Speaker 1: Welcome to the Bloomberg pim L Podcast. I'm pim Fox.
Speaker 1: Along with my co host Lisa Brahmowitz. Each day we
Speaker 1: bring you the most important, noteworthy, and useful interviews for
Speaker 1: you and your money, whether you're at the grocery store
Speaker 1: or the trading floor. Find the Bloomberg p m L
Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. Today
Speaker 1: is the day that the mouse eats the Fox. Yes,
Speaker 1: Disney spending fifty two billion dollars for many assets of
Speaker 1: Century Fox. In here to tell us more is Gita
Speaker 1: Rana nathan Our, senior media analyst for Bloomberg Economics, and
Speaker 1: tar La Chapelle, deal's columnist for Bloomberg Gadfly. Gita, what
Speaker 1: has to go right in order for this merger to
Speaker 1: show that it is a smart deal, not just now
Speaker 1: whenever one is happy and stock prices are moving up,
Speaker 1: but in times when perhaps they're not going to be
Speaker 1: so many hit movies. What kinds of synergies or combinations
Speaker 1: make this a potential success? Um suptem. There are plenty
Speaker 1: of synergies because both of the companies are in such
Speaker 1: similar businesses. There are significant cost savings. Obviously on the
Speaker 1: TV and film production side with all of the sports programming.
Speaker 1: But I think really for them for the deal itself
Speaker 1: to be successful, there are two primary considerations. Number one
Speaker 1: is execution. Disney has absolutely stellar record when it comes
Speaker 1: to acquiring assets and then integrating them. We've seen that
Speaker 1: time and time again with Pixar, with Marvel, with Lucasfilm. Um, Fox,
Speaker 1: of course is going to be a little bit different.
Speaker 1: It's a much bigger asset. But I'm confident they're going
Speaker 1: to do a great job in execution. I think the
Speaker 1: issue where um, you know they're not going to have
Speaker 1: as much control, is going to be on the regulatory side. Um,
Speaker 1: given all of the recent uncertainty with the Department of
Speaker 1: Justice blocking the Time Warner and the A T and
Speaker 1: T deal. So, um, those are the two things that
Speaker 1: we are really looking at. So Tara, come on in
Speaker 1: here exactly on that point. I mean, how big of
Speaker 1: a hurdle is this going to be the cross to
Speaker 1: actually get this deal done. I mean, it's funny because
Speaker 1: it used to be that horizontal mergers like this, meaning
Speaker 1: that a company buying a competitor, were the kind that
Speaker 1: we're most sort of fraught in the regulatory process, and
Speaker 1: now we're seeing a T and T time Warner run
Speaker 1: into hurdles, which is a vertical merger, meaning they're not
Speaker 1: buying competitor, they're buying an adjacent business and that's facing
Speaker 1: all kinds of issues. So it seems like the sentiment
Speaker 1: has been, well, maybe this will have an easier shot,
Speaker 1: which just doesn't make sense when you look at history.
Speaker 1: So I think it could be really interesting to see
Speaker 1: how the government looks at this. I mean I think
Speaker 1: they're going to have some issues on the sports side.
Speaker 1: UM Sky TV, perhaps that's a Sky PLC. Maybe that's
Speaker 1: a little bit easier. Now we'll see easier for Fox
Speaker 1: to complete the deal because that would be uh sort
Speaker 1: of what would happen before Disney would acquire Sky. So
Speaker 1: concerns about proper being a fit, improper broadcaster, and you
Speaker 1: know the scandals that Fox has had. Disney is probably
Speaker 1: a more preferable buyer in that case. Keith, what does
Speaker 1: the competition make of all this? I mean, it's not
Speaker 1: as if they're going to sit idly by while Bob
Speaker 1: Iger tries to combine two huge companies. Yeah, I mean
Speaker 1: this move itself has kind of been um widely viewed as, um,
Speaker 1: you know, creating a Netflix killer. Now, I'm not really
Speaker 1: sure whether they're actually going to be able to do that. Um.
Speaker 1: Netflix is already far ahead, UM, so you know they
Speaker 1: It's going to obviously take some time for Disney to
Speaker 1: to ramp up its presence in the streaming world. But
Speaker 1: I think the bigger question is going to be what
Speaker 1: happens to all of the smaller media companies. What happens
Speaker 1: to a CBS, Viacom, all of these names um now
Speaker 1: in play with Disney becoming such a dominant force in
Speaker 1: the media world. I mean, I think CBS is going
Speaker 1: to be really interesting to watch. And we just did
Speaker 1: a Gadfly piece this week on the three different sort
Speaker 1: of logical deal options that they have on the table now.
Speaker 1: And I think Sherry Redstone could look at a Viacom
Speaker 1: merger again, which is their other property that they control. UM,
Speaker 1: I don't know how much sense that makes with Viacom
Speaker 1: going through such a tough turnaround. But the other ideas
Speaker 1: are Verizon. Verizon could copy a T and T once
Speaker 1: we get a better sense of how this trial is
Speaker 1: going to go over the Time Warner deal, Uh, they
Speaker 1: would you know, be adding content in the same way
Speaker 1: that A. T and T is doing with Time Warner.
Speaker 1: Or there's lions Gate, which has John Malone involved dealmaker obviously,
Speaker 1: um I make I think it makes sense that lions Gate,
Speaker 1: the film studio, would get rolled up into something at
Speaker 1: some point or buy other things. They bought Stars not
Speaker 1: all that long ago. So I think CBS not having
Speaker 1: a film studio, and clearly Disney seeing a lot of
Speaker 1: value in film studios buying Foxes and seeing how Netflix
Speaker 1: has had so much success on the on the movie
Speaker 1: side as well, I think it only makes sense that
Speaker 1: CBS could look at something like that. Next I'm gonna
Speaker 1: throw something crazy out Terra. Would the bigger and improve
Speaker 1: Disney plus Fox be interested in buying Netflix roll them up,
Speaker 1: makes them behemous? It's interesting. I mean, I always thought
Speaker 1: that Disney would be a logical buyer for Netflix. It
Speaker 1: could even solve disney succession question obviously, But I think
Speaker 1: now with this deal, they're kind of going up against
Speaker 1: Netflix and they're trying to take more control of Hulu.
Speaker 1: So I think it depends what happens with Hulu. Does
Speaker 1: Comcast fight Disney if Disney tries to take full control
Speaker 1: of it and try to break that up and take
Speaker 1: it themselves, or if if Disney does keep it, I
Speaker 1: think they'd be more focused on the streaming services that
Speaker 1: they're keeping rather than going after a Netflix. What do
Speaker 1: you think, Yeah, I think so. You know, one of
Speaker 1: them factors is also going to be international. So Disney
Speaker 1: by buying um Star India um gets a significant exposure internationally.
Speaker 1: No Star India actually has a very big streaming presence
Speaker 1: through its app there, which is called hot Star, which
Speaker 1: is siles ahead of Netflix. So Netflix is still kind
Speaker 1: of trying to gain a foothold in the Indian streaming market.
Speaker 1: For instance, Disney through this hot Star app is already
Speaker 1: going to be miles ahead. So internationally they they're probably
Speaker 1: already a little bit ahead of the game there. The
Speaker 1: problem is really going to be in the domestic market,
Speaker 1: and as Tara pointed out, UM, you know, we're going
Speaker 1: to have to see what happens with Hulu they have,
Speaker 1: I mean, the scale that they have there is absolutely
Speaker 1: not comparable to netflixes at all. It's only about sixteen
Speaker 1: million subs or so. Um So we'll have to see
Speaker 1: how that that plays out with com Cash once their
Speaker 1: consent decree and some time next year. Well, thanks to
Speaker 1: both of you for breaking this down. We will be
Speaker 1: talking more about that throughout the day. The fact that
Speaker 1: Disney is indeed buying parts of Fox for fifty two
Speaker 1: billion dollars. Guita around Nathan, senior media analyst for Bloomberg Intelligence,
Speaker 1: as well as Tara la Chapelle, are Bloomberg gad Fly
Speaker 1: columnists who covers all things tech and deals that has
Speaker 1: been following this for quite a while. Really at the
Speaker 1: big question now has to do with Netflix. How they
Speaker 1: respond This is Bloomberg strong jobs data, Well it may falter.
Speaker 1: According to our next guest, Danielle DiMartino Booth is the
Speaker 1: founder of money Strong and a Bloomberg profit and she
Speaker 1: joins us here in our eleven three oh studio. Danielle,
Speaker 1: always a pleasure, Thanks for being here. What do you
Speaker 1: mean by this strong demand in jobs may actually falter?
Speaker 1: You don't think that the job the hiring spree is
Speaker 1: going to continue. I think that the hiring spree for
Speaker 1: skilled workers is certainly going to continue. Um. But by
Speaker 1: the same token, I don't think that people are paying
Speaker 1: near enough attention to some of the distress um signals
Speaker 1: emanating from the restaurant industry right now. Restaurants followed brick
Speaker 1: and mortar retail into the abyss of over expansion, and
Speaker 1: now they're starting to shrink that footprint. If you look
Speaker 1: at the current economic recovery, as long as it has
Speaker 1: been going on, the main hiring sector has been in
Speaker 1: these restaurants, restaurant, leisure, entertainment. They've all over expanded. Danielle,
Speaker 1: You've been a phenomenal over the decades of predicting the
Speaker 1: early signs of a problem, certainly leading up to the
Speaker 1: housing boom and bust that we saw lead to the
Speaker 1: two and eight failure of Lehman Brothers. And I'm just
Speaker 1: wondering right now, we see a dramatic consensus around global
Speaker 1: synchronized growth, healthy consumer everything is hunky dory, and yet
Speaker 1: consumer debt levels are rising if you strip out mortgages
Speaker 1: rising to record levels. Does this concern you? Is this
Speaker 1: a warning sign? Are you seeing rising delinquencies that are
Speaker 1: also a warning sign? I absolutely am. Consider something we
Speaker 1: have seen twenty three back to back months of in
Speaker 1: lation adjusted credit card spending growth outpaced that of incomes,
Speaker 1: and the gap between the two is widening. Credit card
Speaker 1: delinquencies are going up. Major banks are setting aside lost
Speaker 1: provisions at a faster clips. City group actually expressed surprise
Speaker 1: at how quickly they're having to build up their lost provisions.
Speaker 1: And we're seeing a continuation, a very quiet continuation of
Speaker 1: sub prime auto delinquencies and the beginnings of f h
Speaker 1: A Mortgage delinquencies take up from O nine and ten.
Speaker 1: So f f h A is the one agency that
Speaker 1: allows UH allows borrowers home buyers to put down much
Speaker 1: less for their down pays, the only three percent game
Speaker 1: in town, and it was really the only open mortgage
Speaker 1: entity in the immediate years following the housing crisis where
Speaker 1: people could go and put very little down to buy home.
Speaker 1: Do you feel like policymakers UH sufficiently recognize the increase
Speaker 1: in fixed costs that a lot of consumers are facing.
Speaker 1: I mean, I was looking at a Moody's report on
Speaker 1: consumer asset bacts securitizations that they put out yesterday. As
Speaker 1: the share of renters paying more than fifty percent of
Speaker 1: their incomes towards rent climbs to almost from twenty four
Speaker 1: point one percent in two thousand seven, home ownership slumped
Speaker 1: towards a fifty year low. Meanwhile, health insurance costs some
Speaker 1: thirty two faster than a twelve percent increase in workers
Speaker 1: wages five years. These are astounding statistics. We just had
Speaker 1: the CPI report come out that policymakers perceive as being benign.
Speaker 1: How could they see it any other way? If if
Speaker 1: rent inside the c p I are only eight percent
Speaker 1: of the index, and yet they are at least a third,
Speaker 1: if not fifty percent of a given households balance sheet.
Speaker 1: They're running upwards of four percent. If you think back
Speaker 1: to the peak of the housing boom, that was what
Speaker 1: home price appreciation was doing at the time. But right
Speaker 1: now home ownership and renting are more prohibitively expensive than
Speaker 1: they've ever been. And no, I don't think this is
Speaker 1: on federal reserves radar screen. I just want to go
Speaker 1: through some items that people may actually purchase, such as gasoline. Right,
Speaker 1: gasoline prices they are up. We're seeing about two dollars
Speaker 1: and fifty cents a gallon for a national average. That
Speaker 1: compares to two dollars and twenty one cents same time
Speaker 1: last year, So that's an increase. We've also been speaking,
Speaker 1: as you have, about the delinquency for subprime auto loans,
Speaker 1: and we're talking about a figure that it's about ten
Speaker 1: percent of all of those loans are at least ninety
Speaker 1: days or greater delinquent. What happens then, if the Federal
Speaker 1: Reserve actually goes ahead and raises interest rates in three
Speaker 1: times and indeed even four times, as many economists say
Speaker 1: that they're going to do well, this is uh. We
Speaker 1: we've read this book before and we actually know how
Speaker 1: it ends. The FED will always over tighten into late
Speaker 1: cycle signs, and right now we could possibly see a
Speaker 1: four percent handle coming on g d P, and it
Speaker 1: is going to be the biggest head fake, and the
Speaker 1: FED is going to end up chasing that head fake
Speaker 1: and over tightening. If Powell is not astute to the
Speaker 1: fact that still waters run deep so underneath the biggest
Speaker 1: natural disaster year in how long two thousand seventeen. Of course,
Speaker 1: building materials have gone through the roof. Of course, there
Speaker 1: were two good years of of of of car sales.
Speaker 1: All of this rebuilding effort has no precedent. You can't
Speaker 1: compare three hurricanes and two massive wildfires to Hurricane Katrina.
Speaker 1: It doesn't work. But that's the only thing in the
Speaker 1: fed's models. Just to push back a little bit. We're
Speaker 1: not seeing inflation pickup. We're not seeing some of the
Speaker 1: other signs of a late stage in the credit cycle.
Speaker 1: Investors will they have flown into the riskiest assets. They
Speaker 1: have shown some discretion this year. You are seeing some
Speaker 1: potholes and credit markets, some losers amid the froth. So
Speaker 1: you know, what are you looking at when somebody says
Speaker 1: to you, look, yes, all that understood. Still in the
Speaker 1: scheme of things, consumer debt relative to GDP isn't necessarily
Speaker 1: at to record high. We aren't seeing the same kinds
Speaker 1: of default rates as you would leading up to a problem.
Speaker 1: What do you say to them? I think that the
Speaker 1: Fed has left the p p I for dead at
Speaker 1: its peril. We saw the producer prices came out at
Speaker 1: a six year high, and it was it was completely
Speaker 1: wholesale disregarded after the CPI came out by policymakers. A
Speaker 1: lot of that was gasoline, right, I mean the gas
Speaker 1: I think about two thirds of the jump in November
Speaker 1: were gasoline related. It was up more than fift But
Speaker 1: if you look at transportation, if you look at manufacturing,
Speaker 1: if if you look at anything related to the supply chain, disruption,
Speaker 1: which is unprecedented following these natural disasters, and you listen
Speaker 1: to every you can look at ten surveys, this is
Speaker 1: my upcoming Bloomberg View column. You can look at ten
Speaker 1: regional manufacturing surveys, and all of the managers are complaining
Speaker 1: about the fact that their prices have gone through the roof.
Speaker 1: They're actually having to leverage up to cover them if
Speaker 1: they can't pass along these price increases, if they don't
Speaker 1: have pricing power. It's building in the pipeline, it's it exists.
Speaker 1: So what do you think the FEED should do next year?
Speaker 1: I think the FED is in a very difficult place.
Speaker 1: I really do. I'm hoping that I'm hoping that there
Speaker 1: are some eagle eyed staffers who can look through this
Speaker 1: supply chain disruption. Maybe hike in March, maybe, but they
Speaker 1: really do need to step back and study the household
Speaker 1: sector and figure out where inflations really going to be
Speaker 1: after all of these natural disasters. Work their way through
Speaker 1: the data, because at the end of it, you will
Speaker 1: have millions of households who remain devastated by these natural
Speaker 1: disasters and don't have the wherewithal financially to rebuild and
Speaker 1: replace all of these assets. They will add on to
Speaker 1: the existing the pre existing defaults and delinquencies that we
Speaker 1: have seen already in the household sector before Hurricane Harvey landfall.
Speaker 1: Danielle di Martino Booth, thank you so much. Always a
Speaker 1: pleasure speaking with you. She is founder of money Strong,
Speaker 1: a Bloomberg profit. Also, for nine years, she was the
Speaker 1: AID Direct Advisor to President Fisher. The Federal Communications Commission
Speaker 1: is currently meeting. They are widely expected to reverse net
Speaker 1: neutrality rules that were instated during a former President Obama's reign.
Speaker 1: Here to talk about what the implications are is Jerry Smith,
Speaker 1: media reporter for Bloomberg News. Jerry, it's almost a foregone
Speaker 1: conclusion that this committee will indeed vote to reverse not
Speaker 1: neutrality rules. Is that correct? Yeah, I mean the hearing
Speaker 1: is happening right now as we speak, but it is
Speaker 1: pretty much um, you know, on along party lines, and
Speaker 1: the Republican UM FCCS commissioners have the majority, so they're
Speaker 1: going to um you know, they've made it pretty clear
Speaker 1: that they're going to vote to remove these rules. So, Jerry,
Speaker 1: I've seen a couple of polls and it looks like
Speaker 1: the majority of Americans polled art not for rolling back
Speaker 1: some of these net neutrality rules. Uh. The argument from
Speaker 1: the industry is that the big broadband behemoths would invest
Speaker 1: more in their infrastructure if they knew that they could
Speaker 1: earn more from it. Can you lay out both sides
Speaker 1: and UH and and sort of why this is happening now? Yeah,
Speaker 1: I mean, the the internet service providers were talking about
Speaker 1: companies UM like Comcast and Verizon. UH. That's the crux
Speaker 1: of their argument that if there's extra regulations on how
Speaker 1: they how they manage their internet service, then that, UM,
Speaker 1: you know, that gives them less incentive to invest in
Speaker 1: their networks. UM. You know, there is some skepticism about
Speaker 1: that argument. Craig Moffatt, who's probably one of the more
Speaker 1: respected UH analysts in the in the industry, UH, you know,
Speaker 1: he said, there's a lot other there's a lot more
Speaker 1: factors that go into the decision of whether a Comcast
Speaker 1: or Verizon invest in their broadband network than just whether
Speaker 1: there's UH neutrality rules. I mean, one key thing about
Speaker 1: the you know, the future of these companies UM Comcast
Speaker 1: in particular, UH, then their video services declining, and so
Speaker 1: the future of their business is selling you internet service
Speaker 1: and they do not want the government to have any
Speaker 1: ability to tell them how much they can charge you
Speaker 1: for internet service, which is what these rules do, and
Speaker 1: that that's really the bigger fear. It would be very,
Speaker 1: very surprising to see Comcast or Verizon or E T
Speaker 1: and T slow down people's web traffic or block certain
Speaker 1: web traffic. The big concern for these companies and their
Speaker 1: investors is can the government have the ability to tell them,
Speaker 1: you know, how much you charge for broad band because
Speaker 1: that's really where their future profits are going to be. Drey,
Speaker 1: have we seen this before in the wireless industry with
Speaker 1: I guess it's what called zero rating. Yeah, I mean,
Speaker 1: that's another thing that's happening. I mean, the wireless side
Speaker 1: of internet service has sort of been overlooked in this
Speaker 1: whole debate. It's really been more about, um, the high
Speaker 1: speed Internet that you use on your desktop computer, uh
Speaker 1: and your WiFi at home top computer. That's an old
Speaker 1: that that I can't remember what is that agetting all? Yeah, No,
Speaker 1: but wireless is I mean, that's something that you're seeing
Speaker 1: the wireless companies do. Is zero rating is an industry
Speaker 1: term for saying we are not For example, if you
Speaker 1: want to watch Netflix on UM on your phone through
Speaker 1: a wireless network. Uh, that wireless provider would not count
Speaker 1: that data usage towards the limit that you have. I mean,
Speaker 1: some people have unlimited data usage. And I think T
Speaker 1: Mobile did this with Facebook and Facebook Messenger. They said,
Speaker 1: you know, free access to that that was. That's just
Speaker 1: one of there's a few examples of this where you
Speaker 1: they say this won't count. Uh, this particular service won't
Speaker 1: count towards your your data cap and and that's controversial
Speaker 1: because then you're sort of in some ways, these wireless
Speaker 1: providers can pick winners and losers. So, Jerry, I guess
Speaker 1: if you said worst case scenario, what happens if all
Speaker 1: of these internet providers jack up their prices sky high
Speaker 1: and if anybody wants to get on the Worldwide Web
Speaker 1: they need to pay them. The flip side to that
Speaker 1: is these companies are going to be judicious about how
Speaker 1: much they raise rates because they don't want to ignite
Speaker 1: a backlash that ends up creating them and and sort
Speaker 1: of labeling them as utilities. Right, I mean, isn't this
Speaker 1: sort of the push pull that people are looking for? Right?
Speaker 1: I mean I think the um, you know, the internet
Speaker 1: providers will be very very careful about doing this sort
Speaker 1: of thing. I'd be very surprised if in the near
Speaker 1: future if these rules get rolled back and there's gonna
Speaker 1: be probably a prolonged court battle over this, regardless uh
Speaker 1: that they did anything in terms of blocking or slowing traffic.
Speaker 1: And the other thing is, you know, this is really
Speaker 1: more about these smaller startups that need access to the Internet,
Speaker 1: and not so much some of these big companies like
Speaker 1: Netflix that are are so huge that this doesn't really
Speaker 1: affect them as much anymore. You said that they're probably
Speaker 1: going to be lawsuits. Could that end up preventing a
Speaker 1: reverse of the net neutrality rules altogether? I think it's
Speaker 1: it's you know, you talk to experts and they would
Speaker 1: argue that this is likely going to see legal challenges
Speaker 1: in the future regardless of how today's hearing turns out.
Speaker 1: So this is something that's been tied up in the
Speaker 1: courts for several years prior to this, and I'd be
Speaker 1: very surprised if it doesn't stay that way. Well, I'm
Speaker 1: just wondering if this could lead to specific add on
Speaker 1: charges if you want to go to specific websites. So
Speaker 1: if you'd like to go to a website that is
Speaker 1: owned by a T and T and you happen to
Speaker 1: be an a T and T wireless customer, Great, they'll
Speaker 1: let you do that along with your planets. The data
Speaker 1: that is used there is not going to be counted
Speaker 1: against you. But if you want to go to a
Speaker 1: competitor's website, or indeed, if you actually are a content provider,
Speaker 1: which a T and T is seeking to become right
Speaker 1: through there, well they already are really with the addish
Speaker 1: network to a certain extent. But if you want content
Speaker 1: from a competing company, maybe they'll slap on a five
Speaker 1: dollar a month charge, or they'll make it more expensive
Speaker 1: or prohibib or the website could charge directly for that access. Yeah,
Speaker 1: I mean, I think it would be less obvious to
Speaker 1: the consumer initially as far as how much you're paying.
Speaker 1: I think this is more about a streaming service like
Speaker 1: Netflix or an internet a YouTube and whether they would
Speaker 1: have to pay extra in order to make sure that
Speaker 1: their content reaches your home unimpeded, and whether they would
Speaker 1: have to pay an internet provider to do that. Um.
Speaker 1: But you know, I think the bigger question is also
Speaker 1: just um, whether these internet providers, um, they just don't
Speaker 1: want the government looking over their shoulder. They don't want
Speaker 1: the government telling them how much they can charge internet service.
Speaker 1: Thanks very much for being with us. Jerry Smith, our
Speaker 1: media reporter for Bloomberg. He'll be following that f c C,
Speaker 1: the Federal Communications Commission decision that will be coming shortly
Speaker 1: on net neutrality. We have talked a lot about the
Speaker 1: GOP tax overhaul plowing toward passage, and yet to GOP
Speaker 1: senators just slammed the fact that the tax overhaul included
Speaker 1: cuts for the rich. We're talking about Susan Collins of
Speaker 1: Maine and Marco Rubia of Florida. Of Florida here to
Speaker 1: talk a little bit about what this means for the
Speaker 1: passage of the bill is Terry Sullivan, partner and senior
Speaker 1: Republican strategist at Firehouse Strategies in Washington, d C. Also
Speaker 1: the former campaign manager for Marco Rubio's presidential campaign. Terry,
Speaker 1: thank you so much for joining us. I'm wondering how
Speaker 1: should we view the descent that we're hearing out of
Speaker 1: individual members of the Senate Republican Senate. Is this a
Speaker 1: bargaining chip that you're basically seeing in real time, or
Speaker 1: is this real opposition that could end up blocking the
Speaker 1: passage of the bill. Well, I think it's still a
Speaker 1: bill in progress and that you know, and tell there's
Speaker 1: and tell there's something final. Um, it's all negotiation and
Speaker 1: uh sometimes making sausage isn't pretty um, even if the
Speaker 1: end uh end result is going to be what we want. Um.
Speaker 1: So I think there's there's still a lot of negotiating
Speaker 1: going on, and I think that's an important part of
Speaker 1: the process. Um. That there is no done deal in
Speaker 1: this kind of flies in the face of of the
Speaker 1: Democrats argument that this was ramar added through. This is
Speaker 1: you know, there's real debate about what this uh, what's
Speaker 1: the details of this bill look like? But you just
Speaker 1: said I'm just trying to understand this. You said that
Speaker 1: the bill has yet to be completed. We don't know
Speaker 1: many of the details of the bill. If this is
Speaker 1: such a significant piece of legislation, why would the details
Speaker 1: be released and then only have perhaps five days in
Speaker 1: order to analyze this without vigorous debate from public, uh,
Speaker 1: with public input to craft the bill in the first place.
Speaker 1: What how does that make sense? Yeah, I mean, look,
Speaker 1: part of it is the the hyper politicization of everything.
Speaker 1: Now in that look, the senators that you know we
Speaker 1: elected umu as Americans are are there hammering out a
Speaker 1: bill on the on the Senate side and the House
Speaker 1: members on the House side. And you know that doesn't
Speaker 1: mean that every single one of us has to be
Speaker 1: fully informed of every step of the process along the way. UM.
Speaker 1: It's concerning if they don't have the information as in
Speaker 1: some cases in the past, but clearly the the legislators
Speaker 1: are have the information and are working through this UM
Speaker 1: and so uh, it's covered like a horse race, just
Speaker 1: like a political campaign would be. But but this is
Speaker 1: this is the process of give and take and what
Speaker 1: they're trying to do is is find a tax reform
Speaker 1: bill that benefits all Americans. Terry, I think, UM, right
Speaker 1: now one sort of drumbeat, and the backdrop is the
Speaker 1: fact that if the GOP doesn't get something done by
Speaker 1: year end, that the landscape could potentially change next year.
Speaker 1: Given the fact that Alabama new has a new senator
Speaker 1: who is a Democrat. Do you think that that could
Speaker 1: potentially either uh, throw a wrench in the works if
Speaker 1: there is no bill passed by year end, or if
Speaker 1: this is what's accelerating the talks right now. Well, you
Speaker 1: know I think that, yes, I mean, look, there's gonna
Speaker 1: be one. Clearly, everything has come down to very party
Speaker 1: line votes, um, And the Democrats are not going to
Speaker 1: support taxi form or healthcare reform or any of these
Speaker 1: Republican proposals. So the Republicans need the votes to do it,
Speaker 1: and and that having one fewer vote is certainly going
Speaker 1: to make it tougher. Um. So whenever, whenever Jones is
Speaker 1: sworn in it, uh, you know that's that is one
Speaker 1: fewer vote for any of these piece of legislation to
Speaker 1: get through. And just talking about Alabama Democratic Senator Doug Jones,
Speaker 1: who just won the election the special election. I'm just
Speaker 1: wondering for the GOP generally, what has the shakeout been like.
Speaker 1: I mean, we've seen reports from in fighting among members
Speaker 1: of the GOP, people sort of soul searching. What this
Speaker 1: means about President Trump as the head of the Republican Party.
Speaker 1: What's your take on this? You know, I think it. Uh,
Speaker 1: you can't, uh, you can't underestimate the fact that there
Speaker 1: is there are some real divides within the Republican Party
Speaker 1: right now. Um. But in part of it has to
Speaker 1: do with the fact that the Republican Party is so
Speaker 1: big and so strong compared to the Democrat Party in
Speaker 1: that control you know, the House, the Senate, the executive branch,
Speaker 1: the majority of state legislators, the majority of governor's mansions.
Speaker 1: I mean, the Republican Party really is a dominant national party.
Speaker 1: And therefore, once you get to this side, you're gonna size,
Speaker 1: you're gonna have factions within it. Well. But because there
Speaker 1: also is this fee here that we have heard reported
Speaker 1: and perhaps this isn't true, you can you can dispel
Speaker 1: us of this, um, but there's a sort of feeling
Speaker 1: that the Republicans currently, Yes, they are very big, and
Speaker 1: they're failing to get certain things done even though they
Speaker 1: have all this power. Right, I do do not disagree
Speaker 1: with that. I'm not gonna argue that point at all, um.
Speaker 1: And look, they've they've run for all other party has
Speaker 1: run for a lot of years on you know, repealing
Speaker 1: Obamacare and uh tax reform, and so voters are expecting
Speaker 1: him to actually get something done. And uh so I
Speaker 1: don't I don't disagree with your premise at all. Just quickly,
Speaker 1: Uh you know, Josh Holmes, who was the former chief
Speaker 1: of staff of Mitch McConnell and a political advisor. He
Speaker 1: said that the victory in Alabama of Doug Jones unmasked
Speaker 1: Steve Bannon's incompetence. Do you believe that? Uh No, I
Speaker 1: don't believe that at all. Steve Bannon's incompetence was unmasked
Speaker 1: years ago when he ran a Biosphere two program in
Speaker 1: the Arizona Desert to seclude people from the outside world
Speaker 1: for you know, months at a time. Look, he's not,
Speaker 1: nor has he ever been a political strategist. Um, No
Speaker 1: one prior to Donald Trump has ever paid the man
Speaker 1: for his political advice. So, you know, he elevated himself,
Speaker 1: but with his White House position. He came into the
Speaker 1: Trump campaign in the final three four months. Uh. You know,
Speaker 1: the media loves a Darth Vader. Um, he is one
Speaker 1: gruesome looking Darth Vader. We gotta Terry, We're gonna have
Speaker 1: to leave it there. We gotta run. I want to
Speaker 1: appreciate your appearance, said Terry Sullivan, partner at Firehouse Strategies
Speaker 1: and a senior Republican strategist. Thanks for listening to the
Speaker 1: Bloomberg P and L podcast. You can subscribe and listen
Speaker 1: to interviews at Apple Podcasts, SoundCloud, or whatever podcast platform
Speaker 1: you prefer. I'm pim Fox. I'm on Twitter at pim Fox.
Speaker 1: I'm on Twitter at Lisa Abramo wits one. Before the podcast,
Speaker 1: you can always catch us worldwide it on Bloomberg Radio.
Speaker 1: H