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Speaker 4: Welcome back to Balance of Power Live from Washington and
Speaker 4: New York today on Bloomberg TV and Radio and a
Speaker 4: red headline just crossing the Bloomberg Terminal. The US has
Speaker 4: told allies that Russia could deploy a nuclear weapon or
Speaker 4: a mock warhead into space as early as this year,
Speaker 4: so potentially in twenty twenty four. Quite the news to see, Joe,
Speaker 4: especially in light of remarks we got from Russian President
Speaker 4: Vladimir Putin earlier today where he denied US allegations that
Speaker 4: he's planning to deploy a nuclear weapon in space. He
Speaker 4: says he's always been categor categorically against it and are
Speaker 4: now against the deployment of such things, and that the
Speaker 4: US is saying though, that they could do just that
Speaker 4: as early as this year.
Speaker 5: Yeah, the always credible vatim er Putin weighing in, Kaylee,
Speaker 5: if this is true, a nuclear warhead in orbit, which
Speaker 5: is apparently what we're talking about, would violate the nineteen
Speaker 5: sixty seven Outer Space Treaty. That is so sixties that
Speaker 5: we called it the outer Space Treaty to which Russia
Speaker 5: is a signatory here, so this all goes back to
Speaker 5: that statement. Remember with Mike Turner, the Chair of the
Speaker 5: Intelligence Committee last week, we had no idea what he
Speaker 5: was talking about, and you wonder if this would be
Speaker 5: public if he hadn't done that.
Speaker 4: Well, that's an excellent question. Of course, the call from
Speaker 4: the Chair of the Intelligence Committee was for the White
Speaker 4: House to declassify information related to an unspecified threat. Of course,
Speaker 4: that forced the White House to get a little bit
Speaker 4: more specific about what the threat really is, and we
Speaker 4: know that this technology theoretically is supposed to be an
Speaker 4: anti satellite weapon, something that could be disruptive to all
Speaker 4: of the thousands of that are up there orbiting in
Speaker 4: outer space. As you say, Joe, but really just fascinating
Speaker 4: to see this story unfold. We weren't talking about this
Speaker 4: at all until about a week ago. So for more
Speaker 4: on this story, now, let's bring in Larry Liebert. He
Speaker 4: is an editor on our National Security Team and is
Speaker 4: joining us on the phone, So Larry, realistically, we could
Speaker 4: be dealing with a pretty short timeline here. Even though
Speaker 4: President of Russia Vladimir Putin earlier today says he does
Speaker 4: not want to use a weapon like this.
Speaker 6: Yeah, he said Russia is categorically against it. But you
Speaker 6: know he also has been saber rattling someone on his
Speaker 6: nuclear arsenal during the Ukraine War. So not everybody takes
Speaker 6: his assurance as encouraging. Our reporters, Albert Others, Deli, Jeffer Jacobs,
Speaker 6: Katrina Manson broke the story that the US has told
Speaker 6: the allies that Russia could deploy a nuclear weapon or
Speaker 6: a mock warhead which would at least cause as much
Speaker 6: confusion into space during this year. That's a timeline that
Speaker 6: hasn't been reported before. And the question is that there's
Speaker 6: been much confusion about this. Is everybody, including present body,
Speaker 6: and they said, this isn't a new grow weapony in
Speaker 6: space that would be shot at people on Earth. It
Speaker 6: could though if it's up there, it's up there as
Speaker 6: soon as this year, as it's for real, and Russia
Speaker 6: chose to use it, could knock out satellite communications of
Speaker 6: all sorts. It would be catastrophe because there are so
Speaker 6: many satellites we all depend on, even GPS.
Speaker 5: That's for sure. And Larry makes such a great point.
Speaker 5: We could be talking about a phony warhead for all
Speaker 5: we know. There's so much noise and misinformation coming out
Speaker 5: of Moscow that it's hard to really be specific about
Speaker 5: what we're talking about here, Kaylee. But Larry, this will
Speaker 5: be a big deal when the G seven Foreign ministers
Speaker 5: meet in Italy in April. This will be top of
Speaker 5: the agenda, won't it.
Speaker 6: Oh well, I think so. I think it's going to
Speaker 6: hover over all the bates, including debates over Russia's attentions
Speaker 6: in the Ukraine War, the questions about the EU and
Speaker 6: US support for NATO, all of these things tied together.
Speaker 6: Of course. I would say some conservative Republicans in Congress
Speaker 6: has said perhaps that there's some scare mongering going on
Speaker 6: here to have yet another dimension of reasons not to
Speaker 6: trust and to act against Russia. But it's certainly going
Speaker 6: to be an issue at front of mine.
Speaker 4: Well, Larry, you mentioned the question around the future of
Speaker 4: US support for Ukraine, whether or not Congress is actually
Speaker 4: going to pass billions of dollars in additional aid Joe
Speaker 4: and I were speaking with former Defense Secretary Leon Panetta
Speaker 4: just last week, who essentially told us, if Congress doesn't
Speaker 4: do that, President Biden needs to be looking at every
Speaker 4: possible option to continue aiding Ukraine. What real options are there.
Speaker 4: If it's not, that's Congress.
Speaker 6: It's a real good quest. Then Understandably, our sources and
Speaker 6: those of other folks at the Pentagon and in the
Speaker 6: White House aren't eager to spell out any last gas
Speaker 6: or desperate measures they could take. You know, there's been
Speaker 6: talk of US allies in Europe paying to buy and
Speaker 6: then replace weapons from the US Arsenal, which would really
Speaker 6: put the US into a bigger position. They could continue
Speaker 6: to send certain weapons from US doock piles, but with
Speaker 6: no guarantee to replace them. It really raises questions about
Speaker 6: the US readiness in Asia, for Taiwan and elsewhere. And
Speaker 6: so they really are holding firm and they even if
Speaker 6: they developed some workarounds, the situation is urgent from the
Speaker 6: perspective of Ukraine, and there's no way to do billions
Speaker 6: of dollars in weapons without Congress acting.
Speaker 4: All right, Bloomberg's Larry Liebert, thank you so much for
Speaker 4: joining us on the breaking news that crossed this hour.
Speaker 5: Yeah, we add another one here, and just the ridiculous
Speaker 5: number of stories that we're following only four days out
Speaker 5: from South Carolina. Arguably the top political story today, Kyley,
Speaker 5: But it's pretty hard to make those calls on a
Speaker 5: daily basis lately with so much noise. This is huge
Speaker 5: though for Nicki Haley, it's huge for Donald Trump. And
Speaker 5: we have new numbers today, in fact, a couple of
Speaker 5: polls and one specifically we're looking at from Suffolk University,
Speaker 5: USA today, who were just absolutely great in Iowa and
Speaker 5: New Hampshire. That's of course polstered David Paleologos, who we
Speaker 5: want to talk to here. Donald Trump leading Nicki Haley
Speaker 5: in her home state by almost two to one. It's
Speaker 5: sixty three percent to thirty five percent. Remarkable numbers for
Speaker 5: this stage of the campaign. And we do turn to
Speaker 5: David Paleologo. He is the director of the Suffolk University
Speaker 5: Political Research Center. David, this is shut down. Your poll
Speaker 5: agrees with a lot of other polls that we've seen
Speaker 5: in the last couple of weeks where Nikki Haley couldn't
Speaker 5: possibly win her home state.
Speaker 7: How bad is this going to look?
Speaker 8: Well, we never say impossible, as you know, we say
Speaker 8: highly improbable. But it doesn't look good at all. I mean,
Speaker 8: this is just awful for her inner home state, two
Speaker 8: term former governor of South Carolina, you know, worse than
Speaker 8: Iowa for her, worse than New Hampshire. And if these
Speaker 8: if this margin holds up, I mean there's some polls
Speaker 8: out there that have it twenty twenty two. Others have
Speaker 8: it in the thirties. I think the twenty eight number
Speaker 8: is pretty close. We'll see what happens on election day.
Speaker 8: But again, and you know, South Carolina, like New Hampshire,
Speaker 8: anybody can vote, so obviously, Nicki Haley is winning big
Speaker 8: among Democrats provided they didn't vote the Democratic primary, and
Speaker 8: winning comfortably among dependents, but getting crushed among those who matter,
Speaker 8: which are registered voters who see themselves as Republicans.
Speaker 4: Well, and then when you break down the demographics within
Speaker 4: that group of voters, David, it doesn't look like she's
Speaker 4: winning any of them. Former President Trump holds double digit
Speaker 4: advantages among men and women in every age group, among
Speaker 4: both high school graduates and those with a college degree,
Speaker 4: So there is no demographic within the Republican Party that
Speaker 4: Haley is winning outright, right.
Speaker 8: Well, there's two that she's winning. I would say one,
Speaker 8: she's winning within the margin of era, but there are two.
Speaker 8: One is those people are political ideology moderate to liberal.
Speaker 8: She's winning a by about twenty points fifty nine thirty
Speaker 8: eight among that particular group. And also she's winning comfortably
Speaker 8: by more than that among people who say that the
Speaker 8: future of American democracy is the top issue. Now, future
Speaker 8: American democracy was not number win issue, was the number
Speaker 8: three issue. So that doesn't get her very far as
Speaker 8: the number three the issue. And Trump was winning by
Speaker 8: over fifty points among people who said immigration was the
Speaker 8: most important issue, that was the top issue. And secondly,
Speaker 8: he was winning by almost thirty five points among second
Speaker 8: most important issue, which is the economy. So very little
Speaker 8: wiggle room, if you will. She needs a massive influx
Speaker 8: of moderates, liberals Democrats to storm the polls on Saturday.
Speaker 8: But again, from what we can see in terms of
Speaker 8: who made it through the screen about being either a
Speaker 8: very likely voter on Saturday or somebody who had already voted,
Speaker 8: you know, PROMP is poised for a big win.
Speaker 5: David Nikki Haley delivered a state of the race speech
Speaker 5: today in Greenville, and she opened it by announcing that
Speaker 5: she was not dropping out, and which would really give
Speaker 5: you a sense of where we are. But she said
Speaker 5: more than that. Listened to Nikki Haley from earlier today.
Speaker 9: Of course, many of the same politicians who now publicly
Speaker 9: embrace Trump privately dread him. They know what a disaster
Speaker 9: he's been and will continue to be for our party.
Speaker 9: They're just too afraid to say it out loud. Well,
Speaker 9: I'm not afraid to say the hard truth out loud.
Speaker 5: Would have made a difference, David Paleologos if she said
Speaker 5: the hard truth's out loud earlier and is she arguably
Speaker 5: doing damage to her brand now knowing that she needs
Speaker 5: to convince Trump voters if she's going to get anywhere.
Speaker 8: You know, I don't usually do a lot of commentary
Speaker 8: on races like this, but I really do agree with you.
Speaker 8: I don't understand it. I think if she had got
Speaker 8: out endorsed him today wholeheartedly, I think she could maybe
Speaker 8: make the case that she helped deliver a big win
Speaker 8: for Trump in her home state of South Carolina, in
Speaker 8: potentially setting herself up for a Bible twenty twenty eight
Speaker 8: run or twenty thirty two run. But this just seems
Speaker 8: just so ill prepared and hopeless to me if you're
Speaker 8: not showing up in those early primaries and caucuses in
Speaker 8: any way, it's like my class. You have to show
Speaker 8: up in my class and participate to get points four
Speaker 8: points every class. The student doesn't show up those first
Speaker 8: four classes, they're already down sixteen points to the other
Speaker 8: students who have to. And so then how does that
Speaker 8: student justify getting an A in the class? You know,
Speaker 8: no matter how much extra credit they do, no matter
Speaker 8: how well they ace these other metrics in my class.
Speaker 8: And there's no way that she's going to ace any
Speaker 8: states if she can't win her home state. I mean,
Speaker 8: Michigan comes three days later. You know you have got
Speaker 8: the primary and then the Michigan caucus because they you know,
Speaker 8: they have that split up, and you've got other races.
Speaker 8: And on Super Tuesday, even in Massachusetts, I thought she
Speaker 8: had a chance in Massachusetts to potentially pull an upset,
Speaker 8: and she's double digit. She's down in Massachusetts even with
Speaker 8: sixty percent Independence and Tempest are Republicans.
Speaker 4: Yeah, have a tough picture, but we always appreciate you
Speaker 4: joining us. David Pelielogus, Suffolk University Political Research Center Director,
Speaker 4: thank you for your time, and as he talks about
Speaker 4: attendance in his class, it also raises the turnout question, Joe,
Speaker 4: how many people are going to show up and actually
Speaker 4: cast a vote in the primary when his poll shows
Speaker 4: that more voters are more enthusiastic to cast a ballot
Speaker 4: for Trump.
Speaker 5: I think I would have failed David's class. I think
Speaker 5: I would have gotten out to vote. Okayley, this is Bloomberg.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast kens
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Speaker 5: Thirty, Pick your poll. They tell the same story. Today
Speaker 5: Emerson's out with numbers from the Hill, Suffolk is out
Speaker 5: with numbers. They ran with USA today, we saw Winthrop.
Speaker 5: We've been through a couple of these in South Carolina, Cayley.
Speaker 5: They all tell the same story.
Speaker 4: Which is that Nicki Haley is going to lose, at
Speaker 4: least if the polls are correct, pretty badly to Donald
Speaker 4: Trump four days from now in the South Carolina primary.
Speaker 4: That said, Nicki Haley says the outcome doesn't matter. She's
Speaker 4: sticking around for the time being. And also, interestingly, Joe,
Speaker 4: as we hear her sharpening her criticism of Donald Trump,
Speaker 4: the front runner, as we have gotten further into this
Speaker 4: primary cycle, she also says that essentially right now, she's
Speaker 4: just saying the quiet part loudly. Listen to some of
Speaker 4: what she said in her state of the race speech
Speaker 4: in South Carolina earlier today.
Speaker 9: Of course, many of the same politicians who now publicly
Speaker 9: embraced Trump privately dread him. They know what a disaster
Speaker 9: he's been and will continue to be for our party.
Speaker 9: They're just too afraid to say it out loud. Well,
Speaker 9: I'm not afraid to say the hard truth out loud.
Speaker 4: So joining us now for more on this here with
Speaker 4: me in our Washington, d C studio as Bloomberg National
Speaker 4: politics reporter Nancy Cook. So, Nancy, it's worth pointing out
Speaker 4: here that Nikki Haley hasn't essentially been saying this out
Speaker 4: loud for the entirety of this race. It's pretty new
Speaker 4: in fact, that she's saying some of these things about
Speaker 4: the former president. Is it too little, too late for her?
Speaker 10: I mean kind of yes. I mean she really has
Speaker 10: decided to thank Traumond directly. Really just in the last
Speaker 10: month or so before that she was very cautious, and
Speaker 10: this fall we saw that she was very cautious. I
Speaker 10: think at this point she is just trying to set
Speaker 10: up a contrast between her and the former president. And
Speaker 10: I think that, honestly, what we're seeing here is her
Speaker 10: playing a much longer game about you know, if there
Speaker 10: is some sort of healthcare or the former presidents legal
Speaker 10: troubles catch up with him, she will be the alternative.
Speaker 10: But we are really expecting him at this point to
Speaker 10: clinch the nomination, probably by the third week of March.
Speaker 5: Hey, Nancy, it's good to see you. I wonder when
Speaker 5: we talk about the psychological impact, if it's just impossible
Speaker 5: to know what that will be following South Carolina this weekend, because,
Speaker 5: as we've been discussing for days and weeks now, the
Speaker 5: conventional wisdom is Nicki Haley just kind of hangs out
Speaker 5: for the spring in summer and waits to see if
Speaker 5: something goes wrong with the Trump campaign. But what about
Speaker 5: twenty twenty eight, What about her future career if it
Speaker 5: doesn't work out in this campaign, there's a loss that bad,
Speaker 5: A thirty point loss in your home state keep you
Speaker 5: from doing other things in the future based on the
Speaker 5: message that you're sending the embarrassment that comes with it.
Speaker 10: Not at all. I think that that will be a
Speaker 10: big part of what she'll do. I think that she will,
Speaker 10: you know, is really positioning herself to run in twenty
Speaker 10: twenty eight. She will have been the last Republican standing
Speaker 10: against Donald Trump. And you have to remember that if
Speaker 10: Trump loses to Biden in the general election, which is
Speaker 10: months away, Nikki Hilly can say I told you so.
Speaker 10: You know, she's also in her early fifties. She's so
Speaker 10: much younger than Trump and Biden, and I think that
Speaker 10: she has like a long political life left in her.
Speaker 10: So I think part of this is also positioning for
Speaker 10: twenty twenty eight. I think Governor Ronda Santas of Florida
Speaker 10: is doing the same thing. He just announced he's going
Speaker 10: to be in South Carolina tomorrow. So I think that,
Speaker 10: you know, everybody who dropped out is really trying to say, hey,
Speaker 10: hold on, I'll be there in four years.
Speaker 4: Well, of course, Fernicki Haley as well. We have to
Speaker 4: consider that she does have the resources to keep this
Speaker 4: up for a while. She's continued to pull in money
Speaker 4: from donors. When she was speaking in South Carolina earlier,
Speaker 4: I was watching some of her remarks, it was notable
Speaker 4: she actually got choked up when talking about her husband, Michael,
Speaker 4: who is currently deployed to Africa, her second deployment. She
Speaker 4: says she was speaking about how hard it is on
Speaker 4: them as a military family when Donald Trump has effectively
Speaker 4: questioned where her husband is at times. She says it's
Speaker 4: disrespectful of military members and military families. Given South Carolina
Speaker 4: is a pretty military heavy state. Are we expecting that
Speaker 4: to have an impact come primary day?
Speaker 10: I think it could have an impact. I mean just
Speaker 10: with people who don't already like Trump. I think Trump
Speaker 10: is going to hold on to that thirty percent base
Speaker 10: of the Republican Party who really likes him no matter what.
Speaker 10: But I think that there is an opportunity for Nikki
Speaker 10: Haley to pick off voters who are college educated in
Speaker 10: some of these wealthier areas of South Carolina. And so
Speaker 10: that's what I will be looking for, not just like
Speaker 10: what is the margin between those two with the primary,
Speaker 10: but also what types of voters does she end up
Speaker 10: appealing to in South Carolina.
Speaker 5: Hey, Nancy, We're going to talk later on this hour
Speaker 5: with our political panel about Joe Biden's fundraising prowess. He's
Speaker 5: on his way to a week on the West coast
Speaker 5: raising money in California, but ahead of the deadline, he's
Speaker 5: reporting forty two million dollars for the campaign and the DNC.
Speaker 5: He ends January with one hundred and thirty million dollars
Speaker 5: in the bank for his re election effort. Joe Biden
Speaker 5: is winning the fundraising wars here is he not?
Speaker 8: He is?
Speaker 10: And I talked to a bunch of donors after that
Speaker 10: Special Council report that raised questions about his age, and
Speaker 10: a bunch of Democratic donors said, look, you know, we
Speaker 10: think that he has been a good president and as
Speaker 10: long as Trump is on the ticket, we will keep
Speaker 10: funding Biden. It's not so much like a gift to
Speaker 10: Biden or a full vote of confidence in himself as
Speaker 10: it is a donation to just an anti Trump coalition.
Speaker 10: These Democratic donors do not want Trump to be president again,
Speaker 10: and they were they are willing to keep, you know,
Speaker 10: funding Biden's bid because they're just freaked out by that.
Speaker 10: And we've seen he's had a lot of success with
Speaker 10: fundraising in New York, on the West Coast, in Florida.
Speaker 10: You know, fundraising has not been a problem for the
Speaker 10: Biden campaign.
Speaker 5: Well, that's for sure, and we're going to hear about
Speaker 5: the others coming up in short order, whether it's the
Speaker 5: Trump campaign or the party's Nancy Cook. Great to see you,
Speaker 5: great reporting as always, Bloomberg Senior national political correspondent. Find
Speaker 5: Nancy on the terminal and at Bloomberg dot com. Kayleie,
Speaker 5: This of course is a huge story going into South Carolina.
Speaker 5: But immediately after that, we're going to turn our focus
Speaker 5: to Super Tuesday. And here in Washington, there's still a
Speaker 5: conversation about geopolitics, about funding our allies abroad that has
Speaker 5: yet to be resolved. In fact, it's very much up
Speaker 5: in the air after lawmakers went home for two weeks
Speaker 5: without crafting a budget, without passing aid for Ukraine, Israel,
Speaker 5: or Taiwan.
Speaker 8: Yeah.
Speaker 4: Absolutely, and Joe, that is something that the current incumbent President,
Speaker 4: Joe Biden, is keenly aware of. He's putting a lot
Speaker 4: of pressure on Congress in recent days, especially in light
Speaker 4: of the developments of recent days, to pass Ukraine ad
Speaker 4: that aid that he essentially says is badly needed. Just
Speaker 4: take a listen to the president over the weekend.
Speaker 3: Mistake not respond. Look the way they're walking away from
Speaker 3: the thread of.
Speaker 11: Russia, the way they're walking away from NATO, the way
Speaker 11: they're walking away from being our operatation.
Speaker 3: He the discs of shocking.
Speaker 11: I've been for a while, I've.
Speaker 5: Never seen any like this president as he was leaving
Speaker 5: the White House, as Kayleie mentioned over the weekend, we've
Speaker 5: heard this line from him a couple of times, calling
Speaker 5: it bizarre that they would leave town. Remember his news
Speaker 5: conference at the end of last week. We had the
Speaker 5: voice now of Jim Gilmour, the former governor of Virginia
Speaker 5: is with us, former ambassador to the Organization for Security
Speaker 5: and Cooperation in Europe and former chair of the r NC. Governor,
Speaker 5: it's great to see you. Welcome back to Bloomberg. What's
Speaker 5: going to happen when lawmakers come back to town and have
Speaker 5: already spent a couple of weeks at home hearing from
Speaker 5: voters on this watching headlines from Ukraine as areas fall
Speaker 5: to the Russians. Will there be a different feel in
Speaker 5: the air.
Speaker 12: Well, I don't know, but I know there should be.
Speaker 11: I think it's apt the urgent that the Ukraine financing pass.
Speaker 11: All the false narratives that have been out there about
Speaker 11: how we have to look out to our border and
Speaker 11: we can't look after the Ukrainian border, these are all
Speaker 11: false messages. Some of them are being created by the
Speaker 11: Russians in order to try to work on the minds
Speaker 11: of the American people and to destroy our resolve. It's
Speaker 11: absolutely essential that this Ukrainian support passed. And I might
Speaker 11: say to you, Joe, that this is a failure of
Speaker 11: national leadership everywhere. We're not seeing the national leadership anywhere
Speaker 11: to completely explain to the American people the truth and
Speaker 11: how absolutely vital this war in Ukraine is to the
Speaker 11: safety of the United States of America. We're not seeing
Speaker 11: it out of the Congress, we're not seeing it out
Speaker 11: of the Senate, we're not seeing it out.
Speaker 12: Of the Presidency. This has to happen.
Speaker 11: It has to happen, and there has to be an
Speaker 11: explanation as to why. And you have to explose some
Speaker 11: of these false rumors and myths that are being put
Speaker 11: out there to try to destroy American resolveleadership.
Speaker 4: Well, you say that Russia maybe behind some of these
Speaker 4: rumors and myths, but are they not being propagated by
Speaker 4: certain Republicans, including the Republican front runner for the presidency,
Speaker 4: Donald Trump, who has the ear of Speaker Mike Johnson.
Speaker 11: Well, I can say this, when I was the ambassador
Speaker 11: in Vienna on behalf of the United States in the
Speaker 11: Trump administration, Nobody in the Trump administration ever told me to.
Speaker 12: Let up on the Russians. And I don't.
Speaker 11: Foresee that when President Trump is reelected again that he's
Speaker 11: going to back away from NATO or back away from
Speaker 11: anybody else. I think American leadership was stronger then than
Speaker 11: it is now. But Kaylee, I want to repeat my message.
Speaker 11: We're seeing a failure of leadership everywhere by everybody. The
Speaker 11: American people are entitled to know the truth, and the
Speaker 11: truth is that this is vitally important to America's safety
Speaker 11: and national security for the future.
Speaker 5: Well, let's get to what else should be done here, then.
Speaker 5: Governor Joe Biden has delivered a couple of speech is
Speaker 5: one of them in prime time from the Oval Office
Speaker 5: to speak to the dangers around the world, the risks
Speaker 5: that we face, and the need to help to fund
Speaker 5: our allies, whether it be in Ukraine, Israel, or Taiwan.
Speaker 5: We understand that there's a very different conversation that's been
Speaker 5: having in the House of Representatives. We even heard Donald
Speaker 5: Trump say a couple of weekends ago that he would
Speaker 5: let Russia and his words, do whatever the hell it
Speaker 5: wants to our allies who don't meet spending goals in NATO,
Speaker 5: this does seem to be two different conversations.
Speaker 11: Now, oh yeah, Look, I think that what the President
Speaker 11: Trump is doing is putting pressure on the NATO allies
Speaker 11: to step up to the plate. My report to you
Speaker 11: is the truth, though, which is they are stepping up
Speaker 11: to the plate, and largely because our President Trump's pressure
Speaker 11: when he was president, and I think these statements that
Speaker 11: he's making now are intended to do that. But the
Speaker 11: key point is that American leadership is necessary, and we
Speaker 11: do lead, and people look to us for leadership and
Speaker 11: it has to happen. But right now I think we're
Speaker 11: not seeing the proper messaging out of Washington by anybody.
Speaker 4: Well, and that messaging or lack thereof, certainly is noticed
Speaker 4: received by our allies. Of course, we saw the Munich
Speaker 4: Security Conference happening in recent days where a lot of
Speaker 4: American allies expressed concern about the direction of the conversation here. Domestically,
Speaker 4: what it could mean for the future of alliance, is
Speaker 4: the future of US participation and support for allies in Europe.
Speaker 4: What should they be thinking of the United States at
Speaker 4: this moment? Are there concerns not founded in real threat?
Speaker 11: Listen, the real threat is certainly there. This is a
Speaker 11: Russian fascist dictatorship that is committing aggression. I have to
Speaker 11: talk about navioliny for a second. This is a murder
Speaker 11: putent principal leader. Whether he was frozen to death in
Speaker 11: the Arctic gradually and starved to death or submitted to illness,
Speaker 11: or whether he was directly accelerated in a murder through
Speaker 11: some type of activity up there in that remote place.
Speaker 11: That's an important message to the people of Russia, to
Speaker 11: the people of Europe, and it ought to be an
Speaker 11: important message to the people of the United States that
Speaker 11: this is what's in our future if we don't step
Speaker 11: up and do something right now.
Speaker 12: But you're right about this.
Speaker 11: The messaging I think needs to be strong are European allies.
Speaker 12: I worked with him every day while I was in
Speaker 12: the on behalf of the United States.
Speaker 11: Their best interest for their citizens all across Europe is
Speaker 11: to follow American leadership. If American leadership falters, they will
Speaker 11: do the best they can for their citizens, just like
Speaker 11: we do for our citizens. And that means that there's
Speaker 11: risk up the road that they'll compromise.
Speaker 12: We can't allow that to happen.
Speaker 11: Russia cannot succeed in this attempted conquest and the subject
Speaker 11: and subjugation of Ukraine trying to reassemble the Russian Empire.
Speaker 11: If he does that, he threatens Europe and eventually that
Speaker 11: ret in the United States of America.
Speaker 5: Would it have helped Governor if Donald Trump, the former president,
Speaker 5: in his statement about the death of Alexi Navalny, had
Speaker 5: in fact condemned Vladimir Putin, It didn't even mention his name.
Speaker 12: Well, I'm certainly doing it.
Speaker 11: I mean, I think that right now that all of
Speaker 11: our national leadership needs to be as vigorous and strong
Speaker 11: on this as possible and explode some of these myths. Listen,
Speaker 11: we have a right to know that the money the
Speaker 11: taxpayers sent to Ukraine is being properly spent, and that
Speaker 11: means that that information has to be shared. Do z
Speaker 11: Lenski administration has to be it pains to get that
Speaker 11: information to the American taxpayer if he wants the taxpayer money.
Speaker 11: It means that the national leadership from the White House
Speaker 11: has got to be explicit about addressing these issues. You
Speaker 11: have to explain that the American border is important, but
Speaker 11: it's really a different issue from Russian aggression in Europe.
Speaker 12: America is a great power.
Speaker 11: We can do all of these things appropriately, but it
Speaker 11: requires leadership both internationally.
Speaker 12: And you're in the United States, all.
Speaker 4: Right, Ambassador Gilmore, thank you so much for joining us.
Speaker 4: Always great to get your insight. Is the former United
Speaker 4: States Ambassador to the Organization for Security and Cooperation and Europe,
Speaker 4: and of course also former governor of Virginia and former
Speaker 4: RNC chair. Quite a moment we are in as we
Speaker 4: hear the ambassador talking of grave geopolitical risk, and yet
Speaker 4: Congress it's unclear whether or not they want to do
Speaker 4: anything about it. We'll have more coming up for you
Speaker 4: next on Balance of Power on Bloomberg TV and radio.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast.
Speaker 2: Catch just live weekdays at noon Eastern on Apocarplay.
Speaker 3: And then Broudo with the Bloomberg Business App.
Speaker 2: Listen on demand wherever you get your podcasts, or watch
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Speaker 5: Welcome to the Tuesday Feels Like Monday edition of Balance
Speaker 5: of Power. I'm Joe Matthew at World Headquarters in New York,
Speaker 5: Kayley Lines at Bloomberg's Washington Bureau. Political news is funny, Kayley,
Speaker 5: It's not always what the headline says. We spent the
Speaker 5: whole weekend talking about Donald Trump's four hundred dollars gold sneakers,
Speaker 5: and he knows how to plant this story right. I
Speaker 5: don't know if you've got your pre order, and it
Speaker 5: was it was Joe Biden's fundraising though. That was the
Speaker 5: real news.
Speaker 4: Yeah, because he's done a lot of it. In the
Speaker 4: month of January. Joe forty two million dollars has been
Speaker 4: pulled in for his reelection campaign and the Democratic Party
Speaker 4: more broadly.
Speaker 3: So.
Speaker 4: He ended January with one hundred and thirty million dollars
Speaker 4: in the war chest. That's pretty significant, actually a record
Speaker 4: amount for a Democratic candidate at this point in the calendar.
Speaker 5: That's for sure. It's one of the reasons why of
Speaker 5: the primary reason why he's in California this week as well,
Speaker 5: because Joe Biden is in fund raising mode and Kaylee,
Speaker 5: we spent all last week talking about how much money
Speaker 5: Donald Trump is spending on attorneys. He, for what it's worth,
Speaker 5: has not put up his numbers yet. When we get
Speaker 5: to the deadline, we'll see them. But he's likely to
Speaker 5: run out of cash because of all that the court
Speaker 5: cases by July, as Joe Biden continues to put checks
Speaker 5: in the bank. It's a pretty interesting phenomenon.
Speaker 4: Indeed, as we're thinking that Trump is going to have
Speaker 4: to pay out more than four hundred and million dollars
Speaker 4: in damages to Egene Carroll and then the state of
Speaker 4: New York for those two civil trials, and then you
Speaker 4: have to pay all your attorneys. And he spent more
Speaker 4: than fifty million dollars in campaign funds doing that in
Speaker 4: twenty twenty three. So definitely a difficult financial picture for
Speaker 4: the former president. For the incumbent president, though maybe a
Speaker 4: better one. The question is can you put all that
Speaker 4: money to use to actually benefit in a race where
Speaker 4: a lot of polls show you behind Donald Trump at
Speaker 4: this point. So on that note, let's bring in Bloomberg
Speaker 4: Politics contributor Genie Shanzeno alongside Lisa Kumuso Miller, former RNC
Speaker 4: communications director and of course host of the Friday Reporter podcast.
Speaker 4: So Genie, first to you, what's all the money worth
Speaker 4: if it's not deployed appropriately? Is the Biden campaign doing
Speaker 4: a good enough job right now of spending it?
Speaker 13: Yeah, you know they have time, They're going to be
Speaker 13: spending it. What they're doing right now is this fundraising machine. Essentially,
Speaker 13: it has been a jugger, not, as you said, the
Speaker 13: most we've seen out of a Democratic candidate at this point.
Speaker 13: This is the biggest hall since April of last year.
Speaker 13: And there's one number in particular that stands out. Ninety
Speaker 13: seven percent of these donations were under two hundred dollars.
Speaker 13: That is very, very impressive for the campaign. These are
Speaker 13: not just all big time big funders. These are small
Speaker 13: money donations. And also to add to that, the fact
Speaker 13: that they raised in the three days after Iowa a
Speaker 13: million dollars per day. That speaks to where this money
Speaker 13: is coming from. And Nancy Cook said it earlier. A
Speaker 13: lot of this is coming not necessarily because people are
Speaker 13: so excited about Joe Biden, although they may get there
Speaker 13: as we move forward, but because of Donald Trump looking
Speaker 13: like he is going to be the nominee of the
Speaker 13: Republican Party and a real intent the part of people
Speaker 13: funding the Democrats to stop that. And so they are
Speaker 13: out there doing the hard work now of raising the
Speaker 13: money and then to your point, they're gonna have to
Speaker 13: spend it wisely.
Speaker 5: Well, we promise context here at Bloomberg, and it's worth
Speaker 5: throwing some on this particular story here, just to reset
Speaker 5: what Kayley mentioned, forty two million dollars in January for
Speaker 5: the Biden campaign and the DNC. That means one hundred
Speaker 5: and thirty million in the bank. Now, that actually still
Speaker 5: trails what Donald Trump and the RNC had in the
Speaker 5: bank in twenty twenty, not so much this time. The
Speaker 5: RNC started the year with over eight million dollars cash
Speaker 5: on hand, and Donald Trump hasn't put up his numbers yet.
Speaker 5: Here he was coming in with thirty three million dollars.
Speaker 5: They will have their totals up for January. Context, Lisa
Speaker 5: formerly of the RNC, You understand how this works. What
Speaker 5: are the conversations like inside the halls and the offices
Speaker 5: at the Republican National Committee knowing how much money is
Speaker 5: going to Donald Trump's lawyers.
Speaker 14: Well, you know, Joe, it's really hard to compare. It's
Speaker 14: like comparing apples to oranges, because when I was at
Speaker 14: the RNC, there was a bit of a different structure
Speaker 14: in the way that this the financing was happening, right,
Speaker 14: And there are so many other third party groups that
Speaker 14: are involved in all of this that it's hard to
Speaker 14: really sort of compare the two. But what I will
Speaker 14: say is that the party itself is on the verge
Speaker 14: of transition. There's no question about it. Anytime a nominee
Speaker 14: is getting ready to come into their own and be
Speaker 14: at least the incumbent or the one that is going
Speaker 14: to be the candidate that will run for the platform,
Speaker 14: it's time for a change. And I suspect that is
Speaker 14: what's going to happen at the RNC, And sometimes breathing
Speaker 14: new life into the RNC, into the political parties does
Speaker 14: reignite sort of the interest and the fundraising piece of that.
Speaker 14: The one segment that's sort of different that we really
Speaker 14: can't even sort of factor in because it's also brand new,
Speaker 14: is all of these extra expenses, the legal expenses to
Speaker 14: your point, So I think what we're going to have
Speaker 14: to watch is sort of how that all unfolds. The
Speaker 14: one thing I'll say, though, is that what's different about
Speaker 14: these rulings and what's different about Donald Trump is that
Speaker 14: he is someone that knows how to leverage one item
Speaker 14: over another.
Speaker 11: Right.
Speaker 14: He is someone who has very often figured out how
Speaker 14: the system works, and he has used it to his
Speaker 14: advantage to raise more money on the business side.
Speaker 8: So I suspect he's looking.
Speaker 14: For all of those angles on political side as well.
Speaker 14: The one thing I'll say for certain is that this
Speaker 14: is going to be the most expensive presidential race we
Speaker 14: will see in our history in our lifetime. They're going
Speaker 14: to set records this year, and so that's sort of
Speaker 14: indicative of what we're seeing on the Democrat side. The
Speaker 14: most money in a war chest for an incumbent president
Speaker 14: on the Democrat side, and I suspect that the money
Speaker 14: is going to continue to pour in for Donald Trump
Speaker 14: as well. And obviously he's using resources and different means
Speaker 14: like selling four hundred dollars shoes to make that happen.
Speaker 4: Yeah, that's absolutely true. But Lisa, to your point of
Speaker 4: about how there are all of these other factors, like
Speaker 4: his legal fees at play.
Speaker 12: Now.
Speaker 4: I wonder if ultimately everything turns out fine for the
Speaker 4: financing of Donald Trump and his presidential bid, what suffers,
Speaker 4: perhaps is every Republican down the ballot who isn't going
Speaker 4: to be able to tap into RNC resources at a
Speaker 4: time when the Democratic Party may have more resources to
Speaker 4: go around. Is that really where we're going to see
Speaker 4: the impact here, not at the presidential level, Lisa, but
Speaker 4: for everybody else who's trying to get a piece in.
Speaker 3: The buy ale.
Speaker 14: It's hard to know because there are other fundraising operations
Speaker 14: within the political structure, right There's the National Republican Congressional Committee,
Speaker 14: There's the Senate Committee. There are lots of other political
Speaker 14: arms that are also doing some tremendous fundraising, and that
Speaker 14: fundraising is sort of operated not necessarily from the top
Speaker 14: of the ticket, but from the top of the US Senate,
Speaker 14: so through Mitch McConnell and his political operation, as well
Speaker 14: as Mike Johnson, who is also raking in millions and
Speaker 14: millions of dollars. There's been a lot of support for
Speaker 14: him over the course of the last few weeks, since
Speaker 14: he started just six weeks ago, so some of that,
Speaker 14: I think as much as there may be impact down ballot,
Speaker 14: I think more often than that, what we will end
Speaker 14: up seeing is that people will be making choices about
Speaker 14: where they're sending their money, whether it's to the RNC
Speaker 14: or if it's to the other political operations within the
Speaker 14: structure of the political parties.
Speaker 5: Genie, we need to talk about Michigan. This is not
Speaker 5: being widely reported because Joe Biden's going to win the primary.
Speaker 5: It's a week from today. By the way, we're obsessing
Speaker 5: over South Carolina. Michigan's a week from today, and there's
Speaker 5: a movement to get Democrats to vote uncommitted next week.
Speaker 5: This is a movement that has the backing of Congresswoman
Speaker 5: Rashida Talib. There's a separate abandoned Biden campaign launched by
Speaker 5: Muslim voters who formally backed Joe Biden. Without the Arab
Speaker 5: American Muslim American vote, he would have lost Michigan in
Speaker 5: twenty twenty, Genie, And because of what's happening right now
Speaker 5: in Gaza, he could lose them this time around what
Speaker 5: happens in Michigan next week.
Speaker 13: Yeah, it's got to be a big concern to the campaign.
Speaker 13: I mean the idea that you have a Democrat in
Speaker 13: Rashida to Lee urging Democrats in her home state to
Speaker 13: vote uncommitted against an incumbent president. You know, that is
Speaker 13: very unusual, but I think it speaks to your point
Speaker 13: about what a big issue this war with Moss and
Speaker 13: Israel is domestically. I mean, normally we would say foreign
Speaker 13: policy issues don't play big in presidential campaigns. They usually don't.
Speaker 13: This is something different, particularly on the Democratic side. We're
Speaker 13: gonna have to wait and see what happens in Michigan.
Speaker 13: There is a large population of Jewish Americans as well
Speaker 13: in Michigan. But the impact is real because of course
Speaker 13: Joe Biden won that very narrowly last time around, and
Speaker 13: he needs to get out the vote. I would also
Speaker 13: watch out for people, particularly in the African American community,
Speaker 13: who who have been empathetic to what's happening in Gaza
Speaker 13: and who are looking in particular at people like RFK Junior,
Speaker 13: who is out there talking about issues they care about,
Speaker 13: like the environment. And so you couple those together and
Speaker 13: this is a big challenge for Joe Biden. And you
Speaker 13: know he'll win Michigan, but the question is if we
Speaker 13: see a drop in people turning out, that is a
Speaker 13: warning sign for Democrats.
Speaker 5: Great panel, Great conversation with Genie Shanzano and Lisa Cabuso Miller.
Speaker 5: Great to have you both of you, both of you
Speaker 5: with us. I should say, Kaylee, forgive me for interrupting
Speaker 5: here when we look back to twenty twenty just for
Speaker 5: the context on Bloomberg here, Joe Biden won by one
Speaker 5: hundred and fifty five thousand votes, including the vast majority
Speaker 5: of the states two hundred thousand Muslim voters. That's the number,
Speaker 5: two hundred thousand.
Speaker 4: Yeah, it's a very small number when you think about
Speaker 4: the electorate as a whole, Joe, and it just goes
Speaker 4: to show you how close these swing states are and
Speaker 4: how issues are. This really could matter and interesting to
Speaker 4: have this conversation on a day in which we've just
Speaker 4: seen the United States vetoing a UN Security Council resolution
Speaker 4: to call for an immediate ceasefire in Gaza. Yes, it's
Speaker 4: because the US is trying to continue to pursue a
Speaker 4: diplomatic answer exchange of hostages held by a hamas for
Speaker 4: a sea spire of some period of time, which obviously
Speaker 4: hasn't happened yet, but optimi optically, at least for the president,
Speaker 4: could be pretty difficult.
Speaker 5: The news today, Kaylee Lines my partner in Washington. I'm
Speaker 5: Joe Matthew at least for this week. At World Headquarters
Speaker 5: in New York.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast kens
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Speaker 1: Just Say Alexa Play Bloomberg eleven thirty. It's not Monday.
Speaker 5: It just feels like one. Welcome to Tuesday in new numbers.
Speaker 5: With four days to go now to the South Carolina primary.
Speaker 5: It seems so far away. So much seemed possible when
Speaker 5: we were in Iowa and New Hampshire. Not so much
Speaker 5: now as I read on the terminal. Nikki Haley vowing
Speaker 5: to stay in the Republican presidential race against Donald Trump
Speaker 5: regardless of the outcome of Saturday's contest. And that's a
Speaker 5: good thing, because she's looking at the same numbers we
Speaker 5: are not good today. Suffolk University, USA today shows those
Speaker 5: among those at least very likely to vote in the
Speaker 5: Republican primary in South Carolina, Donald Trump leads Nicky Haley
Speaker 5: by close to two to one, sixty three percent to
Speaker 5: thirty five percent. Emerson is also out with a poll
Speaker 5: today showing not quite as wide a gap, but a
Speaker 5: slam dunk for Donald Trump. And that's where we start
Speaker 5: our conversation with Gregory Cordy. He's with us from Bloomberg's
Speaker 5: Washington Bureau. Of course, Bloomberg Politics reporter Gregory. We've seen
Speaker 5: remarkable consistency in the numbers, whether it was Winthrop or
Speaker 5: Suffolk or Emerson. Coming out of South Carolina. Nikki Haley
Speaker 5: is gonna lose badly this weekend, is what they're telling us, Right.
Speaker 7: Yeah, if you want to look at the bright side
Speaker 7: for her, she is gaining ground on Trump. Back when
Speaker 7: just half the New Hampshire primary she was trailing by
Speaker 7: thirty points on average. Now if you average out those
Speaker 7: poles that you talked about just now, she's trailing by
Speaker 7: twenty five points. But the problem is the primaries in
Speaker 7: four days, and at this rate, she will overtake Trump
Speaker 7: sometime far in the future when it won't matter anymore.
Speaker 7: And so, yeah, these are discouraging poll numbers for her,
Speaker 7: but she's pledging to soldier on at least through Super Tuesday,
Speaker 7: when frankly, the polls and the party rules are even
Speaker 7: more foreboding for her, because then you get into winner
Speaker 7: take all states, where all Trump needs to do is
Speaker 7: when a bare majority and gets all the delegates, and
Speaker 7: that can those can stack up pretty quickly, and at
Speaker 7: this rate, he could clinch the nomination by early to
Speaker 7: middle of next month.
Speaker 5: Well, that's certainly what the Trump camp thinks, Gregory. As
Speaker 5: Nicky Haley delivers what is being referred to as a
Speaker 5: state of the race speech today in Greenville, she's at
Speaker 5: it right now. Donald Trump's senior advisor on the campaign,
Speaker 5: Chris la Sevita, says, this is done in the next
Speaker 5: four weeks, not who's ahead, who's trailing, like done presumptive.
Speaker 5: We have the delegates. This is the math here. Even
Speaker 5: if Haley reprises her New Hampshire performance in every state
Speaker 5: voting over the next four weeks, the campaign has crunched
Speaker 5: numbers to show that Donald Trump would still cross twelve
Speaker 5: to fifteen twelve hundred and fifteen delegates required on March nineteenth, Gregory,
Speaker 5: that's the day Florida Illinois, Ohio have winner take all primaries.
Speaker 5: Could Nicky Haley, if this really is a campaign in
Speaker 5: waiting for something to go wrong, continue through all of this,
Speaker 5: just hang in there.
Speaker 7: Yeah, she really is waiting for some big game changing moment,
Speaker 7: but it's hard to see where that will come from.
Speaker 7: Of course, former President Trump is facing four different criminal indictments,
Speaker 7: but the trials for those won't start until late next
Speaker 7: month at the earliest, and even those don't seem to
Speaker 7: have much of a sway on Republican voters, who tend
Speaker 7: to rally around him every time he faces these these
Speaker 7: legal challenges. There's just such a big chasm here with
Speaker 7: where the Republican base is now behind Trump and where
Speaker 7: you know, those sort of moderate you know, those more
Speaker 7: moderate liberal Republicans. We might call them traditional Republicans, main
Speaker 7: street Republicans, country club Republicans, whatever you want to call them.
Speaker 7: They still exist in the Republican Party. They still would
Speaker 7: love to find a Republican candidate that they like, certainly
Speaker 7: more than Donald Trump and certainly more than Joe Biden.
Speaker 7: But there's just not enough of them to carve out
Speaker 7: space for Nicki Haley at this point.
Speaker 5: Like we do have an ear Gregory on her speech
Speaker 5: right now. She did player around a little bit when
Speaker 5: she came out there, but not dropping out as some suggested.
Speaker 5: She did acknowledge that right off the top. If you
Speaker 5: have to tell people you're not dropping out in a
Speaker 5: campaign speech, where does that say? What does that say
Speaker 5: about your campaign?
Speaker 8: Now?
Speaker 7: The problem is when you're behind at this stage of
Speaker 7: the race, you have to tell people every day you're
Speaker 7: not dropping out, because the one day that you tell
Speaker 7: people you don't tell people that, people assume you're gonna
Speaker 7: drop out, and then that's where the donor money dries up,
Speaker 7: and that's where things really start to go south. So, yeah,
Speaker 7: she she has to come out and say that she's
Speaker 7: in this for at least the medium term, and that
Speaker 7: includes South Carolina obviously on Saturday, but then also Super
Speaker 7: Tuesday early next month. And in between we have Michigan
Speaker 7: where her campaign just put in seventy one thousand dollars
Speaker 7: in the Detroit market and television advertising. That's not a
Speaker 7: whole lot, but it is laying a marker to say, look, clearly,
Speaker 7: I'm looking beyond South Carolina. And so she has to
Speaker 7: do those kinds of things to at least project that
Speaker 7: this is not a campaign that's going to drop out.
Speaker 7: Because remember that the yardstick that she set for herself
Speaker 7: after New Hampshire, she said, you know, I came in
Speaker 7: a third in Iowa, I came in second in New Hampshire,
Speaker 7: and all I need to do is improve on my
Speaker 7: performance from state to state. She's now moving those goalposts
Speaker 7: to say that she's in it no matter what after
Speaker 7: South Carolina. That's not what she said right after to
Speaker 7: New Hampshire. She needed to improve on New Hampshire to
Speaker 7: stay in it. She's not necessarily saying that in her
Speaker 7: speech in Greenville as we're watching today. Yeah, that's for sure.
Speaker 5: You wonder what a Tim Scott endorsement might have meant
Speaker 5: at this stage, if she was able to wrap that up.
Speaker 5: Of course, Donald Trump got it in New Hampshire. Gregory,
Speaker 5: it's good to see you, and we thank you. He'll
Speaker 5: be of course a part of our coverage here of
Speaker 5: South Carolina primary. It's only four days away. It's not
Speaker 5: looking good for Nicki Haley. But as we keep hearing,
Speaker 5: that just may not matter when it comes to her
Speaker 5: plans staying in the race. Enter Goldman's sacks. It's the
Speaker 5: economy stupid. You want to advance to the general election
Speaker 5: and get a sense of what voters will be basing
Speaker 5: their decisions on. Check this report February fifth. Reading about
Speaker 5: this today a fascinating read on Bloomberg. Wouldn't know about
Speaker 5: it if it weren't on the terminal and at bloomberg
Speaker 5: dot com. This is new research that explores where the
Speaker 5: economy will be when we vote in who that might
Speaker 5: break for. And it finds that President Biden's economy will
Speaker 5: be right around the dividing line that separates winning re
Speaker 5: election campaigns from losing ones. And they've identified about a
Speaker 5: dozen areas here in which they can plant their flag
Speaker 5: and essentially make a prediction. This is fascinating stuff, and
Speaker 5: we knew there was one man to talk to about it.
Speaker 5: Danny Blanchflower is with us, the economist of course at
Speaker 5: Dartmouth College, recipient of the Commander of the Order of
Speaker 5: the British Empire in he put the fishing pole down
Speaker 5: to talk to us for a couple of moments to day.
Speaker 5: Unbalanced the power, mister Blanchflower, It's great to see you either.
Speaker 5: Could anyone in their right mind, could anyone in their
Speaker 5: right mind predict where the economy is going to be
Speaker 5: in November.
Speaker 15: Well, honestly, it's really really difficult. It certainly looks like
Speaker 15: a soft landing. It certainly looks like the economy is
Speaker 15: in pretty good shape now, much better shape than I
Speaker 15: expected with all the rate hikes. But in nine months time,
Speaker 15: who knows. But I don't think there's a prospect a
Speaker 15: very rapid deterioration between now and November. And that's something
Speaker 15: catastrophic which I don't foresee. But we're going to see
Speaker 15: unemployment rates below four percent or some something like that.
Speaker 15: So if you look at all the forecasting, well it's
Speaker 15: the whole set of models done by Ray Fair and others.
Speaker 15: The state of the economy is an important indicator of
Speaker 15: what's coming. People's living standards are important, and people's perceptions
Speaker 15: are important. But in a sense, the contradiction is people's
Speaker 15: perceptions of how the economy is doing are not that great,
Speaker 15: but they keep on spending and the economy is very resilient.
Speaker 15: And so there's the puzzle.
Speaker 5: Well, you just outline that perfectly, because it's confounding the
Speaker 5: administration and the Biden campaign. We look at the strength
Speaker 5: behind this jobs market, it's enough to confound the stock
Speaker 5: market certainly as well when you look at consumer spending,
Speaker 5: you mentioned it, and that's one of the areas that
Speaker 5: Goldman looked at. Here in what could change the picture
Speaker 5: before November as they point out savings from stimulus and lockdown,
Speaker 5: running out, where's the consumer six or nine months down
Speaker 5: the road?
Speaker 15: Well, I mean, in some sense, the last two years
Speaker 15: has been about expecting the consumer to back off, especially
Speaker 15: in the light of what they say in terms of
Speaker 15: consumer confidence measures. Consumer confidence measures over the last twelve
Speaker 15: months or so have been absolutely predicting recession. They tell
Speaker 15: you stories about the recession that we saw in twenty
Speaker 15: oh eight. They've been system with that, but the consumer
Speaker 15: has still kept going. So unless there's something really that
Speaker 15: changes everything, my assumption has to be now you know
Speaker 15: that I was wrong, that the data, I mean, all
Speaker 15: the things predicted something coming were wrong. But there are
Speaker 15: one or two little negatives on the horizon. Let me
Speaker 15: give you one a couple of good predictions. Besides about
Speaker 15: whether we're in recession, A couple of good indicators is
Speaker 15: whether we have two successive months of negative growth in
Speaker 15: employment now either on what's called the establishment gap, which
Speaker 15: is non farm payrolls or on the household account, which
Speaker 15: is where you generate the unemployment rate. And we've seen
Speaker 15: very big declines over the last two months. Six hundred
Speaker 15: and eighty thousand the month before and thirty eight thirty
Speaker 15: one thousand. That's a pretty darn good indicator to say
Speaker 15: you've gone into recession. But none of the other things
Speaker 15: that are sitting with it. So obviously you know there
Speaker 15: are one or two red flashing lights. But I think
Speaker 15: Goldman's right that it's hard to see the economy being
Speaker 15: really bad. Although the perception, I think is people see
Speaker 15: very well that potential Republican voters see the economy as
Speaker 15: being much worse than the Democrat voters do. And obviously
Speaker 15: the question is what are the swing voters in the
Speaker 15: middle sea and how does it change by state. But
Speaker 15: I think this is a tough one to call. But
Speaker 15: we're I mean we're now we're now coming up to mark.
Speaker 15: We're not that far away. Economy is in less some
Speaker 15: terrible shock. It's than that you did in eight and
Speaker 15: in twenty twenty, and again I guess in twenty two
Speaker 15: with the war and the inflation shock. But it's hard
Speaker 15: to see much changing where we are so, so I
Speaker 15: think pretty much keep on keeping on is likely where
Speaker 15: we are.
Speaker 12: Interesting.
Speaker 5: You look at another item, that's inflation, of course, a
Speaker 5: huge one for Joe Biden. In fact, it was referred
Speaker 5: to in the report as Biden's weakest link. Danny Blanchflower.
Speaker 5: What could change in Goldman Sachs's view is the war
Speaker 5: in the Middle that has already sent flight costs surging.
Speaker 5: That's another wild card.
Speaker 15: Well, of course, I mean the ability to get goods
Speaker 15: through the Gulf, through Suez, through the through the canals
Speaker 15: and try and you know, continue to basically deliver products.
Speaker 15: That's important. I mean, we know what happened supplied chains
Speaker 15: he closed up during COVID, So that's an obvious potential.
Speaker 15: I mean, obviously what happens in Ukraine does that war,
Speaker 15: does it increase, does it slow?
Speaker 3: What does it do?
Speaker 15: So those are clearly potential shocks. But the inflation rate
Speaker 15: has come down and come down sharply, of the order
Speaker 15: of three percent. I think the best predictions, probably without
Speaker 15: you know and knowing exactly what's going to happen in
Speaker 15: the Middle East, is that those numbers will continue to drop.
Speaker 15: And that's what most people are forecasting. And even if
Speaker 15: there's tough things going on, even if the unploant rate rises,
Speaker 15: that predictions are something like four percent, and we haven't
Speaker 15: talked about output, it doesn't appear that the recession. It
Speaker 15: does appear that you output may be slowing. But the
Speaker 15: light here it is you're still going to see positive
Speaker 15: output and published for the second and third quarters, which
Speaker 15: is what we'll see go into the recession. So in
Speaker 15: lots of senses, I mean, the truth is that whether
Speaker 15: people perceive it or not, the FED has actually generated
Speaker 15: a soft landing. The data are pretty damn good, and
Speaker 15: a president is entitled to say I generated masses of jobs.
Speaker 15: The endpoint rate didn't lies. Wage growth is held up,
Speaker 15: and the economist continued to grow against all the pundits
Speaker 15: and all the predictions. So in some sense that's that's
Speaker 15: their fingers are crossed and hoping that some terrible shock
Speaker 15: doesn't come and people come around to understanding how good
Speaker 15: the economy is.
Speaker 5: Boy, okay, we'll see about that, and time could be
Speaker 5: the difference maker. Danny Blanchflower in our remaining moment here,
Speaker 5: I wonder where you are though, on the you know,
Speaker 5: the the rate hike camp right now we had Larry
Speaker 5: Summer see on Bloomberg last week that a hike is possible.
Speaker 5: Everyone's obviously betting on cuts. This thing does not move
Speaker 5: in a straight line. Could you see inflation reversing between
Speaker 5: now and November?
Speaker 15: No, I don't. I mean in some sense that I
Speaker 15: think this is Such comments by Larry Summers and others
Speaker 15: are quite interesting. Well, I was an interest rates setup.
Speaker 15: The job of an interest rates ceter is to think
Speaker 15: about what the inflation rate is going to be fifteen
Speaker 15: months to two years ahead, because monetary policy takes quite
Speaker 15: a time to have an effect. So even if inflation
Speaker 15: now perhaps bumps around, that doesn't suggest that you should
Speaker 15: raise rates. Everything suggests that inflation in the period ahead
Speaker 15: is going to decline. I think it shows Larry Summer
Speaker 15: doesn't seem to understand how you do market policy. It's
Speaker 15: never been a monetary policy maker. And the answer is
Speaker 15: the best thing to think about is rate cuts around
Speaker 15: the agenda. The question is how soon would it be marched?
Speaker 15: Would it be May? And they will continue to come.
Speaker 15: But you're not monetary policy makers. Really, I shouldn't be
Speaker 15: responding to one month at a time data that we
Speaker 15: should be thinking what's my view of eighteen months ahead
Speaker 15: and is the latest day they're.
Speaker 8: Going to change my view about that?
Speaker 15: So I don't be unless something fundamental change it. Anybody
Speaker 15: who thinks is a ray Hip Cummings in Gaga.
Speaker 5: Last time he was on the program, he made clear
Speaker 5: to me and our listeners and viewers that he would
Speaker 5: fail me. I would fail his economics class. And I'm
Speaker 5: pretty sure today didn't change that. Danny Blanchflower, It's great
Speaker 5: to see you. Thank you for the insights as always,
Speaker 5: professor of Economics Dartmouth College. He can get back to
Speaker 5: the fishing now. I'm Joe Matthew at Bloomberg World Headquarters
Speaker 5: in New York. Glad you're with us, Holy Bloomberg. Thanks
Speaker 5: for listening to the Balance of Power podcast. Make sure
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