WEBVTT - The Chemicals in America's Drinking Water Are A Crisis 0:00:02.640 --> 0:00:05.320 Welcome to the Bloomberg Penl Podcast. I'm Paul swing you 0:00:05.360 --> 0:00:07.680 along with my co host Lisa Brahma Waits. Each day 0:00:07.720 --> 0:00:10.240 we bring you the most noteworthy and useful interviews for 0:00:10.280 --> 0:00:12.520 you and your money. Whether at the grocery store or 0:00:12.560 --> 0:00:15.480 the trading floor. Find a Bloomberg Penl podcast on Apple 0:00:15.520 --> 0:00:17.959 podcast or wherever you listen to podcasts, as well as 0:00:17.960 --> 0:00:21.800 that Bloomberg dot com. Do you feel good about yourself 0:00:21.840 --> 0:00:24.959 because you're drinking water instead of soda? Be wary of 0:00:25.079 --> 0:00:27.520 that water? Are joining us now? Is that? Seek all? 0:00:27.600 --> 0:00:30.360 He is author and active as member of the Council 0:00:30.360 --> 0:00:32.680 of Foreign Relations. Do what I guess here at our 0:00:32.680 --> 0:00:35.440 interactive broker studio is he is the author of a 0:00:35.520 --> 0:00:39.040 new book, Troubled Water, What's Wrong with What We Drink? 0:00:39.680 --> 0:00:41.760 I want to talk to you about the book and 0:00:41.880 --> 0:00:44.520 about the sort of larger concept here. And you said 0:00:44.640 --> 0:00:46.519 right before we went on air, I'm not here to 0:00:46.560 --> 0:00:50.440 scare anybody. And yet when I was reading through your materials, Uh, 0:00:50.520 --> 0:00:53.559 it's a little bit unnerving to think that a lot 0:00:53.600 --> 0:00:55.800 of the water that people drink, it's not just flint Michigan, 0:00:56.760 --> 0:01:00.120 is contaminated. It's correct almost everywhere in America, there are 0:01:00.240 --> 0:01:02.880 contaminants in our drinking water, and this is probably the 0:01:03.000 --> 0:01:06.840 largest unspoken of public health threat or menace in the 0:01:06.920 --> 0:01:10.200 United States. There's a large number of different chemicals that 0:01:10.240 --> 0:01:12.560 get into our systems through our drinking water that are 0:01:12.600 --> 0:01:15.400 having unknown effects on our bodies, on our endocrin systems, 0:01:15.400 --> 0:01:20.000 as the technical phrase that affects growth, attention, spans, sexual interest, fertility, 0:01:20.360 --> 0:01:22.399 as well as the possibility of cancer. Some of those 0:01:22.400 --> 0:01:25.080 things are already proven scientifically and some are now in 0:01:25.120 --> 0:01:27.800 the process of being investigated. But I would argue that 0:01:27.880 --> 0:01:30.480 not being investigated aggressively enough by the e p A 0:01:30.480 --> 0:01:33.680 an organization that whether it's a Democratic or Republican president 0:01:33.760 --> 0:01:37.480 or Congress, is unfortunately inactive. We're not active enough in 0:01:37.600 --> 0:01:39.880 pursuing what we need to have pursued to get the 0:01:39.920 --> 0:01:42.520 best health profile for all Americans. All Right, So if 0:01:42.520 --> 0:01:44.880 you don't have the best water, what needs to change 0:01:44.880 --> 0:01:47.800 within the US to improve the quality of our water. Well, 0:01:47.840 --> 0:01:49.760 first of all, there aren't nearly There are about a 0:01:49.800 --> 0:01:52.600 hundred thousand chemicals that are in commerce in the United States, 0:01:52.600 --> 0:01:57.480 maybe even more, and you would think that the would 0:01:57.480 --> 0:01:59.920 be under some type of investigation or regulation by the 0:02:00.120 --> 0:02:03.080 PA because some significant percentage of them get into our 0:02:03.160 --> 0:02:06.560 drinking water and some percentage of those have effect on 0:02:06.560 --> 0:02:09.440 our health. But of that hundred thousand chemicals that are 0:02:09.440 --> 0:02:11.560 in commerce the United States, sounds hard to believe this, 0:02:11.600 --> 0:02:15.959 but it's true, only seventy seven zero are being regulated 0:02:16.000 --> 0:02:18.400 by the e p A for drinking water purposes. And 0:02:18.440 --> 0:02:21.280 as shocking as that low number is, even more shocking 0:02:21.520 --> 0:02:24.040 given how much chemicals is used in daily life in America. 0:02:24.280 --> 0:02:26.400 Even more shocking is the fact that the last time 0:02:26.760 --> 0:02:29.760 the e p A regulated any chemical whatsoever or any 0:02:29.760 --> 0:02:33.799 contaminant whatsoever, was twenty three years ago. They have been 0:02:33.840 --> 0:02:37.080 inactive for generation and longer, and that is putting our 0:02:37.160 --> 0:02:39.800 health at risk. Is there any map of where we 0:02:39.880 --> 0:02:43.040 can and can drink water? Well, tell me who you 0:02:43.080 --> 0:02:44.560 live and I'll let you know. Okay, I'll give you 0:02:44.600 --> 0:02:48.600 my address after this. Seriously, it's anyone tracking or sort 0:02:48.600 --> 0:02:50.920 of trying to do this scientifically. Well. Actually, there's an 0:02:50.960 --> 0:02:54.079 organization called the Environmental Working Group where on their website 0:02:54.080 --> 0:02:56.359 you can punch in your zip code and they can 0:02:56.360 --> 0:03:00.519 tell you, under the federally filed documents by each hility, 0:03:00.840 --> 0:03:03.880 what contaminants have been found in that ZIP codes water. 0:03:04.280 --> 0:03:07.280 Whether or not that's particularly to your particular tap, Lisa, 0:03:07.360 --> 0:03:09.480 I can't say for sure, but invite me over for 0:03:09.560 --> 0:03:13.600 lunch and I'll bring my testing you. All right, So, 0:03:14.360 --> 0:03:18.040 water filtration plans, I thought that was the answer. Yeah, 0:03:18.080 --> 0:03:20.680 you would think so. The problem the problem POLL is 0:03:20.760 --> 0:03:24.680 that both on the wastewater side and on the water filtration, 0:03:24.720 --> 0:03:26.400 which is the where they distribute the water to our 0:03:26.400 --> 0:03:29.560 homes from, on both sides, we're using technologies that are 0:03:29.600 --> 0:03:32.800 about a hundred or more years old. And although in 0:03:32.840 --> 0:03:35.000 the interim places have been rebuilt and they're pretty and 0:03:35.000 --> 0:03:38.120 they're nice parking lots and beautiful reception areas, the truth 0:03:38.240 --> 0:03:41.080 is that the technology is being used never grew up 0:03:41.120 --> 0:03:43.280 along with the time that America became what will call 0:03:43.440 --> 0:03:47.600 highly medicalized society, where now one of where seventy of 0:03:47.640 --> 0:03:50.960 all Americans twelve and overtake at least one pharmaceutical product 0:03:50.960 --> 0:03:56.080 to day. Um people people about Americans twelve and overtake 0:03:56.360 --> 0:03:59.240 five or more prescription pills a day, and that all 0:03:59.240 --> 0:04:01.640 gets into our water a stream. On the inbound side, 0:04:01.960 --> 0:04:03.840 we still do we did a hundred plus years ago 0:04:03.920 --> 0:04:06.400 to get rid of cholera and dysentery and typhoid fever. 0:04:06.680 --> 0:04:10.360 We put a dot of chlorine or chlorine like product 0:04:10.400 --> 0:04:13.200 in it to to cleanse the water, but we don't 0:04:13.240 --> 0:04:17.200 do anything to remove from that water these pharmaceutical residues 0:04:17.240 --> 0:04:19.440 and other chemicals that have found their way into our 0:04:19.480 --> 0:04:22.200 water stream, such that I'll give one example of many 0:04:22.240 --> 0:04:24.039 that are in my book Troubled Water, of just one. 0:04:24.760 --> 0:04:28.159 A scientist, independent scientists, with no act to grind, went 0:04:28.160 --> 0:04:30.760 ahead in the Great Lakes vast amount of water so 0:04:30.960 --> 0:04:33.640 be diluted like crazy would think. She tested fish and 0:04:33.720 --> 0:04:36.000 all five of the Great Lakes, and in all five 0:04:36.040 --> 0:04:37.680 of the Great Lakes she found in their brains and 0:04:37.680 --> 0:04:41.280 in their organs and their muscle, she found residues of 0:04:41.279 --> 0:04:44.880 of all kinds of psychiatric medicines like solof and Selexa 0:04:44.960 --> 0:04:48.880 and fourteen other medications. Now, if that's going there, that 0:04:49.000 --> 0:04:50.880 water is then being sent back to our homes for 0:04:50.960 --> 0:04:53.680 us to drink, and we are getting that dosage is 0:04:53.680 --> 0:04:57.240 back in micro quantities, and we're getting that in magnified amounts. 0:04:57.240 --> 0:04:59.800 Also for eating the fish. I'm just trying. I'm going 0:05:00.000 --> 0:05:03.760 through the sub extrapolation getting increasingly concerned. I'm just wondering, 0:05:03.960 --> 0:05:06.280 you know, how normal is this with other countries as well? 0:05:06.279 --> 0:05:08.320 I mean, is there just sort of this problem globally 0:05:08.440 --> 0:05:11.800 or is the US particularly bad. The more the more industrialized, 0:05:12.000 --> 0:05:15.520 the more industrialized society is, the more likely you are 0:05:15.600 --> 0:05:18.400 to have these problems. Now, there are some countries, UH, 0:05:18.520 --> 0:05:22.719 particularly Israel and Singapore that have very aggressive systems for 0:05:22.800 --> 0:05:27.160 purifying their water for reasons unrelated to UH necessarily health reasons, 0:05:27.160 --> 0:05:29.400 but really for water scarcity reasons. They have a reason 0:05:29.600 --> 0:05:31.040 to do this. And there are some parts of the 0:05:31.080 --> 0:05:34.200 United States, and I talked about in a chapter Orange County, California, 0:05:34.520 --> 0:05:36.760 which has made a decision to basically ignore the e 0:05:36.839 --> 0:05:40.120 p A guidelines, go way above it, and they demonstrate 0:05:40.120 --> 0:05:43.600 the fact that using known technologies at very reasonable prices, 0:05:43.920 --> 0:05:46.280 you can have the safest drinking water possible you can 0:05:46.360 --> 0:05:48.120 of pure water. All you would think that if they 0:05:48.120 --> 0:05:50.760 had Zoloft in the water, Prozac or something, everybody'd be 0:05:50.760 --> 0:05:53.640 a little b happier a little bit exactly. So it's 0:05:53.800 --> 0:05:58.120 seth So private versus public water utilities tell us the 0:05:58.480 --> 0:06:01.039 compare and contrast there. Okay, So, so this was a 0:06:01.040 --> 0:06:02.400 piece that I wrote the other day for The Wall 0:06:02.400 --> 0:06:05.080 Street Journal, and I wanna I wanna highlight something that 0:06:05.200 --> 0:06:07.640 is a completely unknown fact in American life. Even when 0:06:07.640 --> 0:06:09.760 I talk to members of Congress and senators, they have 0:06:09.839 --> 0:06:12.960 no idea. This is the case. You would think, rationally speaking, 0:06:13.000 --> 0:06:15.960 fifty states, maybe every state should have at least one 0:06:15.960 --> 0:06:18.600 water utility, maybe two, maybe three. So maybe there should 0:06:18.640 --> 0:06:21.159 be three hundred, four hundred, maybe five. What are utilities? 0:06:21.240 --> 0:06:24.560 United States? Tops? Even though you could say that one 0:06:24.640 --> 0:06:27.320 utility could cover several states, we have in the United 0:06:27.360 --> 0:06:32.800 States over fifty thousand what are utilities? One county, Los 0:06:32.839 --> 0:06:36.520 Angeles County has two hundred separate water utilities. These are 0:06:36.680 --> 0:06:40.400 very tiny. They have no ability to have the financial 0:06:40.520 --> 0:06:44.279 well wherewithal in order to get the financing that they 0:06:44.400 --> 0:06:46.919 need to make sure that they can hire up to 0:06:47.040 --> 0:06:49.720 date up that they can buy up to date technologies, 0:06:49.960 --> 0:06:53.800 hire the most advanced scientists and engineers, and also fix 0:06:53.839 --> 0:06:57.160 their broken infrastructure. Because this is crazy, just real quick, here, 0:06:57.320 --> 0:06:59.679 who has the interest of keeping all of these smaller 0:06:59.720 --> 0:07:03.080 util it is open the utilities, okay, so, but no 0:07:03.120 --> 0:07:05.920 one in the public, Lisa, nobody in the public should 0:07:06.040 --> 0:07:08.360 for a second think that this is a good idea, 0:07:08.400 --> 0:07:10.360 and it isn't a good idea. That's why one of 0:07:10.360 --> 0:07:13.040 the main thrust of my book talking about public health 0:07:13.080 --> 0:07:16.080 and water is to say that four big takeaways from 0:07:16.080 --> 0:07:19.520 my book, one of which is we must consolidate our 0:07:19.640 --> 0:07:22.800 drinking water utilities. And by the way, a second point 0:07:22.800 --> 0:07:24.360 that I made in the Journal article is that it 0:07:24.400 --> 0:07:27.440 turns out that about fift of American utilities are in 0:07:27.560 --> 0:07:30.360 private hands, which is invest your own hands, whether they're 0:07:30.360 --> 0:07:35.200 public companies or private companies. Remarkably, digging deep into e 0:07:35.360 --> 0:07:39.040 p A health data, which a couple of professors have done, 0:07:39.440 --> 0:07:42.240 you you learned something remarkable, which is that although you 0:07:42.240 --> 0:07:45.040 would think that public utilities have the public's interests in mind, 0:07:45.480 --> 0:07:49.520 actually there's a much higher incidence of contaminated water in 0:07:49.720 --> 0:07:52.120 public utilities. And the reason for that is because mayors 0:07:52.160 --> 0:07:54.960 want to keep the price of water low and therefore 0:07:55.200 --> 0:07:57.840 they don't get the outcomes you want. Set Segal, thanks 0:07:57.840 --> 0:08:01.840 so much for joining fascinating thing discussion. Set single activist, author, 0:08:01.920 --> 0:08:04.840 member of the Council Foreign Relations, author of Troubled Water, 0:08:04.920 --> 0:08:07.720 What's Wrong with What We Drink? That's coming October one, 0:08:07.720 --> 0:08:10.520 and also author of Let there Be Water Israel Solution 0:08:10.600 --> 0:08:13.240 for water star starved world. I am very interested in that. 0:08:13.320 --> 0:08:15.720 Tom Freedom of New York Times op ed today on 0:08:15.800 --> 0:08:29.160 that topic, using the work of Seth. Very interesting. Time 0:08:29.160 --> 0:08:31.480 to check in with Bloomberg Opinion. We're joined by Pining 0:08:31.520 --> 0:08:34.160 columnist Eric Outunus. He's a senior et F analysts for 0:08:34.200 --> 0:08:37.319 Bloomberg Intelligence and Eric, when you come in here, typically 0:08:37.360 --> 0:08:41.199 we talk about what new cool et F. Vanguard is 0:08:41.280 --> 0:08:43.959 launching a little bit different twists. Today Now they're talking 0:08:43.960 --> 0:08:47.440 about getting into the private equity business. What's going on 0:08:47.440 --> 0:08:51.000 one of our favorite ETF issuer. Yeah. I mean, anytime 0:08:51.040 --> 0:08:54.000 you hear Vanguard getting into something, most people shutter, especially 0:08:54.000 --> 0:08:55.760 if you're in that business. But I would say, if 0:08:55.800 --> 0:08:58.280 you're in private equity, don't worry so much. This is 0:08:58.320 --> 0:09:02.199 really aimed at the advisory business, wealth management. This is Vanguard. 0:09:02.280 --> 0:09:04.600 That's what they want to disrupt here. So if you 0:09:04.640 --> 0:09:07.000 are an advisor and you want to get bigger clients, 0:09:07.040 --> 0:09:10.120 institutional clients, you need private equity. So this is just 0:09:10.200 --> 0:09:12.720 to sort of round out their other offerings. It's right 0:09:12.720 --> 0:09:14.679 in the press release. It says here part of an 0:09:14.720 --> 0:09:17.680 ongoing effort to further expand the suite of products to 0:09:17.880 --> 0:09:21.800 our advisory clients, and Tim Buckley said back in March 0:09:21.840 --> 0:09:23.920 of last year, we have been really he's the CEO, 0:09:24.440 --> 0:09:26.960 He's the CEO of Vanguard. To me, this quote is 0:09:27.000 --> 0:09:29.839 really who should be on alert here. We have been 0:09:29.840 --> 0:09:31.880 really pleased with the price competition we have introduced in 0:09:31.880 --> 0:09:35.440 the mutual fund sphere. We liked that we have had 0:09:35.480 --> 0:09:37.280 that much of an impact that the area that really 0:09:37.280 --> 0:09:40.320 needs to come down in price is advice. Okay, this 0:09:40.400 --> 0:09:42.800 is this is really a compelling point because my first 0:09:42.840 --> 0:09:46.480 initial uh take on this was this is where the 0:09:46.480 --> 0:09:49.600 fees are private equity, and so of course Vanguard's gonna 0:09:49.600 --> 0:09:51.839 want to get into private equity, but it's being submanaged 0:09:51.840 --> 0:09:55.480 by somebody else. This isn't necessarily them building out their 0:09:55.520 --> 0:09:59.360 own private equity capacity within the house. This is more 0:09:59.400 --> 0:10:02.080 about what are saying, which is to have a bigger 0:10:02.120 --> 0:10:04.920 suite of offerings to institutions. Is that is that the 0:10:05.000 --> 0:10:07.680 right read of this? Yeah, I'm gonna bet there's no 0:10:07.880 --> 0:10:09.920 uh that. There was nothing in the press release about 0:10:09.920 --> 0:10:11.920 the what the cost would be, But I'm gonna bet 0:10:11.920 --> 0:10:13.600 it's going to be on the cheaper side for a 0:10:13.640 --> 0:10:16.840 private equity fund, probably on the expensive side. If you're 0:10:16.880 --> 0:10:19.280 talking et F prices, but Vanguard is not going to 0:10:19.320 --> 0:10:21.840 do anything that's like, you know, too controlled price wise. 0:10:22.000 --> 0:10:27.760 So then granted, the big loser here is the advisory business. 0:10:28.400 --> 0:10:31.160 But does this also start to put pressure on private 0:10:31.160 --> 0:10:33.000 equity fees in a way that we really haven't seen 0:10:33.080 --> 0:10:36.520 until now. It can, and you know, you cannot underestimate Vanguard. 0:10:36.559 --> 0:10:38.880 I was looking at the flows this year. Vanguard takes 0:10:38.880 --> 0:10:41.360 in more than everybody every year, but this year what's 0:10:41.360 --> 0:10:45.480 interesting is Fidelity, black Rock, Schwab, they're all starting to 0:10:45.559 --> 0:10:48.480 catch up to Vanguard. But the reason they're catching up 0:10:48.520 --> 0:10:50.560 is because they've all just copied Vanguard and they offer 0:10:50.640 --> 0:10:53.839 dirt cheap beta. So in a way, Vanguard is responsible 0:10:53.880 --> 0:10:57.080 for the whole enchilada. Now, if they get into private 0:10:57.080 --> 0:10:59.560 equity and they see clients, maybe come over and work 0:10:59.600 --> 0:11:03.520 with them, possible, But I see the price pressure in 0:11:03.559 --> 0:11:06.679 private equity and it talked to Paul Goldberg RP Analysts 0:11:06.679 --> 0:11:09.880 and he's very adamant about this as well. That's not 0:11:09.880 --> 0:11:12.199 gonna come for a while. We think medium long term 0:11:12.240 --> 0:11:15.120 at best. But right now their advisory business is up 0:11:15.160 --> 0:11:18.240 to a hundred and sixty one billion, and it basically 0:11:18.520 --> 0:11:20.439 is only a couple of years old, so that's a 0:11:20.480 --> 0:11:23.000 fast growth for that business. And remember they have all 0:11:23.040 --> 0:11:25.679 these fund investors who grew up with them and now 0:11:25.720 --> 0:11:28.480 have more complicated life matters. So they've got this natural 0:11:28.800 --> 0:11:31.320 pool of money coming in that they're gonna offer advice on. 0:11:31.800 --> 0:11:34.240 And their fees are low. The highest fee you can 0:11:34.280 --> 0:11:36.120 pay is thirty basis points, but if you have over 0:11:36.160 --> 0:11:39.920 twenty five million, they charge you five. Wow, it's just extraordinary. 0:11:39.960 --> 0:11:42.880 So who are going to be initially kind of the 0:11:42.960 --> 0:11:46.440 customers for this private equities I wouldn't think it would 0:11:46.440 --> 0:11:51.000 be appropriate for every you know, individual investor for example, Uh, institutions, right, 0:11:51.040 --> 0:11:52.800 so you're gonna have to be qualified. So here, I mean, 0:11:52.840 --> 0:11:54.920 here's the quote from the Pressure least many institutional clients 0:11:54.920 --> 0:11:58.240 seek alpha sources not readily available in the public markets. 0:11:58.280 --> 0:12:01.480 This also speaks to a bigger issue, which is, Uh, 0:12:01.559 --> 0:12:05.640 the private equity markets are growing, public equity markets not 0:12:05.920 --> 0:12:09.640 growing as much, and some people estimating that regular fund 0:12:09.640 --> 0:12:11.640 companies are going to have to get into private equity 0:12:11.640 --> 0:12:13.040 to keep up at the times. So who are the 0:12:13.040 --> 0:12:16.160 big advisory firms that should be onnotice? I'd say, well, 0:12:16.200 --> 0:12:19.720 all the big ones Meryl ubs uh. And then also 0:12:20.200 --> 0:12:22.080 I think r A is to a degree. I think 0:12:22.120 --> 0:12:24.120 the r A business. If you are a specialist and 0:12:24.160 --> 0:12:27.600 your local probably fine. But anyone in the middle middle level, 0:12:27.920 --> 0:12:30.480 we're bigger. I think that's who Vanguard typically takes out 0:12:30.520 --> 0:12:35.680 the big guys. How does Vanguard lower the advisory fees here? 0:12:35.840 --> 0:12:38.760 What's their secret sauce? Well, the secret sauce is the 0:12:38.840 --> 0:12:42.120 mutual ownership structure. They're basically designed like a co op, 0:12:42.559 --> 0:12:46.680 so their investors are vanguards, not a public company. That's 0:12:46.679 --> 0:12:49.079 why not much is known about it. But it's rest 0:12:49.120 --> 0:12:53.320 as Mounvern Pennsylvania private company there. They keep such a 0:12:53.320 --> 0:12:57.720 low profile and yet six point two trillion assets under management. Yeah, 0:12:58.040 --> 0:13:01.160 every time they get new profit in they instead of 0:13:01.280 --> 0:13:03.600 you know, doing things with that money, they typically vote 0:13:03.720 --> 0:13:06.439 because the fund investors are the shareholders, so of course 0:13:06.480 --> 0:13:08.480 they're going to vote to lower the fees. So for 0:13:08.559 --> 0:13:11.079 fifties some years they've been lowering the fees on funds, 0:13:11.679 --> 0:13:14.120 and I'd like to say they they were lowering fees 0:13:14.160 --> 0:13:16.400 before it was cool. Now everybody wants to do it. 0:13:16.440 --> 0:13:19.640 They're already at ten bibs everywhere, so in their mind, 0:13:19.720 --> 0:13:22.800 I think they are much more playing a different game. 0:13:22.880 --> 0:13:25.240 They're not looking for profits, They're looking to just lower 0:13:25.280 --> 0:13:29.640 costs for investors everywhere. So if Fidelity gets UH flows 0:13:29.880 --> 0:13:32.360 offering index mutual funds for two basis points, I think 0:13:32.400 --> 0:13:34.880 Vanguard takes that as a win for them, And I 0:13:34.920 --> 0:13:37.040 think if they can maybe have an effect on private equity, 0:13:37.080 --> 0:13:39.079 they'll probably take that as a win as well. But 0:13:39.120 --> 0:13:42.000 I think ultimately, right now their purpose is to build 0:13:42.000 --> 0:13:44.880 out this advisory business called the Personal Advisory Service p 0:13:45.000 --> 0:13:48.319 AS probably the three scariest letters if you're an advisor 0:13:48.400 --> 0:13:52.719 right now. Yeah, p AS, Eric Valcinez, thank you so 0:13:52.800 --> 0:13:55.240 much for being with us of Bloomberg Intelligence r et 0:13:55.360 --> 0:14:08.960 F grew here. It is a busy time down in Washington, 0:14:09.080 --> 0:14:11.800 d C. What with the State of the Union address 0:14:11.960 --> 0:14:15.200 last night by the president, impeachment wrapping up today in 0:14:15.240 --> 0:14:19.080 the Senate UH, and then the Democratic presidential race well underway. 0:14:19.160 --> 0:14:21.840 Let's get the latest returned to Lonnie Chen. Lonnie is 0:14:21.880 --> 0:14:26.160 a David and Diane Stephie research Fellow WHOEVER Institution, also 0:14:26.160 --> 0:14:29.120 a director of Domestic Public Studies and a lecture in 0:14:29.160 --> 0:14:32.760 the Public Policy program at Stanford University. Based in Stanford, 0:14:32.800 --> 0:14:35.760 Lonnie Thanks so much for joining us. Let's start with 0:14:35.840 --> 0:14:39.080 the State of the Union address last night. What are 0:14:39.080 --> 0:14:42.360 your key takeaways? Well, you know, I thought that the 0:14:42.400 --> 0:14:45.560 speech was effective, as you know, the president's sort of 0:14:45.640 --> 0:14:48.600 campaign kickoff in earnest. You know, obviously the President has 0:14:48.600 --> 0:14:51.360 been running for re election, but the speech last night 0:14:51.400 --> 0:14:54.120 was an opportunity for him to articulate what he believes 0:14:54.160 --> 0:14:57.320 the accomplishments of his administration has been. And if you 0:14:57.400 --> 0:14:59.720 look at the policy he discussed, a lot of it 0:14:59.760 --> 0:15:02.800 was aims squarely at the base of the Republican Party, 0:15:02.840 --> 0:15:05.480 really trying to animate and turn out those voters, which 0:15:05.520 --> 0:15:06.960 is going to be key to the success of his 0:15:07.080 --> 0:15:11.520 reelection campaign. So you saw themes like immigration, cultural issues 0:15:11.520 --> 0:15:15.600 like abortion. These are issues obviously that aren't necessarily aimed 0:15:15.640 --> 0:15:18.600 at swing voters or independent voters, are aimed at Republicans 0:15:19.040 --> 0:15:21.000 and getting that vote out is going to be critical. 0:15:21.080 --> 0:15:24.120 So I thought as a re election campaign speech, the 0:15:24.160 --> 0:15:27.000 President did what he needed to do. Uh And and 0:15:27.040 --> 0:15:29.400 now I think it's up to Democrats to define their 0:15:29.480 --> 0:15:33.960 race and pick a nominee. Lonny, You're an incredible guest 0:15:34.000 --> 0:15:36.200 for us to have today. I'm very glad you're here. 0:15:36.240 --> 0:15:38.880 Given the fact that you've advised the Romney and Rubio 0:15:39.000 --> 0:15:42.720 Republican presidential campaigns, and you've seen the way that the 0:15:42.800 --> 0:15:45.800 sausage is made in a lot of ways. I'm wondering, 0:15:45.880 --> 0:15:47.920 especially as some of the polls come out, the Gallop 0:15:47.960 --> 0:15:51.040 one in particular, showing President Trump with a record high 0:15:51.360 --> 0:15:55.359 approval rating, the bifurcation right now, the sort of dispersion 0:15:55.400 --> 0:15:59.400 between the Republicans and the Democrats becoming increasingly sort of 0:16:00.040 --> 0:16:03.120 excuse me, a hard line in their approaches. And I'm wondering, 0:16:03.160 --> 0:16:05.720 from your perspective, do we have a sense of whether 0:16:05.720 --> 0:16:09.000 the Republican Party or the Democratic Party is getting bigger 0:16:09.360 --> 0:16:14.120 in terms of representing overall population in the country. Yeah, 0:16:14.160 --> 0:16:17.960 that's a really good question. I think the Republican Party, 0:16:18.000 --> 0:16:22.400 by and large, the base has consolidated in the Republican Party. 0:16:22.560 --> 0:16:24.960 And what I don't think you're seeing necessarily a whole 0:16:25.000 --> 0:16:27.760 lot of people affiliating with the Republican Party now. I 0:16:27.800 --> 0:16:30.280 think what you are seeing is a lot of people 0:16:30.320 --> 0:16:33.360 who have decided that they'll support President Trump regardless of 0:16:33.400 --> 0:16:37.000 the partisan label. Uh. You know, we oftentimes talk about, 0:16:37.080 --> 0:16:41.200 for example, Midwestern voters in states like Iowa and Michigan 0:16:41.240 --> 0:16:45.160 that voted for President Obama twice, but in voted for 0:16:45.200 --> 0:16:48.000 President Trump. I don't know they would consider themselves Republicans 0:16:48.360 --> 0:16:51.200 or Democrats. I think they might consider themselves Trump voters 0:16:51.240 --> 0:16:54.840 first and foremost on the Democratic party side. I don't 0:16:54.880 --> 0:16:59.160 see their share of the electorate growing, unless you're talking 0:16:59.200 --> 0:17:03.400 about again, because solidating their support in coastal and urban areas. 0:17:03.960 --> 0:17:07.440 So I think what's happening is increasingly a phenomenon where 0:17:07.520 --> 0:17:11.719 voters are are trying to say that they're independent, and 0:17:11.760 --> 0:17:14.439 we have to really dissect what independent means. That mean 0:17:14.520 --> 0:17:16.640 that they're truly independent in the sense that they could 0:17:16.680 --> 0:17:19.240 vote for a Republican or a Democrat, or does it 0:17:19.280 --> 0:17:21.600 mean that they're independent in a more traditional sense, which 0:17:21.640 --> 0:17:23.760 is that they lean one way or the other and 0:17:23.800 --> 0:17:27.000 are inclined to vote for a Democratic Republican. I tend 0:17:27.000 --> 0:17:28.840 to think we're in an era where people are are 0:17:29.040 --> 0:17:32.639 dealigning themselves from political parties, and what that means is 0:17:32.680 --> 0:17:35.080 opportunity for politicians like Trump who are a little bit 0:17:35.080 --> 0:17:38.280 out of the box, a little bit Lonnie. So the 0:17:38.359 --> 0:17:42.879 impeachment process wrapping up today, officially at least within the Senate, 0:17:42.920 --> 0:17:46.560 what do you think, if anything, the lasting impact will 0:17:46.600 --> 0:17:52.160 be on President Trump, particularly as he heads into reelection mode. Yeah, 0:17:51.680 --> 0:17:54.400 I've been saying for a while, I think that this 0:17:54.720 --> 0:17:57.439 impeachment saga is going to be a distant memory by 0:17:57.480 --> 0:17:59.880 the time we get to October and the fall campaign 0:18:00.280 --> 0:18:03.520 leading into the November elections. I really think that, you know, 0:18:03.600 --> 0:18:07.200 while it's dominating the news now, I think by and large, 0:18:07.320 --> 0:18:09.800 voters are going to be concerned about a whole different 0:18:09.840 --> 0:18:12.480 set of other issues, not not impeachment, by the time 0:18:12.480 --> 0:18:15.200 they go to cast their votes. I think the pocketbook issues, 0:18:15.800 --> 0:18:18.720 jobs in the economy, healthcare, those are going to be 0:18:18.720 --> 0:18:20.639 the important ones that voters are going to turn to. 0:18:20.800 --> 0:18:24.600 So I know the the impeachment saga is difficult to 0:18:24.600 --> 0:18:27.880 to not cover, but the reality is that for most 0:18:27.960 --> 0:18:30.000 voters this is not going to be an issue that 0:18:30.000 --> 0:18:33.280 they particularly care about. Lonnie, Since you've advised both the 0:18:33.280 --> 0:18:37.320 Marco Rubio and Romney campaigns, both of those individuals have 0:18:37.400 --> 0:18:41.600 come out against President Trump throughout his presidency, certainly early 0:18:41.720 --> 0:18:46.120 on and before he became presidents have their views changed? 0:18:46.160 --> 0:18:49.360 I mean sort of among moderate Republicans, are they are 0:18:49.359 --> 0:18:53.320 they more supportive of President Trump now? Well, I think 0:18:53.320 --> 0:18:58.000 Senator Rubio has has been, you know, pretty supportive, particularly 0:18:58.080 --> 0:19:01.440 over the last couple of months or so. I think 0:19:01.480 --> 0:19:04.399 he's been supportive on policy. I think with respect of 0:19:04.440 --> 0:19:08.520 this impeachment debate, it's been pretty clear. He's been pretty forceful, 0:19:08.560 --> 0:19:10.560 I think, in arguing that he doesn't believe this is 0:19:10.800 --> 0:19:14.080 a removable offense. And he also, you may recall, voted 0:19:14.119 --> 0:19:16.520 against trying to hear from additional witnesses. So I think 0:19:16.600 --> 0:19:20.359 he's been fairly conventional. He has spoken out against the 0:19:20.359 --> 0:19:23.120 president a few times on on some foreign policy issues, 0:19:23.160 --> 0:19:25.520 but by and large, I think he's been he's been 0:19:25.520 --> 0:19:28.760 pretty consistent in supporting the president. Senator Romney, I think, 0:19:28.800 --> 0:19:32.000 has been in a slightly different position, and he's obviously 0:19:32.080 --> 0:19:35.000 been seen as more of a maverick. I think that 0:19:35.040 --> 0:19:37.480 reflects the fact, first of all, that, um, you know, 0:19:37.520 --> 0:19:41.760 Senator Romney has been somebody who comes politically from a 0:19:41.760 --> 0:19:45.720 different kind of constituency. He's got got some more political safety, 0:19:45.720 --> 0:19:48.760 one would argue, than Senator Rubio does in Florida, which 0:19:48.800 --> 0:19:51.120 is a swing in your state. And I do think 0:19:51.160 --> 0:19:53.240 that Senator Romney is a different phase of his career. 0:19:53.320 --> 0:19:55.960 Quite frankly, Um, you know, he's been the nominee the 0:19:55.960 --> 0:19:58.479 Republican Party, he's been somebody who's been an elder statesman 0:19:58.480 --> 0:20:01.200 in the Republican Party for a while. Um, I think 0:20:01.240 --> 0:20:03.800 he's had the latitude in the freedom to frankly speak 0:20:03.840 --> 0:20:06.280 his mind or but this is this is a this 0:20:06.320 --> 0:20:09.480 is a compelling point. He's more in a position to 0:20:09.520 --> 0:20:13.800 speak his mind. Do other Republicans feel similarly to him 0:20:13.840 --> 0:20:18.240 when they're not speaking in public? Yeah, Well that's the 0:20:18.359 --> 0:20:21.840 that's the key, uh modifier there, lisays when they're not 0:20:21.880 --> 0:20:25.000 in public. I think a lot of Republicans privately, are 0:20:25.080 --> 0:20:28.280 are you not happy with the president's behavior on the 0:20:28.400 --> 0:20:32.120 Ukraine situation? They would say that privately, but publicly they haven't. 0:20:32.160 --> 0:20:34.480 They haven't stood out and said that because they fear 0:20:34.520 --> 0:20:37.359 the repercussions and or they believe that the way the 0:20:37.400 --> 0:20:40.359 Republican Party is now, there would be electoral consequences to 0:20:40.400 --> 0:20:42.919 speaking out against presidents. So yeah, there definitely is this 0:20:43.000 --> 0:20:46.760 dichotomy between private and public. Lonnie, just real quickly thirty seconds. 0:20:46.760 --> 0:20:48.879 How do you handicap the democratic field? We had that 0:20:48.920 --> 0:20:51.760 Debacco in the Iowa caucus is just right now? How 0:20:51.760 --> 0:20:54.800