a temporary exception rather than a radical change of 200 00:10:18,640 --> 00:10:21,800 Speaker 3: the US. Yes, there is a little bit more popularism 201 00:10:21,840 --> 00:10:24,760 Speaker 3: because there are plenty of people left behind. Some of 202 00:10:24,800 --> 00:10:27,680 Speaker 3: them vote for the Progressive, some of them vote MAGA, 203 00:10:28,280 --> 00:10:30,480 Speaker 3: but there'll be the strong increasing growth. I think that 204 00:10:30,559 --> 00:10:35,280 Speaker 3: after midimal election, if the GOP loses the House, Trump 205 00:10:35,320 --> 00:10:37,720 Speaker 3: is going to be a lim duck. Anybody from Jed 206 00:10:37,760 --> 00:10:40,240 Speaker 3: Evans to Marco Rubio to a bunch of others going 207 00:10:40,280 --> 00:10:42,720 Speaker 3: to say, I want to run, great job president for 208 00:10:42,760 --> 00:10:45,200 Speaker 3: two terms, even in Supreme Court. It's not going to 209 00:10:45,200 --> 00:10:48,120 Speaker 3: allow him to run for a third term. And therefore, 210 00:10:48,360 --> 00:10:49,679 Speaker 3: you know, is it going to be lin duck and 211 00:10:49,720 --> 00:10:52,280 Speaker 3: we're going to whoever is going to be elected, maybe 212 00:10:52,280 --> 00:10:54,760 Speaker 3: the exception of Jed Evans, but even a Mark Ruby 213 00:10:54,880 --> 00:10:58,840 Speaker 3: is going to be somehow in between the traditional you know, 214 00:10:58,920 --> 00:11:03,160 Speaker 3: George Bush publican party and more populous one. So and 215 00:11:03,320 --> 00:11:05,760 Speaker 3: we have stronger economic growth. I think some of these 216 00:11:06,120 --> 00:11:10,280 Speaker 3: backlash against liberal democracy and free market is gonna shrink. 217 00:11:10,280 --> 00:11:12,200 Speaker 3: There will be some of the backlash, but I think 218 00:11:12,200 --> 00:11:14,719 Speaker 3: we've hired growth. Some of these concerns about in a 219 00:11:14,840 --> 00:11:17,400 Speaker 3: quality and other things are going to be lessened over time. 220 00:11:18,640 --> 00:11:21,160 Speaker 4: Nauria, with all your travels and all your contacts around 221 00:11:21,160 --> 00:11:25,719 Speaker 4: the world. Is the US leadership position, which it's held 222 00:11:26,280 --> 00:11:29,560 Speaker 4: generally interrupted since the end of World War two? 223 00:11:30,240 --> 00:11:30,960 Speaker 2: Is that changed? 224 00:11:31,040 --> 00:11:31,720 Speaker 4: Is that done? 225 00:11:31,840 --> 00:11:32,040 Speaker 1: Is that. 226 00:11:33,520 --> 00:11:35,360 Speaker 4: Is that framework no longer in place? 227 00:11:35,400 --> 00:11:37,920 Speaker 3: Do you think, well, you know, even our friends and 228 00:11:38,000 --> 00:11:41,760 Speaker 3: allies in Europe, in the Middle East, in Asia are 229 00:11:41,840 --> 00:11:47,120 Speaker 3: unhappy because the US is behaving like a bully, but 230 00:11:47,200 --> 00:11:49,800 Speaker 3: your NATO is still there. We're going to find deals 231 00:11:49,840 --> 00:11:52,880 Speaker 3: on trade and other things. And think about the Europeans. 232 00:11:53,520 --> 00:11:56,040 Speaker 3: Do they really want to use the fans tag of 233 00:11:56,160 --> 00:12:00,319 Speaker 3: China and AI of China and being the Chinese or 234 00:12:00,320 --> 00:12:02,400 Speaker 3: a bit of course not, so they have a non 235 00:12:02,440 --> 00:12:06,120 Speaker 3: option and they have to essentially spend more on the fence, 236 00:12:06,240 --> 00:12:10,520 Speaker 3: be part of NATO, buy even more American weapons. And 237 00:12:10,840 --> 00:12:13,000 Speaker 3: there are going to be two technological stacks are going 238 00:12:13,040 --> 00:12:15,680 Speaker 3: to be completely the risk because there's the a US 239 00:12:15,760 --> 00:12:18,120 Speaker 3: stack and a Chinese stack. And if you are friends 240 00:12:18,160 --> 00:12:20,520 Speaker 3: of life the US. They don't to be subject to 241 00:12:20,559 --> 00:12:25,280 Speaker 3: the spying and being within the firewall of China. So 242 00:12:25,720 --> 00:12:28,120 Speaker 3: you have Europe and friends and analyies have no choice. They 243 00:12:28,160 --> 00:12:30,839 Speaker 3: have to go with our technology. We are defens we're 244 00:12:30,920 --> 00:12:34,040 Speaker 3: on system, we are economic channels. They'll do some trade 245 00:12:34,080 --> 00:12:37,120 Speaker 3: with China, but not stuff that is really sensitive. They 246 00:12:37,160 --> 00:12:38,680 Speaker 3: have an option by going with the US. 247 00:12:38,800 --> 00:12:41,680 Speaker 1: Nora Rabini and Richard Clareday have sat in this chair 248 00:12:41,720 --> 00:12:44,920 Speaker 1: and imposing sat in the chair and others to discuss 249 00:12:44,920 --> 00:12:48,280 Speaker 1: the next chairman of the FED. Are you comfortable with 250 00:12:48,360 --> 00:12:51,680 Speaker 1: mister warrisher? Are you particularly comfortable with him that he 251 00:12:51,760 --> 00:12:55,760 Speaker 1: doesn't have the academics say of Richard Clareda, he wouldn't 252 00:12:55,760 --> 00:12:58,079 Speaker 1: know DSGE theory over the. 253 00:12:58,040 --> 00:13:01,280 Speaker 3: Head and that doesn't bother me as much. And he 254 00:13:01,440 --> 00:13:04,960 Speaker 3: wasn't a fat before and even powerless done well while 255 00:13:04,960 --> 00:13:09,080 Speaker 3: being a lawyer. I'm more concerned about these views. The 256 00:13:09,200 --> 00:13:11,920 Speaker 3: view that you can because of AI reduce the FED 257 00:13:11,960 --> 00:13:15,320 Speaker 3: funds or it is wrong because even if AI will 258 00:13:15,360 --> 00:13:19,040 Speaker 3: eventually reduce inflation, is going to increase potential growth. So 259 00:13:19,080 --> 00:13:23,720 Speaker 3: the equilibrium real our star is higher, while the nominal 260 00:13:23,760 --> 00:13:26,000 Speaker 3: because of inflation could be lower. And it's going to 261 00:13:26,000 --> 00:13:28,200 Speaker 3: be a wash between the two. So on one side, 262 00:13:28,200 --> 00:13:31,839 Speaker 3: the real growth implies high real rates. On the other side, 263 00:13:31,920 --> 00:13:35,120 Speaker 3: lower inflation implies lower nominal and it's a wash between 264 00:13:35,120 --> 00:13:37,720 Speaker 3: the two. So that doesn't justify it or fed function. 265 00:13:37,880 --> 00:13:41,120 Speaker 1: Once you included the dynamics here, I asked, do we 266 00:13:41,200 --> 00:13:43,839 Speaker 1: need two our stars because we got an American and 267 00:13:43,920 --> 00:13:47,280 Speaker 1: Oriel flat in their back. There's not part of this 268 00:13:47,520 --> 00:13:52,560 Speaker 1: AI productivity experiment. Are we living to our stars right now? 269 00:13:52,720 --> 00:13:55,200 Speaker 3: Well, we live in what everybody refers to as a 270 00:13:55,360 --> 00:13:59,199 Speaker 3: case shaped economy. The top ten twenty percent is doing 271 00:13:59,320 --> 00:14:03,160 Speaker 3: very well. About on fifty percent struggles from paycheck to paycheck. 272 00:14:03,200 --> 00:14:05,320 Speaker 3: Even if we were at full employment, at least people 273 00:14:05,559 --> 00:14:09,400 Speaker 3: have jobs. But even if you were to cut policy 274 00:14:09,480 --> 00:14:12,240 Speaker 3: rate in an economy is near full employment, you're going 275 00:14:12,280 --> 00:14:15,160 Speaker 3: to fuel only inflation and if it is gonna hold 276 00:14:15,200 --> 00:14:18,560 Speaker 3: more the working class than otherwise. So the solution is 277 00:14:18,600 --> 00:14:21,280 Speaker 3: not going to be reducing the policy rate. If you're 278 00:14:21,320 --> 00:14:24,280 Speaker 3: worried about inequality, you have to do stuff like providing 279 00:14:24,400 --> 00:14:27,240 Speaker 3: educational skills and retraining and all the things we're not 280 00:14:27,320 --> 00:14:29,600 Speaker 3: doing to make sure that those were left behind are 281 00:14:29,640 --> 00:14:31,720 Speaker 3: not left The band it's not the job of monetary body. 282 00:14:31,800 --> 00:14:34,880 Speaker 1: Your PhD advisor Jeff Say exited the book fifteen years ago, 283 00:14:34,920 --> 00:14:38,560 Speaker 1: folks predicting all of this educational failure in America. I 284 00:14:38,560 --> 00:14:39,520 Speaker 1: got twenty seconds. 285 00:14:39,560 --> 00:14:41,040 Speaker 2: When's the next Rubini book? 286 00:14:42,480 --> 00:14:46,960 Speaker 3: I usually write one every decade. Crisis Economics was twenty ten, 287 00:14:47,360 --> 00:14:51,040 Speaker 3: Mega Tread was twenty twenty two. So maybe something on 288 00:14:51,120 --> 00:14:52,920 Speaker 3: AI and how the world is going to change. But 289 00:14:53,680 --> 00:14:55,600 Speaker 3: it's going to be by the end of the decade, 290 00:14:55,360 --> 00:14:56,480 Speaker 3: not anytime soon.