1 00:00:10,039 --> 00:00:13,720 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Always 2 00:00:14,000 --> 00:00:17,560 Speaker 1: with Michael McKee. Daily we bring you insight from the 3 00:00:17,560 --> 00:00:22,800 Speaker 1: best in economics, finance, investment, and international relations. Find Bloomberg 4 00:00:22,840 --> 00:00:27,240 Speaker 1: Surveillance on iTunes, SoundCloud, Bloomberg dot Com, and of course, 5 00:00:27,760 --> 00:00:35,080 Speaker 1: on the Bloomberg Carl Weinberger's chief economist at High Frequency Economics. 6 00:00:35,120 --> 00:00:38,639 Speaker 1: He watches Japan, he watches gold. I want to get 7 00:00:38,640 --> 00:00:41,800 Speaker 1: to Japan in just a moment, but let's talk a 8 00:00:41,800 --> 00:00:45,000 Speaker 1: little bit of that history. Nixon probably didn't realize he 9 00:00:45,040 --> 00:00:48,080 Speaker 1: was doing it at the time, but he profoundly altered 10 00:00:48,479 --> 00:00:51,360 Speaker 1: the gold global economy by taking the US off the 11 00:00:51,360 --> 00:00:53,000 Speaker 1: gold standard. And he did a little more than just 12 00:00:53,120 --> 00:00:55,080 Speaker 1: take us off the gold standard. That's same day he 13 00:00:55,120 --> 00:00:58,680 Speaker 1: also slammed the door shut on imports of Japanese vehicles, 14 00:00:58,720 --> 00:01:00,440 Speaker 1: which is probably why the stock mark he went up 15 00:01:00,440 --> 00:01:02,600 Speaker 1: the next day, all those big automakers and the and 16 00:01:02,640 --> 00:01:05,600 Speaker 1: the dowd Jones. And he also introduced the first phase 17 00:01:05,640 --> 00:01:08,720 Speaker 1: of wage and price controls against a whopping two and 18 00:01:08,720 --> 00:01:12,000 Speaker 1: a half percent inflation rate because he was afraid of 19 00:01:12,080 --> 00:01:14,560 Speaker 1: national security. The Vietnam War was heating the economy over 20 00:01:14,560 --> 00:01:17,399 Speaker 1: the time, so a lot of things happened that day. 21 00:01:18,000 --> 00:01:21,200 Speaker 1: I think that the floating currency was happening. Anyhow, if 22 00:01:21,200 --> 00:01:23,679 Speaker 1: you read Robert Solomon's book on the History of the 23 00:01:23,720 --> 00:01:26,880 Speaker 1: World Financial System, you know he says the most outstanding 24 00:01:26,920 --> 00:01:29,720 Speaker 1: characteristic of the period of fixed exchange rates was how 25 00:01:29,720 --> 00:01:32,360 Speaker 1: often they adjusted them. And like every month the finance 26 00:01:32,400 --> 00:01:35,320 Speaker 1: ministers were getting together some place nice to re fixed 27 00:01:35,319 --> 00:01:38,000 Speaker 1: exchange rates. So that was coming. Anyhow, was a shock 28 00:01:38,080 --> 00:01:39,959 Speaker 1: to the French that he wouldn't give them their gold, 29 00:01:40,200 --> 00:01:42,480 Speaker 1: but it wasn't really a shock to the world economy 30 00:01:42,480 --> 00:01:43,959 Speaker 1: as much as some of the other things he did 31 00:01:44,000 --> 00:01:47,880 Speaker 1: that well. Historically, um Franklin Roosevelt would call his top 32 00:01:47,920 --> 00:01:50,560 Speaker 1: advisors into his bedroom and they would decide on the 33 00:01:50,600 --> 00:01:53,640 Speaker 1: gold price that before. Well, I was just going I 34 00:01:53,720 --> 00:01:55,640 Speaker 1: was not an economist at the time. I don't know 35 00:01:55,680 --> 00:01:58,680 Speaker 1: where Richard Nixon took his cabinet trust, uh, I was. 36 00:01:58,960 --> 00:02:01,040 Speaker 1: I was actually on my way. We can do that 37 00:02:01,080 --> 00:02:05,600 Speaker 1: at the Keen household every morning gets together with his children, 38 00:02:05,640 --> 00:02:09,400 Speaker 1: and the price of the price of an iPad probably 39 00:02:10,400 --> 00:02:12,600 Speaker 1: is the currency to you at your house. I was 40 00:02:12,600 --> 00:02:15,240 Speaker 1: actually packed up to go to graduate school and economics 41 00:02:15,280 --> 00:02:17,440 Speaker 1: the very next day, all my earthly positions with my 42 00:02:17,520 --> 00:02:21,359 Speaker 1: Volkswagen um Beatle, and I was taped down to a 43 00:02:21,440 --> 00:02:23,720 Speaker 1: chair by my roommates in college who said, if you're 44 00:02:23,720 --> 00:02:25,720 Speaker 1: going to be an economist, you're gonna watch this speech 45 00:02:25,720 --> 00:02:27,560 Speaker 1: and then you're gonna tell us what it means. And 46 00:02:27,600 --> 00:02:29,959 Speaker 1: I have to say, forty years later, I still don't 47 00:02:29,960 --> 00:02:31,840 Speaker 1: know what it means. Well, that was because you you're 48 00:02:31,840 --> 00:02:33,799 Speaker 1: the week before, you're a wood stock. Right now, I 49 00:02:33,880 --> 00:02:37,639 Speaker 1: don't want to discuss that Bloomberg surveillance. This morning, we 50 00:02:37,639 --> 00:02:40,600 Speaker 1: welcome all of you. I love this talking to gold 51 00:02:40,639 --> 00:02:44,960 Speaker 1: Standard with Carl Weinberg Berry ken Green has a definitive 52 00:02:45,000 --> 00:02:48,560 Speaker 1: book and how we got to Richard Dixon and the 53 00:02:48,600 --> 00:02:53,160 Speaker 1: freeing of gold golden fetters that implies it gold is 54 00:02:53,200 --> 00:02:58,640 Speaker 1: a disciplinary force. Where's the disciplinary force today? Well, you know, 55 00:02:58,680 --> 00:03:00,880 Speaker 1: the world has changed a bit. The problem with gold 56 00:03:00,919 --> 00:03:03,120 Speaker 1: is that there wasn't enough of it, and there still 57 00:03:03,240 --> 00:03:05,880 Speaker 1: isn't enough to to allow for enough growth of the 58 00:03:05,880 --> 00:03:08,440 Speaker 1: world financial system to get to where we are today. 59 00:03:08,480 --> 00:03:11,120 Speaker 1: The world economy would be strangled by a shortage of 60 00:03:11,160 --> 00:03:13,680 Speaker 1: gold supply if all of our money were linked to gold. 61 00:03:13,960 --> 00:03:16,440 Speaker 1: So since money has to be back by something. Today, 62 00:03:16,480 --> 00:03:18,480 Speaker 1: we put our faith in trust in the government and 63 00:03:18,520 --> 00:03:22,840 Speaker 1: we back our money with bonds rather than with gold specie, 64 00:03:23,080 --> 00:03:25,400 Speaker 1: and bonds have become the new specie, if you will. 65 00:03:25,840 --> 00:03:27,880 Speaker 1: But there's an argument being made by a lot of 66 00:03:28,040 --> 00:03:30,760 Speaker 1: politicians that we should go back to the gold standard 67 00:03:30,760 --> 00:03:35,000 Speaker 1: because it would keep Washington honest. You know, Washington being 68 00:03:35,040 --> 00:03:37,480 Speaker 1: honest is one thing, and the gold standard is quite 69 00:03:37,520 --> 00:03:40,600 Speaker 1: another thing. I don't see how mechanically we could do that. 70 00:03:40,640 --> 00:03:43,200 Speaker 1: I don't see how we could blomp down our money supply, 71 00:03:43,240 --> 00:03:45,120 Speaker 1: for lack of a better word, to the size that 72 00:03:45,120 --> 00:03:47,480 Speaker 1: would be required to match it up with the amount 73 00:03:47,480 --> 00:03:50,360 Speaker 1: of gold that we have. And frankly, I think it's 74 00:03:50,360 --> 00:03:53,720 Speaker 1: a bad idea. You know, gold was something important in 75 00:03:53,760 --> 00:03:56,600 Speaker 1: its time, but for right now, I don't really think 76 00:03:56,600 --> 00:03:59,360 Speaker 1: that gold is relevant. People say they're worried about inflation, 77 00:03:59,520 --> 00:04:01,280 Speaker 1: and they say, well, gold will be vent us from 78 00:04:01,320 --> 00:04:03,920 Speaker 1: having inflation. Well, hello, you know, I'm having a hard 79 00:04:03,920 --> 00:04:06,480 Speaker 1: time imagining inflation pretty much any place in the world 80 00:04:06,560 --> 00:04:10,800 Speaker 1: right now. What is gold If gold is not any 81 00:04:10,840 --> 00:04:13,280 Speaker 1: You say it was important first time, what is it now, Well, 82 00:04:13,320 --> 00:04:15,880 Speaker 1: it's a speculative vehicle, you know, in a time of 83 00:04:16,000 --> 00:04:19,479 Speaker 1: negative interest rates. Gold could actually have appeal if you 84 00:04:19,520 --> 00:04:21,240 Speaker 1: have a way to keep it and store it. It 85 00:04:21,240 --> 00:04:23,360 Speaker 1: earns a better rate of return than money in the bank, 86 00:04:23,400 --> 00:04:26,440 Speaker 1: if you're paying your bank to hold your deposits, and 87 00:04:26,480 --> 00:04:28,520 Speaker 1: then maybe a bit of a resurgence in gold on 88 00:04:28,560 --> 00:04:31,960 Speaker 1: the back of that. Certainly cash should be in greater 89 00:04:32,040 --> 00:04:35,360 Speaker 1: demand if money under the mattress pays better than money 90 00:04:35,800 --> 00:04:38,000 Speaker 1: um in the bank. And at the end of the day, 91 00:04:38,080 --> 00:04:41,159 Speaker 1: cash is you know, supposedly backed by whether it's gold 92 00:04:41,240 --> 00:04:43,080 Speaker 1: or specie or whatever, it's the same thing. It's a 93 00:04:43,160 --> 00:04:47,479 Speaker 1: zero interest security. I look today, how we want the 94 00:04:47,480 --> 00:04:49,800 Speaker 1: police to help us out. We're eight years into a crisis. 95 00:04:49,839 --> 00:04:52,200 Speaker 1: I haven't even done the math, Like this week is 96 00:04:52,200 --> 00:04:55,760 Speaker 1: the anniversary of when we went out for standard deviations 97 00:04:55,760 --> 00:04:59,680 Speaker 1: and library are we beyond the crisis yet? Carl Wimberg, Well, Tom, 98 00:04:59,720 --> 00:05:02,000 Speaker 1: you know my view on this. I think that we 99 00:05:02,080 --> 00:05:05,040 Speaker 1: are in a global economic depression that began with the 100 00:05:05,080 --> 00:05:07,800 Speaker 1: global financial crisis, and we're now in the eighth year 101 00:05:07,800 --> 00:05:10,039 Speaker 1: of it. And you know, the Great Depression was a 102 00:05:10,080 --> 00:05:12,440 Speaker 1: ten year event. People forget about that. They think, you know, 103 00:05:12,520 --> 00:05:15,960 Speaker 1: stocks crash and twenty nine and everybody jumped out the 104 00:05:16,000 --> 00:05:18,160 Speaker 1: window and it was over and we recovered. But in 105 00:05:18,200 --> 00:05:20,760 Speaker 1: fact it was a decade with three distinct waves in it. 106 00:05:20,960 --> 00:05:23,839 Speaker 1: And right now we are certainly through two full waves 107 00:05:23,880 --> 00:05:27,320 Speaker 1: of this crisis that was spawned by the global financial crisis. 108 00:05:27,320 --> 00:05:29,400 Speaker 1: And at the end of the day, world GDP is 109 00:05:29,400 --> 00:05:32,159 Speaker 1: not growing very much. World industrial production is not grown 110 00:05:32,200 --> 00:05:35,600 Speaker 1: at all outside of China. So I think that we 111 00:05:35,640 --> 00:05:38,799 Speaker 1: are experiencing a prolonged event here. And it's a mistake 112 00:05:38,839 --> 00:05:41,480 Speaker 1: to talk about recovery and boom and bus within this. 113 00:05:41,600 --> 00:05:43,719 Speaker 1: We do have a cycle within it, but the big 114 00:05:43,760 --> 00:05:46,440 Speaker 1: story is that we can't grow because people are not 115 00:05:46,480 --> 00:05:49,520 Speaker 1: putting money at risk. Right now, Well do we uh, 116 00:05:49,760 --> 00:05:53,719 Speaker 1: do we really resemble the nineteen thirties, Well, the thirties 117 00:05:53,839 --> 00:05:56,520 Speaker 1: was a deeper crash on the stock market for sure. Alright, 118 00:05:56,600 --> 00:05:59,240 Speaker 1: but you look at what's happening in industrial production, all right? 119 00:05:59,520 --> 00:06:04,760 Speaker 1: Not it is deep, but certainly prolonged and certainly i'll 120 00:06:04,760 --> 00:06:08,200 Speaker 1: call it institutional. Right. We look at some places you 121 00:06:08,240 --> 00:06:11,239 Speaker 1: know that are you know, like Japan, where industrial production 122 00:06:11,320 --> 00:06:14,200 Speaker 1: is back at the level where it was in and 123 00:06:14,240 --> 00:06:16,800 Speaker 1: we look at Europe, we see we're back at some 124 00:06:16,880 --> 00:06:19,839 Speaker 1: of the charts in Italy, you're just extraordinary. It's a 125 00:06:19,920 --> 00:06:22,120 Speaker 1: very very hard time in the world economy right now. 126 00:06:22,160 --> 00:06:24,680 Speaker 1: And whether historians will call it a depression or not, 127 00:06:25,080 --> 00:06:27,359 Speaker 1: his mood, one thing is sure. We were just talking 128 00:06:27,360 --> 00:06:30,559 Speaker 1: about this on TV Tom. You know, monetary policy doesn't 129 00:06:30,560 --> 00:06:32,800 Speaker 1: seem to be working. It's not working in Japan, it's 130 00:06:32,839 --> 00:06:35,359 Speaker 1: not delivering the results in Europe. You know, whether it 131 00:06:35,400 --> 00:06:38,000 Speaker 1: works in the UK at this phase remains to be seen. 132 00:06:38,480 --> 00:06:41,240 Speaker 1: And when Montai policy doesn't work, you know, Kane's called 133 00:06:41,240 --> 00:06:43,920 Speaker 1: that a liquidity trap, is there? This is a good 134 00:06:43,920 --> 00:06:46,880 Speaker 1: morning Gary showing. If you're listening in from a BF 135 00:06:46,920 --> 00:06:48,800 Speaker 1: I wonder what the bees of Gary Shilling doing the 136 00:06:48,920 --> 00:06:51,280 Speaker 1: ninety degree. I really wonder what we'll have to ask 137 00:06:51,360 --> 00:06:54,200 Speaker 1: him that next time he's in. Gary Shilling in his 138 00:06:54,520 --> 00:06:57,560 Speaker 1: classic book on deflation, I think I get a royalty 139 00:06:57,640 --> 00:07:00,480 Speaker 1: check about not every ninety days, every hund any days 140 00:07:01,279 --> 00:07:06,919 Speaker 1: good and bad deflation. Is Japan having good deflation? I 141 00:07:06,960 --> 00:07:10,320 Speaker 1: think Japan is having bad everything right now, and deflation 142 00:07:10,400 --> 00:07:13,840 Speaker 1: is only one aspect of what's happening there. The depopulation 143 00:07:13,920 --> 00:07:18,400 Speaker 1: of Japan has consequences, and among those consequences are shrinking economy, 144 00:07:18,800 --> 00:07:23,760 Speaker 1: falling prices, rising, debt relative to income, rising debt relative 145 00:07:23,840 --> 00:07:26,840 Speaker 1: to population. Right there's no upside to what's happening in 146 00:07:27,160 --> 00:07:30,080 Speaker 1: Japan right now. And that's the end of the conversation 147 00:07:30,120 --> 00:07:32,080 Speaker 1: as far as I'm concerned. You know, there's a thing, 148 00:07:32,080 --> 00:07:34,200 Speaker 1: a lot of things to talk about with Carl Weinberg, 149 00:07:34,600 --> 00:07:38,840 Speaker 1: I am f Japan, talk about productivity. We could also 150 00:07:38,840 --> 00:07:41,000 Speaker 1: talk about chickens in the heat way. We were mentioning 151 00:07:41,040 --> 00:07:44,400 Speaker 1: Gary Show earlier. What do the bees do when it's sunny? Carl, 152 00:07:44,920 --> 00:07:47,200 Speaker 1: how many chickens do you have? Well, we're down to 153 00:07:47,280 --> 00:07:51,720 Speaker 1: about eleven. Now we're up to seventeen and chickens and 154 00:07:51,720 --> 00:07:54,040 Speaker 1: we've got pretty good productivity out of them in the heat. 155 00:07:54,160 --> 00:07:57,560 Speaker 1: Do they watch the Olympics when it's is hot? What 156 00:07:57,640 --> 00:07:58,920 Speaker 1: they do is they try to stay out of the 157 00:07:58,960 --> 00:08:00,920 Speaker 1: thunderstorms when it gets to be this hard. But they 158 00:08:00,920 --> 00:08:03,240 Speaker 1: are making eggs. So for those of you who are 159 00:08:03,240 --> 00:08:05,560 Speaker 1: looking at egg futures out there, I can say that, 160 00:08:05,640 --> 00:08:09,360 Speaker 1: certainly on the Wineberg chicken ranch that the eggs are abundant. 161 00:08:10,720 --> 00:08:14,440 Speaker 1: And at your farm report with Bloomberg here we are, Michael. 162 00:08:15,280 --> 00:08:17,400 Speaker 1: I remember in the early days of my career where 163 00:08:17,760 --> 00:08:22,640 Speaker 1: the farm Farm Journal, Farm Journal exactly. UM, if I can't, 164 00:08:22,680 --> 00:08:25,120 Speaker 1: I know Tom wants to talk a little bit about productivity. 165 00:08:25,120 --> 00:08:28,360 Speaker 1: I want to ask a quick question though about UM, 166 00:08:28,400 --> 00:08:30,760 Speaker 1: this proposal that seems to have come out over the 167 00:08:30,800 --> 00:08:35,439 Speaker 1: weekend from the International Monetary Fund UH. You mentioned earlier 168 00:08:35,720 --> 00:08:39,040 Speaker 1: that this is along with the gold standard, the anniversary 169 00:08:39,040 --> 00:08:41,240 Speaker 1: of Nixon imposing wage and price controls. The i m 170 00:08:41,240 --> 00:08:45,440 Speaker 1: emphasis Japan should do the opposite, UH income you know, 171 00:08:45,840 --> 00:08:50,240 Speaker 1: guarantee that wages are going to go higher, force companies 172 00:08:50,280 --> 00:08:55,240 Speaker 1: to commit to higher wages UH in order to stimulate 173 00:08:55,280 --> 00:08:57,920 Speaker 1: consumer spending. And I guess if people feel their wages 174 00:08:57,920 --> 00:08:59,839 Speaker 1: are gonna keep going up, maybe that boosts spending and 175 00:09:00,040 --> 00:09:04,040 Speaker 1: and inflation with more money coming into the economy. That way, 176 00:09:04,400 --> 00:09:06,920 Speaker 1: they say this would be better than helicopter money. And well, 177 00:09:06,960 --> 00:09:09,719 Speaker 1: I haven't seen the the i m F report, but 178 00:09:10,120 --> 00:09:11,959 Speaker 1: you know, based on what you've told me, first of all, 179 00:09:12,000 --> 00:09:14,679 Speaker 1: anything is better than helicopter money, because helicopter money just 180 00:09:14,720 --> 00:09:17,640 Speaker 1: can't it won't happen, And every policy maker has pretty 181 00:09:17,640 --> 00:09:19,840 Speaker 1: been been pretty clear about that. So I don't know 182 00:09:19,880 --> 00:09:24,319 Speaker 1: why that is still in discussion amongst the economists and journalists. 183 00:09:24,640 --> 00:09:27,840 Speaker 1: As far as you know, giving a wage policy is concerned. 184 00:09:27,840 --> 00:09:29,800 Speaker 1: This is what the British used to call a wage policy. 185 00:09:30,080 --> 00:09:32,680 Speaker 1: You know, call me old fashioned, but where I come from, 186 00:09:33,040 --> 00:09:35,640 Speaker 1: wages are a result of the economic system and not 187 00:09:35,760 --> 00:09:38,560 Speaker 1: a policy variable. And that at the end of the day, 188 00:09:38,800 --> 00:09:41,760 Speaker 1: you pay people the value of their marginal product. And 189 00:09:41,840 --> 00:09:46,360 Speaker 1: in Japan, with a declining population, with declining demand, it's 190 00:09:46,360 --> 00:09:49,640 Speaker 1: going to be hard to keep marginal product of workers rising. 191 00:09:50,120 --> 00:09:52,320 Speaker 1: So I think that you know, I don't know the 192 00:09:52,360 --> 00:09:55,000 Speaker 1: context that this proposal came in, but it sounds to 193 00:09:55,080 --> 00:09:56,840 Speaker 1: me like it's it's not a very I m F 194 00:09:56,920 --> 00:10:00,760 Speaker 1: like proposal. Is there anything that you can see them 195 00:10:00,760 --> 00:10:04,120 Speaker 1: doing in the short run, I mean September twenty one, 196 00:10:04,160 --> 00:10:06,600 Speaker 1: I guess the next bo J meeting, anything from them, 197 00:10:06,880 --> 00:10:11,840 Speaker 1: anything from obviously that could generate the kind of growth 198 00:10:12,280 --> 00:10:14,640 Speaker 1: that they want to have. Well, Mike Tom, you know 199 00:10:14,640 --> 00:10:16,440 Speaker 1: what I'm gonna say next, because I say it every 200 00:10:16,440 --> 00:10:19,760 Speaker 1: time I'm here. Japan needs more people. Doesn't need more 201 00:10:19,840 --> 00:10:23,120 Speaker 1: quantitative easing, It doesn't need more public sector dead or 202 00:10:23,160 --> 00:10:27,199 Speaker 1: fiscal stimulus. It needs more people. Open the doors, letting 203 00:10:27,240 --> 00:10:29,640 Speaker 1: the people. There are lots of unemployed people in Europe, 204 00:10:29,720 --> 00:10:32,520 Speaker 1: lots of unemployed people in Asia, lots of unemployed people 205 00:10:32,600 --> 00:10:35,240 Speaker 1: everywhere in the world. All right, some of whom, if 206 00:10:35,240 --> 00:10:38,320 Speaker 1: they would be welcomed into Japan might come without people 207 00:10:38,440 --> 00:10:41,320 Speaker 1: With a shrinking population, the economy has to shrink and 208 00:10:41,360 --> 00:10:44,840 Speaker 1: monitor with with deflation, and neither monetary nor fiscal policy 209 00:10:44,920 --> 00:10:48,360 Speaker 1: can defeat that. I look at this, and I guess 210 00:10:48,360 --> 00:10:51,439 Speaker 1: the silliness of you know, demanded wage increases goes right 211 00:10:51,440 --> 00:10:53,840 Speaker 1: over to productivity. In the bombshell that you and I 212 00:10:53,880 --> 00:10:58,520 Speaker 1: witnessed last week while McKee was using my vacation days, 213 00:10:58,559 --> 00:11:03,200 Speaker 1: in the denominator of all this Faulder role is hours worked. 214 00:11:03,880 --> 00:11:07,360 Speaker 1: I had no less than four emails, tweets, etcetera, etcetera, 215 00:11:07,800 --> 00:11:11,160 Speaker 1: saying how do we count ours work? Where we're all 216 00:11:11,320 --> 00:11:16,000 Speaker 1: wedded to our cell phones? Eight? I mean, is ours 217 00:11:16,120 --> 00:11:19,200 Speaker 1: worked a legitimate number? Yeah, that's a tough one time. 218 00:11:19,240 --> 00:11:21,800 Speaker 1: You know, all measurement has to be reconsidered in the 219 00:11:21,800 --> 00:11:23,960 Speaker 1: age of lead of digital communications. You know, do we 220 00:11:24,000 --> 00:11:27,200 Speaker 1: take vacations at all? You know, should that be added 221 00:11:27,200 --> 00:11:29,960 Speaker 1: back into productivity the time we spend on vacation and 222 00:11:30,120 --> 00:11:32,800 Speaker 1: just answering that one email which could be the crux 223 00:11:32,800 --> 00:11:36,280 Speaker 1: of a deal or the very important transaction or something 224 00:11:36,320 --> 00:11:39,360 Speaker 1: critical to your company. You know, I think that we 225 00:11:39,400 --> 00:11:42,480 Speaker 1: are working hard or generally speaking, for people in certain 226 00:11:42,520 --> 00:11:46,520 Speaker 1: categories of labor, right, and other categories of labor, it's 227 00:11:46,559 --> 00:11:50,720 Speaker 1: not really that important. For example, factory workers, it doesn't 228 00:11:50,760 --> 00:11:52,680 Speaker 1: matter if the phone goes off when they're away. They're 229 00:11:52,720 --> 00:11:55,120 Speaker 1: not in their factory, they're not making stuff. They're not 230 00:11:55,200 --> 00:11:57,359 Speaker 1: a big part. They were shrinking part of the population, 231 00:11:57,400 --> 00:12:01,480 Speaker 1: but just the same they're they're important service sector workers. Okay, 232 00:12:01,520 --> 00:12:03,440 Speaker 1: if you're work in a restaurant, you know, either you're 233 00:12:03,440 --> 00:12:06,240 Speaker 1: working or you're not. If you're driving a cab, if 234 00:12:06,240 --> 00:12:09,480 Speaker 1: you're doing anything in the services sector, you're less productive. 235 00:12:09,559 --> 00:12:12,040 Speaker 1: Although in other places of the service sector like lawyers 236 00:12:12,040 --> 00:12:15,080 Speaker 1: and investment bankers and so forth. Um So, I think 237 00:12:15,120 --> 00:12:18,239 Speaker 1: that that there's a mix of experience around the economy. 238 00:12:18,400 --> 00:12:20,280 Speaker 1: But I think that ours worked. If something has to 239 00:12:20,280 --> 00:12:24,760 Speaker 1: be reconsidered very quickly and well, and we're going to 240 00:12:24,840 --> 00:12:28,040 Speaker 1: continue on to Mike's point, which you said many times 241 00:12:28,120 --> 00:12:31,320 Speaker 1: very Redholts last week, questioning how we measure productivity? Do 242 00:12:31,360 --> 00:12:34,200 Speaker 1: we measure it correctly? Um well, I think we do 243 00:12:34,320 --> 00:12:36,440 Speaker 1: the best we can. You know, correct, you're never going 244 00:12:36,480 --> 00:12:39,000 Speaker 1: to get it correct. I do think we need to 245 00:12:39,080 --> 00:12:42,280 Speaker 1: reconsider the impact of digital technology on the way that 246 00:12:42,320 --> 00:12:44,880 Speaker 1: we work, on the influence on the workforce. And I 247 00:12:44,920 --> 00:12:46,440 Speaker 1: think that you know, from time to time we get 248 00:12:46,480 --> 00:12:49,040 Speaker 1: benchmark revisions to our series, and I think that certainly 249 00:12:49,080 --> 00:12:50,800 Speaker 1: has to be one of the things that will be considered. Mike, 250 00:12:50,800 --> 00:12:52,839 Speaker 1: where are you? And its Ridholts was screaming a storm 251 00:12:52,960 --> 00:12:56,920 Speaker 1: up when he was auditioning for your spot. Barry was like, 252 00:12:57,000 --> 00:13:00,000 Speaker 1: all over, like productivity, we're not measuring it correctly. Where 253 00:12:59,800 --> 00:13:02,000 Speaker 1: are you? I don't think we're measuring it correctly, but 254 00:13:02,040 --> 00:13:05,359 Speaker 1: I'm not sure. A lot of the additional electronics contributes 255 00:13:05,520 --> 00:13:07,320 Speaker 1: a whole lot to growth, So I'm not sure that 256 00:13:07,360 --> 00:13:11,720 Speaker 1: productivity is uh and is impact. I'm with you, uh. 257 00:13:11,880 --> 00:13:14,920 Speaker 1: Carl Weinberg, thank you so much. High frequency economists, particularly 258 00:13:15,280 --> 00:13:19,600 Speaker 1: on mr nix and the gold standard on economics, finance 259 00:13:19,640 --> 00:13:36,200 Speaker 1: and investment. This is Bloomberg surveillance, This is Bloomberg. I 260 00:13:36,280 --> 00:13:40,360 Speaker 1: mentioned the Empire Manufacturing housing market index from the home 261 00:13:40,360 --> 00:13:42,920 Speaker 1: Builder's Day. Not big deals, but we do get housing 262 00:13:42,920 --> 00:13:46,680 Speaker 1: starts tomorrow and on Wednesday we get the Fed minutes, 263 00:13:46,720 --> 00:13:48,240 Speaker 1: and that's kind of a focus for a lot of 264 00:13:48,240 --> 00:13:52,160 Speaker 1: people in the markets. Tony KRISSENSGI is a market strategist 265 00:13:52,160 --> 00:13:55,760 Speaker 1: portfolio manager for Pimco. He especially keeps an eye on 266 00:13:56,280 --> 00:13:59,920 Speaker 1: the shorthand of things. And Franzine lackwise asked me this morning, 267 00:14:00,600 --> 00:14:04,719 Speaker 1: what what the minutes meaning? I basically said, um, this 268 00:14:04,800 --> 00:14:07,920 Speaker 1: is about your vacation, you know, because if the minutes 269 00:14:08,600 --> 00:14:12,240 Speaker 1: are really devilish, then everybody kind of says with Janet 270 00:14:12,320 --> 00:14:14,480 Speaker 1: Yellen doesn't have to do anything in Jackson Hole, but 271 00:14:14,800 --> 00:14:17,160 Speaker 1: if she's hot, if they're hawkish, then there's a big 272 00:14:17,160 --> 00:14:20,200 Speaker 1: focus on what she says out there. Well, I was 273 00:14:20,240 --> 00:14:22,640 Speaker 1: just reading through the last speech by Bill Dudley, the 274 00:14:22,680 --> 00:14:25,000 Speaker 1: New York Fed President. He spoke on July thirty one. 275 00:14:25,160 --> 00:14:28,120 Speaker 1: He's speaking again this week. The reason I would focus 276 00:14:28,160 --> 00:14:30,200 Speaker 1: on him as he's considered one of the three most 277 00:14:30,200 --> 00:14:33,400 Speaker 1: powerful members of the f O m C, the Federal 278 00:14:33,400 --> 00:14:36,920 Speaker 1: Open Market Committee, the body that sets interest rate policy. 279 00:14:37,160 --> 00:14:39,280 Speaker 1: UH and he spoke to a lot of the different 280 00:14:39,600 --> 00:14:42,080 Speaker 1: headwinds in the United States since he said, perhaps there's 281 00:14:42,120 --> 00:14:45,760 Speaker 1: evidence accumulating that suggests that these headwinds won't fade as 282 00:14:45,760 --> 00:14:47,880 Speaker 1: fast as the FED previously thought. Remember the Fed going 283 00:14:47,920 --> 00:14:50,120 Speaker 1: into two thousand and sixteen thought the FED thought it 284 00:14:50,200 --> 00:14:53,360 Speaker 1: might raise interest rates as many as four times, raised 285 00:14:53,560 --> 00:14:56,200 Speaker 1: the federal funds rate a quarter point four times, and 286 00:14:56,280 --> 00:14:59,480 Speaker 1: hasn't raised it at all. Uh And so the minutes 287 00:14:59,560 --> 00:15:03,920 Speaker 1: may clarify whether they think these headwinds FED are fading, 288 00:15:04,040 --> 00:15:06,080 Speaker 1: or whether they think they should pay attention to the 289 00:15:06,080 --> 00:15:08,880 Speaker 1: fact that the job is rate is low enough to 290 00:15:08,920 --> 00:15:12,680 Speaker 1: produce higher wage gains and hence ultimately higher inflation. One 291 00:15:12,720 --> 00:15:17,360 Speaker 1: of the two things that feeds charged with fixing inflation, 292 00:15:17,480 --> 00:15:21,520 Speaker 1: of course, unemployment. The minutes are of a meeting that 293 00:15:21,560 --> 00:15:25,120 Speaker 1: took place three weeks ago and decisions that were based 294 00:15:25,120 --> 00:15:27,680 Speaker 1: on data that came even before that. Since then, we've 295 00:15:27,720 --> 00:15:30,160 Speaker 1: had a very strong jobs report, as you mentioned, we'll 296 00:15:30,200 --> 00:15:32,640 Speaker 1: get on the same day we get the minutes we're 297 00:15:32,680 --> 00:15:35,040 Speaker 1: going to get, actually a day before we get the 298 00:15:35,040 --> 00:15:36,640 Speaker 1: minut we're gonna get cp I will have an idea 299 00:15:36,640 --> 00:15:40,280 Speaker 1: of what's happening with inflation. Uh So, why why do 300 00:15:40,400 --> 00:15:42,520 Speaker 1: we pay so much attention to them all these minutes? 301 00:15:42,760 --> 00:15:46,200 Speaker 1: Even and I reference Studley in part because he referred 302 00:15:46,240 --> 00:15:48,680 Speaker 1: to the minutes as a form of communication that the 303 00:15:48,720 --> 00:15:52,720 Speaker 1: FED provides to try to clarify policy to the world. 304 00:15:52,720 --> 00:15:56,000 Speaker 1: And two investors and there he drew excerpts from the 305 00:15:56,000 --> 00:15:58,640 Speaker 1: minutes to show that hey, early in the year, for example, 306 00:15:58,720 --> 00:16:02,280 Speaker 1: we the FED point to China as a force perhaps 307 00:16:02,280 --> 00:16:05,320 Speaker 1: shaping the outlet for monetary policy, and so there are 308 00:16:05,360 --> 00:16:08,320 Speaker 1: excerpts in there that may be intentionally put to try 309 00:16:08,360 --> 00:16:10,960 Speaker 1: and send signals to the market about what might be next, 310 00:16:11,000 --> 00:16:13,400 Speaker 1: and so the minutes are important to that end. And 311 00:16:13,440 --> 00:16:16,440 Speaker 1: then of course Jenn Llen speaking and do you think 312 00:16:16,440 --> 00:16:18,920 Speaker 1: the minutes are are a fair and neutral representation of 313 00:16:18,920 --> 00:16:21,360 Speaker 1: what was discussed or do you think they shade them 314 00:16:21,480 --> 00:16:26,080 Speaker 1: to try to send him go? Of course has been 315 00:16:26,160 --> 00:16:29,320 Speaker 1: Bernanky form of FED chair as an advisor. We've spoken. 316 00:16:29,400 --> 00:16:34,000 Speaker 1: We we once had Alan Greenspan as a former advisor. 317 00:16:34,080 --> 00:16:38,440 Speaker 1: I've asked them about the minutes myself because I've wondered, um, 318 00:16:39,520 --> 00:16:42,680 Speaker 1: do the minutes get massaged? Because it does show that 319 00:16:43,560 --> 00:16:46,040 Speaker 1: the minutes up till the last day pretty much the 320 00:16:46,040 --> 00:16:50,320 Speaker 1: FED chair gets to review them. But uh, in and 321 00:16:50,400 --> 00:16:54,560 Speaker 1: asking these illustrious people and others with within the FED, 322 00:16:54,600 --> 00:16:57,120 Speaker 1: it seems that it's really a snapshot, a picture of 323 00:16:57,160 --> 00:17:00,360 Speaker 1: what happened that day, and there is no massaging, isn't it. 324 00:17:00,400 --> 00:17:02,960 Speaker 1: There is a very strong attempt, and I've even spoken 325 00:17:02,960 --> 00:17:05,600 Speaker 1: to people have written them. Um, there is a very 326 00:17:05,600 --> 00:17:08,960 Speaker 1: strong attempt to capture the essence of what was happening 327 00:17:08,960 --> 00:17:13,159 Speaker 1: in the room that day, with no no manipulation of 328 00:17:13,200 --> 00:17:17,159 Speaker 1: any sort, nons too strong a word, no massaging on, 329 00:17:17,240 --> 00:17:21,200 Speaker 1: no alterations. It's a snapshot. I was immunizing myself over 330 00:17:21,240 --> 00:17:24,359 Speaker 1: the heatway this weekend with bulldog Gin Gin and Tonics. 331 00:17:24,440 --> 00:17:27,800 Speaker 1: And I did it by reading Stigham's Money Market Anthony 332 00:17:27,880 --> 00:17:31,960 Speaker 1: Krissenzi and Marshall Stigham, Mike. I got up on money 333 00:17:31,960 --> 00:17:34,800 Speaker 1: market yields, I got up to page A hundred four 334 00:17:35,240 --> 00:17:41,520 Speaker 1: immunizing a portfolio. I got there amazing, amazing, And what 335 00:17:41,600 --> 00:17:43,920 Speaker 1: did you learn? I learned that I had to continue 336 00:17:44,000 --> 00:17:48,280 Speaker 1: immunizing myself with bulldog Gin and Tonics. Well, I immunized 337 00:17:48,359 --> 00:17:52,280 Speaker 1: myself with Tony Krissenzi's boring short term World. But it's 338 00:17:52,280 --> 00:17:55,280 Speaker 1: really important, isn't it. But it's really important. I mean, 339 00:17:55,320 --> 00:17:58,080 Speaker 1: it's the oil in the engine right, like kind of 340 00:17:58,160 --> 00:18:00,880 Speaker 1: just discussing offline about Japan as an example of short 341 00:18:00,960 --> 00:18:03,080 Speaker 1: term rates versus long term rates and what matters more, 342 00:18:03,160 --> 00:18:05,639 Speaker 1: and many nations long term rates matter more. Think of 343 00:18:05,640 --> 00:18:09,600 Speaker 1: the United States, to an individual in the rates matter 344 00:18:09,640 --> 00:18:11,679 Speaker 1: because I think of the housing market, which is a 345 00:18:11,680 --> 00:18:15,000 Speaker 1: big part of the economy. It matters to people. Long 346 00:18:15,080 --> 00:18:17,760 Speaker 1: term rates matter, capital spending it matters, of course, and 347 00:18:17,800 --> 00:18:20,840 Speaker 1: even to governments it matters. But in Japan they realize 348 00:18:20,880 --> 00:18:23,160 Speaker 1: that low long term rates can actually hurt, and that's 349 00:18:23,240 --> 00:18:25,919 Speaker 1: low short term rates that are really important. Low long 350 00:18:26,040 --> 00:18:28,560 Speaker 1: term rates can hurt because it's how monitor of policy 351 00:18:28,640 --> 00:18:31,880 Speaker 1: transmits and it's done negatively, because it hurts banks, other 352 00:18:31,880 --> 00:18:35,160 Speaker 1: financial institutions, including pension funds and insurance companies, and they're 353 00:18:35,160 --> 00:18:38,359 Speaker 1: all saying, you're hurting us, do something about it. Steep 354 00:18:38,400 --> 00:18:40,800 Speaker 1: in the yield curve, which is to say, put a spread, 355 00:18:40,880 --> 00:18:43,280 Speaker 1: a yield spread between long term rates and short term 356 00:18:43,359 --> 00:18:47,600 Speaker 1: rates help us to get better rates on the assets 357 00:18:47,640 --> 00:18:50,679 Speaker 1: we have, so banks and asset could be alone, and 358 00:18:50,720 --> 00:18:52,600 Speaker 1: so they want to widen the spread. So this is 359 00:18:52,880 --> 00:18:57,080 Speaker 1: something new in the policy land, this idea that very 360 00:18:57,119 --> 00:19:00,280 Speaker 1: low or negative long term interest rates can actually to 361 00:19:00,320 --> 00:19:03,680 Speaker 1: be detrimental. It wasn't a belief that was in place 362 00:19:03,720 --> 00:19:06,680 Speaker 1: when the Bank of Japan pushed pushed its policy rate 363 00:19:06,680 --> 00:19:09,200 Speaker 1: into negative territory at the end of January, but it's 364 00:19:09,240 --> 00:19:13,160 Speaker 1: it's become a more widespread belief globally about these short 365 00:19:13,240 --> 00:19:16,439 Speaker 1: term rates, and yet we're seeing the the the ECB 366 00:19:16,640 --> 00:19:20,600 Speaker 1: still seem to be committed to that, and we've got 367 00:19:20,840 --> 00:19:24,280 Speaker 1: not negative but extremely low rates, very flat yield curve 368 00:19:24,280 --> 00:19:28,560 Speaker 1: her right. But there's a shift in global policy circles 369 00:19:28,600 --> 00:19:32,399 Speaker 1: toward credit easing as opposed to rate easing, which is 370 00:19:32,440 --> 00:19:36,520 Speaker 1: to say, try and do things that push banks to lend, 371 00:19:36,720 --> 00:19:40,800 Speaker 1: but they're not. It's not easy to do banks if 372 00:19:40,840 --> 00:19:43,160 Speaker 1: I don't want to borrow, it doesn't matter or lend. 373 00:19:43,680 --> 00:19:45,840 Speaker 1: Banks in Europe a three times the size of GDP 374 00:19:46,520 --> 00:19:49,200 Speaker 1: in the United States it's one to one banks they're oversized. 375 00:19:49,240 --> 00:19:52,520 Speaker 1: So for three years in Europe there's negative growth and lending, 376 00:19:52,560 --> 00:19:55,760 Speaker 1: the death of money, the vanishing of money. Imagine going 377 00:19:55,800 --> 00:19:57,560 Speaker 1: to a bank to repay a loan. You have a 378 00:19:57,600 --> 00:20:00,560 Speaker 1: thousand dollar loan, want to repay banks for decades, like 379 00:20:00,640 --> 00:20:03,000 Speaker 1: factories produce things and they produce this money. You say, 380 00:20:03,240 --> 00:20:04,960 Speaker 1: take it back bank. I don't want. I want to 381 00:20:05,000 --> 00:20:08,320 Speaker 1: deliver my situation that thousand dollars you bring to the bank, 382 00:20:08,400 --> 00:20:11,400 Speaker 1: unless it's that loan that you pay off is replaced 383 00:20:11,400 --> 00:20:14,080 Speaker 1: with a new one. In thousand dollars vanishes from the 384 00:20:14,119 --> 00:20:17,000 Speaker 1: financial system in the same way that it was created 385 00:20:17,160 --> 00:20:20,159 Speaker 1: out of thin air. And that means it's the thousand 386 00:20:20,200 --> 00:20:23,280 Speaker 1: dollars not available to spend in the economy on goods 387 00:20:23,280 --> 00:20:27,440 Speaker 1: and services, and that can cause very wretched conditions the 388 00:20:27,520 --> 00:20:29,520 Speaker 1: sort we saw in the nineteen thirties. This is why 389 00:20:29,520 --> 00:20:32,520 Speaker 1: I say world without the FED. These central banks, while 390 00:20:32,520 --> 00:20:35,919 Speaker 1: we complain about them, we can't do without them because 391 00:20:35,920 --> 00:20:39,600 Speaker 1: we have a so called fractional reserve banking system. We 392 00:20:39,920 --> 00:20:43,679 Speaker 1: need to have lots of paper money, fiat currency system 393 00:20:45,240 --> 00:20:48,240 Speaker 1: to Jackson Hole with corotas on from the Bank of 394 00:20:48,320 --> 00:20:51,240 Speaker 1: Japan and UH and others from the European Central Bank. 395 00:20:51,280 --> 00:20:54,400 Speaker 1: They're gonna talk about all this UH monetary policy and 396 00:20:54,560 --> 00:20:57,879 Speaker 1: how it works. Is is on the agenda. UH. What 397 00:20:57,960 --> 00:21:01,920 Speaker 1: do you think they should conclude? Well, the last two years, 398 00:21:02,119 --> 00:21:05,440 Speaker 1: the main topic was on the Fed's mandate. Last year 399 00:21:05,480 --> 00:21:09,359 Speaker 1: was inflation dynamics, two years ago it was the labor 400 00:21:09,359 --> 00:21:14,240 Speaker 1: market dynamics. And this year it's about designing better monetary 401 00:21:14,280 --> 00:21:17,719 Speaker 1: policies for the future. So it's it's as introspection. In 402 00:21:17,720 --> 00:21:20,320 Speaker 1: other words, the FED will be looking at itself and efficacy, 403 00:21:20,359 --> 00:21:22,760 Speaker 1: whether it's effective in doing things. The Bank Japan is 404 00:21:22,800 --> 00:21:25,600 Speaker 1: undergoing something similar. It said in its last meeting that 405 00:21:25,640 --> 00:21:27,960 Speaker 1: on September twenty one, when it meets again, will under 406 00:21:28,040 --> 00:21:31,560 Speaker 1: have undergone a comprehensive assessment of its policies, so that 407 00:21:31,680 --> 00:21:34,600 Speaker 1: to the extent that central banks are looking at themselves, 408 00:21:35,119 --> 00:21:38,159 Speaker 1: markets will say, well, the central banks don't exactly know 409 00:21:38,240 --> 00:21:41,359 Speaker 1: whether they're being effective, why should we and we should 410 00:21:41,400 --> 00:21:43,960 Speaker 1: expect them to continue to be to lean onside of caution, 411 00:21:44,359 --> 00:21:48,600 Speaker 1: risk management and provide lots of monetary accommodation. Print Money, Tony, 412 00:21:48,680 --> 00:21:50,480 Speaker 1: you have one of the best titles of the book 413 00:21:50,920 --> 00:21:53,520 Speaker 1: during this crisis, and folks, we are shocked to say 414 00:21:53,600 --> 00:21:56,560 Speaker 1: we enter the ninth or tenth year of the crisis 415 00:21:56,640 --> 00:21:59,879 Speaker 1: coming up here in a week beyond the Kinsie and 416 00:22:00,080 --> 00:22:03,639 Speaker 1: the endpoint was from I think five years ago. What 417 00:22:03,760 --> 00:22:08,080 Speaker 1: does that mean? And are we beyond the orthodoxy of 418 00:22:09,080 --> 00:22:12,560 Speaker 1: economics of another time? Well, then I mentioned the idea 419 00:22:12,680 --> 00:22:15,439 Speaker 1: that if the world without the FED would be wretched 420 00:22:15,560 --> 00:22:19,240 Speaker 1: and difficult because we have an inherently unstable financial system, 421 00:22:19,400 --> 00:22:22,639 Speaker 1: so called fractional reserve banking system, which is a fancy 422 00:22:22,640 --> 00:22:25,600 Speaker 1: way of saying that banks have more assets loans than 423 00:22:25,640 --> 00:22:29,200 Speaker 1: they have capital in place, and this requires central banks 424 00:22:29,240 --> 00:22:31,920 Speaker 1: to put money in the system. But when people decide, 425 00:22:31,960 --> 00:22:34,120 Speaker 1: well I don't want these loans anymore and pay them off, 426 00:22:34,200 --> 00:22:36,679 Speaker 1: it can become very problematic because it removes money from 427 00:22:36,680 --> 00:22:40,320 Speaker 1: the system and crush demand. So Pecaines and the thirty said, hey, 428 00:22:40,640 --> 00:22:44,719 Speaker 1: let's spend. Let's have deficit spending. But politicians for decades 429 00:22:44,800 --> 00:22:47,480 Speaker 1: maybe took it a little too far. Of course, we 430 00:22:47,680 --> 00:22:49,879 Speaker 1: have lots of government spending for things that don't in 431 00:22:49,920 --> 00:22:52,360 Speaker 1: the long run necessarily produce lots of growth. Where will 432 00:22:52,400 --> 00:22:55,000 Speaker 1: governments think of Greece? Where does it can it? Has 433 00:22:55,040 --> 00:22:58,159 Speaker 1: it reach a Kinzie endpoint? Yes, because it can't borrow 434 00:22:58,200 --> 00:23:01,280 Speaker 1: in the way it used to promote economic growth. Ellen 435 00:23:01,920 --> 00:23:05,760 Speaker 1: and Ellen Center and Morgan Stanley makes clear she sees 436 00:23:05,920 --> 00:23:08,880 Speaker 1: a debt build up now every new debt maybe it's 437 00:23:08,880 --> 00:23:12,600 Speaker 1: in a different portion segment of the economy. Are we 438 00:23:12,640 --> 00:23:14,920 Speaker 1: at a point where we need to worry about less debt? 439 00:23:16,320 --> 00:23:18,800 Speaker 1: There has been increasing indebtedness. Has been a shift of 440 00:23:18,840 --> 00:23:22,679 Speaker 1: indebtedness from the private sector, I think households to the 441 00:23:22,720 --> 00:23:25,960 Speaker 1: public sector. Remember the large budget deficits the United States 442 00:23:25,960 --> 00:23:28,280 Speaker 1: had of one and a half trillion dollars for a 443 00:23:28,359 --> 00:23:30,400 Speaker 1: number of years, and it's still pretty large, about four 444 00:23:30,480 --> 00:23:32,879 Speaker 1: hundred billion dollars. So the indebtedness has gone up in 445 00:23:32,920 --> 00:23:35,840 Speaker 1: the debt to GDP ratio is still rising. The only 446 00:23:35,840 --> 00:23:37,600 Speaker 1: way to get a handle on that in the long 447 00:23:37,680 --> 00:23:40,960 Speaker 1: run is to have faster growth. And the central banks 448 00:23:40,960 --> 00:23:44,040 Speaker 1: are trying, but they can't because they can't force banks 449 00:23:44,080 --> 00:23:47,440 Speaker 1: to create more money and more spending and and out 450 00:23:47,520 --> 00:23:50,600 Speaker 1: start to beat this race in terms of debt versus GDP. 451 00:23:50,920 --> 00:23:53,879 Speaker 1: The only way in the end we're discussing on television earlier, 452 00:23:53,880 --> 00:23:57,479 Speaker 1: is for governments to invest in people and and stuff. 453 00:23:57,480 --> 00:24:01,640 Speaker 1: It could be infrastructure, it could be communications. But think 454 00:24:01,640 --> 00:24:04,679 Speaker 1: about it, does seem to be a bit of inflections 455 00:24:04,760 --> 00:24:08,000 Speaker 1: each in Canada engage recently in some fiscal spending. You 456 00:24:08,040 --> 00:24:09,960 Speaker 1: see Japan pivoting a little bit towards it. In the 457 00:24:10,000 --> 00:24:12,320 Speaker 1: United States, it does seem both sides of the want 458 00:24:12,400 --> 00:24:16,040 Speaker 1: some form of corporate tax reform, some degree of infrastructure spending. 459 00:24:16,040 --> 00:24:17,439 Speaker 1: It does seem there will be a little bit of 460 00:24:17,480 --> 00:24:21,080 Speaker 1: a pivot because we're realizing that central banks have exhausted 461 00:24:21,080 --> 00:24:24,280 Speaker 1: themselves in terms of efficacy. All central banks can do 462 00:24:24,359 --> 00:24:28,440 Speaker 1: is pull forward or push back economic activity. They print money, 463 00:24:28,520 --> 00:24:31,879 Speaker 1: do they educate people? Do they build roads? Do they 464 00:24:31,920 --> 00:24:35,160 Speaker 1: create communications facilities, energy grids? Things that in the long 465 00:24:35,240 --> 00:24:37,360 Speaker 1: run can produce economic growth. Not at all. They can 466 00:24:37,400 --> 00:24:40,280 Speaker 1: only change the timeline and when those things take place perhaps, 467 00:24:40,720 --> 00:24:45,040 Speaker 1: and even there they've been very unsuccessful. Recently talked about 468 00:24:45,040 --> 00:24:48,160 Speaker 1: inflection point in terms of fiscal policy, and you talked 469 00:24:48,160 --> 00:24:51,320 Speaker 1: about the idea that monetary policy is undergoing reassessment by 470 00:24:51,320 --> 00:24:56,320 Speaker 1: these various banks. Anybody going to conclude that monetary policy 471 00:24:56,640 --> 00:25:00,439 Speaker 1: isn't working in that higher rates maybe point what you 472 00:25:00,480 --> 00:25:04,000 Speaker 1: need to do. Uh, that's also improbable. It seems that 473 00:25:05,000 --> 00:25:08,560 Speaker 1: central bankers still think that they can be effective and 474 00:25:08,640 --> 00:25:10,879 Speaker 1: do think that they have been affected, and they have 475 00:25:11,040 --> 00:25:14,520 Speaker 1: been enormously successful in one way in preventing the death 476 00:25:14,560 --> 00:25:18,399 Speaker 1: of money, preventing money from vanishing from the system. As 477 00:25:18,400 --> 00:25:21,240 Speaker 1: I said in my example earlier, if all these loans 478 00:25:21,280 --> 00:25:24,480 Speaker 1: that have been repaid by people entities over these recent 479 00:25:24,560 --> 00:25:27,280 Speaker 1: years were not replaced by new ones, uh, we would 480 00:25:27,280 --> 00:25:29,800 Speaker 1: have seen money leave the financial system. Because that's the 481 00:25:29,880 --> 00:25:31,720 Speaker 1: sort of financial system we have. We're stuck with it. 482 00:25:31,720 --> 00:25:34,320 Speaker 1: It's not a goal standard, etcetera. And so they did 483 00:25:34,400 --> 00:25:37,879 Speaker 1: succeed in closing closing that whole in terms of the 484 00:25:38,160 --> 00:25:40,240 Speaker 1: amounts of money in the financial system, they were trying 485 00:25:40,240 --> 00:25:43,879 Speaker 1: to prevent it from leaving. But now it's it's up 486 00:25:43,880 --> 00:25:46,200 Speaker 1: to the fiscal authorities to take over from the monetary 487 00:25:46,200 --> 00:25:49,680 Speaker 1: authorities to do things to promote economic growth so that 488 00:25:50,160 --> 00:25:54,359 Speaker 1: GDP can run and grow faster than the indebtedness. But 489 00:25:54,440 --> 00:25:57,080 Speaker 1: that's not happening. So central banks have reached their their 490 00:25:57,160 --> 00:26:01,120 Speaker 1: point of exhaustion. What if they raised once they made 491 00:26:01,160 --> 00:26:04,040 Speaker 1: clear it was a one off moves, As vice chairman 492 00:26:04,040 --> 00:26:07,800 Speaker 1: Fisher wants to get away from Ulter, what would happen, 493 00:26:08,440 --> 00:26:10,680 Speaker 1: What would happen on no, What would happen on the 494 00:26:10,720 --> 00:26:15,679 Speaker 1: PIMCO desk, Well, we would It depends how the markets respond, 495 00:26:15,720 --> 00:26:17,800 Speaker 1: of course, in terms of where values created. But long 496 00:26:18,160 --> 00:26:21,320 Speaker 1: there's a certain amount of uh interest rate hikes built 497 00:26:21,320 --> 00:26:24,080 Speaker 1: into the so called forward curve, and otherwise markets are 498 00:26:24,160 --> 00:26:28,320 Speaker 1: thinking in the future they'll be interest rate cut hikes 499 00:26:28,960 --> 00:26:32,120 Speaker 1: that would get priced out. And also if there's only one, 500 00:26:32,240 --> 00:26:34,159 Speaker 1: it just depends it would evolve over time. If one 501 00:26:34,160 --> 00:26:37,040 Speaker 1: thought that would be only one hike, and we thought 502 00:26:37,080 --> 00:26:39,280 Speaker 1: PIMCO that there would be a need for four or 503 00:26:39,280 --> 00:26:42,800 Speaker 1: five or sex. We would think not initially because they 504 00:26:43,280 --> 00:26:46,560 Speaker 1: know you're right, because we wouldn't know whether they would 505 00:26:46,600 --> 00:26:48,840 Speaker 1: it would produce inflation. The fact that the FED staying 506 00:26:48,920 --> 00:26:51,200 Speaker 1: accommodated for a very long period of time, maybe more 507 00:26:51,240 --> 00:26:55,119 Speaker 1: than crying Tony KRISENSI can't say enough about a book 508 00:26:55,200 --> 00:26:57,879 Speaker 1: one or two ago. He's a prolific writer. Beyond the 509 00:26:57,960 --> 00:27:15,080 Speaker 1: Keynesian end point um. This is a joy, absolute joy. 510 00:27:15,160 --> 00:27:18,439 Speaker 1: John Dickerson, of course you know him from CBS. The 511 00:27:18,520 --> 00:27:22,240 Speaker 1: book is whistle Stop, which comes, I'm going to say, 512 00:27:22,240 --> 00:27:26,679 Speaker 1: a decade after his fabulous book on the Trail about 513 00:27:27,000 --> 00:27:30,919 Speaker 1: Nancy Dickerson and his mother, and which I thought Mike 514 00:27:31,000 --> 00:27:33,440 Speaker 1: McKee was one of the great courageous books of all time. 515 00:27:33,520 --> 00:27:37,119 Speaker 1: John Dickerson writing on his life, and now he writes 516 00:27:37,160 --> 00:27:40,199 Speaker 1: on the president's lives. The book is whistle Stop. My 517 00:27:40,280 --> 00:27:43,960 Speaker 1: favorite stories from presidential campaign history. Mike, you've covered more 518 00:27:44,000 --> 00:27:47,800 Speaker 1: presidential campaigns than me. Why don't you start with Mr Dickerson? 519 00:27:48,600 --> 00:27:52,159 Speaker 1: Occurred to me. Is uh, John is of course we 520 00:27:52,359 --> 00:27:57,359 Speaker 1: decry the level of rhetoric and deportment into this campaign. 521 00:27:57,680 --> 00:27:59,720 Speaker 1: But as you make clear, and it's something that I've 522 00:27:59,760 --> 00:28:03,280 Speaker 1: often thought about back in eighteen eighty four when Tom 523 00:28:03,359 --> 00:28:05,919 Speaker 1: was just getting into the business. Uh there's a good example. 524 00:28:06,000 --> 00:28:08,480 Speaker 1: Or you go, you know, go back to the Jefferson 525 00:28:08,600 --> 00:28:11,359 Speaker 1: campaigns and the role the press played there. That Donald 526 00:28:11,359 --> 00:28:14,720 Speaker 1: Trump thinks he's got trouble with the New York Times. Uh, 527 00:28:14,800 --> 00:28:19,280 Speaker 1: this has all happened before on the campaign traip. Yeah, 528 00:28:19,320 --> 00:28:20,920 Speaker 1: that's great to be with you guys. By the way, 529 00:28:21,080 --> 00:28:25,119 Speaker 1: Um it has. I mean, Donald Trump is a singular figure. 530 00:28:25,280 --> 00:28:28,080 Speaker 1: I mean, so we've had businessmen before when the Wilkie 531 00:28:28,080 --> 00:28:31,320 Speaker 1: in came out of nowhere sort of or at least 532 00:28:31,400 --> 00:28:33,520 Speaker 1: leapt over the people who were in line ahead of him. 533 00:28:33,560 --> 00:28:36,000 Speaker 1: But but you're right. I mean, if you whether you 534 00:28:36,040 --> 00:28:40,880 Speaker 1: want to look at Andrew Jackson in you know, a 535 00:28:40,880 --> 00:28:44,520 Speaker 1: man of the people who people, uh, his critics worried 536 00:28:44,520 --> 00:28:47,040 Speaker 1: about him being a demagogue, putting too much power in 537 00:28:47,080 --> 00:28:49,640 Speaker 1: the hands of one person who claimed they could fix everything. 538 00:28:50,320 --> 00:28:53,880 Speaker 1: Or eighteen eighty four, or I should say eighteen forty, 539 00:28:53,920 --> 00:28:57,320 Speaker 1: where you know, the first kind of presidential campaign where 540 00:28:57,320 --> 00:29:00,320 Speaker 1: a candidate campaigned, it was a circus. It was more 541 00:29:00,320 --> 00:29:04,280 Speaker 1: of a circus than it is today. With George Wallace, 542 00:29:04,320 --> 00:29:08,120 Speaker 1: there parallels there and and there there are places where 543 00:29:08,120 --> 00:29:10,600 Speaker 1: you see a lot of what we talk about today, 544 00:29:10,720 --> 00:29:13,200 Speaker 1: and the tensions we've seen in the campaign today played 545 00:29:13,200 --> 00:29:17,640 Speaker 1: out in history before. Well you look. And I enjoyed 546 00:29:18,160 --> 00:29:21,040 Speaker 1: the book, and I enjoyed reading um going back in 547 00:29:21,120 --> 00:29:24,680 Speaker 1: history because I find those things fascinating. Um, the eight 548 00:29:24,800 --> 00:29:28,280 Speaker 1: four campaign Cleveland against Blaine and the charges and counter 549 00:29:28,360 --> 00:29:30,960 Speaker 1: charges that went back and forth. Um. I mean the 550 00:29:31,000 --> 00:29:32,880 Speaker 1: New York Post would be embarrassed to print some of 551 00:29:32,880 --> 00:29:37,040 Speaker 1: the stuff. Uh that that's they put the naked pictures 552 00:29:37,080 --> 00:29:41,080 Speaker 1: of Millennia Trump on the cover. Um. And yet the 553 00:29:41,160 --> 00:29:44,840 Speaker 1: Republic survived it? Did you would you? You can only 554 00:29:44,880 --> 00:29:47,800 Speaker 1: imagine what would have happened to poor Maria Helpin, those 555 00:29:47,920 --> 00:29:52,680 Speaker 1: who was whom Cleveland had his affair. Uh you know 556 00:29:52,760 --> 00:29:54,600 Speaker 1: what would happen today on the New York Post if 557 00:29:54,640 --> 00:29:59,120 Speaker 1: she she were around? The Republic did survived. It was 558 00:29:59,160 --> 00:30:02,520 Speaker 1: the last election I think when I look back at 559 00:30:02,560 --> 00:30:05,600 Speaker 1: one where people felt the choice was, you know, kind 560 00:30:05,600 --> 00:30:08,640 Speaker 1: of dreary on both sides. We see that consistently in 561 00:30:08,720 --> 00:30:11,400 Speaker 1: polls and interviews I do with voters about how depressed 562 00:30:11,440 --> 00:30:15,200 Speaker 1: they find the choice. In our recent CBS Battleground Tracker 563 00:30:15,240 --> 00:30:17,760 Speaker 1: poll in New Hampshire. Only one per cent of the 564 00:30:17,800 --> 00:30:21,240 Speaker 1: people we pulled said they were happy with the choice. 565 00:30:21,440 --> 00:30:26,120 Speaker 1: And and yet after four things worked out okay, um. 566 00:30:26,200 --> 00:30:29,400 Speaker 1: And in eighty four you had Blaine who was just 567 00:30:29,560 --> 00:30:32,840 Speaker 1: a was full of scandal. Uh. And then Cleveland had 568 00:30:32,840 --> 00:30:34,640 Speaker 1: the out of wedlock birth, which is what made it 569 00:30:34,760 --> 00:30:38,360 Speaker 1: a tough choice for voters at the time. John, I 570 00:30:38,360 --> 00:30:42,120 Speaker 1: I look at your work at CBS each and every Sunday, 571 00:30:42,160 --> 00:30:45,040 Speaker 1: and it's part of imparting history on an a historical 572 00:30:45,160 --> 00:30:51,240 Speaker 1: public whistle stop is basically a public service of accessible history. 573 00:30:51,280 --> 00:30:54,600 Speaker 1: What is your single message about what we need to 574 00:30:54,640 --> 00:30:58,840 Speaker 1: know about our presidential history as we all stagger to 575 00:30:58,920 --> 00:31:02,760 Speaker 1: the first Tuesday of November. Well, I think it's a 576 00:31:02,760 --> 00:31:05,880 Speaker 1: great question. I think the that a lot of the 577 00:31:06,000 --> 00:31:09,480 Speaker 1: things we recognize that there are tensions in the American 578 00:31:09,520 --> 00:31:12,680 Speaker 1: system that have been there since the beginning, between the 579 00:31:12,760 --> 00:31:16,680 Speaker 1: power of the people to break through the hammer locked 580 00:31:16,720 --> 00:31:21,160 Speaker 1: by elite, but then also um, the fact that the 581 00:31:21,160 --> 00:31:23,520 Speaker 1: country was founded on the fears of putting too much 582 00:31:23,560 --> 00:31:26,440 Speaker 1: power in the hands of one person, um, And that 583 00:31:26,520 --> 00:31:30,960 Speaker 1: those tensions have always been there, and that we seek 584 00:31:30,960 --> 00:31:34,440 Speaker 1: a balance, but not one or the other. I mean 585 00:31:34,560 --> 00:31:38,480 Speaker 1: and and to be, to be to be nervous about 586 00:31:39,640 --> 00:31:43,680 Speaker 1: whether we go too far in one one direction or another. Um. 587 00:31:43,760 --> 00:31:46,120 Speaker 1: And then I think also that there is a resilience 588 00:31:46,160 --> 00:31:50,880 Speaker 1: to the American experience that that we uh get through 589 00:31:50,920 --> 00:31:54,120 Speaker 1: these moments. And and that's hopeful in a time of 590 00:31:54,440 --> 00:31:59,920 Speaker 1: where people might feel depressed. We do have these complaints 591 00:32:00,320 --> 00:32:03,040 Speaker 1: recently from Donald Trump about the press. And you go 592 00:32:03,080 --> 00:32:05,680 Speaker 1: back in history, of course, and uh, in the and 593 00:32:05,720 --> 00:32:08,959 Speaker 1: the press was particularly vicious then, but even since then 594 00:32:09,240 --> 00:32:11,840 Speaker 1: in the more modern era, and I'm thinking you write 595 00:32:11,880 --> 00:32:17,960 Speaker 1: about Edmund Muskie, you write about the Dean scream. Uh, 596 00:32:18,000 --> 00:32:21,680 Speaker 1: And in those cases the press sort of distorted what 597 00:32:21,840 --> 00:32:24,959 Speaker 1: actually happened, and maybe the candidates did have a reason 598 00:32:25,000 --> 00:32:28,680 Speaker 1: to complain. Yeah, well, you're right. I mean example is 599 00:32:28,720 --> 00:32:32,120 Speaker 1: a really great one. In nineteen seventy two, he appears 600 00:32:32,200 --> 00:32:36,720 Speaker 1: to cry when talking about the editor of Manchester Union Leader. Um. 601 00:32:36,760 --> 00:32:39,480 Speaker 1: He clearly was emotional, but the first account of it 602 00:32:40,240 --> 00:32:45,240 Speaker 1: had him sort of a burbling massive of spears, and um, 603 00:32:45,800 --> 00:32:48,840 Speaker 1: he must have other problems. He wasn't really that McGovern 604 00:32:48,920 --> 00:32:51,360 Speaker 1: was a more exciting candidates the based the Democratic Party 605 00:32:51,400 --> 00:32:53,080 Speaker 1: and Musk he was trying to be kind of all 606 00:32:53,120 --> 00:32:55,880 Speaker 1: things to all people. So for him, what really got 607 00:32:56,000 --> 00:32:58,760 Speaker 1: him as the expectations were too api for his candidates. 608 00:32:59,000 --> 00:33:02,520 Speaker 1: But uh, and of course then was the role of 609 00:33:02,640 --> 00:33:05,800 Speaker 1: Nixon the Nixon team in creating the conditions that got 610 00:33:05,800 --> 00:33:09,040 Speaker 1: that Massy so upset. But that's one certainly where the 611 00:33:09,720 --> 00:33:15,280 Speaker 1: coverage was not. John Dickerson is with us. He is, 612 00:33:15,360 --> 00:33:18,760 Speaker 1: of course the moderate of CBSS Faced the Nation two pm. 613 00:33:18,920 --> 00:33:21,760 Speaker 1: You can hear it here on Bloomberg Radio every Sunday. 614 00:33:22,000 --> 00:33:24,280 Speaker 1: He's the author of whistle Stop, My Favorite Stories from 615 00:33:24,320 --> 00:33:29,520 Speaker 1: Presidential campaign History. We're talking about how the past is 616 00:33:29,560 --> 00:33:31,840 Speaker 1: prologue for a lot of this. John, if you're if 617 00:33:31,840 --> 00:33:33,640 Speaker 1: you're going to write an update to this book in 618 00:33:33,680 --> 00:33:36,560 Speaker 1: a year or so, what would you say What would 619 00:33:36,600 --> 00:33:40,200 Speaker 1: be the central theme of this year's campaign? Would it 620 00:33:40,240 --> 00:33:42,320 Speaker 1: be Donald Trump or would it be the fact, as 621 00:33:42,320 --> 00:33:47,040 Speaker 1: you mentioned earlier, that nobody really likes either candidate? Well, yeah, 622 00:33:47,440 --> 00:33:49,440 Speaker 1: we'd have the benefit of knowing how the election turned 623 00:33:49,480 --> 00:33:52,560 Speaker 1: out in the end, and so that would be nice. Um. 624 00:33:52,600 --> 00:33:55,400 Speaker 1: I think it's got to be Donald Trump. Um. And 625 00:33:55,400 --> 00:33:59,520 Speaker 1: and what he tapped into what it said about the 626 00:33:59,520 --> 00:34:01,360 Speaker 1: state of the publican party where it is right now? 627 00:34:01,360 --> 00:34:05,440 Speaker 1: What it tells us about campaigns. UM. And also then 628 00:34:06,200 --> 00:34:09,040 Speaker 1: what we decided were in the end about the about 629 00:34:09,040 --> 00:34:13,320 Speaker 1: the country. So if the the dissatisfaction that channeled into 630 00:34:13,320 --> 00:34:16,360 Speaker 1: the Trump campaign, was it what we were watching in 631 00:34:16,400 --> 00:34:19,319 Speaker 1: conservative politics starting with Pat Buchanan going through the Tea 632 00:34:19,360 --> 00:34:23,960 Speaker 1: Party movement, was it the latest version of that? Was 633 00:34:24,000 --> 00:34:27,799 Speaker 1: there something new that then? Um, we can connect with 634 00:34:27,880 --> 00:34:31,800 Speaker 1: the Sanders movement on the left? Is that to Pat? 635 00:34:31,920 --> 00:34:35,359 Speaker 1: I mean we would? I think the the we've known 636 00:34:35,400 --> 00:34:37,439 Speaker 1: for a long time that people have been unhappy with 637 00:34:37,760 --> 00:34:41,960 Speaker 1: their with the federal government and unhappy with um, the 638 00:34:42,080 --> 00:34:44,960 Speaker 1: results of their elections. In other words, they vote for 639 00:34:45,000 --> 00:34:48,239 Speaker 1: people and then don't get what they expected. UM. And 640 00:34:48,320 --> 00:34:51,520 Speaker 1: so how much of that was behind Donald Trump? UM? 641 00:34:51,640 --> 00:34:53,920 Speaker 1: And then in the end, if we know what you know, 642 00:34:54,400 --> 00:34:57,439 Speaker 1: who wins, will have to will draw some conclusion about 643 00:34:57,440 --> 00:35:00,359 Speaker 1: what the the nation ultimately decided, unhappy as they may 644 00:35:00,400 --> 00:35:04,760 Speaker 1: be with the choices. If I ask you what chance 645 00:35:04,920 --> 00:35:07,719 Speaker 1: Donald Trump has a winning you'll probably tell me it's 646 00:35:07,760 --> 00:35:11,239 Speaker 1: not over UM. But is there anything that you can 647 00:35:11,239 --> 00:35:14,000 Speaker 1: base that on other than the fact that he's confounded 648 00:35:14,040 --> 00:35:16,960 Speaker 1: the critics time and again during this campaign? I mean 649 00:35:16,960 --> 00:35:19,960 Speaker 1: by by the metrics we've used in past races. He's 650 00:35:19,960 --> 00:35:22,320 Speaker 1: in a lot of trouble, right, I think that's I 651 00:35:22,400 --> 00:35:25,040 Speaker 1: think that's right. I think you can and then we 652 00:35:25,080 --> 00:35:26,719 Speaker 1: can go down the line. I think the case for 653 00:35:26,880 --> 00:35:29,640 Speaker 1: hope if you're a Trump supporter is that Hillary Clinton 654 00:35:30,320 --> 00:35:33,319 Speaker 1: is a weak candidate, which is to say, um, she 655 00:35:33,400 --> 00:35:36,799 Speaker 1: has liabilities. Um. Trump beats her on things like who 656 00:35:36,800 --> 00:35:38,640 Speaker 1: do you trust to handle the economy and that kind 657 00:35:38,680 --> 00:35:41,600 Speaker 1: of thing. If somehow he could get the campaign from 658 00:35:41,640 --> 00:35:44,840 Speaker 1: being a referendum on his temperament to being one about 659 00:35:45,080 --> 00:35:48,200 Speaker 1: about Hillary Clinton, that might give him a chance. And 660 00:35:48,200 --> 00:35:51,839 Speaker 1: then if something happened out there about Hillary Clinton, Uh, 661 00:35:52,239 --> 00:35:54,880 Speaker 1: that might help. But right now it's looking you know, 662 00:35:55,080 --> 00:35:59,160 Speaker 1: obviously it's looking pretty dark for him. John Dickinson, Page 663 00:35:58,440 --> 00:36:01,120 Speaker 1: one of whistle stuff. You go right to where I 664 00:36:01,160 --> 00:36:04,640 Speaker 1: want to go, which is very goldwater in ninety four. 665 00:36:05,000 --> 00:36:08,040 Speaker 1: Here's the quote, page one, sixty What in God's name 666 00:36:08,080 --> 00:36:11,960 Speaker 1: has happened to the Republican Party from your research and 667 00:36:12,200 --> 00:36:15,200 Speaker 1: basically the way you live this in Washington. Are we 668 00:36:15,280 --> 00:36:17,920 Speaker 1: just seeing a redux of sixty four or is it 669 00:36:18,040 --> 00:36:21,239 Speaker 1: different than goldwater? Miller, Well, in the sense that there 670 00:36:21,280 --> 00:36:24,040 Speaker 1: was a stop Goldwater movement, and there's a never Trump movement. 671 00:36:24,080 --> 00:36:26,600 Speaker 1: There is a repeat there. I think what's different is 672 00:36:26,600 --> 00:36:31,280 Speaker 1: that Donald Trump doesn't represent an ideological wing of the world. 673 00:36:31,360 --> 00:36:34,600 Speaker 1: I mean, you know, Goldwater was it was a conservative, 674 00:36:34,640 --> 00:36:38,080 Speaker 1: and that became the defining ideology of the Republican Party 675 00:36:38,120 --> 00:36:42,280 Speaker 1: and and launched you know, Reagan and and and Donald 676 00:36:42,280 --> 00:36:46,200 Speaker 1: Trump isn't. That's not what he is. And so nevertheless, 677 00:36:46,280 --> 00:36:48,920 Speaker 1: there are people. I mean, it's absolutely a time of 678 00:36:49,000 --> 00:36:51,960 Speaker 1: choosing in the Republican Party. But I don't think it's 679 00:36:51,960 --> 00:36:55,480 Speaker 1: as clear as it was in sixty four in terms 680 00:36:55,520 --> 00:36:59,560 Speaker 1: of kind of where people stand ideologically on things. Um, 681 00:36:59,600 --> 00:37:04,320 Speaker 1: you know, Goldwater was the old fashioned smaller government. Um uh, 682 00:37:04,360 --> 00:37:06,640 Speaker 1: you know, a strong national defense. And I just don't 683 00:37:07,040 --> 00:37:10,000 Speaker 1: Donald Trump doesn't match up with existing ideology. I'll go 684 00:37:10,040 --> 00:37:12,200 Speaker 1: with you on that. You have brilliantly in their Henry 685 00:37:12,200 --> 00:37:15,399 Speaker 1: Cabot Lodge where Ambassador Lodge gets run over. I get that. 686 00:37:15,760 --> 00:37:18,399 Speaker 1: And then along comes Nixon X number of years later. 687 00:37:18,719 --> 00:37:22,879 Speaker 1: Who's the Nixon this time around for the GOP. Well, 688 00:37:22,960 --> 00:37:24,920 Speaker 1: it's you know, it's interesting. I mean, so who is 689 00:37:24,960 --> 00:37:27,839 Speaker 1: the Nixon or who is the Reagan? Because um, you 690 00:37:27,840 --> 00:37:31,879 Speaker 1: know a lot of people think Goldwater. Really the person 691 00:37:31,920 --> 00:37:33,799 Speaker 1: who picked up the mantle was Reagan. But then you 692 00:37:33,880 --> 00:37:35,880 Speaker 1: have Nixon kind of slipping in there in the middle. 693 00:37:35,960 --> 00:37:40,960 Speaker 1: Not um, not as much of a conservative as Reagan. UM. 694 00:37:41,040 --> 00:37:44,040 Speaker 1: So so that's the big question is let's say Donald 695 00:37:44,040 --> 00:37:46,960 Speaker 1: Trump doesn't sixteed, then the question is is it a 696 00:37:47,040 --> 00:37:49,600 Speaker 1: kind of a Ted Cruise kind of party that emerges 697 00:37:50,280 --> 00:37:54,760 Speaker 1: more conservative um? Or is it more conservative Western Southern? 698 00:37:54,960 --> 00:37:58,520 Speaker 1: Or is it a John Kasik party? Uh? Uh, you know, 699 00:37:59,400 --> 00:38:01,640 Speaker 1: buying in to the argument that was made in the 700 00:38:02,560 --> 00:38:04,919 Speaker 1: autopsy report that the that the party has to reach 701 00:38:04,960 --> 00:38:08,359 Speaker 1: out to a broader emerging electorate. UM, that it has 702 00:38:08,400 --> 00:38:11,719 Speaker 1: to soften its tone. Um. And that's a and then 703 00:38:11,719 --> 00:38:14,200 Speaker 1: there were players who were in between. Paul Ryan fits 704 00:38:14,239 --> 00:38:18,839 Speaker 1: somewhere between that that you know, those two candidates. Um. 705 00:38:18,880 --> 00:38:22,399 Speaker 1: And that's the great conversation that's going to take place. Uh. 706 00:38:22,440 --> 00:38:24,600 Speaker 1: And is already some people are preparing for it to 707 00:38:24,640 --> 00:38:27,719 Speaker 1: take place, you know, sort of quietly trying to get 708 00:38:27,760 --> 00:38:31,480 Speaker 1: first movers advantage if things don't work out for Donald Trump. 709 00:38:32,280 --> 00:38:34,360 Speaker 1: YE might jump in here. I just can tell you 710 00:38:34,520 --> 00:38:37,440 Speaker 1: the memories. Uh. John brings back of the eight forty 711 00:38:37,480 --> 00:38:40,320 Speaker 1: election the way Marty van Buren was treated. I couldn't 712 00:38:42,520 --> 00:38:44,959 Speaker 1: I want to go eight years after that, actually, because 713 00:38:44,960 --> 00:38:47,000 Speaker 1: I want to sort of follow on what you were 714 00:38:47,040 --> 00:38:49,440 Speaker 1: just saying about the Republican Party. Is this the Whig 715 00:38:49,480 --> 00:38:52,239 Speaker 1: Party of eighteen forty eight their last election because the 716 00:38:52,280 --> 00:38:56,600 Speaker 1: party splintered, or have the two Has the two party 717 00:38:56,640 --> 00:39:01,120 Speaker 1: system become so ingrained that you still have the Republicans 718 00:39:01,120 --> 00:39:04,759 Speaker 1: and the Democrats after this, no matter what happens. I 719 00:39:04,760 --> 00:39:08,840 Speaker 1: think the two party system is ingrained. I think I 720 00:39:08,880 --> 00:39:13,320 Speaker 1: think if Donald Trump were a better kind of general 721 00:39:13,360 --> 00:39:18,000 Speaker 1: election candidate, he would be able to mail the or 722 00:39:18,040 --> 00:39:20,040 Speaker 1: you know, both the two parts of the party together 723 00:39:20,200 --> 00:39:22,359 Speaker 1: in a way that he's had some difficulty doing. I mean, 724 00:39:23,040 --> 00:39:25,520 Speaker 1: in the chapter in the book on Reagan and seventy six, 725 00:39:25,560 --> 00:39:27,839 Speaker 1: Reagan decides not to leave the Republican Party. It's one 726 00:39:27,840 --> 00:39:31,440 Speaker 1: of his genius acts and decisions. He knows that if 727 00:39:31,440 --> 00:39:34,080 Speaker 1: he leaves the party, he'll split it, He'll get blamed 728 00:39:34,080 --> 00:39:38,799 Speaker 1: for electing uh Carter, and then he won't be able 729 00:39:38,840 --> 00:39:40,919 Speaker 1: to kind of put the thing back together again once 730 00:39:40,960 --> 00:39:43,640 Speaker 1: you break it. And by holding the by staying in 731 00:39:43,640 --> 00:39:46,600 Speaker 1: the Republican Party, he's able to then go on and 732 00:39:47,120 --> 00:39:49,919 Speaker 1: build that coalition to win an eighty and I think 733 00:39:50,360 --> 00:39:53,879 Speaker 1: that's the road to success for Republicans. But there may 734 00:39:53,880 --> 00:39:56,560 Speaker 1: be a group that splits off in anger if Donald 735 00:39:56,600 --> 00:40:00,640 Speaker 1: Trump doesn't win. John, congratulations, folks, this is the book. 736 00:40:01,000 --> 00:40:02,920 Speaker 1: If you've got a young kid going off to the 737 00:40:03,000 --> 00:40:06,439 Speaker 1: University of Virginia, like Mr Dickerson a few years ago, 738 00:40:06,640 --> 00:40:09,000 Speaker 1: throw the book. Try not to hit their forehead because 739 00:40:09,000 --> 00:40:12,560 Speaker 1: it's a little thick. But whistle Stop is just lovely. 740 00:40:12,880 --> 00:40:16,360 Speaker 1: It's a lovely way to read about our presidential history. 741 00:40:16,440 --> 00:40:21,880 Speaker 1: John Dickerson with CBS and Face the Nation. Thanks for 742 00:40:21,960 --> 00:40:26,319 Speaker 1: listening to the Bloomberg Surveillance podcast. Subscribe and listen to 743 00:40:26,480 --> 00:40:31,640 Speaker 1: interviews on iTunes, SoundCloud, or whichever podcast platform you prefer. 744 00:40:32,200 --> 00:40:36,400 Speaker 1: I'm on Twitter at Tom Keane. Michael McKee is at Economy. 745 00:40:36,800 --> 00:40:40,560 Speaker 1: Before the podcast, you can always catch us worldwide. I'm 746 00:40:40,600 --> 00:40:41,480 Speaker 1: Bloomberg Radio.