WEBVTT - Moelis Vice Chairman Eric Cantor Talks Trump Economy

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news, Wall Street's biggest banks

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<v Speaker 1>looking for some clarity on policy. JP Morgan's Jamie Timon

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<v Speaker 1>urging Trump to start talks with China and telling the

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<v Speaker 1>ft quote, we should be careful. I don't think anyone

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<v Speaker 1>should assume they have a divine right to success and

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<v Speaker 1>therefore don't worry about it. Joining us now to discuss

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<v Speaker 1>the former Republican House Majority leader Eric Cancer. Eric, welcome

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<v Speaker 1>to the program, So welcome back. It's good to see it.

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<v Speaker 2>Nice to be here, Jonathan.

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<v Speaker 1>Let's reach that. What do you make of the approach

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<v Speaker 1>from the administration to trade over the last few weeks.

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<v Speaker 3>Well, listen, I mean there are so many there's so

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<v Speaker 3>much noise, so many signals coming from the White House

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<v Speaker 3>right now.

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<v Speaker 2>I think that.

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<v Speaker 3>Market players are just, you know, sort of trying to

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<v Speaker 3>take a step back and figure out if they have

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<v Speaker 3>a portfolio of companies, you know, what it is that

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<v Speaker 3>they look like, if they're import sensitive. Obviously, there's now

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<v Speaker 3>a little bit more focus on what's coming out every

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<v Speaker 3>single day of the White House. I think the imperative

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<v Speaker 3>for the President and his team today as we're meeting

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<v Speaker 3>with Japan is to demonstrate success. I mean, this is

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<v Speaker 3>where I think people are looking for some amount of

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<v Speaker 3>clarity and that what does it mean when we're supposed

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<v Speaker 3>to be enduring some pain and the president's been pretty

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<v Speaker 3>clear said hey, we've got we're going to change sort

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<v Speaker 3>of the trajectory of the country.

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<v Speaker 2>We're going to strengthen the foundation. And if that's the case, what.

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<v Speaker 3>Does it really look like when he's dealing with the

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<v Speaker 3>counterparty and if it's Japan and I would say even India,

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<v Speaker 3>because India is the one that is most protectionist, that

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<v Speaker 3>comes to mind. If we can demonstrate there's an opening

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<v Speaker 3>up of that marketsa this is what it's all about.

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<v Speaker 3>I think that that would calm some nerves right now.

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<v Speaker 1>Are you convinced that is the metric for success?

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<v Speaker 3>Well, I think you know there is at leasta you

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<v Speaker 3>talked about sort of taking him literally, taking him seriously

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<v Speaker 3>or hinted of that what you just said. And I

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<v Speaker 3>look at this term of the Trump administration somewhat differently

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<v Speaker 3>than the way we look at the last one in

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<v Speaker 3>that almost he is sticking to his little word when

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<v Speaker 3>we're talking about tariffs and trade here.

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<v Speaker 2>So Jonathan, back to your question.

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<v Speaker 3>If he's about trade deficits, because that's been one of

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<v Speaker 3>the real metrics that he's put out there consistently.

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<v Speaker 2>That's what it's about.

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<v Speaker 3>So who are we going to see the Japanese buying

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<v Speaker 3>more of our goods? Are we going to see that

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<v Speaker 3>along with the opening up of their markets so that

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<v Speaker 3>our exports can flow into these other countries.

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<v Speaker 4>The President ran though, on hutting everyday goods down in prices,

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<v Speaker 4>things like groceries, things like gas. A recent CBS poll

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<v Speaker 4>says the majority of American sea tariffs adding to prices,

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<v Speaker 4>adding to inflation. Can they wrap this up before the midterms?

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<v Speaker 2>Well, this is the and then this brings up the

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<v Speaker 2>last point.

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<v Speaker 3>I think that's really important about today, and when we

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<v Speaker 3>look at Capitol Hill when Congress gets bad, I think

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<v Speaker 3>the administration and the Republicans need to act with dispatch.

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<v Speaker 3>It's important that the get there is some success under

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<v Speaker 3>the belt demonstrably, so the markets see that in terms

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<v Speaker 3>of dealing with countries, and I think from the Republican

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<v Speaker 3>standpoint in Congress, they've got to get this reconciliation bill done.

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<v Speaker 3>Simplicity is their friend right now. Adding additional taxes doing

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<v Speaker 3>those kinds of things is going to take weeks, if

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<v Speaker 3>not months, to bring everyone on board. And I think

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<v Speaker 3>if we can just extend what President Trump had said

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<v Speaker 3>was the greatest tax bill ever twenty seventeen, they should

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<v Speaker 3>just go ahead and do that.

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<v Speaker 4>If I had said to you, Congress right now is

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<v Speaker 4>debating whether or not to raise taxes on people that

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<v Speaker 4>make a million dollars a year. Would you think that

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<v Speaker 4>came from a Republican or a Democrat.

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<v Speaker 3>It is an extraordinary concept coming out of what I

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<v Speaker 3>believe is still a very pro growth party. And I think,

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<v Speaker 3>as I think you've been discussing this morning, the three

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<v Speaker 3>legs of the stool of the Trump Economic Plan. One

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<v Speaker 3>of them is taxes, the other deregulation. Along with the

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<v Speaker 3>trade agenda, all that has to come together to help

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<v Speaker 3>growth in this country, to see incomes rise, wages, growth, wealth,

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<v Speaker 3>all of it opportunity. And to sit here and say

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<v Speaker 3>that we are going to be increasing marginal rates on

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<v Speaker 3>individuals that ends up hurting small businesses. I mean, that's

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<v Speaker 3>the trick there. When they start talking about millionaires. Remember

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<v Speaker 3>we've got a lot of people in this country that

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<v Speaker 3>file taxes, that have subs or LPs or that are

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<v Speaker 3>taxed at the individual level, but actually run businesses. And

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<v Speaker 3>I don't think they're going to get too far with

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<v Speaker 3>that concept.

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<v Speaker 4>But what if they do. This is a pillar of

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<v Speaker 4>conservative orthodoxy, not to raise taxes period on anyone. What

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<v Speaker 4>do you make of the party in the direction of

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<v Speaker 4>travel if they were to go ahead with this, Well, again.

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<v Speaker 2>I'm not sure that they're going to go ahead with this.

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<v Speaker 3>So they're discussing, well, I'm not so sure how widespread

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<v Speaker 3>that discussion is and what kind of enthusiasm there is.

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<v Speaker 3>This is not a pro growth item, and I think

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<v Speaker 3>more of the focus is going to be on how

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<v Speaker 3>they come together on these pay fors because we saw

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<v Speaker 3>again the important data point that occurred last week was

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<v Speaker 3>the bond markets.

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<v Speaker 2>We saw the concern.

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<v Speaker 3>There about the fiscal health going forward, and I think

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<v Speaker 3>it's really important they focus on that so they can

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<v Speaker 3>act with dispatch and get these tax rates extended.

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<v Speaker 5>Heading into this year, the belief was that President Trump

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<v Speaker 5>was going to be a pro business president who is

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<v Speaker 5>going to focus on fiscal responsibility as well as celebrating

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<v Speaker 5>national champions. We have seen policies that have reached the

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<v Speaker 5>opposite consequences in markets. Do you think that this President

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<v Speaker 5>is still pro growth.

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<v Speaker 2>I do think he's a business guy.

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<v Speaker 3>I mean, we all know he's a real estate developer

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<v Speaker 3>from New York City that was very successful and had

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<v Speaker 3>times here where just like any in the real estate business,

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<v Speaker 3>they are ups and downs. But he has demonstrated the

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<v Speaker 3>ability in business to create wealth.

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<v Speaker 2>And I think he wants to do that for America.

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<v Speaker 3>And so yes, I think he is now what he's

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<v Speaker 3>going about doing in re ordering our economy and trying

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<v Speaker 3>to sort.

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<v Speaker 2>Of rebalance, if you will, the balance of trade as

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<v Speaker 2>well as the burden.

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<v Speaker 3>Sharing that occurs with US and our allies, importantly in

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<v Speaker 3>the financial realm as well as the defense realm.

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<v Speaker 5>Although you have a unique position because you wear the

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<v Speaker 5>hat of both being in government in a leadership position

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<v Speaker 5>and also talking with tons of companies while being vice

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<v Speaker 5>chair of molus. Do they have the confidence to invest?

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<v Speaker 5>Do they feel like they can be expanding right now

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<v Speaker 5>and have confidence and conviction that ultimately this whole mix

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<v Speaker 5>will benefit where they're heading?

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<v Speaker 3>Well, I mean I would say, first of all, we're

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<v Speaker 3>still America, right, I Mean, there is still this unbelievable

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<v Speaker 3>country that we've got with and we can go through

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<v Speaker 3>the various aspects of what draws capital and investors here,

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<v Speaker 3>rule of law, transparency, you name it, innovation, the rest.

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<v Speaker 3>We're still that the Trump administration understands. The President in

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<v Speaker 3>particular has said the biggest asset we've got is this

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<v Speaker 3>huge consumer market that the world now has tooled up

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<v Speaker 3>to take advantage of, and he's trying to use that

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<v Speaker 3>to go in and create a more stable trajectory longer term,

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<v Speaker 3>both from a fiscal and economic standpoint. So I think

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<v Speaker 3>listen right now, as we started, there's a lot of

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<v Speaker 3>signals that are creating this sort of question on the

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<v Speaker 3>minds of individuals, whether they are strategics, whether they are sponsors,

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<v Speaker 3>and how to go about in terms of conducting their business.

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<v Speaker 3>And that's why I say again, really really important that

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<v Speaker 3>we see manifestation of success.

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<v Speaker 2>You know, the present's really good at communicating.

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<v Speaker 3>I hope we can see some communication of success and

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<v Speaker 3>that people will begin to understand what the trade off

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<v Speaker 3>here is.

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<v Speaker 1>This is ambitious stuff. Let's finish on this. Governor. Youngki

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<v Speaker 1>is in your seat yesterday and we asked him this question.

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<v Speaker 1>I'll phrase it differently. At the moment, there are two

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<v Speaker 1>very left wing politicians in this country Philly stadiums. Getting

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<v Speaker 1>support at a time in the Democratic part is an

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<v Speaker 1>absolute mess in supporters rock Bottom. I get that, But

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<v Speaker 1>do you worry that if the president isn't successful that

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<v Speaker 1>a number of years time this pendulum could swing aggressively

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<v Speaker 1>to the left. If the right can't provide the solutions,

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<v Speaker 1>does this country seacunt solutions from the left?

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<v Speaker 2>Look, all I know is the left is so in tatters, and.

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<v Speaker 3>The one pillar that they've got of any kind of

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<v Speaker 3>unity is so extreme on the cultural side and the

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<v Speaker 3>design of where they see the world. There is no

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<v Speaker 3>way that the mass of this country, in terms of

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<v Speaker 3>an electorate, is going to adhere to that extreme Bernie

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<v Speaker 3>Sanders AOC agenda. There is just no way now not

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<v Speaker 3>to say that there will be unhappiness if we don't

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<v Speaker 3>see success again. Which is why I come back to

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<v Speaker 3>the point it's important that we act with that we

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<v Speaker 3>see some urgency and acting with dispatch in Washington.

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<v Speaker 1>Because you understand the risk here to bring up the

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<v Speaker 1>em example that you swing between Bolsonnaro and Lula. Bolscenaro

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<v Speaker 1>and Lula start to resemble what we see in Latin America. Repeatedly,

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<v Speaker 1>we are America.

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<v Speaker 2>We are America.

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<v Speaker 3>We are not Brazil, right, so we have a long

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<v Speaker 3>tradition of continued institutional guardrails, protections. We have the deepest,

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<v Speaker 3>broadest capital markets there are. I still believe that we

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<v Speaker 3>can get through this. Again, as you said, this is

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<v Speaker 3>a very ambitious goal that the president has set out

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<v Speaker 3>to sort of rebalance. It is where we can head.

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<v Speaker 3>And the fact that there have been some people left out,

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<v Speaker 3>and when you talk about these stadiums that are filled

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<v Speaker 3>by Bernie Sanders and aoc accolytes, it is those people

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<v Speaker 3>that are looking for the answers and frankly a lot

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<v Speaker 3>of sort of people who feel left out if there

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<v Speaker 3>are those stadiums. They are looking to the president to

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<v Speaker 3>deliver on the promises.

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<v Speaker 2>That he's made.

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<v Speaker 1>It's an ambitious agenda. We've said it repeatedly on this program.

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<v Speaker 1>For the good of the country. We hope he's successful.

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<v Speaker 1>Eric is good to see it. Thanks for droving night

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<v Speaker 1>the former House majority to their Eric cancer