1 00:00:01,000 --> 00:00:05,160 Speaker 1: This is Bloomberg Wall Street Week with David Weston from 2 00:00:05,320 --> 00:00:06,439 Speaker 1: Bloomberg Radio. 3 00:00:07,160 --> 00:00:09,559 Speaker 2: The problem is that's led us two years and years 4 00:00:09,560 --> 00:00:12,080 Speaker 2: of borrowing too much. We now have a debt that's 5 00:00:12,119 --> 00:00:14,800 Speaker 2: about to be at record levels, interest payments that are 6 00:00:14,840 --> 00:00:16,840 Speaker 2: the fastest growing part of the budget about to be 7 00:00:17,040 --> 00:00:18,000 Speaker 2: larger than defense. 8 00:00:18,640 --> 00:00:21,520 Speaker 3: That was Miyamaguinnis of the Committee for a Responsible Federal 9 00:00:21,560 --> 00:00:24,960 Speaker 3: Budget talking about the great and growing US federal debt 10 00:00:25,000 --> 00:00:28,680 Speaker 3: and deficit. This is a special Wall Street Week podcast, 11 00:00:28,840 --> 00:00:31,920 Speaker 3: and we sat down with former Treasury Secretary Bob Rubin 12 00:00:32,120 --> 00:00:34,720 Speaker 3: to take us through not just where we are now, 13 00:00:35,000 --> 00:00:37,600 Speaker 3: but about how he helped President Clinton engineer a way 14 00:00:37,640 --> 00:00:40,680 Speaker 3: out of a similar situation some thirty years ago when 15 00:00:40,680 --> 00:00:44,400 Speaker 3: he ran the White House Economic Council. To fix the problem, 16 00:00:44,440 --> 00:00:46,680 Speaker 3: we first have to figure out how we got here. 17 00:00:47,280 --> 00:00:50,640 Speaker 3: Some like presidential candidate Nikki Haley say that the problem 18 00:00:50,720 --> 00:00:52,320 Speaker 3: is that we're spending too much. 19 00:00:52,880 --> 00:00:56,120 Speaker 4: Do you have to start cutting what you spend? Why 20 00:00:56,320 --> 00:00:58,960 Speaker 4: is it everybody in this room balance as a budget. 21 00:00:59,320 --> 00:01:02,040 Speaker 4: I balanced budget is Governor of South Carolina? Why is 22 00:01:02,120 --> 00:01:04,880 Speaker 4: Congress the only group that refuses to balance a budget. 23 00:01:05,319 --> 00:01:08,800 Speaker 3: Others like Willet Advisors Steve Ratner point to the Trump 24 00:01:08,920 --> 00:01:09,559 Speaker 3: tax cuts. 25 00:01:09,880 --> 00:01:12,119 Speaker 5: There are a lot of people who basically on Wall Street, 26 00:01:12,160 --> 00:01:14,559 Speaker 5: who you and I would know, who voted for Trump 27 00:01:14,600 --> 00:01:17,320 Speaker 5: once or even twice. Basically, look, I don't like the guy, 28 00:01:17,360 --> 00:01:19,680 Speaker 5: but I like the policies, and they got what they wanted, 29 00:01:19,720 --> 00:01:22,160 Speaker 5: the tax of the TCGA, the Tax Cut and Jobs 30 00:01:22,200 --> 00:01:24,280 Speaker 5: Act being the most prominent. 31 00:01:24,319 --> 00:01:28,000 Speaker 3: And the answer likely is both. That was why, according 32 00:01:28,000 --> 00:01:32,000 Speaker 3: to Larry Summers, President Clinton both raised taxes and cut 33 00:01:32,040 --> 00:01:36,199 Speaker 3: spending in his nineteen ninety three Omnibus Budget Reconciliation Act. 34 00:01:36,560 --> 00:01:39,040 Speaker 3: That was the last time that the federal government really 35 00:01:39,080 --> 00:01:41,240 Speaker 3: got serious about addressing the debt. 36 00:01:41,600 --> 00:01:44,920 Speaker 6: I think he laid out the case, he brought people together, 37 00:01:45,480 --> 00:01:49,440 Speaker 6: He was willing to do things that were painful for 38 00:01:49,560 --> 00:01:53,840 Speaker 6: the people who were his friend. He was able to 39 00:01:53,920 --> 00:01:58,840 Speaker 6: explain the case to the American people, and that's the 40 00:01:58,960 --> 00:02:03,080 Speaker 6: kind of leadership we're going to need, and he reaped 41 00:02:03,080 --> 00:02:04,360 Speaker 6: a benefit. 42 00:02:07,120 --> 00:02:08,760 Speaker 3: And to explain to us where we are in the 43 00:02:08,800 --> 00:02:11,600 Speaker 3: Debton deficit and where we were back in nineteen ninety three, 44 00:02:11,600 --> 00:02:12,040 Speaker 3: were welcome. 45 00:02:12,120 --> 00:02:12,280 Speaker 7: Now. 46 00:02:12,320 --> 00:02:15,160 Speaker 3: One of the architects of that plan that President Clinton pursued. 47 00:02:15,400 --> 00:02:18,040 Speaker 3: He is Bob rowin former Treasury Secretary. So, Bob, thank 48 00:02:18,080 --> 00:02:19,480 Speaker 3: you so much for being on Wall Street. 49 00:02:19,560 --> 00:02:20,920 Speaker 7: Rig David happy to be with you. 50 00:02:21,360 --> 00:02:23,640 Speaker 3: So at the time, you actually were Director of National 51 00:02:23,639 --> 00:02:25,840 Speaker 3: Economic Council and you helped put together a plan with 52 00:02:25,919 --> 00:02:29,000 Speaker 3: Lloyd Benson the Treasury, but President Clinton really pushed it through. 53 00:02:29,200 --> 00:02:32,160 Speaker 3: Give us a sense of how bad the problems were 54 00:02:32,200 --> 00:02:34,120 Speaker 3: you were facing. Then what caused you to do what 55 00:02:34,280 --> 00:02:35,760 Speaker 3: you did in ninety three Act. 56 00:02:36,200 --> 00:02:40,000 Speaker 1: David, we met with the president elect Governor of Arkansas 57 00:02:40,160 --> 00:02:43,760 Speaker 1: in Little Rock after the election, the economic team, the 58 00:02:43,800 --> 00:02:46,840 Speaker 1: income economic Team, and we talked to him about what 59 00:02:46,919 --> 00:02:50,520 Speaker 1: kind of an strategy he should have, and he said, 60 00:02:51,160 --> 00:02:55,040 Speaker 1: listening to all this, our deficit is a threshold issue. 61 00:02:54,760 --> 00:02:55,839 Speaker 7: And who want everything else? 62 00:02:56,080 --> 00:02:57,680 Speaker 1: We've got to do that because we have to get 63 00:02:57,680 --> 00:02:59,960 Speaker 1: our fiscal house in order, and that was really the 64 00:03:00,400 --> 00:03:02,320 Speaker 1: our focus. Now we did it in the same time 65 00:03:02,320 --> 00:03:05,760 Speaker 1: we did public investment. But the pressures, I think were 66 00:03:05,840 --> 00:03:07,959 Speaker 1: very substantial. There was a lot of concern in the 67 00:03:07,960 --> 00:03:09,880 Speaker 1: business community, there was a lot of concern in the markets, 68 00:03:10,280 --> 00:03:12,720 Speaker 1: and there was a real public political environment, which unfortunate 69 00:03:12,760 --> 00:03:14,960 Speaker 1: we don't have today. He not only had the substance 70 00:03:14,960 --> 00:03:16,720 Speaker 1: of it, which is President Clinton, the few that this 71 00:03:16,800 --> 00:03:19,120 Speaker 1: was the rest of the issue at threshold issue. We 72 00:03:19,160 --> 00:03:21,640 Speaker 1: also have a political environment in which it was doable. 73 00:03:21,880 --> 00:03:24,000 Speaker 3: If we can try to tease those two things out. 74 00:03:24,160 --> 00:03:26,400 Speaker 3: How much of it was the market reaction what you 75 00:03:26,440 --> 00:03:29,320 Speaker 3: were seeing? Basically we have the famous incidents supposedly where 76 00:03:29,400 --> 00:03:31,079 Speaker 3: Jim Carvell said, I want to come back to the 77 00:03:31,120 --> 00:03:31,680 Speaker 3: bond market. 78 00:03:31,800 --> 00:03:34,280 Speaker 1: Well that was James said that he wanted to come well, 79 00:03:34,360 --> 00:03:36,680 Speaker 1: because what happened there was we were having a debate 80 00:03:36,680 --> 00:03:40,400 Speaker 1: within the administration should we focus on fiscal matters or 81 00:03:40,400 --> 00:03:41,760 Speaker 1: should we focus on public investment. 82 00:03:41,760 --> 00:03:44,560 Speaker 7: We end up doing both, but with a program, the ninety. 83 00:03:44,320 --> 00:03:46,480 Speaker 1: Three Deaths Production program that was very heavily focused on 84 00:03:46,520 --> 00:03:49,840 Speaker 1: death production. And that's when James said he wantause. We argued, 85 00:03:49,880 --> 00:03:51,560 Speaker 1: and I think rightly argument and it turned out to 86 00:03:51,560 --> 00:03:54,480 Speaker 1: be correct that markets would react very favorably if we 87 00:03:54,480 --> 00:03:57,800 Speaker 1: were serious, and also the better reserve would react very favorably. 88 00:03:57,920 --> 00:04:00,080 Speaker 1: So James and responses all that said he would I 89 00:04:00,160 --> 00:04:01,960 Speaker 1: to come back in his next life is the bond market. 90 00:04:02,680 --> 00:04:04,920 Speaker 3: So that is a somewhat market oriented approach. I mean, 91 00:04:04,920 --> 00:04:06,840 Speaker 3: you'd come out of Goldman Sachs, you knew the markets 92 00:04:06,920 --> 00:04:10,280 Speaker 3: terribly well you took that sort of approach. The whole 93 00:04:10,320 --> 00:04:12,080 Speaker 3: question how much that that drove what it was? Was 94 00:04:12,080 --> 00:04:14,240 Speaker 3: it really just almost dollars and cents in what was 95 00:04:14,280 --> 00:04:15,280 Speaker 3: going on in the markets. 96 00:04:15,400 --> 00:04:17,159 Speaker 1: It was more than just the markets, and I think 97 00:04:17,160 --> 00:04:19,480 Speaker 1: this is something unfortunate that it hasn't been focused on, 98 00:04:19,560 --> 00:04:22,400 Speaker 1: But it was the market's David. And when we got 99 00:04:22,440 --> 00:04:25,599 Speaker 1: serious about deficit reduction, it was very favorable for the markets. 100 00:04:25,920 --> 00:04:28,400 Speaker 1: And also green Spend reacted very well in terms of 101 00:04:29,120 --> 00:04:33,279 Speaker 1: maintaining a relatively livable with a practical speaking, a FED 102 00:04:33,320 --> 00:04:35,880 Speaker 1: funds rate that was consistent with growth, but it went 103 00:04:35,920 --> 00:04:36,520 Speaker 1: way beyond that. 104 00:04:36,560 --> 00:04:38,480 Speaker 7: We wanted to have the resilience after. 105 00:04:38,360 --> 00:04:39,760 Speaker 1: If you're going to have if you have an economic 106 00:04:40,120 --> 00:04:42,520 Speaker 1: or a noir security emergency of some sort, you want 107 00:04:42,520 --> 00:04:44,960 Speaker 1: to be able to deal with it without creating fiscal havoc. 108 00:04:45,680 --> 00:04:47,760 Speaker 1: And another thing, when I was at Goldman Sacks and 109 00:04:47,839 --> 00:04:50,360 Speaker 1: Steve Freeman and I were the co CEOs of Coleman 110 00:04:50,440 --> 00:04:53,600 Speaker 1: Sacks in ninety one and in ninety two, one thing 111 00:04:53,640 --> 00:04:56,680 Speaker 1: that I had the impression was that business was very 112 00:04:56,680 --> 00:04:59,799 Speaker 1: concerned about our fiscal position, not only because the fiscal position, 113 00:04:59,800 --> 00:05:01,919 Speaker 1: per say, but also because it gave him the feeling 114 00:05:01,920 --> 00:05:05,000 Speaker 1: government was incapable of dealing with our problems. So business confidence, 115 00:05:05,160 --> 00:05:08,360 Speaker 1: I think was a very important factor. And once we acted, 116 00:05:08,520 --> 00:05:10,960 Speaker 1: I think it had a really positive effect on business confidence. 117 00:05:11,120 --> 00:05:13,359 Speaker 3: Giving me a sense of what that means as a pracuamatory, 118 00:05:13,720 --> 00:05:16,280 Speaker 3: does that translate into investment or lack of investment? 119 00:05:16,480 --> 00:05:16,840 Speaker 7: Exactly? 120 00:05:16,920 --> 00:05:21,120 Speaker 1: Exactly what well investment plans in terms of expansion. John 121 00:05:21,160 --> 00:05:24,200 Speaker 1: Maynor Kaine famously referred to animal spirits in his letter, 122 00:05:24,240 --> 00:05:27,360 Speaker 1: his famous letter to President Roosevelt, and animal spirits make 123 00:05:27,400 --> 00:05:30,200 Speaker 1: a confidence makes a very big difference. And yeah, it 124 00:05:30,240 --> 00:05:34,280 Speaker 1: does in terms of hiring plans, expansion plans, investment, And 125 00:05:34,320 --> 00:05:35,560 Speaker 1: that absolutely is what happened. 126 00:05:35,600 --> 00:05:36,680 Speaker 7: Talk about the politics of it. 127 00:05:36,800 --> 00:05:39,440 Speaker 3: You said that, then governor about to be President Clinton 128 00:05:39,440 --> 00:05:41,359 Speaker 3: came in and said, that's a threshold issue of the deficit. 129 00:05:41,560 --> 00:05:44,000 Speaker 3: It's hard to imagine right now an incoming president saying 130 00:05:44,040 --> 00:05:45,560 Speaker 3: the same thing. But give me a sense of what 131 00:05:45,680 --> 00:05:48,479 Speaker 3: was going on politically in the country that obviously President 132 00:05:48,520 --> 00:05:50,320 Speaker 3: Clinton was reflecting to some extent what he thought the 133 00:05:50,360 --> 00:05:51,000 Speaker 3: people felt. 134 00:05:51,120 --> 00:05:52,640 Speaker 1: I think there was a feeling there was a broad 135 00:05:52,720 --> 00:05:56,840 Speaker 1: public concern about our fiscal position. And then Songus ran 136 00:05:56,880 --> 00:06:00,040 Speaker 1: for Paul Songus ran for president on a fiscal the 137 00:06:00,160 --> 00:06:03,840 Speaker 1: unfortunately died as you know, in that process, but on 138 00:06:04,400 --> 00:06:07,560 Speaker 1: a fiscal discipline plank if you want to call it that, 139 00:06:07,640 --> 00:06:10,000 Speaker 1: or program, let's say, and that attracted a lot of 140 00:06:10,000 --> 00:06:10,719 Speaker 1: favorable attention. 141 00:06:10,880 --> 00:06:14,520 Speaker 7: Then Ross Bureau came along and he ran. 142 00:06:14,400 --> 00:06:17,480 Speaker 1: Also on a fiscal discipline theory, and he got about 143 00:06:17,560 --> 00:06:19,200 Speaker 1: nineteen percent of the vote if I remember correctly. 144 00:06:19,600 --> 00:06:21,160 Speaker 7: President Clinton believed it to begin with. 145 00:06:21,720 --> 00:06:24,240 Speaker 1: But then you had the politics I guess you call 146 00:06:24,320 --> 00:06:27,159 Speaker 1: converge around this point of view as you saw songis 147 00:06:27,200 --> 00:06:30,320 Speaker 1: and then as I said, Perro and President Clinton made 148 00:06:30,320 --> 00:06:32,559 Speaker 1: that central to his economic program. But you know, David, 149 00:06:32,800 --> 00:06:36,480 Speaker 1: he always combined it with vigorous public investment. Now, once 150 00:06:36,520 --> 00:06:39,599 Speaker 1: we got there, what we found was that the prospects 151 00:06:39,720 --> 00:06:44,719 Speaker 1: that the outgoing Bush omb was providing had gotten much worse, 152 00:06:45,160 --> 00:06:47,279 Speaker 1: and so it forced us to cut back on what 153 00:06:47,279 --> 00:06:49,520 Speaker 1: we would have done in public investment and to increase 154 00:06:49,600 --> 00:06:51,240 Speaker 1: what we did on definit reduction. 155 00:06:51,480 --> 00:06:53,280 Speaker 3: So when you decided to address this, I should say 156 00:06:53,320 --> 00:06:54,880 Speaker 3: the president decided, The President. 157 00:06:54,600 --> 00:06:56,200 Speaker 7: Absolute decided he was terrific. David. 158 00:06:56,760 --> 00:06:59,080 Speaker 1: He really was steeped in this. So while all of 159 00:06:59,160 --> 00:07:02,520 Speaker 1: us gathered together. We really were gathering with somebody who 160 00:07:02,560 --> 00:07:04,720 Speaker 1: were ready was really very highly heavily. 161 00:07:04,480 --> 00:07:05,040 Speaker 7: Informed on this. 162 00:07:05,560 --> 00:07:08,160 Speaker 1: I mean by this, I mean on economic policy ramifications 163 00:07:08,200 --> 00:07:09,480 Speaker 1: of various measures one might take. 164 00:07:09,680 --> 00:07:11,800 Speaker 3: When one goes back and looks at the package, it 165 00:07:11,840 --> 00:07:16,160 Speaker 3: looks like there was both tax increases as well as 166 00:07:16,320 --> 00:07:17,120 Speaker 3: spending cuts. 167 00:07:17,120 --> 00:07:17,520 Speaker 7: Correct. 168 00:07:17,840 --> 00:07:19,360 Speaker 3: Was that the theory from the beginning, we have to 169 00:07:19,400 --> 00:07:20,880 Speaker 3: do it both ways at the same time. 170 00:07:20,960 --> 00:07:23,880 Speaker 1: The theory, well, the theory was we would do fifty 171 00:07:23,880 --> 00:07:25,800 Speaker 1: to fifty, and we did do fifty to fifty. We're 172 00:07:25,800 --> 00:07:28,080 Speaker 1: discussing then and not now. But if you looked at now, 173 00:07:28,400 --> 00:07:31,960 Speaker 1: I think, unfortunately we face a very different empirical situation. 174 00:07:32,040 --> 00:07:34,240 Speaker 1: But in those days, that exactly was our theory, and 175 00:07:34,240 --> 00:07:34,760 Speaker 1: that's what we did. 176 00:07:35,000 --> 00:07:36,440 Speaker 3: We're going to come back and talk about now, but 177 00:07:36,480 --> 00:07:39,360 Speaker 3: before that, give us a sense of the effects once 178 00:07:39,400 --> 00:07:40,720 Speaker 3: you got this through. By the way, it was a 179 00:07:40,760 --> 00:07:44,520 Speaker 3: near run thing politically, as I recall the Towers we won. 180 00:07:44,760 --> 00:07:47,000 Speaker 1: We had by one vote if I remember correctly, in 181 00:07:47,000 --> 00:07:50,680 Speaker 1: the House of Representative and it was a tie I 182 00:07:50,680 --> 00:07:53,440 Speaker 1: guess in the Senate and Gork cast inciting vote in 183 00:07:53,440 --> 00:07:56,320 Speaker 1: our favor obviously, but it was a very close thing 184 00:07:56,360 --> 00:07:58,760 Speaker 1: and I remember being in the Oval Office the night 185 00:07:58,800 --> 00:08:00,520 Speaker 1: of the vote. You know, there's that little room that 186 00:08:01,080 --> 00:08:03,600 Speaker 1: is adjacent to the Oval Office is the President's room, 187 00:08:03,920 --> 00:08:06,520 Speaker 1: and we were all sitting there watching a television as 188 00:08:06,600 --> 00:08:08,520 Speaker 1: people voted, and it was a very near thing, in 189 00:08:08,560 --> 00:08:09,360 Speaker 1: a really nailbier. 190 00:08:09,600 --> 00:08:12,280 Speaker 3: How did the results of it through the rest of 191 00:08:12,280 --> 00:08:12,880 Speaker 3: the Clinton term. 192 00:08:12,880 --> 00:08:13,840 Speaker 7: We're going to take it through there. 193 00:08:14,080 --> 00:08:16,520 Speaker 3: Compare with what you expected when you first got it through. 194 00:08:16,640 --> 00:08:18,280 Speaker 3: If you'd written down and said this is what I expect, 195 00:08:18,440 --> 00:08:21,200 Speaker 3: it's good to compare with what happened. I gotta compare, 196 00:08:21,520 --> 00:08:22,120 Speaker 3: you know, David. 197 00:08:22,440 --> 00:08:24,160 Speaker 1: I think one thing that I saw and I think 198 00:08:24,240 --> 00:08:27,440 Speaker 1: was right, was that our fiscal situation, for the reasons 199 00:08:27,440 --> 00:08:30,000 Speaker 1: I already discussed, was having a real adverse effect on 200 00:08:30,000 --> 00:08:32,679 Speaker 1: business confidence. And I thought if we did this, there 201 00:08:32,720 --> 00:08:34,800 Speaker 1: was a reasonable chance that could affect that. But I 202 00:08:34,800 --> 00:08:36,360 Speaker 1: think the effect of it was much greater than I 203 00:08:36,400 --> 00:08:38,560 Speaker 1: thought it would be. President Clint went through eight years 204 00:08:38,880 --> 00:08:41,240 Speaker 1: in which the business community felt that he related to 205 00:08:41,800 --> 00:08:44,000 Speaker 1: the issues that they faced. They didn't always agree with them, 206 00:08:44,200 --> 00:08:46,199 Speaker 1: or he didn't always agree with them, but I think 207 00:08:46,200 --> 00:08:47,839 Speaker 1: they really felt that he related to their issues, and 208 00:08:47,880 --> 00:08:49,840 Speaker 1: I think this played a major role in that. I 209 00:08:49,920 --> 00:08:52,440 Speaker 1: thought something like that would happen, at least that would 210 00:08:52,440 --> 00:08:54,280 Speaker 1: have been my expectation, But I think it happened to 211 00:08:54,280 --> 00:08:56,360 Speaker 1: a greater degree than I thought. The market reacted very well, 212 00:08:56,360 --> 00:08:58,200 Speaker 1: as you may or remember in terms of interest rates. 213 00:08:58,679 --> 00:09:01,199 Speaker 3: One big difference between that now is we were very 214 00:09:01,200 --> 00:09:03,760 Speaker 3: concerned at the time. I remember this personally with Japan. 215 00:09:04,160 --> 00:09:05,880 Speaker 3: The rise of Japan is that I can have power 216 00:09:05,960 --> 00:09:07,640 Speaker 3: that they basically had a better mouse. 217 00:09:07,400 --> 00:09:08,640 Speaker 7: Trap than we did and they take us over. 218 00:09:09,080 --> 00:09:11,720 Speaker 3: How important was that in helping drive this through to 219 00:09:11,720 --> 00:09:14,040 Speaker 3: say we've got to actually catch up with Japan. 220 00:09:15,520 --> 00:09:18,400 Speaker 1: As you correctly say, David, Japan reviewed as a goliath. 221 00:09:18,600 --> 00:09:20,000 Speaker 1: And I can remember this so well when I was 222 00:09:20,000 --> 00:09:22,240 Speaker 1: at Golden Sacks, because we were very much focused on 223 00:09:22,240 --> 00:09:24,480 Speaker 1: where should our business go, where should we focus? And 224 00:09:24,480 --> 00:09:27,320 Speaker 1: we very much focused on Japan for the very reason 225 00:09:27,320 --> 00:09:29,360 Speaker 1: you just said, And I think that was part of it. 226 00:09:29,400 --> 00:09:32,040 Speaker 1: I think there was a feeling of a real competitive urgency, 227 00:09:32,040 --> 00:09:35,079 Speaker 1: if you will, imperative, real competitive imperative with respect of Japan. 228 00:09:35,640 --> 00:09:37,200 Speaker 7: But it was more than that, David. 229 00:09:37,200 --> 00:09:39,080 Speaker 1: I think there was just a general recognition, which we 230 00:09:39,080 --> 00:09:42,520 Speaker 1: don't have today in the country that unsound, fiscal conditions 231 00:09:42,559 --> 00:09:45,679 Speaker 1: were very dangerous, which I think they are very dangerous economically, 232 00:09:45,880 --> 00:09:48,240 Speaker 1: and people sort of connected the dots and there was 233 00:09:48,320 --> 00:09:50,880 Speaker 1: broad based support for fiscal discipline. It was a political 234 00:09:50,960 --> 00:09:54,400 Speaker 1: reality within the context of which President Clinton acted and 235 00:09:54,400 --> 00:09:56,400 Speaker 1: then eventually and Congress came along with it, as you said, 236 00:09:56,400 --> 00:09:58,200 Speaker 1: by a very very narrow margin. 237 00:09:58,559 --> 00:10:01,160 Speaker 3: You mentioned Chairman Greenspan, Alan green spent at the time. 238 00:10:01,280 --> 00:10:03,760 Speaker 3: What role did he play and the FED play throughout 239 00:10:03,800 --> 00:10:05,000 Speaker 3: this entire process. 240 00:10:05,360 --> 00:10:07,720 Speaker 7: Well, I will tell you what it was. 241 00:10:07,760 --> 00:10:10,840 Speaker 1: It's not been written this way sometimes, but Alan green 242 00:10:10,880 --> 00:10:13,920 Speaker 1: Spin came down to a little rock. He conferred with 243 00:10:14,440 --> 00:10:17,560 Speaker 1: the advice or President elect Clinton, and I think his 244 00:10:17,679 --> 00:10:20,160 Speaker 1: advice was very sound. On the other hand, there was 245 00:10:20,200 --> 00:10:22,199 Speaker 1: never although it was legs in some places that there 246 00:10:22,280 --> 00:10:24,760 Speaker 1: was never a deal, and I've asked both President Clinton 247 00:10:24,760 --> 00:10:26,920 Speaker 1: and Alan Greenspan about this. There was a never deal 248 00:10:26,960 --> 00:10:29,400 Speaker 1: between the two of them pursuing to which, if you 249 00:10:29,520 --> 00:10:32,280 Speaker 1: President Clinton will reduce the efic it, I'll keep interest 250 00:10:32,320 --> 00:10:32,760 Speaker 1: rate flow. 251 00:10:32,840 --> 00:10:33,760 Speaker 7: That never occurred. 252 00:10:33,920 --> 00:10:37,160 Speaker 1: But what did occur was the advice that Alan green 253 00:10:37,200 --> 00:10:39,600 Speaker 1: Spin gave to President Clinton and all of us, because 254 00:10:39,600 --> 00:10:41,520 Speaker 1: we had a very good relationship about what at least 255 00:10:41,559 --> 00:10:43,280 Speaker 1: he thought, and then we would deal with it as 256 00:10:43,280 --> 00:10:43,800 Speaker 1: we saw fit. 257 00:10:44,400 --> 00:10:46,400 Speaker 3: One of the key elements, as I understand it, economists 258 00:10:46,400 --> 00:10:50,360 Speaker 3: tell us economic growth is productivity. Was there an effect, 259 00:10:50,440 --> 00:10:52,880 Speaker 3: in your opinion, on productivity? What was the effect? How 260 00:10:52,960 --> 00:10:53,760 Speaker 3: large was it? 261 00:10:53,800 --> 00:10:56,400 Speaker 1: There was a substantial effect on productivity. And it's sort 262 00:10:56,440 --> 00:10:58,920 Speaker 1: of interesting, at least in my opinion, David, because this 263 00:10:59,040 --> 00:11:00,840 Speaker 1: was also, as you may remember, the nineties at the 264 00:11:00,840 --> 00:11:04,880 Speaker 1: time the technology technology development took off, but even more important, 265 00:11:04,920 --> 00:11:07,840 Speaker 1: maybe the application of technology took off. But it happened 266 00:11:07,840 --> 00:11:10,199 Speaker 1: here and it didn't happen in Europe to merely the 267 00:11:10,240 --> 00:11:12,360 Speaker 1: same degree. So the question is why, And I'll tell 268 00:11:12,400 --> 00:11:14,840 Speaker 1: you what I think. I think the administration made enormous 269 00:11:15,080 --> 00:11:17,480 Speaker 1: and President Clinton made enormous difference in this respect because 270 00:11:17,480 --> 00:11:20,080 Speaker 1: I think what happened was what you were getting out before. 271 00:11:20,480 --> 00:11:22,800 Speaker 1: I think there was an atmosphere of confidence. And it 272 00:11:22,800 --> 00:11:25,319 Speaker 1: doesn't mean, as I said before, I'm repeating myself, it 273 00:11:25,320 --> 00:11:27,280 Speaker 1: didn't mean the business agree with everything we did, because 274 00:11:27,280 --> 00:11:30,080 Speaker 1: they didn't. But fundamentally they believed that this was a 275 00:11:30,280 --> 00:11:33,520 Speaker 1: sound administration. And I think that had an enormous impact 276 00:11:33,800 --> 00:11:37,040 Speaker 1: on investment and therefore on productivity. So we had a 277 00:11:37,240 --> 00:11:41,559 Speaker 1: productivity boost from both the technology development and application, which Europe 278 00:11:41,559 --> 00:11:43,520 Speaker 1: which had a different sort of political environment and a 279 00:11:43,559 --> 00:11:47,800 Speaker 1: different sense of confidence in their case lack thereof. 280 00:11:47,880 --> 00:11:48,360 Speaker 7: Than we did. 281 00:11:48,679 --> 00:11:50,959 Speaker 3: So, Bob, we've been talking about what happened in ninety 282 00:11:50,960 --> 00:11:52,760 Speaker 3: three when you were there in the White House. Now 283 00:11:52,800 --> 00:11:54,800 Speaker 3: let's bring it forward to today, because there's a lot 284 00:11:54,800 --> 00:11:57,000 Speaker 3: of talk about the debt and deficit, which is frankly 285 00:11:57,040 --> 00:12:01,080 Speaker 3: a lot larger both and nominal now and in comparative 286 00:12:01,080 --> 00:12:02,199 Speaker 3: dollars than it was back then. 287 00:12:02,360 --> 00:12:03,319 Speaker 7: Let's talk about. 288 00:12:03,040 --> 00:12:04,839 Speaker 3: What you learned in ninety three, what you did in 289 00:12:04,960 --> 00:12:07,800 Speaker 3: ninety three, they could continuably be applied to twenty twenty four. 290 00:12:07,840 --> 00:12:09,720 Speaker 1: It's also a lot bigger, David, And this is the 291 00:12:09,720 --> 00:12:12,000 Speaker 1: really important thing as a percentage of GDP and the 292 00:12:12,000 --> 00:12:14,640 Speaker 1: preenet of our economy, and that I think is the 293 00:12:14,679 --> 00:12:18,000 Speaker 1: critical point. I think that the risks that we identified then, 294 00:12:18,080 --> 00:12:20,440 Speaker 1: the multiple risks, the same as they are today. I 295 00:12:20,480 --> 00:12:22,640 Speaker 1: think that the risks are even greater today because our 296 00:12:22,679 --> 00:12:26,240 Speaker 1: debt GDP ratio is a proximal sumbio estimated about one 297 00:12:26,280 --> 00:12:27,240 Speaker 1: hundred percent right now. 298 00:12:27,520 --> 00:12:29,080 Speaker 7: It's the highest in the history of the country. 299 00:12:29,080 --> 00:12:31,160 Speaker 1: Except for nineteen forty six and forty seven we were 300 00:12:31,200 --> 00:12:33,319 Speaker 1: coming back out of World War Two. I think the 301 00:12:33,400 --> 00:12:36,360 Speaker 1: risks are enormous, and some of them are materializing already, 302 00:12:36,360 --> 00:12:38,600 Speaker 1: like higher interest rates and effect on inflation in part 303 00:12:38,679 --> 00:12:41,800 Speaker 1: not full, and others haven't materialized yet, but I think 304 00:12:41,840 --> 00:12:44,200 Speaker 1: they're out there and sooner related will materialize if we 305 00:12:44,200 --> 00:12:45,880 Speaker 1: don't correct our our physical trajectory. 306 00:12:46,280 --> 00:12:48,720 Speaker 3: You talked about some of the market indicators and even 307 00:12:48,800 --> 00:12:50,600 Speaker 3: forces that you saw in ninety three that sort of 308 00:12:50,640 --> 00:12:52,679 Speaker 3: pointed you in a direction quite at present, Clinton, in 309 00:12:52,720 --> 00:12:54,680 Speaker 3: the direction of really making the depth set. 310 00:12:54,520 --> 00:12:55,280 Speaker 7: Of special issue. 311 00:12:55,320 --> 00:12:57,520 Speaker 3: Are we seeing those indicators of their forces today in 312 00:12:57,559 --> 00:12:58,160 Speaker 3: the markets. 313 00:12:58,600 --> 00:13:01,880 Speaker 1: I think that we are seeing the effects, but it's 314 00:13:02,000 --> 00:13:04,800 Speaker 1: unfortunately from a political point of view, David, I don't 315 00:13:04,800 --> 00:13:07,960 Speaker 1: think they're getting connected in a meaningful way with deficit 316 00:13:08,200 --> 00:13:11,040 Speaker 1: reduction sure interest. I mean, the long the tenure was 317 00:13:11,080 --> 00:13:13,280 Speaker 1: about I think one and a half percent, say two 318 00:13:13,360 --> 00:13:15,560 Speaker 1: years ago, and now it's about four and a half percent. 319 00:13:15,800 --> 00:13:15,880 Speaker 6: Now. 320 00:13:15,960 --> 00:13:17,960 Speaker 7: That's a lot of factors that go into that, but 321 00:13:18,080 --> 00:13:18,600 Speaker 7: I think. 322 00:13:18,400 --> 00:13:20,720 Speaker 1: Part of it is our fiscal situation and the effect 323 00:13:20,720 --> 00:13:23,400 Speaker 1: that's had on inflation. I think it's been an aggravator 324 00:13:23,400 --> 00:13:27,480 Speaker 1: of he if you will an effect on inflation. And 325 00:13:27,559 --> 00:13:31,760 Speaker 1: I think there's a general concern about the imbalance between 326 00:13:31,760 --> 00:13:35,079 Speaker 1: supplying demand for savings and the excess demand that's created 327 00:13:35,080 --> 00:13:40,240 Speaker 1: by our deficits, but it's not Unfortunately, from political point 328 00:13:40,240 --> 00:13:42,240 Speaker 1: of view, I don't think the dots are being connected 329 00:13:42,240 --> 00:13:44,360 Speaker 1: the way they were back in ninety two to three 330 00:13:44,360 --> 00:13:46,640 Speaker 1: when we acted. Ninety three we acted, but ninety two 331 00:13:47,120 --> 00:13:49,079 Speaker 1: when preddent Clinton was putting his plans together. 332 00:13:49,160 --> 00:13:50,600 Speaker 3: There's a lot of talk these days when we talk 333 00:13:50,600 --> 00:13:54,280 Speaker 3: about the feed about the neutral rate and debate about 334 00:13:54,320 --> 00:13:56,480 Speaker 3: whether it is the neutral rate higher. And I guess 335 00:13:56,559 --> 00:14:00,280 Speaker 3: my question is does the deficit and the debt normally, 336 00:14:00,320 --> 00:14:02,840 Speaker 3: all the things being equal, drive the neutroid higher? 337 00:14:03,480 --> 00:14:05,520 Speaker 1: I think over time, but I think you can also 338 00:14:05,559 --> 00:14:06,960 Speaker 1: have a long period of time. And we had a 339 00:14:06,960 --> 00:14:09,280 Speaker 1: long period of time, David, actually a long long period 340 00:14:09,320 --> 00:14:12,000 Speaker 1: of time during which all this was having little effect, 341 00:14:12,160 --> 00:14:14,400 Speaker 1: and then all of a sudden that the tenure went, 342 00:14:14,440 --> 00:14:15,959 Speaker 1: as I said, a moment ago, from roughly one and 343 00:14:16,000 --> 00:14:19,160 Speaker 1: a half to roughly four and a half. And I've 344 00:14:19,160 --> 00:14:22,200 Speaker 1: been around markets, and these policies were for five decades now, 345 00:14:22,320 --> 00:14:25,000 Speaker 1: and there's certainly our periods when you can have a 346 00:14:25,120 --> 00:14:29,480 Speaker 1: long time when reality is out of or what's happening 347 00:14:29,520 --> 00:14:32,200 Speaker 1: is out of sync with reality. But that doesn't go 348 00:14:32,280 --> 00:14:34,920 Speaker 1: on forever, and when it corrects, it can correct savagely. 349 00:14:35,360 --> 00:14:38,560 Speaker 1: A good example was the Eurozone, the sovereign Eurozone crisis. 350 00:14:38,920 --> 00:14:42,400 Speaker 1: For years, a Greek bondstrated roughly speaking parody with ghivlie 351 00:14:42,480 --> 00:14:44,640 Speaker 1: take with German buns, and then all of a sudden 352 00:14:44,640 --> 00:14:46,800 Speaker 1: it exploded. And I think it's a good example of 353 00:14:47,280 --> 00:14:51,080 Speaker 1: how what isn't sensible ultimately doesn't continue. 354 00:14:51,400 --> 00:14:53,200 Speaker 3: There's the politics of it, which I want to talk about. 355 00:14:53,200 --> 00:14:55,760 Speaker 3: Before that, Let's talk about the approach taken to it. 356 00:14:55,840 --> 00:14:58,120 Speaker 3: Let's talk about, for example, the Biden administration. We can 357 00:14:58,160 --> 00:14:59,640 Speaker 3: talk about the Trumpet search if you walk, but the 358 00:14:59,680 --> 00:15:02,560 Speaker 3: Biden is when you were there back in the nineties, 359 00:15:02,680 --> 00:15:04,800 Speaker 3: you came from Golden Sachs, you had other people there 360 00:15:04,800 --> 00:15:07,280 Speaker 3: who knew the markets pretty well. There was a healthy 361 00:15:07,360 --> 00:15:09,480 Speaker 3: dose of how are the markets reacting this? What does 362 00:15:09,520 --> 00:15:12,040 Speaker 3: that do for us? Do we still have that or 363 00:15:12,120 --> 00:15:14,840 Speaker 3: is it more ideologically driven because some people think we've 364 00:15:14,880 --> 00:15:18,360 Speaker 3: sort of shifted the orientation, particularly the Democratic Party, more 365 00:15:18,400 --> 00:15:20,640 Speaker 3: toward protectionism, more toward populism. 366 00:15:20,800 --> 00:15:22,880 Speaker 7: Well, you've asked multiple questions, so I'll give you. I'll 367 00:15:22,880 --> 00:15:23,440 Speaker 7: give you my view. 368 00:15:23,440 --> 00:15:25,000 Speaker 1: I've given a lot of thought this, and I know 369 00:15:25,040 --> 00:15:27,200 Speaker 1: the people there pretty well. If you look at the proposals, 370 00:15:27,280 --> 00:15:30,920 Speaker 1: the major policy proposals that President Biden made, they were 371 00:15:30,960 --> 00:15:34,120 Speaker 1: all paid for in the proposals. Now, ultimately they had 372 00:15:34,160 --> 00:15:35,800 Speaker 1: to go through Congress, and when they went through Congress, 373 00:15:35,800 --> 00:15:37,640 Speaker 1: they came out, some of them paid forwards and some 374 00:15:37,680 --> 00:15:40,480 Speaker 1: of them not. I think he's actually pretty good on this. 375 00:15:40,800 --> 00:15:42,480 Speaker 1: I think there are other issues were I might have 376 00:15:42,640 --> 00:15:45,640 Speaker 1: a different view than he does, or maybe I would 377 00:15:45,640 --> 00:15:47,920 Speaker 1: have it so say it an altered view rather than 378 00:15:47,920 --> 00:15:50,440 Speaker 1: a different view. But I think on fiscal stuff, actually 379 00:15:50,480 --> 00:15:52,000 Speaker 1: he's got a pretty good sense of it. I think 380 00:15:52,040 --> 00:15:55,120 Speaker 1: on the proposals that they had three major bills I 381 00:15:55,200 --> 00:15:58,680 Speaker 1: were chips and infrastructure, and in the original proposal and 382 00:15:58,720 --> 00:16:01,640 Speaker 1: then of course for that build back better and all 383 00:16:01,640 --> 00:16:03,440 Speaker 1: of those if you look at them, and this is 384 00:16:03,520 --> 00:16:06,520 Speaker 1: correct because I looked at them, all of those the 385 00:16:06,560 --> 00:16:08,960 Speaker 1: proposals were fully paid for that to go through Congress, 386 00:16:08,960 --> 00:16:11,000 Speaker 1: and in Congress they in some cases they lost the 387 00:16:11,040 --> 00:16:13,000 Speaker 1: pay for us. You know you mentioned I forgot how 388 00:16:13,040 --> 00:16:15,040 Speaker 1: you put it now before? But did you say populism 389 00:16:15,160 --> 00:16:18,880 Speaker 1: or progressive? Yeah, populism. If you look at what has 390 00:16:18,960 --> 00:16:21,160 Speaker 1: been referred to as industrial policy, and they referred to 391 00:16:21,200 --> 00:16:25,040 Speaker 1: as industrial policy, it's their label, but it's not picking 392 00:16:25,040 --> 00:16:27,040 Speaker 1: winners and losers. Now it may be in the minds 393 00:16:27,080 --> 00:16:28,440 Speaker 1: of some of those people, but if you look at 394 00:16:28,440 --> 00:16:30,480 Speaker 1: those proposals, and I've talked to their people about this 395 00:16:30,520 --> 00:16:32,120 Speaker 1: a lot, I think they actually make a lot of 396 00:16:32,160 --> 00:16:35,720 Speaker 1: sense on a purely economic basis. Their externalities they basically 397 00:16:35,720 --> 00:16:39,880 Speaker 1: dealt with, short for, with insecurities in our system, excuse me, 398 00:16:39,920 --> 00:16:42,640 Speaker 1: in our economic system with respect to our economic security 399 00:16:42,760 --> 00:16:46,840 Speaker 1: or economic function are geopolitical or national security functioning that 400 00:16:46,880 --> 00:16:48,320 Speaker 1: markets were not going to meet and had to be 401 00:16:48,360 --> 00:16:50,840 Speaker 1: met by government. So that I think is not industrial 402 00:16:50,840 --> 00:16:53,440 Speaker 1: policy in the traditional sense. And let's pick winners and losers. 403 00:16:53,640 --> 00:16:56,000 Speaker 1: It was let's fill holes that the private sector simply 404 00:16:56,040 --> 00:16:59,000 Speaker 1: isn't filling, and those are holes of economic and incial security. 405 00:16:59,120 --> 00:17:02,240 Speaker 3: So from your perspect the overall approach, you don't take 406 00:17:02,320 --> 00:17:04,600 Speaker 3: much issue with. No do we end up with where 407 00:17:04,600 --> 00:17:07,680 Speaker 3: we are, where we have increasing deficits in increasing debts. 408 00:17:07,720 --> 00:17:11,640 Speaker 1: Oh weud a minute, what I talked about with the proposals. No, 409 00:17:11,800 --> 00:17:14,760 Speaker 1: I think we're in a terrible place because unfortunately, once 410 00:17:14,760 --> 00:17:17,440 Speaker 1: you get to legislating, there isn't the will. There's a 411 00:17:17,480 --> 00:17:21,560 Speaker 1: lot of talk, but the talk is always divided politically 412 00:17:21,880 --> 00:17:25,320 Speaker 1: between the Republicans who refused to raise taxes and the 413 00:17:25,359 --> 00:17:28,080 Speaker 1: Democrats who won't deal with entitlements. Now, I think there 414 00:17:28,119 --> 00:17:30,680 Speaker 1: was a reality to this, and that is I do 415 00:17:30,720 --> 00:17:33,240 Speaker 1: think when we eventually get to doing this, or if 416 00:17:33,240 --> 00:17:35,720 Speaker 1: we're going to do it after the next election, which 417 00:17:36,280 --> 00:17:37,600 Speaker 1: the Good Lord would hope we will, but I. 418 00:17:37,560 --> 00:17:38,359 Speaker 7: Wouldn't bet on it. 419 00:17:39,200 --> 00:17:42,960 Speaker 1: About sixty percent or something of the increase in the 420 00:17:43,000 --> 00:17:46,720 Speaker 1: debt from two thousand to twenty twenty two was because 421 00:17:46,760 --> 00:17:49,240 Speaker 1: of the tax cuts, So if it hadn't been for that, 422 00:17:50,160 --> 00:17:52,280 Speaker 1: the debt, instead of being one hundred percent CDP would 423 00:17:52,280 --> 00:17:54,639 Speaker 1: about sixty percent. Another way to look at it is 424 00:17:54,720 --> 00:17:57,040 Speaker 1: exactly what I just said, which is what percent would 425 00:17:57,080 --> 00:17:59,360 Speaker 1: the debt be of GDP we had the two tax 426 00:17:59,400 --> 00:18:02,000 Speaker 1: cuts is about the same number, around sixty three percent 427 00:18:02,080 --> 00:18:04,600 Speaker 1: or something like that. So I think in very large 428 00:18:04,640 --> 00:18:07,520 Speaker 1: measure what happened is we had two very big tax cuts, 429 00:18:07,600 --> 00:18:09,600 Speaker 1: neither what we paid for, so we decided not to 430 00:18:09,600 --> 00:18:11,439 Speaker 1: pay for what we were spending, and that's how we 431 00:18:11,440 --> 00:18:13,440 Speaker 1: got where we are. But looking forward, we're gonna have 432 00:18:13,480 --> 00:18:15,600 Speaker 1: to deal with both spending and taxes, though I think 433 00:18:15,640 --> 00:18:17,720 Speaker 1: for the reasons I just said, when you get realistic 434 00:18:17,760 --> 00:18:19,960 Speaker 1: about it, I think you're going to have to be 435 00:18:20,200 --> 00:18:21,560 Speaker 1: largely on the tax side. 436 00:18:21,880 --> 00:18:24,160 Speaker 3: On the tax cuts, the theory of that was to 437 00:18:24,200 --> 00:18:26,920 Speaker 3: increase productivity, increase growth. Can we grow our way out 438 00:18:26,920 --> 00:18:28,960 Speaker 3: of the problem. No, no, But let's go back one step. 439 00:18:29,560 --> 00:18:32,439 Speaker 1: When the Trump tax cuts were enacted, one of the 440 00:18:32,480 --> 00:18:37,600 Speaker 1: major investment banks put out a piece saying that on 441 00:18:37,600 --> 00:18:40,359 Speaker 1: a ten year basis, they thought that the tax cuts 442 00:18:40,960 --> 00:18:45,160 Speaker 1: had zero effect on investment and productivity and growth. Now 443 00:18:45,240 --> 00:18:48,240 Speaker 1: that's the tax cuts in terms of their impact. On 444 00:18:48,280 --> 00:18:50,600 Speaker 1: the other hand, what it did do is contribute greatly 445 00:18:50,600 --> 00:18:53,679 Speaker 1: to our fist, to our deficits when it comes to 446 00:18:53,840 --> 00:18:54,919 Speaker 1: really garnering support. 447 00:18:55,080 --> 00:18:56,040 Speaker 7: Can we grow our way out? 448 00:18:56,240 --> 00:19:01,200 Speaker 1: Look, if we could put in place a serious inclusive 449 00:19:01,240 --> 00:19:05,880 Speaker 1: growth strategy and increase our rate of growth, that would 450 00:19:05,880 --> 00:19:09,080 Speaker 1: certainly help. Because of those debt over GDP, so that 451 00:19:09,119 --> 00:19:10,960 Speaker 1: would help. But I still think we're going to have 452 00:19:11,000 --> 00:19:15,120 Speaker 1: to deal with our expending. But even mostly with our taxes. 453 00:19:15,080 --> 00:19:17,040 Speaker 3: If we could put together a plan. As you look 454 00:19:17,080 --> 00:19:20,719 Speaker 3: at the two likely candidates right now, Donald Trump Joe Biden, 455 00:19:21,119 --> 00:19:23,760 Speaker 3: is either one putting forward a comprehensive growth plan. 456 00:19:25,240 --> 00:19:28,439 Speaker 1: No, but I think natured I think is no. But 457 00:19:28,560 --> 00:19:30,800 Speaker 1: I do think if you look at what President Biden 458 00:19:30,840 --> 00:19:32,320 Speaker 1: has done, as I said a few moments ago, I 459 00:19:32,359 --> 00:19:34,840 Speaker 1: actually think he's sort of pretty much in the right track. 460 00:19:35,720 --> 00:19:38,000 Speaker 1: I think if you look at the major programs these, 461 00:19:38,080 --> 00:19:40,480 Speaker 1: I believe our externalities they were dealing with, that is 462 00:19:40,560 --> 00:19:43,879 Speaker 1: to say, areas where the economy needed the indrection of 463 00:19:43,920 --> 00:19:46,760 Speaker 1: government to deal with what the markets were not. But 464 00:19:46,800 --> 00:19:48,439 Speaker 1: I would say that neither one is at the present 465 00:19:48,440 --> 00:19:51,399 Speaker 1: time put forward they program. But if you extrapolate what 466 00:19:51,440 --> 00:19:56,200 Speaker 1: President Biden has done looking forward conceptually at least be 467 00:19:56,200 --> 00:19:58,800 Speaker 1: pretty comfortable with subjects A caveat that we need to 468 00:19:58,840 --> 00:20:03,199 Speaker 1: focus on our on the issues that we have unable 469 00:20:03,280 --> 00:20:05,840 Speaker 1: to politically. But that of course gets you back to 470 00:20:05,840 --> 00:20:06,440 Speaker 1: the politics. 471 00:20:06,960 --> 00:20:07,880 Speaker 7: Trump is a different matter. 472 00:20:07,880 --> 00:20:11,000 Speaker 1: I mean, Trump is talking about huge tax cuts and 473 00:20:11,040 --> 00:20:13,000 Speaker 1: that will just exacerbate our problem. I don't think it's 474 00:20:13,000 --> 00:20:14,800 Speaker 1: gonna have any effect at all and growth, just like 475 00:20:14,520 --> 00:20:17,959 Speaker 1: an other trap tax cuts did I think a lot 476 00:20:18,000 --> 00:20:19,800 Speaker 1: of other problems by the way around the Trump president 477 00:20:19,840 --> 00:20:22,360 Speaker 1: that we could have run into the rule of law 478 00:20:22,440 --> 00:20:25,480 Speaker 1: is fundamental to our economy. He's talking about weaponizing the 479 00:20:25,560 --> 00:20:32,200 Speaker 1: Dust Department and the FBI. He's look, the fundamental of 480 00:20:32,600 --> 00:20:35,080 Speaker 1: any democracy is the peaceful transfer of power. He's denying 481 00:20:35,080 --> 00:20:37,760 Speaker 1: their legitimate in the twenty twenty elections. Still so, I 482 00:20:37,800 --> 00:20:39,800 Speaker 1: think there are a lot of problems economically if he 483 00:20:39,800 --> 00:20:40,359 Speaker 1: gets elected. 484 00:20:40,880 --> 00:20:42,640 Speaker 3: When we talked about nineteen eighty three, we talked about 485 00:20:42,680 --> 00:20:45,560 Speaker 3: Japan and the perceived threat of Japan, challenge of Japan 486 00:20:45,800 --> 00:20:48,760 Speaker 3: and the business community more broadly, Can China play that 487 00:20:48,840 --> 00:20:50,919 Speaker 3: role today? Where is China? Is it something that we 488 00:20:50,960 --> 00:20:52,920 Speaker 3: need to focus on. Is it something that might cause 489 00:20:53,040 --> 00:20:54,760 Speaker 3: the American people say, you know, we better address this 490 00:20:54,880 --> 00:20:56,359 Speaker 3: or else we're going to be in trouble with China. 491 00:20:58,320 --> 00:21:01,639 Speaker 1: I think people do say that to some extent, So 492 00:21:01,720 --> 00:21:04,240 Speaker 1: that may be, but not it's not in the same way, David. 493 00:21:04,480 --> 00:21:07,240 Speaker 1: I mean, Japan was a palpable in a lot of 494 00:21:07,280 --> 00:21:10,880 Speaker 1: people's minds, a palpable and ever present risk at the time. 495 00:21:11,440 --> 00:21:15,120 Speaker 1: I don't think China plays quite that role. Also, China China, 496 00:21:15,160 --> 00:21:17,000 Speaker 1: and I wouldn't profess expertise as back to China, but 497 00:21:17,080 --> 00:21:19,000 Speaker 1: a little bit about it. I think they've got some 498 00:21:19,000 --> 00:21:21,080 Speaker 1: really serious problems. I think they're much more. Is not 499 00:21:21,160 --> 00:21:23,760 Speaker 1: just a question of the way they reacted to COVID 500 00:21:23,840 --> 00:21:25,960 Speaker 1: or something. I think there's some really systemic problems. It 501 00:21:26,040 --> 00:21:28,760 Speaker 1: was a terrific article Foreign Affairs by Adam Posen a 502 00:21:28,840 --> 00:21:30,719 Speaker 1: few months ago. I guess about what I would call 503 00:21:30,760 --> 00:21:32,800 Speaker 1: the systemic issues that they faced, and I think they're 504 00:21:32,880 --> 00:21:33,359 Speaker 1: very serious. 505 00:21:34,160 --> 00:21:37,439 Speaker 3: That was former Treasury Secretary Bob Rubin. And this has 506 00:21:37,440 --> 00:21:40,480 Speaker 3: been a special Bloomberg Wall Street Week podcast. 507 00:21:40,920 --> 00:21:43,440 Speaker 1: Here the full conversation on the latest edition of a 508 00:21:43,480 --> 00:21:47,679 Speaker 1: Bloomberg Wall Street Week podcast. Subscribe on Apple Spot, of Client, 509 00:21:47,800 --> 00:21:49,720 Speaker 1: anywhere else you get your podcasts 510 00:21:49,760 --> 00:21:53,399 Speaker 3: Plus listen anytime on the Bloomberg Business app and Bloomberg 511 00:21:53,440 --> 00:21:58,000 Speaker 3: dot Com.