Speaker 1: Yeah, Welcome to the Bloomberg Surveillance podcast. I'm Tom Keene
Speaker 1: Jay Leye. We bring you insight from the best in economics, finance, investment,
Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,
Speaker 1: Bloomberg dot Com, and of course, on the Bloomberg I'm
Speaker 1: ready pleased to say that joining us now from China
Speaker 1: is k you Gin, London School of Economics and Political
Speaker 1: Science professor joining us to discuss global trade. Professor, Great
Speaker 1: to have you with us on the program. It is
Speaker 1: some some soothing words from President She. Can it actually
Speaker 1: materialize into real policy. It's great to be here. Thank you. Um.
Speaker 1: I think that these words are necessary at this junction
Speaker 1: to the cool things down on me. At this point,
Speaker 1: I eat China US has really trade frictions, not yet
Speaker 1: ignited a trade war. What President She's also trying to
Speaker 1: acknowledge is that given that China has benefited so much
Speaker 1: from globalization in the last few decades, it is actually
Speaker 1: time to give back to the global system. So I
Speaker 1: think that is really good news in the pubic positive signal.
Speaker 1: Looking at our reporting over the last twenty four hours
Speaker 1: from the team at Bloomberg News, it seems if there's
Speaker 1: a a point of tension, Professor, it's over the made
Speaker 1: in China twenties five goals and the subsidizing of those
Speaker 1: industries that China would like to excel at. Is that
Speaker 1: going to be a red line for the Chinese in
Speaker 1: these negotiations when they do officially start. I think that
Speaker 1: these are kind of trigger points that have attracted a
Speaker 1: lot of attention in China and has kind of, um
Speaker 1: to some extent, irritated the Chinese government officials. So these
Speaker 1: will definitely be points of of tension. Um. I think
Speaker 1: what is clear is that despite the fact that President
Speaker 1: she As announced to the world these kind of soothing words, um,
Speaker 1: China is ready ready to stand, uh, you know, to
Speaker 1: confront if necessary, rising trade tension, even a trade war.
Speaker 1: I think that they are totally prepared for a contingent strategy. Professor.
Speaker 1: Is there a an understanding on the Chinese side of
Speaker 1: what the minimum condition of successes for the United States,
Speaker 1: what the United States would like, what would actually equal success.
Speaker 1: I think the perspective in China is that if the US,
Speaker 1: particular President Trump's administration is ready to back off in
Speaker 1: some of these very strong words that have been put forth,
Speaker 1: then China welcomes it, and that China would um prefer
Speaker 1: to have talks and negotiations UM, the outcome of which
Speaker 1: would depend, but I think that the preference is for
Speaker 1: UH there you know, the US to UH to UH
Speaker 1: to use the tension and then try to to follow suit.
Speaker 1: Professor good morning, Tom Keene in New York. When I
Speaker 1: when I look at the Chinese culture here in the
Speaker 1: tapestry that they bring to these debates, it is a
Speaker 1: timeline that is longer than any American timeline known. Is
Speaker 1: the basic theme of the Chinese to wait all this
Speaker 1: out um exactly. Very interesting that I think that the
Speaker 1: Chinese perspective is that they are ready and prepared to
Speaker 1: um to to deal with the rising trade engine, even
Speaker 1: trade war, and they believe that it's a war of endurance.
Speaker 1: And yet yeah, absolutely right, Tom. There's part of the
Speaker 1: studies cultural, but also the fact that the government has
Speaker 1: a horizon now with the term limit cancelations of indefinite horizons,
Speaker 1: that they think that they will be able to wear
Speaker 1: this out better than Americans. I mean, part of this
Speaker 1: is their perspective of our president. They look do they
Speaker 1: look at the president is a one off cultural event.
Speaker 1: Do they look at the president? Is a change, is
Speaker 1: a a moment in American history where this will be
Speaker 1: consistently the American voice? Or is it? Is it something
Speaker 1: more substantial than that. Well, I think this is actually
Speaker 1: precisely the problem of this every four or eight years
Speaker 1: and change of president, because they're trying to actually think
Speaker 1: that they want to build a constructive and enduring good
Speaker 1: relationship to the US. But that's not going to work
Speaker 1: if you know, every four eight years there comes a
Speaker 1: president that is willing to completely destroy what they have constructed.
Speaker 1: So there is no consistency or constancy of that relationship.
Speaker 1: And that's why it's very difficult for China US relations
Speaker 1: despite the fact that it is the most central form
Speaker 1: relations going forward. Sometimes, Professor, we take quite a simplistic
Speaker 1: view of things and frame this tension through just one
Speaker 1: data point, the trade deficit between the United States and China.
Speaker 1: What is the prospect of actually a radicain in that
Speaker 1: trade deficit anytime soon? Professor um So, I think that
Speaker 1: first of all, there is um consue on both sides
Speaker 1: about the nature of trade deficits. Uh, this confusion little
Speaker 1: bit fatal because so long as the Chinese people produce
Speaker 1: more than it's able to consume, which I can see
Speaker 1: in the foreseeable future, it is always going to run
Speaker 1: a trade surplus. And similarly for the US. Of the
Speaker 1: Americans don't raise their saving rate, it's always going to
Speaker 1: raise the trade deficits. Though it's not just a bilateral
Speaker 1: trade agreement kind of issue between the China and the US.
Speaker 1: And we have also seen that Chinese you know, R
Speaker 1: and B or the Chinese guardency has appreciated a substantially
Speaker 1: in the last ten years, and the trade deficits has
Speaker 1: reduced also substantially. UM and the Chinese have sent you know,
Speaker 1: multiple high level officials uh to uh you know, to
Speaker 1: to kind of ease the trade tension talk, and this
Speaker 1: has not been enough. So now the Chinese people have
Speaker 1: been kind of set up and actually the Chinese businesses
Speaker 1: are putting putting pressure on the government to engage. For
Speaker 1: our listeners, just turning again, the mood music really improving
Speaker 1: overnight with the speech from the President of China. Futures
Speaker 1: up by twenty eight points on the SMP five positive,
Speaker 1: about two seventy six on the DOW. As we approach
Speaker 1: the market open about two hours and twenty three minutes away.
Speaker 1: Professor keep saying the mood music has improved because the story,
Speaker 1: the sentiment around this speech gave a sort of a
Speaker 1: considiatory tone from the President of China. But when I
Speaker 1: look for real new policy or a suggestion that we
Speaker 1: would get new policy, I see a president reiterating things
Speaker 1: he said before. Is there anything new in this? Well,
Speaker 1: I think you're absolutely right. I mean there is rhetoric.
Speaker 1: When the Chinese government official puts together these very formal,
Speaker 1: you know, a kind of speeches and then those actions,
Speaker 1: I think that the spirit for a greater openness is
Speaker 1: certainly true. I think they're kind of commitment to open
Speaker 1: China even more by importing more and giving back to
Speaker 1: the global trading system and especially in terms of financial
Speaker 1: services is certainly there. But the question is over what
Speaker 1: time horizon tenders be reached. Is it really going to
Speaker 1: be executed? Um, you know, in the time horizon that
Speaker 1: is relevant? I think that is a very big question. Marker,
Speaker 1: Preson jin thank you so much. Jin Uh with the
Speaker 1: London School of Economics, Daniel Tannembam has without question the
Speaker 1: oddest job at Price Waterhouse Cooper's b WC. And that
Speaker 1: he's in the financial crimes unit with a huge history
Speaker 1: of things like sanctions, but yet yet bringing to get
Speaker 1: over to homeland security and and such, I just got
Speaker 1: to go to an open question, Daniel Tannembam, and that
Speaker 1: is what was your response when you saw a private
Speaker 1: attorney have an FBI rate his home, his office, and
Speaker 1: I believe where he was staying at the Loews Regency
Speaker 1: hotel two blocks away from our office. How did you
Speaker 1: respond when you saw those headlines yesterday? And it's a
Speaker 1: fairly significant move by the Southern District of New York
Speaker 1: by the FBI to move further on an attorney for
Speaker 1: obviously a facially high profile individual. Philip Bump as a
Speaker 1: wonderful explainer in the Post today where there was literally
Speaker 1: a team within the team of the Federal Bureau of
Speaker 1: Investigation to protect the client attorney privilege. Have you ever
Speaker 1: seen this in your career, not in this high profile
Speaker 1: of an instance. I mean, the barrier to entry to
Speaker 1: obtain a warrant in a situation like this is significant.
Speaker 1: I think people need to bear that in mind, given
Speaker 1: the fact that a federal judge would have needed to
Speaker 1: approve the warrant to allow this search to happen. So
Speaker 1: this wasn't just kind of a decision made by the
Speaker 1: Special Council or even the U. S. Attorney for the
Speaker 1: Southern District. There was a lot more that went into it,
Speaker 1: including Mr Rosenstein at Corday. Let's move on to your expertise.
Speaker 1: What is step two or step three or step eight
Speaker 1: of sanctions? I mean, I guess we all get brea
Speaker 1: cheese is a sanction item. Where do we go next
Speaker 1: on sanctions if we sanction, well, if we're looking at Russia,
Speaker 1: and I think the move that the Trump administration made
Speaker 1: on Friday was by far the most significant since the
Speaker 1: Russia sanctions came out. The Trump administration finally made good
Speaker 1: on the congressionally requested mandate to designate oligarchs and businesses
Speaker 1: close to president putin January thirty one. Around eleven fifty
Speaker 1: seven pm. There was the first oligarch list that came out,
Speaker 1: which was really nothing but the Fortune list of the
Speaker 1: top one hundred wealthiest people in Russia. What came out
Speaker 1: on Friday was significant. These are businessmen who actually are
Speaker 1: part of the global economy, who have dealings with the
Speaker 1: United States, that have global businesses. This was a significant designation.
Speaker 1: What's fascinating about this and it it strikes me as
Speaker 1: incredible when you have such a huge divorce between narratives
Speaker 1: and reality. The reality is this administration has not actually
Speaker 1: gone aboff and beyond what the previous administration did on Russia.
Speaker 1: This is really quite strong stuff from this administration against Russia.
Speaker 1: And it's not even just this. If you take the
Speaker 1: action for the amount of diplomats expelled, it was greater
Speaker 1: than any European country, including the UK, in terms of
Speaker 1: how many diplomats from the Russian government were forced out.
Speaker 1: So they've actually taken some fairly significant steps against Russia.
Speaker 1: You don't hear much narrative outside of the actions and
Speaker 1: the press releases coming out of Treasury, however, so let's
Speaker 1: talk about what this ultimately means. They've sanctioned twenty four individuals,
Speaker 1: fourteen companies, How does this actually play out, and what
Speaker 1: are the kind of hotspots you're looking at. So the
Speaker 1: simple rationale of what this means is all of these
Speaker 1: individuals and entities and their assets in the United States
Speaker 1: are considered blocked, so they cannot access them, move them,
Speaker 1: do anything with them. It also means that US businesses
Speaker 1: um and US persons cannot do this with these individuals
Speaker 1: and entities. Where this gets more complicated and where I'm
Speaker 1: advising clients very specifically at the moment, is this is
Speaker 1: not an exhaustive list. So if you look at these
Speaker 1: oligarchs and you look at the list of entities designated,
Speaker 1: this is not an an exhaustive list of their holdings.
Speaker 1: Anything that these individuals own fifty cent or more is
Speaker 1: also considered a block entity, meaning there's prohibitions and dealings
Speaker 1: with them. So it's a bit of a go fish
Speaker 1: exercise because you have to do the due diligence understand
Speaker 1: beneficial owners of your clients to know who actually owns
Speaker 1: these businesses in Russia and is it one of these
Speaker 1: designated oligarchs. So for a lot of companies outside the
Speaker 1: United States of America, now I would assume, and you
Speaker 1: can correct me if I'm wrong, the bias will be
Speaker 1: just to stop doing business with them full stop. I
Speaker 1: mean you can't, it's Russia. It's not that simple to
Speaker 1: just wind down. But the reason I asked down is
Speaker 1: because for many multinationals outside of the the United States, they'll
Speaker 1: be wondering whether these sanctions apply to them and whether
Speaker 1: if they continue doing business with them, ultimately, what does
Speaker 1: it mean for doing business with the United States. So
Speaker 1: that is of the questions, and the US has had
Speaker 1: for some time what are called secondary sanctions, and that
Speaker 1: basically is forcing foreign businesses with otherwise no US presence
Speaker 1: to choose between doing business with the target of the U.
Speaker 1: S Government or the United States. And I think that
Speaker 1: is a point we may get to. It's also pretty
Speaker 1: clear that this is just the first round of these
Speaker 1: type of designations. There's likely going to be more to
Speaker 1: come within this. Do the Russians fear sanctions or do
Speaker 1: they just sort of yeah, yeah, yeah, whatever. The sentiment
Speaker 1: in Russia's I understand it from my colleagues is this
Speaker 1: is having an impact. Obviously, you look at what's happened
Speaker 1: to the ruble, You look at what's happened to some
Speaker 1: of the listed companies, some of which have lost in
Speaker 1: value over the last few days, and the sixteen billion
Speaker 1: dollars in personal wealth lost by some of the oligarchs.
Speaker 1: This is having some bite to it. So this will
Speaker 1: have an impact. What it means in terms of the
Speaker 1: Russian response, both either positively in trying to wind back
Speaker 1: some of the behavior that drove the package or offensively
Speaker 1: against the United States, that's still unclear. Just take a
Speaker 1: company like russol Tom owned by like Dea Pasco. They're
Speaker 1: responsible for seven percent of global aluminium production. I mean,
Speaker 1: it's huge. So you've now got this big immediate shortage
Speaker 1: for aluminium supply for so many people. And if actually
Speaker 1: if you look at the commodity market just briefly alumin
Speaker 1: you're flipping into backwardation because the front end has just
Speaker 1: shifted aggressively high. So there's some really interesting market bike
Speaker 1: points that are taking place here, Dan, I think moving forward,
Speaker 1: this isn't just about Russian sanctions off the back of
Speaker 1: what happened in the election here in the United States,
Speaker 1: and there's also a conversation around Syria, but it's it's
Speaker 1: also crimea as well. This is like a huge parge
Speaker 1: of issues that drove the designation to US just briefly
Speaker 1: about how the Syria issue could actually escalate things even
Speaker 1: further if there is continued pastoring by the Russian government
Speaker 1: in terms of what they're calling fake news in the
Speaker 1: attack that the Asside regime had placed upon its people
Speaker 1: over the last few weeks. I think that does further exacerbated.
Speaker 1: I don't need to rub the storage is broken, it's
Speaker 1: been out, but so Cana in a ferraud kozak out
Speaker 1: of Istan will really right it up. And it goes
Speaker 1: right to the complexities uh Dan Tannebon that you guys
Speaker 1: have to work with. From Damascus, if you go two
Speaker 1: hundred and sixty miles straight north almost a Turkey, you're
Speaker 1: running into the old hate province, going back to like
Speaker 1: World War One and Lawrence of Arabia and all that.
Speaker 1: And there is a town called Afron, Syria which the
Speaker 1: Turks have taken over and they're not going to give
Speaker 1: it back even though Russia wants it. When you see
Speaker 1: geo politics like that, how does that fold into the
Speaker 1: financial threats and world of Russia. It all feeds into
Speaker 1: trying to understand where and which you have interested parties
Speaker 1: that may be prohibited from dealing with certain territories. So
Speaker 1: where there's heightened Russian interest, these are provinces. These are
Speaker 1: regions that businesses may want to avoid to ensure that
Speaker 1: they don't get ensnared in any further sanctions issues themselves,
Speaker 1: that they may not find themsel elves as the target
Speaker 1: of a potential investigation. So really, I mean you need
Speaker 1: to understand where you're doing business and where its sanctioned
Speaker 1: parties or at least neighboring territories to sanction countries are
Speaker 1: in operation to try and manage that risk. And John
Speaker 1: the headline here from Mr Iurdwan. When the time comes,
Speaker 1: we will return offering to its people, but we will
Speaker 1: decide on its timing. And right, i'm que speaking of
Speaker 1: our contention Turkish laa out to new weakness. Dollar Lira
Speaker 1: record high, a new record high in dollar era. Not
Speaker 1: a substantial move for the dollar against the Turkish leader
Speaker 1: in the grand scheme of things, of just six tents
Speaker 1: of one percent, but it's certainly a continuing bleed for
Speaker 1: that emerging market currency. In circuits home, this is the
Speaker 1: interview of the day on Syria. Stephen Cookers of the
Speaker 1: Council and Foreign Relations is he has done long and
Speaker 1: hard thinking about Syria, about French Syria and the greater
Speaker 1: in Near Middle East. Stephen Cooks thrilled that you're with
Speaker 1: us today. Let me begin with an open question, what
Speaker 1: will you listen for from President Trump and his General's Well,
Speaker 1: First of all, thanks for having me on and I
Speaker 1: think Uh, it's I think the President has been clear
Speaker 1: in signaling that there is an American military strike uh
Speaker 1: in the office. Um, he has said over again that
Speaker 1: those who are responsible for this terrible chemical strikeer going
Speaker 1: to pay a price. So now the question is what
Speaker 1: does the Pentagon planning look like. Uh. We did fire
Speaker 1: fifty nine cruise missiles at Syria not long after the
Speaker 1: President took office. Uh, so it seems that they're going
Speaker 1: to have to do something much larger because those fifty
Speaker 1: nine cruising hadn't didn't do the job that it was
Speaker 1: supposed to do, which was to deter the offsets from
Speaker 1: music about the weapons. Again, your book False Dawn is out.
Speaker 1: What is the false dawn right now for the Middle East?
Speaker 1: What is the false dawn for the artificial borders of
Speaker 1: the Mandate of nineteen two big games that became Syria. Well,
Speaker 1: the false dawn is this terrible, horrible civil war that
Speaker 1: has become a war tex of violence that has destabilized
Speaker 1: both the Levant as well as parts of Europe. Uh,
Speaker 1: and the the outflow of refugees from Syria has had
Speaker 1: a tremendous impact on the politics in Europe. So it
Speaker 1: is really tast this shadow or this false dawn. When
Speaker 1: at the at the outset in March of two thousand eleven,
Speaker 1: when Syrians rose up against the straw offset and the
Speaker 1: idea was that he would fall in democracy would follow.
Speaker 1: We have had actually tremendous amount of blood set and
Speaker 1: signit the can political change um not just in the
Speaker 1: greater Middle East, but stretching as far as Europe. Help
Speaker 1: us with the response of the allies of Mr Asad,
Speaker 1: Mike Allen and Jonathan Swan over to actually, as I
Speaker 1: do think, do a nice job folks of partitioning. If
Speaker 1: we do a they do be. If we do see
Speaker 1: they do d etcetera, etcetera. Does a pro like you,
Speaker 1: Stephen Cook worry about the responses of these allies to
Speaker 1: our surgical force. Yeah, that is in part an important
Speaker 1: part of thinking about what our strategy should be in Syria.
Speaker 1: It's not only how to respond to the actual event,
Speaker 1: but then subsequently how the and his allies in turn
Speaker 1: going to respond. And I think we are in a process,
Speaker 1: we are testing each other, and we're at a rather
Speaker 1: dangerous moment because the Russians have laid the ground work
Speaker 1: for UH indicate saying that this is some type of
Speaker 1: false black operation, an excuse to the United States UH
Speaker 1: and its allies to take action against Syria, and we
Speaker 1: are inching ever closer to a real complication. Let me
Speaker 1: let me give credit to David Lawler over to Access
Speaker 1: It wrote this smart article of the three Thrust Stephen
Speaker 1: Cook to quote, if one idea hitting targets like joint
Speaker 1: Russian Iranian bases or command and control centers, is that
Speaker 1: even feasible? Now that's a real escalation from what we
Speaker 1: saw with the previous tomahawk attack, isn't it. It absolutely
Speaker 1: is an escalation. And there is a school of thought
Speaker 1: in Washington that, um, you need to take this type
Speaker 1: of action. The Russians UH are more capable than they
Speaker 1: have been in the past, but not as capable. Clearly
Speaker 1: don't match the United States, so that we could really
Speaker 1: send a message to them that they need to reig
Speaker 1: in Charlotte and it would give us significant leverage in
Speaker 1: any negotiation process. And I think that that I think
Speaker 1: that's the position that makes sense. But we need to
Speaker 1: keep in mind the tremendous risks associated with the first
Speaker 1: day and the job. I can't imagine Stephen Cook your
Speaker 1: first day in the job for Richard has it comes
Speaker 1: on foreign relations. Imagine Mr Bolton, his national security advisor.
Speaker 1: Does he change the calculus of these choices or is
Speaker 1: he someone that's going to be a bystander to Pentagon choice.
Speaker 1: I think that that baster Bolton Long has a history
Speaker 1: of being hawkish on both the Russians and Uranians. So
Speaker 1: I uh supposed that he's deeply involved in these discussions
Speaker 1: and evaluating what types of military plans. I would imagine
Speaker 1: that he is leaning more heavily towards sending a stronger
Speaker 1: message to the Russian recognizing that our capabilities are now
Speaker 1: remained greater than those are the Russians. Stephen Cook consolant
Speaker 1: foreign relations. In the time we've got left with you,
Speaker 1: I want to go back to your core abilities. And
Speaker 1: this goes to the Crown Prince of Saudi Arabia with
Speaker 1: Mr McCraw, and we look over at the old French Syria.
Speaker 1: As I mentioned earlier, Folks, Damaskus two hundred and sixty
Speaker 1: miles straight north to Turkey is a town in Syria.
Speaker 1: The Turks have taken over Alfred. They said, no, we're
Speaker 1: not going to give it back. Help us with the
Speaker 1: minority calculus of Western Syria buttter stuff against the Levan
Speaker 1: and the Mediterranean. What does that calculus look like right
Speaker 1: now for these leaders and particularly soon He dominated Saudi Arabia.
Speaker 1: This is the Syria problem has been UH forefront for
Speaker 1: the Saudias, primarily because Siria has had a long standing
Speaker 1: strategic relationship with Iran, and that has put Syria really
Speaker 1: in play. And the way in which other powers in
Speaker 1: the region have sought to use soon He's with and
Speaker 1: Syria pit them against the minority, but in power UH minority.
Speaker 1: The way in which the courage have been used by
Speaker 1: outside powers who are trying to advance their own interests.
Speaker 1: That is why we see this fragmentation. There is this
Speaker 1: central conflict that runs through the Middle East right now,
Speaker 1: and that's between Iran and Saudi Arabia and being played
Speaker 1: out in places like Syria, in Yemen, less so in Iraq,
Speaker 1: also in Lebanon. So Um, I'm afraid even if the
Speaker 1: United States take some sort of muscular action in UH
Speaker 1: the region against the Syrians, this type of proxy conflict
Speaker 1: is going to continue over a period of time because
Speaker 1: Shoudis are not being killed and Iranians are not being
Speaker 1: killed in large numbers. They're using others in their own
Speaker 1: conflict against each other. Then within French Syria, this oddity
Speaker 1: of Mr Assad and his Syria alloyed Syria and next
Speaker 1: door Lebanon. I mean, the adjacence ease here are extraordinary complex,
Speaker 1: aren't they They are indeed, Uh, And it has been
Speaker 1: a great mystery to many people why the violence in
Speaker 1: Syria hasn't spilled over in a big way into Lebanon.
Speaker 1: Part of that has part of it has to do
Speaker 1: with the fact that through much of this conflict, the
Speaker 1: Lebanese have not had a government. Uh. They do actually
Speaker 1: have a government now, but is dominated by his Blah,
Speaker 1: which is keeping a lid on my smid. But you
Speaker 1: mentioned French Syria. What we're seeing is a legacy of
Speaker 1: French colonial policy in this area that had sought to
Speaker 1: build up minorities at the extent of the Sunni community,
Speaker 1: that sought that it was their right to be in
Speaker 1: control in UH Syria and Lebanon. Um. As a results,
Speaker 1: you have an empowered alle white community in in Syria.
Speaker 1: The drews were built up specifically on the Marinite community
Speaker 1: within Lebanon had a special relationship with friends, and this
Speaker 1: has created these kind of ethnic and religious differences that
Speaker 1: have plagued this part of the Middle East for a
Speaker 1: very very long time. Stephen Cook, this has been fabulous
Speaker 1: a clinic of your great abilities. Mr Cook is at
Speaker 1: the console on foreign relations. I really can't say enough
Speaker 1: about his work and I we're trying to bring you, folks,
Speaker 1: within our mix of economics, finance and investment, this important
Speaker 1: international relations at these important times, to provide clarity for
Speaker 1: are you now on the Facebook of your grandparents, your parents,
Speaker 1: you and your children? Is Scott Galloway of New York University.
Speaker 1: Many of you know his book The Four The Hidden
Speaker 1: DNA of Amazon, Apple, Facebook, and Google was immediately my
Speaker 1: Book of the Year last year. I can't wait for
Speaker 1: the paperback with the updates. Scott Galloway, page one eleven.
Speaker 1: In your brilliant chapter on Facebook, you talk about the
Speaker 1: difference of posts and interactions. How will these politicians talk
Speaker 1: to Mark Zuckerberg about his thing that makes us interacts?
Speaker 1: Good to be with you, Tom, and thanks to the
Speaker 1: kind words. It's going to be difficult, just logistically because
Speaker 1: I believe it's what's called an open session, and each
Speaker 1: senator only has four minutes, so they're going to have
Speaker 1: time to sort of ask a question, and they're gonna
Speaker 1: have to get angry pretty fast, which I think a
Speaker 1: lot of them want to do. But it's going to
Speaker 1: be difficult for them to really get any sort of
Speaker 1: what i'd call engagement or conversation going unless one senator
Speaker 1: more than one yield to someone else. So it's going
Speaker 1: to be a series of quick hits, is what we're
Speaker 1: likely and store for. Within this is the history that
Speaker 1: you've studied of technology. We had an uproar about radio,
Speaker 1: We had an uproar about TV. Bob Moon mentions the
Speaker 1: Paola uproar of the fifties. Now we've got an uproar
Speaker 1: about Facebook. Is that the same professor is our earlier
Speaker 1: uproars or is this time different? That's the right analogy time,
Speaker 1: and that is Facebook at its base case isn't really
Speaker 1: doing anything that any media company hasn't done before. Media
Speaker 1: companies trying to gather information on their viewers and their
Speaker 1: advertisers and then use it to make the programming and
Speaker 1: the advertising and the targeting more deft. The issue is
Speaker 1: nobody has ever been this good at it, and the
Speaker 1: other issue is that it doesn't appear the firm has
Speaker 1: taken really any steps to protect against bad actors. The
Speaker 1: analogy of a bank that leaves its doors and its
Speaker 1: vaults open and then screams, we've been robbed. And you
Speaker 1: have these old economy firms, media companies policing what is
Speaker 1: the most technologically literate firm or one of them in history.
Speaker 1: So there's just a general lack of regard for the
Speaker 1: commonwealth that has got everyone angry here, Scott Galloway, you know,
Speaker 1: in in reading your book The Four, the Hidden DNA
Speaker 1: of Amazon, Apple, Facebook, and Google, I am reminded of
Speaker 1: the Big Four and that takes us to another century.
Speaker 1: The Big Four being the creators of the Central Pacific Railroad,
Speaker 1: Leland Stanford, Collis Huntington's, Mark Hopkins and Charles Crocker. They
Speaker 1: were all individuals and their empires and their legacy depended
Speaker 1: on individuals. Is that going to be the same legacy
Speaker 1: for these for companies. Yeah, I'm just sitting here Pim
Speaker 1: and thinking I'd love to see an intellectual dance off
Speaker 1: between Pim Fox and Tom King on economic history. That
Speaker 1: would be fun to watch. But yeah, these these guys
Speaker 1: look we're out of my view a similar part of
Speaker 1: the in the natural and a healthy part of the
Speaker 1: economic cycle, where a few firms have aggregated so much
Speaker 1: power that it requires external intervention and it doesn't necessarily
Speaker 1: mean they've done anything wrong. That doesn't mean they're bad people.
Speaker 1: It just means the markets need to be oxygenated. PIM.
Speaker 1: If we did that for Scott Galloway into economic history,
Speaker 1: we could do that at a paint store up at
Speaker 1: Electington Avenue, when we could watch some paint dry while
Speaker 1: we talk PIM pick it up. Well, I don't know
Speaker 1: about that. You can find the big the big paint store,
Speaker 1: the black paint store down in the near Soho in
Speaker 1: the East village. We can throw some paint and it
Speaker 1: will stick and it is exciting to watch because Scott,
Speaker 1: you know, to your point there was a popular lit
Speaker 1: backlash against the business tactics of the Big four. Are
Speaker 1: we going to see a popular backlash against these four companies?
Speaker 1: And should we be mindful of the reaction that, once
Speaker 1: let loose, cannot be controlled. You know, I don't think so, Pam.
Speaker 1: I think consumers talk a big game about supply chain
Speaker 1: ethics and then want that little black dress, and how
Speaker 1: do you people? A lot of people are upset, A
Speaker 1: lot of consumers are upset about the scepter fuge of
Speaker 1: our democracy, and where do they express their outrage? They
Speaker 1: only go to Facebook for Instagram. So this revolution will
Speaker 1: not be led by consumer. Scott Gello, you have been great.
Speaker 1: You're almost professor of arrogance at n y U is
Speaker 1: just gonna pound the arrogance out of Silicon Valley. Maybe
Speaker 1: not Apple, maybe there are a separate beast, but the
Speaker 1: in Bezos as well. But the common theme of so
Speaker 1: many of these unicorns and want to be unicorns has
Speaker 1: been business and financial arrogance. Does this event of Mr
Speaker 1: Zuckerberg today begin the pound that arrogance out of him?
Speaker 1: You know, I'd like to thank so. I'm a bit cynical.
Speaker 1: I don't think anything is gonna happen. Anything's gonna come
Speaker 1: out of d C here. DC does not have the
Speaker 1: collective will or i Q to take on big tech.
Speaker 1: If the White House takes on big Tech, it's Mayweather
Speaker 1: McGregor part two, and that is the redhead gets the
Speaker 1: crap kicked out of him. The only progress here against
Speaker 1: big tech is happening in Europe. When's your paperback come out?
Speaker 1: Thanks for asking. It comes out in September. Tom September,
Speaker 1: perfect time. He's just so, He's so. Let me? Could
Speaker 1: I be as cynical as Scott Galloway? John Tucker Scott
Speaker 1: Galloway with a paperback out in September, perfect for classrooms nationwide.
Speaker 1: I was hoping for summer reading at the beach. At
Speaker 1: the beach, it could be the way, Scott Galloway. The
Speaker 1: book is the Four the hidden DNA of Amazon, Apple, Facebook,
Speaker 1: and Google. You will agree and disagree with every single
Speaker 1: page of it. It is so contentious about these four
Speaker 1: giant parts of our life. Him, I don't know what
Speaker 1: we're gonna hear today in the hill. That's the summer
Speaker 1: I get from all these interviews. Probably a lot of us.
Speaker 1: I'm sorry. What do you think? I'm sorry? And I
Speaker 1: won't do it again. I don't know. There it is
Speaker 1: the Fort, Scott Galloway. Thanks for listening to the Bloomberg
Speaker 1: Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud,
Speaker 1: or whichever podcast platform you prefer. I'm on Twitter at
Speaker 1: Tom Keane before the podcast. You can always catch us worldwide.
Speaker 1: I'm Bloomberg Radio,