1 00:00:00,240 --> 00:00:04,040 Speaker 1: Runt You by Bank of America Mary Lynch. With virtual reality, 2 00:00:04,320 --> 00:00:09,719 Speaker 1: virtually everything will change. Discover opportunities in a transforming world. 3 00:00:10,119 --> 00:00:14,440 Speaker 1: Be of a mL dot Com, slash VR, Mary Lynch, 4 00:00:14,520 --> 00:00:28,120 Speaker 1: Pierced Fenner and Smith Incorporated. Ye, Welcome to the Bloomberg 5 00:00:28,160 --> 00:00:32,360 Speaker 1: Surveillance Podcast. I'm Tom Keene with David Gura. Daily we 6 00:00:32,440 --> 00:00:36,080 Speaker 1: bring you insight from the best of economics, finance, investment, 7 00:00:36,120 --> 00:00:42,160 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 8 00:00:42,280 --> 00:00:50,080 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg phil 9 00:00:50,120 --> 00:00:52,040 Speaker 1: and Powder joins us now here on Bloomberg eleven three 10 00:00:52,040 --> 00:00:54,520 Speaker 1: oh Studios in New York, and great to have you 11 00:00:54,560 --> 00:00:56,800 Speaker 1: with us. Suffice to say this was a bit of 12 00:00:56,800 --> 00:00:58,760 Speaker 1: a surprise for for you, as it was for many people. 13 00:00:58,760 --> 00:01:04,920 Speaker 1: I think, yes, clearly the lead had been narrowing spectacularly, 14 00:01:04,959 --> 00:01:10,639 Speaker 1: but yes, to have actually a minority government and the 15 00:01:10,680 --> 00:01:13,720 Speaker 1: tourists coming out of this much the minute, especially Mrs 16 00:01:13,800 --> 00:01:16,720 Speaker 1: May is a surprise as you you piece together what 17 00:01:16,840 --> 00:01:20,240 Speaker 1: happened here, what what you attributed to. I mean, these 18 00:01:20,280 --> 00:01:22,480 Speaker 1: are these are early hours, yet we don't know a 19 00:01:22,520 --> 00:01:25,200 Speaker 1: whole lot still about turnout, who voted, who didn't, vote, etcetera. 20 00:01:25,440 --> 00:01:28,039 Speaker 1: But what you attributed to first this was not a 21 00:01:28,040 --> 00:01:33,280 Speaker 1: brexit actually, uh, the British people, for better words, considered 22 00:01:33,319 --> 00:01:35,280 Speaker 1: brexit done deal. They don't know what it means yet, 23 00:01:35,360 --> 00:01:38,119 Speaker 1: but it's going to be out. So it became an 24 00:01:38,120 --> 00:01:39,959 Speaker 1: issue about the kind of bris that they're on the 25 00:01:40,000 --> 00:01:44,440 Speaker 1: living and apparently on a number of key issues Mrs 26 00:01:44,440 --> 00:01:47,560 Speaker 1: May managed to push the wrong button, especially on the 27 00:01:47,640 --> 00:01:52,880 Speaker 1: MENSA attacks and other social economic issues. What what happens 28 00:01:53,160 --> 00:01:55,640 Speaker 1: from here? As you see it? I mentioned the negotiations 29 00:01:55,640 --> 00:01:57,920 Speaker 1: that are taking place. We expect the Prime Minister to 30 00:01:57,960 --> 00:02:00,320 Speaker 1: go to bucking In Palace. That indicates that she has 31 00:02:00,320 --> 00:02:03,120 Speaker 1: gotten some commitment here that a coalition could could be formed. 32 00:02:03,600 --> 00:02:05,920 Speaker 1: How tenuous a coalition would that bedia think? And what 33 00:02:05,960 --> 00:02:08,000 Speaker 1: does it mean for for the negotiations over breaks that 34 00:02:08,120 --> 00:02:10,000 Speaker 1: are scheduled to take place I think in just ten 35 00:02:10,080 --> 00:02:13,120 Speaker 1: days time. It's it's very hard to say. Clearly, they 36 00:02:13,160 --> 00:02:19,519 Speaker 1: have a majority three nineteen Conservatives, ten Democratic Unionists and 37 00:02:20,160 --> 00:02:23,880 Speaker 1: so they can govern whether they will lost beyond the 38 00:02:23,919 --> 00:02:27,560 Speaker 1: fall or whether w generary election, which of course, but 39 00:02:27,720 --> 00:02:31,560 Speaker 1: the Tories wouldn't enter with Mrs May, Mrs making the 40 00:02:31,639 --> 00:02:33,960 Speaker 1: leadership it's it's all possible. I think we're going to 41 00:02:34,000 --> 00:02:38,400 Speaker 1: see the negotiations starting in a very different tone from 42 00:02:38,840 --> 00:02:41,160 Speaker 1: the band that Mrs May hope to start with so 43 00:02:41,400 --> 00:02:47,320 Speaker 1: confident with personal mandate. There is no mandate, and I 44 00:02:47,320 --> 00:02:51,040 Speaker 1: think Britain will end up playing a lot nicer. Who's 45 00:02:51,040 --> 00:02:53,000 Speaker 1: gonna Who's gonna set that tone? Is that going to 46 00:02:53,040 --> 00:02:55,560 Speaker 1: be the the EU taking advantage here of of a 47 00:02:55,639 --> 00:02:57,680 Speaker 1: change in dynamic? Is it going to be a chastened 48 00:02:57,800 --> 00:03:00,320 Speaker 1: there reason May if in fact she continues to service 49 00:03:00,360 --> 00:03:02,000 Speaker 1: as Prime Minister. Who's going to set the tone going 50 00:03:02,000 --> 00:03:07,520 Speaker 1: forward here in those negotiations? Well, it's a two party negotiation, right, 51 00:03:07,560 --> 00:03:13,959 Speaker 1: so I don't think that Mrs clearly Bill jointly determined 52 00:03:13,960 --> 00:03:16,200 Speaker 1: the tone. But the tone is going to be, I think, 53 00:03:16,560 --> 00:03:22,480 Speaker 1: very much less assertive and aggressive and no no deals 54 00:03:22,520 --> 00:03:26,560 Speaker 1: better than a bad deal type of stuff that was 55 00:03:26,639 --> 00:03:30,280 Speaker 1: in the air until not that long ago. You mentioned 56 00:03:30,320 --> 00:03:32,800 Speaker 1: that it's it's it was not a Brexit vote. What 57 00:03:32,880 --> 00:03:35,000 Speaker 1: are the kind of global ramifications of the vote that 58 00:03:35,040 --> 00:03:37,560 Speaker 1: we had yesterday? Are they diminished as well? In other words, 59 00:03:37,760 --> 00:03:39,240 Speaker 1: is the outcome from this going to have less of 60 00:03:39,240 --> 00:03:41,440 Speaker 1: an effect than the outcome of the vote we had 61 00:03:41,480 --> 00:03:45,640 Speaker 1: last last June. Well, what was interesting in UH where 62 00:03:45,720 --> 00:03:49,280 Speaker 1: this election was that UH in Britain unlike in France, 63 00:03:49,280 --> 00:03:54,360 Speaker 1: but like in Germany, the traditional two large parties are 64 00:03:54,400 --> 00:03:58,600 Speaker 1: back right. This is the obviously don't happen in France, 65 00:03:58,640 --> 00:04:00,560 Speaker 1: and it hasn't never been every add but here are 66 00:04:00,600 --> 00:04:03,920 Speaker 1: two key European countries ready old sort of center left 67 00:04:03,920 --> 00:04:07,640 Speaker 1: and center right dominant again old the minority parties UH 68 00:04:08,160 --> 00:04:11,000 Speaker 1: flunked out. Let's come back to that. That's an important point. 69 00:04:11,000 --> 00:04:14,080 Speaker 1: Film about her with US City. Good morning, David, you're back. 70 00:04:14,360 --> 00:04:16,120 Speaker 1: I had a dream last night and you said on 71 00:04:16,160 --> 00:04:25,240 Speaker 1: the runway Reagan Bloomberg surveillance this morning with all of 72 00:04:25,240 --> 00:04:27,719 Speaker 1: our news flow and thanks to our team for really 73 00:04:27,720 --> 00:04:32,320 Speaker 1: working truly around the clock over the last hours. I 74 00:04:32,360 --> 00:04:35,840 Speaker 1: love your idea, Professor Powder. We've come full circle back 75 00:04:35,920 --> 00:04:38,560 Speaker 1: to two parties, which I guess goes back to the 76 00:04:38,680 --> 00:04:42,200 Speaker 1: seventies and the eighties, almost pre Thatcher. I would I 77 00:04:42,240 --> 00:04:46,000 Speaker 1: would put it to where we are, where does labor 78 00:04:46,200 --> 00:04:51,480 Speaker 1: fit into labor? I mean the unions. That's the big difference. 79 00:04:51,760 --> 00:04:56,560 Speaker 1: The atomization of any labor market now makes it totally 80 00:04:56,600 --> 00:05:00,360 Speaker 1: different than the nostalgia we have for another time. In yes, 81 00:05:00,880 --> 00:05:03,360 Speaker 1: the Labor Party in terms of ideology at the moment 82 00:05:03,560 --> 00:05:07,240 Speaker 1: is very much the leadership like the Labor Party of 83 00:05:07,279 --> 00:05:11,120 Speaker 1: Michael Foot in the seventies. But clearly the role of 84 00:05:11,240 --> 00:05:13,600 Speaker 1: the unions in the economy is much weak, and they 85 00:05:13,640 --> 00:05:16,880 Speaker 1: still have a significant savers inside the Labor Party. But 86 00:05:16,960 --> 00:05:20,800 Speaker 1: yet from that perspective we are not back where we 87 00:05:20,839 --> 00:05:24,160 Speaker 1: where before, because as you say, the atomization of the 88 00:05:24,240 --> 00:05:27,839 Speaker 1: labor market, the fact that organized labor is almost a 89 00:05:27,839 --> 00:05:31,400 Speaker 1: contradiction in terms right, that really is a qualitative change 90 00:05:31,640 --> 00:05:35,320 Speaker 1: that we see in this country, as indeed we see 91 00:05:35,360 --> 00:05:38,680 Speaker 1: in continental Europe. A critical question on this morning, and 92 00:05:38,720 --> 00:05:40,800 Speaker 1: I haven't had time to ask it with the news flow, 93 00:05:41,440 --> 00:05:45,839 Speaker 1: is this a generational election or is it just another election? 94 00:05:47,360 --> 00:05:50,360 Speaker 1: Is there a shift going on? Almost as in Japan. 95 00:05:51,200 --> 00:05:54,919 Speaker 1: It's interesting in some way as usual, they all suggested, No, 96 00:05:55,160 --> 00:05:58,560 Speaker 1: it's a generational election in the sense that Labor got 97 00:05:58,640 --> 00:06:02,800 Speaker 1: voted in by the young. But at the same time, 98 00:06:03,520 --> 00:06:11,200 Speaker 1: Labor's leadership inspires the young is very no past generation. 99 00:06:11,480 --> 00:06:16,120 Speaker 1: So it is it's a it's a very strange concoction 100 00:06:16,560 --> 00:06:23,360 Speaker 1: of youngsters going a ladders. Wow, there you go. Is 101 00:06:23,400 --> 00:06:26,200 Speaker 1: there is their residence here, with what we saw as 102 00:06:26,240 --> 00:06:28,560 Speaker 1: the residents here, with what we saw with with Bernie 103 00:06:28,560 --> 00:06:32,080 Speaker 1: Sanders in the US very much. Yes, How does Jeremy 104 00:06:32,120 --> 00:06:34,400 Speaker 1: Corby murag from from all from all of this? He 105 00:06:34,480 --> 00:06:36,000 Speaker 1: was the one where everyone had been talking about, who 106 00:06:36,240 --> 00:06:38,159 Speaker 1: is he going to continue to lead his party? Is 107 00:06:38,200 --> 00:06:40,320 Speaker 1: this a victory in some small light for for him? 108 00:06:40,360 --> 00:06:44,240 Speaker 1: And absolutely? I mean, you know, he led his party 109 00:06:44,279 --> 00:06:46,880 Speaker 1: into this election. People thought that he was go to 110 00:06:47,040 --> 00:06:50,560 Speaker 1: bomb and he's done much better than expected. Though he 111 00:06:50,800 --> 00:06:53,880 Speaker 1: gains from this personal level and his wing of the 112 00:06:53,920 --> 00:06:57,560 Speaker 1: party gains from this. Yes, go ahead, no, go ahead, 113 00:06:57,600 --> 00:07:02,080 Speaker 1: Please insist you're on the runway right yesterday? How how 114 00:07:02,600 --> 00:07:05,000 Speaker 1: do you see treason a you know, a few months 115 00:07:05,000 --> 00:07:07,520 Speaker 1: in here settling into this job as prime minister, we've 116 00:07:07,520 --> 00:07:09,200 Speaker 1: now had occasion to listen to her, could deliver many 117 00:07:09,200 --> 00:07:12,600 Speaker 1: important speeches, some of which were tied to two terrible events, 118 00:07:12,680 --> 00:07:15,160 Speaker 1: terrorist events in the country. But how how do you 119 00:07:15,200 --> 00:07:17,240 Speaker 1: see her in that role? How is she doing as 120 00:07:17,280 --> 00:07:20,320 Speaker 1: prime minister in terms of the duties of the job 121 00:07:20,360 --> 00:07:22,880 Speaker 1: of taking care of the country, of addressing national tragedies 122 00:07:22,880 --> 00:07:26,720 Speaker 1: and big, big events, and of planning a path forward. Well, unfortunately, 123 00:07:26,800 --> 00:07:32,320 Speaker 1: we haven't seen any real ideas, initiatives, deep thoughts like 124 00:07:32,440 --> 00:07:35,640 Speaker 1: brexit means brexit and enough is enough and not a 125 00:07:35,720 --> 00:07:39,080 Speaker 1: substitute for policies, right, So I think she has to 126 00:07:39,240 --> 00:07:42,640 Speaker 1: me got a lot to prove that you can actually 127 00:07:42,960 --> 00:07:48,080 Speaker 1: lead by addressing concrete issues with concrete policies. And unless 128 00:07:48,080 --> 00:07:51,040 Speaker 1: she does that, I don't think she lost long has 129 00:07:51,080 --> 00:07:53,840 Speaker 1: her reactiveness been because of the fact that Brexit is 130 00:07:53,880 --> 00:07:56,480 Speaker 1: so all consuming? Do you see it being that that 131 00:07:56,520 --> 00:07:58,880 Speaker 1: she's myopic or shortsighted, or is she just dealing with 132 00:07:58,880 --> 00:08:00,760 Speaker 1: what she has to do that being this is this 133 00:08:00,800 --> 00:08:03,040 Speaker 1: is the overarching, biggest issue that this government has to do. 134 00:08:03,120 --> 00:08:06,960 Speaker 1: And she comes from the background bitches home office of 135 00:08:07,120 --> 00:08:10,000 Speaker 1: the pulpit of the Interior, if you are, and so 136 00:08:10,360 --> 00:08:15,720 Speaker 1: international cross border issues simply not part of uh what's 137 00:08:15,720 --> 00:08:18,720 Speaker 1: just all about? And it shows. But we're waiting at 138 00:08:18,720 --> 00:08:22,080 Speaker 1: some point we may have comments from the Prime Minister 139 00:08:22,160 --> 00:08:25,280 Speaker 1: of the United Kingdom. We've got all sorts of feeds 140 00:08:25,280 --> 00:08:29,720 Speaker 1: into our world headquarters, into our radio operation. Here the 141 00:08:29,840 --> 00:08:36,000 Speaker 1: jaguar waits outside of ten Downing Street, My great the Queen, 142 00:08:36,320 --> 00:08:42,560 Speaker 1: I mean, rather the Prime Minister over to jaguar jaguar 143 00:08:42,880 --> 00:08:46,760 Speaker 1: jaguar anyways, Uh it is silver uh and the cat 144 00:08:46,840 --> 00:08:58,080 Speaker 1: is not separately North Nicole Sturgeon is taking questions and speaking. 145 00:08:58,480 --> 00:09:01,840 Speaker 1: I believe it's boothouse, Fuessor Bouder, b u t e 146 00:09:02,120 --> 00:09:06,440 Speaker 1: beaute house. I think I am. I'm in Scotland, I'm 147 00:09:06,480 --> 00:09:10,640 Speaker 1: the beautiful lot of jokes here mute but mute house. 148 00:09:10,720 --> 00:09:14,440 Speaker 1: There it is. But she is speaking after the SMP 149 00:09:15,240 --> 00:09:19,239 Speaker 1: was defeated, Alex Sanmon even losing his seat among other worthies. 150 00:09:19,640 --> 00:09:22,360 Speaker 1: And the clear sight guys this morning is she will 151 00:09:22,400 --> 00:09:26,920 Speaker 1: tilt away from an independence focus to an s MP brex, 152 00:09:26,960 --> 00:09:31,160 Speaker 1: said Professor Bower. Within your wonderful understanding of the culture 153 00:09:31,160 --> 00:09:35,280 Speaker 1: and politics of Europe and the United Kingdom, How does 154 00:09:35,679 --> 00:09:40,880 Speaker 1: remain deal on this interesting morning? Remain in Northern Ireland, 155 00:09:41,200 --> 00:09:46,400 Speaker 1: Remain in Scotland. How lonely are they this morning? Remain 156 00:09:46,559 --> 00:09:49,480 Speaker 1: Have I have a lot of company? Now they've got 157 00:09:49,559 --> 00:09:52,680 Speaker 1: company in England. You think there's been a shift back 158 00:09:52,679 --> 00:09:57,400 Speaker 1: to remain well in a sense that d not the 159 00:09:58,120 --> 00:10:03,120 Speaker 1: main but the from the desire for a softer breck 160 00:10:03,160 --> 00:10:07,480 Speaker 1: shit then, but Mrs May seemed to be hinting at 161 00:10:08,360 --> 00:10:14,080 Speaker 1: step away even from a no deal is UH is 162 00:10:14,120 --> 00:10:17,640 Speaker 1: better than than a bad deal, so UM, I don't 163 00:10:17,679 --> 00:10:22,439 Speaker 1: think regrettably the remains is an option. At this point 164 00:10:22,880 --> 00:10:25,160 Speaker 1: the UK will have to leave the EEL before it 165 00:10:25,240 --> 00:10:28,600 Speaker 1: kind of applied to rejoin. But I think the softer 166 00:10:28,760 --> 00:10:33,079 Speaker 1: landing for all concerned is good news. The uber driver 167 00:10:33,200 --> 00:10:38,880 Speaker 1: showed up, the uber driver the new normal in the 168 00:10:38,960 --> 00:10:43,800 Speaker 1: UK six minutes feeling matter. What's tod that you? Yesterday 169 00:10:44,320 --> 00:10:46,240 Speaker 1: the President of the e CV was in Estonia, not 170 00:10:46,280 --> 00:10:49,959 Speaker 1: in in Frankfort, but in Estonia, delivering that new policy 171 00:10:50,000 --> 00:10:52,320 Speaker 1: statement and taking questions from from reporters. What's that? What 172 00:10:52,400 --> 00:10:54,280 Speaker 1: was the key headline for you of what Mr drug 173 00:10:54,360 --> 00:10:57,840 Speaker 1: he said yesterday? Well, no surprises, A right, They're not 174 00:10:57,880 --> 00:11:01,360 Speaker 1: going to cut rates, uh. It makes no sense to 175 00:11:01,440 --> 00:11:04,800 Speaker 1: cut rates when you're at the zeroo abound unless you're 176 00:11:04,800 --> 00:11:07,320 Speaker 1: going to get rid of cash, which they won't, and 177 00:11:07,800 --> 00:11:12,680 Speaker 1: they will go easy on on the tapering of the 178 00:11:12,880 --> 00:11:17,960 Speaker 1: of the balance sheet. There's both entirely expected. I think 179 00:11:18,240 --> 00:11:21,680 Speaker 1: the fact that he is uh concern about the continuing 180 00:11:21,720 --> 00:11:24,880 Speaker 1: weakness of inflation is also not a surprise. We have 181 00:11:25,520 --> 00:11:29,880 Speaker 1: the flatters Philip skirls. Since you know Mr Philip invented 182 00:11:30,920 --> 00:11:37,600 Speaker 1: and uh, there's no admission yet that they're out of AMMO, 183 00:11:38,120 --> 00:11:43,120 Speaker 1: but they're clearly shame. You're not going to cut rates 184 00:11:43,200 --> 00:11:47,640 Speaker 1: and the build taper more slowly or affect he es 185 00:11:47,640 --> 00:11:51,800 Speaker 1: basically recognized reality that the ECB in terms of the 186 00:11:51,800 --> 00:11:55,720 Speaker 1: ability to stimulate the economy is uh now a bit player. 187 00:11:55,920 --> 00:11:57,760 Speaker 1: To let me pull back the surveillance, Curtiney, here a 188 00:11:57,800 --> 00:12:00,240 Speaker 1: little bit that we take these press conferences after the 189 00:12:00,280 --> 00:12:03,079 Speaker 1: policy statements renounce, and you and I listen and decide 190 00:12:03,080 --> 00:12:04,640 Speaker 1: how long we're gonna we're gonna take it. We really 191 00:12:04,679 --> 00:12:06,440 Speaker 1: take it in full. You were very engaged with what 192 00:12:06,640 --> 00:12:09,240 Speaker 1: with Mark d saying, yeah, it started out dry as dust, 193 00:12:09,280 --> 00:12:14,000 Speaker 1: you mean Bowder nodded off over his audience, and then seriously, Professor, 194 00:12:14,160 --> 00:12:19,040 Speaker 1: it really clicked in. I mean he really went at 195 00:12:19,120 --> 00:12:22,839 Speaker 1: it about how he does not have the fear that 196 00:12:23,040 --> 00:12:26,040 Speaker 1: so many of the handwringers have. You mentioned this earlier 197 00:12:26,120 --> 00:12:30,559 Speaker 1: this morning. You see it as a very stable process 198 00:12:31,240 --> 00:12:33,720 Speaker 1: to do what he has to do on the balance 199 00:12:33,760 --> 00:12:37,840 Speaker 1: sheet on normalizing rates. Oh, you got to give me 200 00:12:37,880 --> 00:12:40,679 Speaker 1: a bigger answer on a Friday than yes, you can 201 00:12:40,720 --> 00:12:43,280 Speaker 1: do that on Wednesday. The balance sheet isn't on the issue, 202 00:12:43,400 --> 00:12:48,280 Speaker 1: but right from an economic technical perspective, a bit bit 203 00:12:48,679 --> 00:12:51,800 Speaker 1: political issue because the central bank, especially on the asset 204 00:12:51,880 --> 00:12:54,320 Speaker 1: side of his balance sheet, has all kinds of rubbish 205 00:12:54,440 --> 00:12:56,880 Speaker 1: that central bank should not have the engage in credit 206 00:12:56,880 --> 00:13:00,200 Speaker 1: policy increased a fiscal policy, and that's an issue from 207 00:13:00,240 --> 00:13:02,719 Speaker 1: a technical point of view. As soon as they get 208 00:13:02,760 --> 00:13:06,240 Speaker 1: away from the zeroo abound, they can play the interest 209 00:13:06,280 --> 00:13:08,680 Speaker 1: rates again, even if the balance sheet is likely to 210 00:13:09,480 --> 00:13:13,520 Speaker 1: GDP by then about twice the size that as the 211 00:13:13,520 --> 00:13:17,120 Speaker 1: GDP of the fense balance sheet. Incidentally, not the the 212 00:13:17,160 --> 00:13:19,120 Speaker 1: two day FED meeting next week, give us a bit 213 00:13:19,120 --> 00:13:21,839 Speaker 1: of a preview for what you're looking for. Their seems 214 00:13:21,840 --> 00:13:23,800 Speaker 1: like insensus we're gonna see rates when it comes to 215 00:13:23,800 --> 00:13:25,600 Speaker 1: the balance sheet. What are you hoping to hear from 216 00:13:25,600 --> 00:13:30,480 Speaker 1: from the Fed next week? Just um a clear statement 217 00:13:30,800 --> 00:13:37,080 Speaker 1: that they are no looking at this very seriously, working 218 00:13:37,080 --> 00:13:41,920 Speaker 1: on the communications strategy only to avoid recurrence of tape 219 00:13:41,920 --> 00:13:45,600 Speaker 1: a tantum nonsense, and that they will do this in 220 00:13:45,640 --> 00:13:50,520 Speaker 1: a way that will not upset especially the RMBS market, 221 00:13:51,040 --> 00:13:54,360 Speaker 1: and that they'll do it slowly, gradually, and that there 222 00:13:54,360 --> 00:13:57,400 Speaker 1: are no villan boarders. Thank you so much for your 223 00:13:57,679 --> 00:14:02,120 Speaker 1: about surveillance greatly, greatly, Ship David. I'm I'm upset the 224 00:14:02,160 --> 00:14:06,000 Speaker 1: first Lady, the former first Lady, Michelle Obama making an 225 00:14:06,120 --> 00:14:09,040 Speaker 1: uproar about the president wearing his tucks for eight years, 226 00:14:09,880 --> 00:14:12,680 Speaker 1: the same tux for eight years. Can I do a 227 00:14:12,720 --> 00:14:15,400 Speaker 1: shout out this morning? I got my tux of trash 228 00:14:15,440 --> 00:14:18,800 Speaker 1: and Vaudeville down in the East Village and that was 229 00:14:18,880 --> 00:14:22,080 Speaker 1: like fourteen years ago, John Tucker, your tux goes back, 230 00:14:22,240 --> 00:14:25,240 Speaker 1: you know, years, goes back like twenty three years, right, Yeah, 231 00:14:25,280 --> 00:14:29,720 Speaker 1: I got it from Jerry Mahoney. Anyways, I I think 232 00:14:30,120 --> 00:14:34,400 Speaker 1: Mrs eight years is just breaking in a tuxedo. Stay 233 00:14:34,440 --> 00:14:38,720 Speaker 1: with us worldwide. This is Bloomberg surveillance much more. Next 234 00:14:50,840 --> 00:14:54,920 Speaker 1: right now, what a perfect guest to wrap up the week. 235 00:14:55,040 --> 00:14:58,320 Speaker 1: Jeffrey Rosenberg is at Blackrock and what he does is 236 00:14:58,360 --> 00:15:01,280 Speaker 1: he brings a synthesis of what we do economics, financial 237 00:15:01,280 --> 00:15:06,440 Speaker 1: investment with prodigious math skills out of Carnegie Mellon. Are 238 00:15:06,480 --> 00:15:10,800 Speaker 1: we in a normal distribution, Jeffrey Rosenberg? Is this a 239 00:15:10,880 --> 00:15:16,240 Speaker 1: normal environment we're in in terms of financial stability? Thanks 240 00:15:16,280 --> 00:15:19,560 Speaker 1: Tom for that. Uh No, we're certainly not. And you know, 241 00:15:19,640 --> 00:15:23,160 Speaker 1: just just to sort of talk about the distributional outcomes 242 00:15:23,200 --> 00:15:26,360 Speaker 1: after the UK election. You know, one of the things 243 00:15:26,400 --> 00:15:30,520 Speaker 1: that this has resulted in is is really raising the 244 00:15:30,720 --> 00:15:35,880 Speaker 1: uncertainty around both sides of the distribution. Does this increase 245 00:15:35,960 --> 00:15:39,560 Speaker 1: the odds of a hard breath Brexit possibly, does it 246 00:15:39,960 --> 00:15:43,440 Speaker 1: increase the odds of a softer Bregxit. The change in 247 00:15:43,480 --> 00:15:45,760 Speaker 1: the leadership that you just talked about and what might 248 00:15:46,440 --> 00:15:50,720 Speaker 1: result from that has has shifted the distribution and and 249 00:15:50,960 --> 00:15:55,360 Speaker 1: increased the uncertainty of over what this means for the bregsit. 250 00:15:55,400 --> 00:15:59,280 Speaker 1: That's certainly one of the main takeaways this morning. I'm 251 00:15:59,280 --> 00:16:01,440 Speaker 1: fairly confident they were paying attention to this on thread 252 00:16:01,520 --> 00:16:03,600 Speaker 1: Needle Street. There's a b E B o E meeting 253 00:16:03,640 --> 00:16:06,960 Speaker 1: next week in London. How are they processing what's transpired 254 00:16:07,000 --> 00:16:10,400 Speaker 1: here over the last twenty four hours. So again, you know, 255 00:16:10,480 --> 00:16:14,520 Speaker 1: the issue is what is the implications for the UK 256 00:16:14,720 --> 00:16:21,400 Speaker 1: economy of the Brexit negotiations and what kind of uncertainty 257 00:16:21,560 --> 00:16:26,560 Speaker 1: does that, along the way translate into for the currency, 258 00:16:26,920 --> 00:16:31,479 Speaker 1: what does the currency due to inflation and inflation expectations 259 00:16:31,680 --> 00:16:34,240 Speaker 1: and what does the uncertainty due to the performance of 260 00:16:34,280 --> 00:16:38,360 Speaker 1: the economy. If anything, uncertainty here is going to keep 261 00:16:38,440 --> 00:16:42,200 Speaker 1: the BOE more accommodative for a longer period of time 262 00:16:42,240 --> 00:16:47,200 Speaker 1: as they as they watch what the exit negotiations mean 263 00:16:47,360 --> 00:16:52,760 Speaker 1: for the fundamental performance the UK economy. Were looking forward 264 00:16:52,800 --> 00:16:55,120 Speaker 1: to there being a limited amount of political risk after 265 00:16:55,120 --> 00:16:58,000 Speaker 1: the elections in France just a couple of weeks ago. 266 00:16:58,080 --> 00:17:00,840 Speaker 1: Does this add more political risk to political risk? Stay 267 00:17:00,880 --> 00:17:02,360 Speaker 1: the same? How do you how do you view that? 268 00:17:03,880 --> 00:17:07,159 Speaker 1: So you know, and and shameless plug here we we 269 00:17:07,359 --> 00:17:10,760 Speaker 1: just published on the Black Ark website a whole treatise 270 00:17:10,880 --> 00:17:14,520 Speaker 1: on on political risk and and and the rise of 271 00:17:14,560 --> 00:17:17,680 Speaker 1: populism and and and some of the changes and certainly 272 00:17:18,000 --> 00:17:21,520 Speaker 1: in the aftermath of the French election, the tide appears 273 00:17:21,600 --> 00:17:26,159 Speaker 1: to be actually decreasing in terms of uh the kinds 274 00:17:26,160 --> 00:17:30,600 Speaker 1: of political risk, particularly when we're focused on Europe that 275 00:17:30,880 --> 00:17:34,480 Speaker 1: are associated with the breakup risk, you know, the kinds 276 00:17:34,560 --> 00:17:37,880 Speaker 1: of risks. Look at the market reaction this morning about 277 00:17:37,960 --> 00:17:42,680 Speaker 1: the UK. This is not systemic risk, this is not spillovers. 278 00:17:42,840 --> 00:17:47,720 Speaker 1: This is important to the UK domestic economy, it's important 279 00:17:47,760 --> 00:17:51,360 Speaker 1: to UK related assets, but it's having a very minor 280 00:17:51,440 --> 00:17:54,680 Speaker 1: impact relative to the kinds of conversations we had when 281 00:17:54,680 --> 00:17:58,439 Speaker 1: we were talking about political risk. Where really was affecting 282 00:17:58,520 --> 00:18:02,840 Speaker 1: global market position global markets, So certainly there appears to 283 00:18:02,840 --> 00:18:05,400 Speaker 1: be a bit of decline. We had had that risk 284 00:18:05,480 --> 00:18:07,840 Speaker 1: around the lead up to the French elections, but the 285 00:18:07,920 --> 00:18:11,000 Speaker 1: very surprising result appears to be dampening that some risks 286 00:18:11,040 --> 00:18:15,160 Speaker 1: around that, certainly because you've got the potential early call 287 00:18:15,240 --> 00:18:18,760 Speaker 1: for elections in in in Italy. But relative to the 288 00:18:18,880 --> 00:18:24,320 Speaker 1: kinds of volatility politics have driven in terms of financial markets, 289 00:18:24,520 --> 00:18:28,520 Speaker 1: today's events certainly seem much much lower. Well said, But 290 00:18:29,160 --> 00:18:31,440 Speaker 1: the theme of the week away from all this follow 291 00:18:31,520 --> 00:18:33,679 Speaker 1: a that we've been dealing with is the idea of 292 00:18:33,680 --> 00:18:37,440 Speaker 1: an inflation vector going the wrong way? Does the politics 293 00:18:38,240 --> 00:18:43,040 Speaker 1: subdue nominal GDP? Does it put a dampening on the 294 00:18:43,119 --> 00:18:46,600 Speaker 1: animal spirit? And maybe we do get decent real GDP, 295 00:18:46,760 --> 00:18:49,600 Speaker 1: but the inflation just isn't there. Is that an outcome 296 00:18:49,680 --> 00:18:53,240 Speaker 1: that you and share yell and have to consider. So 297 00:18:53,240 --> 00:18:57,639 Speaker 1: so it's a really interesting question around what the politics 298 00:18:57,680 --> 00:19:01,399 Speaker 1: implies for the inflationary outlook because we've how to separate 299 00:19:01,760 --> 00:19:05,360 Speaker 1: the time horizons over which we're talking about the the 300 00:19:05,400 --> 00:19:09,720 Speaker 1: inflation going the other way. Tom that's the near term dynamic, 301 00:19:09,840 --> 00:19:12,560 Speaker 1: that's the cp I figures. Next week, we're gonna have 302 00:19:12,560 --> 00:19:15,280 Speaker 1: a CPI report a lot of focus that's about the 303 00:19:15,280 --> 00:19:18,600 Speaker 1: near term. What's one of the implications of the UK election. 304 00:19:18,840 --> 00:19:22,240 Speaker 1: It's out in the tail of the distribution, but the win, 305 00:19:22,640 --> 00:19:27,359 Speaker 1: according to the Labor Party UH is raising the odds 306 00:19:27,400 --> 00:19:32,480 Speaker 1: of potentially a political shift towards more fiscal expansionary policies, 307 00:19:32,880 --> 00:19:37,879 Speaker 1: more debt and deficit policies, which is inflationary and and 308 00:19:38,040 --> 00:19:41,920 Speaker 1: is certainly an impact of greater issuance of government debt 309 00:19:41,920 --> 00:19:44,919 Speaker 1: and potentially higher risk premium around that. It's not in 310 00:19:44,960 --> 00:19:47,560 Speaker 1: the market today, it's not part of the whole conversation 311 00:19:47,840 --> 00:19:52,720 Speaker 1: around near term impacts. But the shift towards more am accommodation, 312 00:19:52,800 --> 00:19:56,320 Speaker 1: more fiscal policy expansion, more debt and deficits is a 313 00:19:56,440 --> 00:20:00,720 Speaker 1: push towards higher inflationary environments. That's what you've seen here 314 00:20:00,760 --> 00:20:03,159 Speaker 1: in the US vs of a fiscal policy, a lot 315 00:20:03,200 --> 00:20:05,480 Speaker 1: of talk about it for a time, a lot of optimism. 316 00:20:05,480 --> 00:20:08,080 Speaker 1: Optimism about it changed how you view the potential for 317 00:20:08,160 --> 00:20:12,359 Speaker 1: it in other countries. Well, you know, we we we've 318 00:20:12,400 --> 00:20:18,920 Speaker 1: had a big turnaround in terms of expectations around fiscal policy. 319 00:20:18,960 --> 00:20:23,800 Speaker 1: The initial enthusiasm UH in the US, UH you know, 320 00:20:23,880 --> 00:20:27,680 Speaker 1: certainly followed by an unwinding of that. You know, the 321 00:20:27,760 --> 00:20:33,400 Speaker 1: fiscal policy is run by politicians, so the political uncertainty 322 00:20:33,440 --> 00:20:37,840 Speaker 1: and the potential swings makes it harder for markets to 323 00:20:38,359 --> 00:20:43,680 Speaker 1: price what those outcomes are relative to monetary policy run 324 00:20:43,720 --> 00:20:48,680 Speaker 1: by technocrats, run under various forms of we don't want 325 00:20:48,680 --> 00:20:51,239 Speaker 1: to get in the whole debate event how hard and 326 00:20:51,400 --> 00:20:54,600 Speaker 1: fast they follow the rules. But there is a reaction 327 00:20:54,720 --> 00:20:58,960 Speaker 1: function that monetary policy tries to show to the market, 328 00:20:59,000 --> 00:21:03,040 Speaker 1: so that there's a little bit more predictability, if you will. 329 00:21:03,160 --> 00:21:06,320 Speaker 1: On the fiscal policy side, very hard to predict that. 330 00:21:06,400 --> 00:21:09,520 Speaker 1: And so the swings here and the UK, you know, 331 00:21:09,520 --> 00:21:12,360 Speaker 1: again pivoting off of last night's results, the swings here 332 00:21:12,400 --> 00:21:16,080 Speaker 1: are are really headspinning for financial marketing, and so it 333 00:21:16,720 --> 00:21:20,160 Speaker 1: widens the scope of uncertainty. Markets have a hard time 334 00:21:20,240 --> 00:21:23,119 Speaker 1: sort of pricing those outcomes. I get about eight more questions, 335 00:21:23,119 --> 00:21:25,480 Speaker 1: but no time. Jeff Rosenberg, right, Well, we'll see your 336 00:21:25,480 --> 00:21:28,520 Speaker 1: research note this weekend or into Monday as well. He 337 00:21:28,640 --> 00:21:38,800 Speaker 1: is with black Rock uh this morning runch you by 338 00:21:39,080 --> 00:21:43,360 Speaker 1: Bank of America Mary Lynch with virtual reality, virtually everything 339 00:21:43,400 --> 00:21:48,280 Speaker 1: will change. Discover opportunities in a transforming world VI of 340 00:21:48,440 --> 00:21:53,119 Speaker 1: a mL dot com slash VR, Mary Lynch, Pierced Fenner 341 00:21:53,160 --> 00:22:02,399 Speaker 1: and Smith Incorporated. After what we saw yesterday, the bright lights, 342 00:22:02,440 --> 00:22:05,159 Speaker 1: the show biz of the Comy testimony, how about a 343 00:22:05,320 --> 00:22:08,359 Speaker 1: move back to reality. Listen to this sentence, folks. He 344 00:22:08,520 --> 00:22:14,280 Speaker 1: strengthened priority programs to fight public corruption, transnational criminal enterprises 345 00:22:14,560 --> 00:22:18,399 Speaker 1: and violent gangs, and work to protect our children. Uh 346 00:22:18,440 --> 00:22:23,080 Speaker 1: and cherished civil rights. That would be an essay by 347 00:22:23,440 --> 00:22:27,280 Speaker 1: Robert Mueller, Director of the FBI, on one Chris Wecker 348 00:22:27,640 --> 00:22:31,600 Speaker 1: as he left the FBI eleven years ago. Chris Wecker, 349 00:22:31,640 --> 00:22:36,240 Speaker 1: good morning, Good morning. You worked with Mr Muller. There's 350 00:22:36,280 --> 00:22:39,760 Speaker 1: this odd linkage now between the Special Council and the 351 00:22:39,840 --> 00:22:44,240 Speaker 1: former acting director. How do you perceive that Mr Muller 352 00:22:44,280 --> 00:22:50,520 Speaker 1: will move forward after the testimony yesterday? Yeah, Well, it's interesting. 353 00:22:50,800 --> 00:22:54,600 Speaker 1: A couple of revelations yesterday and question marks were questions 354 00:22:54,600 --> 00:22:58,920 Speaker 1: were answered in that the the Jim Comy's interactions with 355 00:22:59,000 --> 00:23:01,639 Speaker 1: the President have are now in the hands are are 356 00:23:01,800 --> 00:23:05,159 Speaker 1: are being examined by a special counsel Mueller. That was 357 00:23:05,160 --> 00:23:08,760 Speaker 1: an open question until yesterday. So his note, his memos, 358 00:23:08,800 --> 00:23:12,000 Speaker 1: they're all in the hands of former Director Mueller, that's 359 00:23:12,040 --> 00:23:16,200 Speaker 1: one significant thing. Yeah, they know each other pretty well. Uh. 360 00:23:16,520 --> 00:23:20,119 Speaker 1: At one time, Robert Mueller as director the FBI reported 361 00:23:20,160 --> 00:23:23,000 Speaker 1: to Jim Comey as the Deputy Attorney General. That's the 362 00:23:23,080 --> 00:23:27,760 Speaker 1: reporting hierarchy. Uh and still is was and is. So 363 00:23:28,000 --> 00:23:30,120 Speaker 1: they certainly know each other. But I will say that 364 00:23:30,640 --> 00:23:33,840 Speaker 1: former Director Mueller has the blinders on. He he knows 365 00:23:33,880 --> 00:23:36,879 Speaker 1: a lot of people in those circles. It's not unusual 366 00:23:37,040 --> 00:23:39,800 Speaker 1: for these people be very familiar with each other. I 367 00:23:39,800 --> 00:23:42,679 Speaker 1: don't think it's going to affect him one bit that 368 00:23:42,760 --> 00:23:45,760 Speaker 1: he knows Jim Comey, and I think Jim Comey has 369 00:23:45,840 --> 00:23:49,400 Speaker 1: will cooperate fully with that investigation. That's about the best, uh, 370 00:23:50,320 --> 00:23:52,800 Speaker 1: the thing that you can say about that relationship. Chris, 371 00:23:52,880 --> 00:23:54,800 Speaker 1: let me ask you. There was a comment from the 372 00:23:54,800 --> 00:23:57,800 Speaker 1: House Speaker yesterday that we've seen some missteps here by 373 00:23:57,840 --> 00:24:01,320 Speaker 1: this president because he's new to the job. I'm paraphrasing there, 374 00:24:01,320 --> 00:24:02,840 Speaker 1: but that was the thrust of what the House Speaker 375 00:24:03,320 --> 00:24:05,600 Speaker 1: had to say. Contrast that with what we saw and 376 00:24:05,680 --> 00:24:08,800 Speaker 1: heard yesterday from James Comby. He is somebody who, during 377 00:24:08,840 --> 00:24:10,879 Speaker 1: the course of that almost three hour hearing, really came 378 00:24:10,920 --> 00:24:14,440 Speaker 1: across as somebody who knows about the way government works, 379 00:24:14,440 --> 00:24:18,000 Speaker 1: knows about the way separation of powers and agencies works. 380 00:24:18,280 --> 00:24:21,200 Speaker 1: There were indications here that he did some things deliberately 381 00:24:21,280 --> 00:24:24,040 Speaker 1: so that we could see a special council tell us 382 00:24:24,080 --> 00:24:26,679 Speaker 1: a bit more about that. The way that James Coby 383 00:24:26,680 --> 00:24:28,800 Speaker 1: knows how to maneuver and make his way through the 384 00:24:29,040 --> 00:24:33,479 Speaker 1: system down in Washington, well, that was a big reveal 385 00:24:33,600 --> 00:24:36,960 Speaker 1: yesterday that he basically manipulated the system to get a 386 00:24:37,000 --> 00:24:40,280 Speaker 1: special counsel appointed. But I think what what he also 387 00:24:40,320 --> 00:24:43,000 Speaker 1: have to consider is that Jim Comey laid out his 388 00:24:43,040 --> 00:24:45,840 Speaker 1: own failings yesterday. And I'm a big fan of his, 389 00:24:46,440 --> 00:24:49,119 Speaker 1: We've worked together. I think he has total integrity. I 390 00:24:49,119 --> 00:24:51,480 Speaker 1: don't think he lies. I think he tells the truth. 391 00:24:52,040 --> 00:24:54,879 Speaker 1: But he also showed how weak he was and not 392 00:24:54,960 --> 00:24:58,080 Speaker 1: pushing back at the President when he felt like something 393 00:24:58,200 --> 00:25:01,040 Speaker 1: inappropriate was going on. That's one thing I would have 394 00:25:01,080 --> 00:25:05,600 Speaker 1: expected much much more courage and fortitude and decisiveness on 395 00:25:05,760 --> 00:25:09,359 Speaker 1: his part. And secondly, he's now painting a picture of 396 00:25:09,400 --> 00:25:12,360 Speaker 1: a mandate from the president or directed from the President, 397 00:25:12,480 --> 00:25:18,000 Speaker 1: to to derail the Flint investigation, and if that were 398 00:25:18,040 --> 00:25:20,439 Speaker 1: the case, he should have referred that he should have 399 00:25:20,480 --> 00:25:24,800 Speaker 1: refused himself as a potential witness and referred that to 400 00:25:25,080 --> 00:25:28,000 Speaker 1: his number two or number three as to whether a 401 00:25:28,000 --> 00:25:31,200 Speaker 1: preliminary inquiries should have been opened up under the Attorney 402 00:25:31,240 --> 00:25:34,159 Speaker 1: General guidelines. And that's a fairly low bar, but instead 403 00:25:34,200 --> 00:25:35,760 Speaker 1: he stuck it in the corner of his desk and 404 00:25:36,160 --> 00:25:38,960 Speaker 1: for later use. Chris, let me ask you. You you 405 00:25:39,000 --> 00:25:42,360 Speaker 1: mentioned the respect that you have for the former FBI director. 406 00:25:42,720 --> 00:25:45,640 Speaker 1: Talk about the significance of who accompanied him or went 407 00:25:45,680 --> 00:25:48,440 Speaker 1: to this hearing with him. It was remarkable to see 408 00:25:48,840 --> 00:25:51,560 Speaker 1: Hart to sixteen, that big hearing room packed to the 409 00:25:51,600 --> 00:25:53,680 Speaker 1: gills with reporters. He saw the tables in the back 410 00:25:53,720 --> 00:25:55,080 Speaker 1: of the room. There weren't a whole lot of seats 411 00:25:55,080 --> 00:25:58,520 Speaker 1: behind him. But my understanding is a number of FBI agents, 412 00:25:58,520 --> 00:26:01,080 Speaker 1: a number of his now former colleagues, made their way 413 00:26:01,080 --> 00:26:03,000 Speaker 1: there of their own volition to sit behind him at 414 00:26:03,000 --> 00:26:05,960 Speaker 1: the here And what did that signify to you? Well, 415 00:26:06,000 --> 00:26:09,199 Speaker 1: it's well known that Director Comey had a lot of 416 00:26:09,280 --> 00:26:13,400 Speaker 1: empathy for the agents he got to Everage Field office. Uh. 417 00:26:13,840 --> 00:26:17,119 Speaker 1: He was very personable, you know. And Director Muller I 418 00:26:17,160 --> 00:26:20,000 Speaker 1: served under him. He was more business like. He was 419 00:26:20,080 --> 00:26:22,920 Speaker 1: more he was all about business. And there weren't a 420 00:26:22,960 --> 00:26:27,520 Speaker 1: lot of personal relationships developed, but I have utmost respect 421 00:26:27,600 --> 00:26:30,840 Speaker 1: for Mueller and the way he handled his job. Comey 422 00:26:31,000 --> 00:26:36,159 Speaker 1: was just basically won over the agents in the office. 423 00:26:36,200 --> 00:26:39,240 Speaker 1: I think there was there was quite a bit of dissension, however, 424 00:26:39,680 --> 00:26:42,520 Speaker 1: about how he handled a lot of things the further 425 00:26:42,600 --> 00:26:45,119 Speaker 1: you go out from his inner circle, but I do 426 00:26:45,200 --> 00:26:47,320 Speaker 1: think they appreciate the fact he gotta see them and 427 00:26:47,359 --> 00:26:50,240 Speaker 1: he and he really loved being director of the FBI. 428 00:26:51,400 --> 00:26:52,959 Speaker 1: Chris Bucker, great to speak with you. Thank you very 429 00:26:53,040 --> 00:26:55,360 Speaker 1: much for the time here as we continue to analyze 430 00:26:55,359 --> 00:26:57,600 Speaker 1: the hearing yesterday before the Senate Select Committee on Intelligence 431 00:26:57,680 --> 00:27:00,719 Speaker 1: at James coming there in two sessions open and closed yesterday. 432 00:27:00,760 --> 00:27:03,520 Speaker 1: Chris Wecker, former Assistant Director of the Federal View of Investigation, 433 00:27:03,600 --> 00:27:17,600 Speaker 1: joining us on our phone line, David Gura and Tom 434 00:27:17,680 --> 00:27:19,920 Speaker 1: Keene in New York in our Bloomberg eleven three oh studios. 435 00:27:19,920 --> 00:27:22,439 Speaker 1: This is Bloomberg Surveillance on Bloomberg Radio from here in 436 00:27:22,520 --> 00:27:24,959 Speaker 1: New York. We're paying attention to what's going on in 437 00:27:25,000 --> 00:27:27,120 Speaker 1: London in the US looking over to the United Kingdom. 438 00:27:27,200 --> 00:27:29,560 Speaker 1: That's something that Thomas Wright does day in and day 439 00:27:29,600 --> 00:27:32,480 Speaker 1: out as a director of the Project on International Order 440 00:27:32,520 --> 00:27:35,399 Speaker 1: and Strategy at the Brookings Institution. He's the author of 441 00:27:35,400 --> 00:27:38,119 Speaker 1: All Measures Short of War, The Contest for the twenty 442 00:27:38,160 --> 00:27:41,239 Speaker 1: three Century, and the Future of American Power. Thomas Right, 443 00:27:41,280 --> 00:27:44,199 Speaker 1: great to speak with you once again. Congratulations on the 444 00:27:44,240 --> 00:27:46,720 Speaker 1: new book, and I want to start with the opinion 445 00:27:46,760 --> 00:27:49,200 Speaker 1: piece that Gary Cohen, the director of the National Economic 446 00:27:49,280 --> 00:27:52,560 Speaker 1: Council UH and H. R. McMaster, the President's National Security advisor, 447 00:27:52,600 --> 00:27:54,840 Speaker 1: wrote for the Wall Street Journal just a couple of 448 00:27:54,880 --> 00:27:59,240 Speaker 1: weeks ago. That piece, America first doesn't mean America alone. 449 00:27:59,320 --> 00:28:02,479 Speaker 1: Those two men wrote about the arena in America's role 450 00:28:02,600 --> 00:28:04,840 Speaker 1: in the arena. What does the arena look like to 451 00:28:04,960 --> 00:28:09,520 Speaker 1: you today? Yeah, it's a great question coming just you know, 452 00:28:09,640 --> 00:28:14,399 Speaker 1: hours after another sort of astonishing um election results in 453 00:28:14,440 --> 00:28:16,520 Speaker 1: the UK. I guess we can get onto that in 454 00:28:16,520 --> 00:28:19,400 Speaker 1: a minute. But one that really know and had had predicted. 455 00:28:19,480 --> 00:28:21,960 Speaker 1: And I think what what what I try to argue 456 00:28:21,960 --> 00:28:24,080 Speaker 1: in the book, and it is that I think this 457 00:28:24,200 --> 00:28:27,520 Speaker 1: post co war order that we saw where the world 458 00:28:27,600 --> 00:28:30,040 Speaker 1: was converging on a sort of single model of an 459 00:28:30,040 --> 00:28:35,120 Speaker 1: open global economy, no international institutions, respect for borders, um, 460 00:28:35,280 --> 00:28:37,640 Speaker 1: sort of very centril type of politics that that has 461 00:28:37,680 --> 00:28:40,880 Speaker 1: come to an end and is unraveling, and around the 462 00:28:40,880 --> 00:28:42,760 Speaker 1: world we sort of see the return of a more 463 00:28:42,840 --> 00:28:47,959 Speaker 1: nationalist deo, politically competitive, even a cantilist world, and I 464 00:28:47,960 --> 00:28:51,600 Speaker 1: think that the British election was the latest example of that. 465 00:28:51,680 --> 00:28:55,560 Speaker 1: Last night, the sort of another rejection of the establishment 466 00:28:55,640 --> 00:28:58,320 Speaker 1: on the col McMaster op ed that was I thought 467 00:28:58,320 --> 00:29:00,959 Speaker 1: a very curious piece because it was really their effort 468 00:29:01,000 --> 00:29:03,920 Speaker 1: to try to um co opt in a way the 469 00:29:03,920 --> 00:29:07,360 Speaker 1: Trump America First policy and show that it was um 470 00:29:07,520 --> 00:29:10,720 Speaker 1: not you know, as radical as some people make out. 471 00:29:10,760 --> 00:29:13,520 Speaker 1: But I thought it was came in for an awful 472 00:29:13,520 --> 00:29:15,920 Speaker 1: lot of criticism because they did sort of deride this 473 00:29:16,000 --> 00:29:18,920 Speaker 1: idea of the global community and they said the world 474 00:29:19,000 --> 00:29:21,560 Speaker 1: is an inherently competitive place. And I think they didn't 475 00:29:21,600 --> 00:29:24,920 Speaker 1: really give much assurance to US allies and that the 476 00:29:25,000 --> 00:29:26,960 Speaker 1: US will continue to play the role that has played 477 00:29:27,000 --> 00:29:29,560 Speaker 1: since War two. How long does it take Thomas Right 478 00:29:29,640 --> 00:29:32,240 Speaker 1: for a president to develop a doctrine? You you read 479 00:29:32,280 --> 00:29:34,680 Speaker 1: what those two men wrote, and you can think that 480 00:29:34,760 --> 00:29:36,719 Speaker 1: perhaps what they're doing is try to lay the paper 481 00:29:37,360 --> 00:29:39,880 Speaker 1: the belief system when it comes to foreign policy. This 482 00:29:39,920 --> 00:29:44,280 Speaker 1: administration has. When you look to history, how quickly can 483 00:29:44,160 --> 00:29:47,719 Speaker 1: a policy perspective, a policy platform change and how much 484 00:29:47,760 --> 00:29:51,600 Speaker 1: staying power does it have. Well, it usually takes quite 485 00:29:51,640 --> 00:29:53,960 Speaker 1: some time if it appears at all. I mean there's 486 00:29:54,000 --> 00:29:56,120 Speaker 1: all a sort of an elusive search for the doctrine 487 00:29:56,120 --> 00:29:59,640 Speaker 1: of whatever president is in power, you know, the Obama 488 00:29:59,720 --> 00:30:02,200 Speaker 1: doctor and really I think chuck well into the second 489 00:30:02,280 --> 00:30:05,440 Speaker 1: term for people to you know, identify it as sort 490 00:30:05,480 --> 00:30:07,680 Speaker 1: of this desire for restraint and the pullback from the 491 00:30:07,720 --> 00:30:10,000 Speaker 1: Middle East. And the reason is is that in the 492 00:30:10,040 --> 00:30:14,760 Speaker 1: early period of any administration, there's lots of contradictory actions 493 00:30:14,800 --> 00:30:17,520 Speaker 1: and decisions that sort of cut neater directions. So if 494 00:30:17,520 --> 00:30:20,720 Speaker 1: you remember with President Obama, you know, in his first 495 00:30:20,800 --> 00:30:23,960 Speaker 1: year he didn't mini search to Afghanistan, so that didn't 496 00:30:24,040 --> 00:30:26,520 Speaker 1: very much look, that didn't really look like a strategy 497 00:30:26,560 --> 00:30:29,160 Speaker 1: of restraint or pulling back. So I think it often 498 00:30:29,200 --> 00:30:31,160 Speaker 1: takes time, but I think this time it would be 499 00:30:31,280 --> 00:30:35,680 Speaker 1: much more difficult because there's an inherent sort of contradiction 500 00:30:35,720 --> 00:30:38,760 Speaker 1: at the heart of this administration, which is the president 501 00:30:38,840 --> 00:30:41,000 Speaker 1: has one set of ideas and it's unique I think 502 00:30:41,040 --> 00:30:43,760 Speaker 1: in his ideology and his temperament, in the way he 503 00:30:43,800 --> 00:30:47,240 Speaker 1: processed this information, and then his cabinet are actually much 504 00:30:47,280 --> 00:30:50,040 Speaker 1: more traditional in the mainstream, and that's never going to 505 00:30:50,080 --> 00:30:52,479 Speaker 1: be resolved. I think that's right where he wanted to go. 506 00:30:52,840 --> 00:30:57,080 Speaker 1: What's magical about your book? Time all measures short of war? 507 00:30:57,760 --> 00:31:00,320 Speaker 1: As you take us back to the real add event 508 00:31:00,480 --> 00:31:04,200 Speaker 1: of the modern liberal thought on how America acts in 509 00:31:04,200 --> 00:31:07,080 Speaker 1: the world. This goes back to Harry Truman and Dean Atchison, 510 00:31:07,160 --> 00:31:10,960 Speaker 1: among I mean others. They invented a liberal theme coming 511 00:31:10,960 --> 00:31:14,880 Speaker 1: out of World War two. Is it dead? I don't 512 00:31:14,880 --> 00:31:18,080 Speaker 1: think it's dead. I think it's under serious stress, you know. 513 00:31:18,200 --> 00:31:22,040 Speaker 1: I think it's been rejected by the current president. But um, 514 00:31:22,200 --> 00:31:23,680 Speaker 1: the case I try to make in the book is 515 00:31:23,680 --> 00:31:25,800 Speaker 1: if you look at it and sort of try to 516 00:31:25,800 --> 00:31:29,280 Speaker 1: look at it objectively, it actually still offers a much 517 00:31:29,320 --> 00:31:33,240 Speaker 1: better way of protecting America's interest from really the interest 518 00:31:33,280 --> 00:31:36,480 Speaker 1: in most countries in the world over the alternatives. Because 519 00:31:36,600 --> 00:31:39,760 Speaker 1: any sort of any you know, state of affairs has 520 00:31:39,800 --> 00:31:42,920 Speaker 1: to be dude relative to the to the alternatives. And 521 00:31:42,920 --> 00:31:45,720 Speaker 1: in this case, you know, the alternative is a sturge 522 00:31:45,720 --> 00:31:49,640 Speaker 1: of influence order that's much more sort of nineteenth century style, 523 00:31:49,760 --> 00:31:53,000 Speaker 1: where the major powers are competing and and will really 524 00:31:53,040 --> 00:31:56,040 Speaker 1: be not cooperating, possibly on the verge of conflict with 525 00:31:56,080 --> 00:31:58,720 Speaker 1: each other. Um. You know, the global economy will be 526 00:31:58,800 --> 00:32:02,239 Speaker 1: damaged by that, the be less trade, less openness, and 527 00:32:02,280 --> 00:32:04,560 Speaker 1: I think in the long run that's something that I 528 00:32:04,600 --> 00:32:08,280 Speaker 1: think people will will be very uncomfortable with. After the 529 00:32:08,400 --> 00:32:11,800 Speaker 1: the US elected via its president to withdraw from the 530 00:32:11,840 --> 00:32:15,400 Speaker 1: Paris Agreement, Scott PRUITTT, the administrator of the Environmental Protection Agency, 531 00:32:15,440 --> 00:32:18,760 Speaker 1: spoke to reporters and addressed the issue of whether or 532 00:32:18,800 --> 00:32:21,080 Speaker 1: not the US would have occasion to come back to 533 00:32:21,120 --> 00:32:24,520 Speaker 1: the table to renegotiate that particular deal, and he said, 534 00:32:24,560 --> 00:32:26,440 Speaker 1: we'll always have a seat at the table where the 535 00:32:26,520 --> 00:32:29,800 Speaker 1: United States. How do you you process what he said there? 536 00:32:29,840 --> 00:32:32,000 Speaker 1: And in light of what we've seen here over the 537 00:32:32,080 --> 00:32:35,400 Speaker 1: last four or five months, how reparable is the damage 538 00:32:35,440 --> 00:32:38,120 Speaker 1: that we've seen to the trans atlantic relationship, to a 539 00:32:38,120 --> 00:32:42,320 Speaker 1: relationship with NATO allies? How how can you how successfully 540 00:32:42,280 --> 00:32:44,840 Speaker 1: do you think the US can reverse some of that? Yeah, 541 00:32:44,920 --> 00:32:46,880 Speaker 1: it's a great question. It's won't've been trying to think 542 00:32:46,920 --> 00:32:48,840 Speaker 1: about recently, because you know, a lot of what the 543 00:32:48,840 --> 00:32:52,200 Speaker 1: Trump administration is doing can be reversed. You know, Paris 544 00:32:52,280 --> 00:32:55,480 Speaker 1: is a good example the US isn't technically out of 545 00:32:55,520 --> 00:32:59,440 Speaker 1: Paris until which is after the next election, because there's 546 00:32:59,440 --> 00:33:03,360 Speaker 1: a three or where waiting time period in the in 547 00:33:03,440 --> 00:33:06,840 Speaker 1: the accord um, so a future president could reverse that. 548 00:33:06,920 --> 00:33:09,239 Speaker 1: And of course the future president can you know, if 549 00:33:09,240 --> 00:33:11,680 Speaker 1: there was a new Obama or somebody like that, come 550 00:33:11,760 --> 00:33:13,960 Speaker 1: in and recome in America to the world and undo 551 00:33:14,000 --> 00:33:16,920 Speaker 1: a lot of the damage. But the interesting question I 552 00:33:16,920 --> 00:33:19,920 Speaker 1: think is how what could happen if the reversible you know, 553 00:33:19,960 --> 00:33:23,560 Speaker 1: what could break that can't be fixed. And I particularly 554 00:33:23,600 --> 00:33:26,600 Speaker 1: worried about the NATO comments in that regard because I think, 555 00:33:27,080 --> 00:33:29,640 Speaker 1: you know, if an alliance is discredited, it's impossible to 556 00:33:29,640 --> 00:33:32,400 Speaker 1: put back together. And I think on climate there are 557 00:33:32,400 --> 00:33:34,760 Speaker 1: worries that we're going to lose time, you know, very 558 00:33:34,880 --> 00:33:39,440 Speaker 1: valuable time to need to deal with these problems. And 559 00:33:39,560 --> 00:33:41,280 Speaker 1: there you know, as you saw in the Middle East 560 00:33:41,400 --> 00:33:44,360 Speaker 1: last week, we're cutter in Saudi Arabia. You know, there's 561 00:33:44,360 --> 00:33:46,920 Speaker 1: the potential of sort of a side conflict that could 562 00:33:47,040 --> 00:33:51,120 Speaker 1: erupt that would have major implications because of sort of 563 00:33:51,280 --> 00:33:54,200 Speaker 1: US disinterest. So there's many things that I think could break, 564 00:33:54,320 --> 00:33:57,040 Speaker 1: some of them that are probably are reversible. Great to 565 00:33:57,040 --> 00:33:59,040 Speaker 1: speak with you once again, Thomas Right, the author of 566 00:33:59,120 --> 00:34:01,520 Speaker 1: All Measures or If We're the Contest for the twenty 567 00:34:01,520 --> 00:34:04,200 Speaker 1: one Century and the Future of American Power, his new book. 568 00:34:04,400 --> 00:34:06,840 Speaker 1: He is the director of the Project on International Order 569 00:34:06,880 --> 00:34:18,800 Speaker 1: and Strategy at the Brookings Institution. And thanks for listening 570 00:34:18,840 --> 00:34:23,200 Speaker 1: to the Bloomberg Surveillance podcast. Subscribe and listen to interviews 571 00:34:23,560 --> 00:34:28,640 Speaker 1: on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. 572 00:34:29,200 --> 00:34:32,279 Speaker 1: I'm on Twitter at Tom Keene. David Gura is at 573 00:34:32,400 --> 00:34:37,239 Speaker 1: David Gura. Before the podcast, you can always catch us worldwide. 574 00:34:37,400 --> 00:34:51,760 Speaker 1: I'm Bloomberg Radio. Runch you by Bank of America Mary Lynch. 575 00:34:52,000 --> 00:34:57,520 Speaker 1: With virtual reality, virtually everything will change. Discover opportunities in 576 00:34:57,560 --> 00:35:02,160 Speaker 1: a transforming world. Be of a mL dot Com, slash VR, 577 00:35:03,000 --> 00:35:06,000 Speaker 1: Mary Lynch, Pierced Fenner and Smith Incorporated.