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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: This would probably be controversial among my friends in the

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Speaker 2: Biden administration, but I think that there's a general perception

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Speaker 2: that Vice President Harris will be a bit more business friendly.

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Speaker 1: Welcome back to voter Nomics, where politics and markets collide.

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Speaker 1: This year, voters around the world have the ability to

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Speaker 1: affect markets, countries, and economies like never before, so we've

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Speaker 1: created this series to help you make sense of it all.

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Speaker 3: I'm Allegra Stratton, I'm Adrian Wooldridge, and I'm Stephanie Flanders.

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Speaker 1: So look, we are seven minutes out.

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Speaker 3: From the seven minutes.

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Speaker 1: Obviously fail in the first ten seconds. We are seven

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Speaker 1: weeks out from the US election, and although the outcome

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Speaker 1: is no clearer, the end is coming into sites. So

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Speaker 1: we're going to continue to unpick what the candidate's financial

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Speaker 1: and regulatory policies could mean for American businesses.

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Speaker 3: And one of the things we're going to get into later,

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Speaker 3: Adrian and I spoke with one of Wall Street's higher

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Speaker 3: profile Democrats and ever Core Chairman emeritus, Ralph sch Losty,

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Speaker 3: one of its founders, just to get an idea of

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Speaker 3: what the potential ideas could mean for business. You know,

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Speaker 3: he's sitting in Wall Street, or certainly was sitting in

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Speaker 3: Wall Street, and has a particular perspective that you might

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Speaker 3: say was a kind of traditional approach to thinking about

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Speaker 3: business and campaigns. You know, how much money are they

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Speaker 3: give it putting in what impact of the candidates policies

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Speaker 3: going to have? But Adrian and I don't know about you,

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Speaker 3: but I've just been struck. You know, Donald Trump progressively

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Speaker 3: has so scrambled the way we think about business and

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Speaker 3: politics and brought them closer and closer together. And we've

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Speaker 3: seen that particularly in an increasingly close relationship between him

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Speaker 3: and Elon Musk, where Elon Musk is not just giving

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Speaker 3: him a huge amount of money, but giving him a

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Speaker 3: platform actively supporting him on Twitter.

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Speaker 4: Absolutely, there used to be a sort of hands off

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Speaker 4: relationship between the donor on the one hand and the

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Speaker 4: candidate on the other. The donor would give some money,

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Speaker 4: it would go through a lot of intermediaries and there'd

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Speaker 4: be some sort of space between the two. Now you're

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Speaker 4: getting a direct intermingling between business on the one hand

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Speaker 4: and the candidates on the other. Trump obviously did this,

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Speaker 4: and it's most flagrant with his hotel in Washington that

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Speaker 4: he encouraged people to go into. But now we're saying

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Speaker 4: with Musk, Musk is running this business which is ex Twitter.

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Speaker 4: That part of the business model seems to be outrage

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Speaker 4: people to put Trump on there to encourage sort of

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Speaker 4: active engagement with Twitter through saying Trump Trump leaning things.

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Speaker 4: So it's an extraordinary sort of commingling, I think.

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Speaker 1: And also there's a kickback because if Trump's selective, Musk

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Speaker 1: is going to be given this role looking at So

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Speaker 1: there's and I do try not to be too parochial

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Speaker 1: and bring it back to the UK. But in the

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Speaker 1: UK right now we're having every day on the front page,

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Speaker 1: we've got the Prime Minister and his wife being accused

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Speaker 1: for taking clothes and money off of Well, money is

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Speaker 1: not the problem, but clothes and other benefits that they

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Speaker 1: haven't declared off a donor on the one hand. But

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Speaker 1: then in America you've got it on a mega mega,

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Speaker 1: mega scale and it doesn't not mega but a mega scale,

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Speaker 1: And it doesn't seem to there doesn't seem to be

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Speaker 1: anybody saying, hold on a second, it's not allowed.

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Speaker 3: Well except I mean, there's plenty of people amazed at

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Speaker 3: the kind of conflict of interest that would represent. I mean, remember,

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Speaker 3: it's not just that it's payback for support in the campaign.

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Speaker 3: It would be an ongoing and massive conflict of interest

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Speaker 3: for Elon Musk to be reinventing government or thinking about

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Speaker 3: how to reduce government at a time when his own

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Speaker 3: company is receiving billions of dollars in government contracts. So

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Speaker 3: the idea that there are no guardrails against that, I

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Speaker 3: think is surprise to people in America, where we always

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Speaker 3: taught that, you know, there is this written constitution that

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Speaker 3: provides checks and balances. They're increasingly getting faded.

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Speaker 1: If you read the biography of Musk, it's clear that

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Speaker 1: about eighteen months ago, two years ago, Musk thought Trump

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Speaker 1: was a loser.

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Speaker 3: And maybe that's the direct quote. Well, not very long ago,

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Speaker 3: Donald Trump thought crypto currencies were a scam, and we

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Speaker 3: now know that he's going to get his own.

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Speaker 1: Okay, So to talk about that change of heart that

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Speaker 1: Stephanie just mentioned and how crypto is playing in the

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Speaker 1: US election, we have in the podcast studio right now

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Speaker 1: Emily Nicole, who is Bloomberg's crypto reporter. Hi, Emily, Hi,

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Speaker 1: just explain for us what was launched by Donald Trump

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Speaker 1: and family this week launched.

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Speaker 5: Maybe a bit of a generous term, actually more like

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Speaker 5: a veiled to a certain extent. So earlier this week,

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Speaker 5: Donald Trump went on an X spaces I guess you'd

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Speaker 5: call it now, where he spoke for about two hours

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Speaker 5: along with other members of the Trump family about the

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Speaker 5: project that they intend to launch called World Liberty Financial.

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Speaker 5: We still don't really know what it is, except for

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Speaker 5: the fact that it's going to be in the world

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Speaker 5: of decentralized finance, which means that there will be some

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Speaker 5: loose form of governance by the people and the community

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Speaker 5: that are buying into it rather than by the people

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Speaker 5: running it, and that there will be a token attached

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Speaker 5: to it for that purpose which people can buy to

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Speaker 5: use to vote on proposals on how it's run, but

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Speaker 5: also probably speculate with as well.

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Speaker 1: So for an expert like yourself, does it look promising

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Speaker 1: or does it look a bit odd?

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Speaker 3: It looks light on details. I think it's probably not

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Speaker 3: the first crypto enterprise that's been a bit light onto.

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Speaker 5: Yeah, exactly, but it's probably the most high profile one

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Speaker 5: that we've had so far. I mean, for a respective

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Speaker 5: of president to be launching something like this. It definitely

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Speaker 5: is in that gray area of we don't know exactly

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Speaker 5: where it sits between business interests, financial interests, how much

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Speaker 5: he might stand to profit from it or benefit from it.

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Speaker 5: There is a disclaimer on the project that says Trump

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Speaker 5: or his family members, none of them will benefit financially

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Speaker 5: from it. But you know, that's assuming that the token

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Speaker 5: itself isn't going to be something that can appreciate in value.

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Speaker 5: Obviously it will, so whether or not that actually bears

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Speaker 5: out to be the case is something to be.

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Speaker 1: Seen, Adrian, I mean, before we get onto talking to

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Speaker 1: Emily about the crypto in the election, just sort of

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Speaker 1: on the principle of a presidential candidate launching or unveiling,

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Speaker 1: to use Emily's phrase, unveiling something like this.

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Speaker 3: Would we see that in the UK though.

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Speaker 4: I can't conceivably imagine it. It's not just that there

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Speaker 4: that he's unveiling this. This thing is a presidential candidate.

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Speaker 4: He's doing it seven weeks before the election on a

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Speaker 4: platform provided by one of his biggest backers, Elon m

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Speaker 4: It's quite extraordinary, and.

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Speaker 3: It's also the intermingling with the family. The family are

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Speaker 3: ever presently and the business interests continue with the family.

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Speaker 3: And I noticed even in our story that the white

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Speaker 3: paper for well, it sounds like white paper is also

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Speaker 3: a sort of a generous phrase. But the World Liberty

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Speaker 3: Financial reviewed by Bloomberg News and that listed Donald Trump

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Speaker 3: as chief Crypto Advocate, Eric and Donald Junior each as

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Speaker 3: Web three ambassadors, and eighteen year old Baron Trump as

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Speaker 3: Chief DEFY Visionary. I guess we should. I mean DeFi

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Speaker 3: is a sort of particular bit of the crypto universe

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Speaker 3: which is even considered a little bit fringe even by

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Speaker 3: some of the crypto people. Is that right Somewhat? Yes?

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Speaker 5: I mean, if you're kind of the yeah, who would

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Speaker 5: buy bitcoin or ether because you think it might be

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Speaker 5: a bit of an investment, than Defy is certainly fringe

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Speaker 5: to you the crypto traders. Though It's kind of the

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Speaker 5: bread and butter of how things work, because it's often

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Speaker 5: the way that you get to experiment with new tokens,

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Speaker 5: new projects and things before they can get vetted properly

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Speaker 5: to be on the big exchanges like Finance or coinbase.

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Speaker 5: For Trump, and in this project, the purpose of it

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Speaker 5: being in DeFi is quite important because it means that

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Speaker 5: they can have this claim to not really have any

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Speaker 5: control or say over how it operates. Defy itself as

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Speaker 5: a construct is imagine a project that's basically just a

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Speaker 5: whole run of code and smart contracts that kind of

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Speaker 5: execute when certain conditions are met, and nobody can intervene

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Speaker 5: once they're written. So the idea is that people who

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Speaker 5: hold this token that's touched the project can use that

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Speaker 5: bit of token that they own to say, Okay, well

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Speaker 5: I vote this way, and somebody with more tokens can

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Speaker 5: vote another way, and in that way, the Trump family

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Speaker 5: themselves can say, well, really, I don't have any say

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Speaker 5: about how this goes because all the token holders are

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Speaker 5: voting whichever way. That doesn't necessarily mean they don't benefit

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Speaker 5: financially from it, though, especially if token does trade in

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Speaker 5: open markets, which it should do in time.

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Speaker 3: I mean, there is this a bit of the sort

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Speaker 3: of demographic that Trump is really going for, which is

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Speaker 3: the sort of countercultural younger skeptical of government. And this

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Speaker 3: is right. Even if they don't make any money on this,

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Speaker 3: it does sort of send that message that I'm all

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Speaker 3: about sort of somewhat, you know, it's getting away from

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Speaker 3: the mainstream financial system. Libertarianism, I mean, that's part of

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Speaker 3: the messaging.

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Speaker 5: Yeah, all of those things are kind of at the

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Speaker 5: heart of crypto, and so a lot of the traders

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Speaker 5: who sit within crypto are at least you know, hardcore,

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Speaker 5: day to day, live and breathe it very much sit

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Speaker 5: on that side. But then you have to wonder if

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Speaker 5: that they would have been Trump voters anyway to a

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Speaker 5: certain extent. And so Trump has made repeated over to

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Speaker 5: the crypto industry this year to say that he wants

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Speaker 5: to be part of it, he wants to create rules

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Speaker 5: for it, he wants to get rid of sec chair

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Speaker 5: Gary Guns are on day one because Gary Guns that

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Speaker 5: has been launching several enforcement actions against scripto companies over

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Speaker 5: the last few years that the industry is seeves as

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Speaker 5: overly harsh. But you know, saying all of that was

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Speaker 5: probably enough because by comparison, his competitor Kamala Harris hasn't

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Speaker 5: really said anything on crypto.

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Speaker 3: I mean, when it comes to the sort of directly

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Speaker 3: benefiting financially from the campaign, we had that you know,

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Speaker 3: Trump Media ipo. In April Origin it was valued at

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Speaker 3: nine billion. I think it's now less than half that

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Speaker 3: he could still potentially make two billion and people are

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Speaker 3: literally trading him and it's been going down pretty steadily,

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Speaker 3: certainly since Biden got out of the race. If people

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Speaker 3: end up trading on this platform, which is very much

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Speaker 3: associated with him, if they're speculating on Trump media stocks

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Speaker 3: based on whether or not they think he's going to win,

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Speaker 3: and then they end up losing a lot of money,

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Speaker 3: I mean, it isn't done that back fire on him

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Speaker 3: in the end, or does it not matter because he's lost?

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Speaker 5: And it depends how much he can distance himself from it.

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Speaker 5: I mean the ability to be able to say, well,

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Speaker 5: you know, we don't earn any money from this, I'm

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Speaker 5: just an advisor, or I sit on the periphery. I'm

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Speaker 5: just promoting it, but my family are really more involved

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Speaker 5: these kind of things. There's always a way from to

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Speaker 5: distance himself. That said, we did do a story my

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Speaker 5: colleagues Zeker Fox and Miashen early this month about the

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Speaker 5: people behind the project who are building it. And they've

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Speaker 5: previously built projects that have been subject to hacks, They've

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Speaker 5: done get rich quick schemes, they've sold colon cleanses online.

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Speaker 5: You know, it's not necessarily the kind of business business

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Speaker 5: that you think would be solid footing, so looking ahead

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Speaker 5: to what world liberty might look like. I mean, there's

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Speaker 5: always a chance, for example, that they don't launch this

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Speaker 5: before the election happens, and so he's able to kind

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Speaker 5: of say that, well, you know, nothing infringed upon the

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Speaker 5: voting process in a certain sense, but once it goes live,

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Speaker 5: there's nothing to say. I guess that he couldn't still

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Speaker 5: sit on those edges without having all his fingers in.

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Speaker 3: I guess this is all part of why it must

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Speaker 3: be interesting day to day to be a Bloomberg crypto reporter.

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Speaker 3: Thank you very much, Sheery, Thank you my top fact.

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Speaker 3: I was looking up while we were talking that Trump

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Speaker 3: Media's revenue is equivalent and I have to admit this

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Speaker 3: is according to Roy, but it is equivalent to two

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Speaker 3: Starbucks coffee shops, and strategists say it's three point six

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Speaker 3: billion stock market value is detached from its day to

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Speaker 3: day business, since it lost just UNDERD nine hundred thousand

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Speaker 3: dollars in its most reported quarter. I love that it's

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Speaker 3: worth several billion dollars and its revenue is the same

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Speaker 3: as two star coffee shops. We have our guest this week, Adrian,

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Speaker 3: and I spoke with one of Wall Street's higher profile Democrats.

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Speaker 3: A few days ago, Ralph schlostein chairman emeritus at Evercourt,

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Speaker 3: which is a global investment banking advisory business, and I

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Speaker 3: started by asking him, at this late stage in the campaign,

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Speaker 3: was it really going to come down to who had

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Speaker 3: the most money?

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Speaker 2: I think the answer to that is how much does

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Speaker 2: the relative net worth of Bill Gates and Warren Buffett? Matter?

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Speaker 2: Both of them have more money than they need.

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Speaker 3: They don't have instant access to massive social media.

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Speaker 2: Platform and I would say both campaigns have more than

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Speaker 2: enough money to promote their candidate, and the differential in money,

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Speaker 2: which at least at the current moment, seems to favor

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Speaker 2: Vice President Harris, is not going to be the determining

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Speaker 2: factor in this election.

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Speaker 4: Can you give us a general sense of how corporate

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Speaker 4: America business America is seeing and splitting over this debate.

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Speaker 4: Are there any clear lines of difference between different business

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Speaker 4: groupings and is it changing? Is that as the election evolves.

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Speaker 2: This would probably be controversial among my friends in the

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Speaker 2: Biden administration, but I think that there's a general perception

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Speaker 2: that Vice President Harris will be a bit more business friendly.

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Speaker 2: Large technology and corporate business friendly, and I think some

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Speaker 2: of that is a function of her background and where

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Speaker 2: she comes from. She's represented in the Senate many of

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Speaker 2: these large technology companies, obviously Silicon Valley is in California,

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Speaker 2: and she's got a long history of interacting with them,

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Speaker 2: being supported by them, and having i think some empathy

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Speaker 2: to the issues that might be of interest to them.

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Speaker 2: And that's not to say that President Biden has been

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Speaker 2: hostile toward business, but he's just he's got less of

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Speaker 2: a background and an empathy toward that, and he's got

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Speaker 2: a very strong background in foreign policy and that's been

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Speaker 2: a big focus of his I think her agenda is

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Speaker 2: very focused on two things. Growth for the overall economy,

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Speaker 2: which I think is really important, as there is something

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Speaker 2: to be said for this long around quote of the

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Speaker 2: rising tide lifting all ships. And then she's also i

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Speaker 2: think very focused on moving a little bit more of

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Speaker 2: the benefits of public policy to the middle class. Her

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Speaker 2: housing plan, her childcare plan, her child credit, tax credit,

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Speaker 2: capping drug prices, and the fact, you know there's going

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Speaker 2: to be a massive discussion next year about what do

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Speaker 2: we do with the Trump tax cuts. They all expire

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Speaker 2: at the end of twenty twenty five, and there's a

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Speaker 2: probably the biggest difference between the two candidates, which neither

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Speaker 2: of them talks particularly a lot about, is what their

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Speaker 2: view is of what should happen to that next year.

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Speaker 4: Against that, I just want to say that surely we're

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Speaker 4: seeing business fleeing from California as a significant rate, and

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Speaker 4: middle class people fleeing from California as a significant rate,

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Speaker 4: because it's hard for middle class people to make ends meet,

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Speaker 4: and businesses feel that the burden of regulation is an

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Speaker 4: intrusiveness of regulation is very high. If I was looking

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Speaker 4: at California, I wouldn't say that that's the sort of

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Speaker 4: place I wanted to do business these days.

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Speaker 2: Oh, it has a lot of things going for it too.

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Speaker 2: It has an incredibly educated labor force, and it's been,

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Speaker 2: you know, until relatively recently, a you know, an engine

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Speaker 2: of demographic growth for the United States. So you know,

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Speaker 2: there certainly are highly publicized, occasionally controversial figures like Elon

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Speaker 2: Musk who make very strong statements about the friendliness of

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Speaker 2: the California business climate. And I do think as a

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Speaker 2: general matter, the Democratic Party has been a little bit

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Speaker 2: excessive in its regulatory exuberance, and that's true at the

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Speaker 2: national level, and it's certainly true in the states that

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Speaker 2: where you have one party rule, one of which I

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Speaker 2: live in.

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Speaker 3: I'm interested. There's been quite a lot of talk. You

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Speaker 3: actually just mentioned it. There about three quite unpopular characters

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Speaker 3: in large parts of the business community that are currently

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Speaker 3: in the administration, Lena Khan and Gary Gainsler, the head

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Speaker 3: of the leader Khan being a Federal Trade Commission head,

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Speaker 3: and the Security and Exchange Commission head Gary against Leni

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Speaker 3: Khan in particular has distinguished herself for a sort of

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Speaker 3: pro competitive, quite aggressive approach to at least a starting

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Speaker 3: to regulate big tech companies and others. Then more generally,

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Speaker 3: I would say, there's a sort of interesting dividing line

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Speaker 3: between right and left in large parts of the world now,

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Speaker 3: where it's actually the left of the progressive side that

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Speaker 3: is talking more. I don't know if they've done a

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Speaker 3: lot more, but talking a lot more about competition and

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Speaker 3: worried about concentration of corporate power. I Nikan is a

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Speaker 3: sort of symbolic figure for many people and the more

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Speaker 3: progressive side of Democrats, because she has been considered to

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Speaker 3: be quite radical. Kamala Harras worry about that whether or

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Speaker 3: not she gets reappointed, is that going to be a

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Speaker 3: key issue.

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Speaker 2: A very high quality news organization, Bloomberg that wrote a

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Speaker 2: story about how donors and supporters of Kamala Harris were

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Speaker 2: suggesting that their support or donations should be conditioned upon

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Speaker 2: the removal of her, and I wasn't quoted in that story,

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Speaker 2: but I was called about it, and I said that

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Speaker 2: I thought that was highly premature and ridiculous. Other than that,

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Speaker 2: completely true and the reason I do believe that, first

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Speaker 2: of all, you had anti trust policy and competition policy.

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Speaker 2: There hasn't been a single change in law since probably

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Speaker 2: two thousand or earlier. I said in twenty seventeen that

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Speaker 2: I thought one of the most difficult professional jobs in

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Speaker 2: America under President Trump was to be an anti trust lawyer,

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Speaker 2: because the law didn't really matter. It was whether he

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Speaker 2: liked you or not. So he went after the Time

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Speaker 2: Warner Att merger because he hated CNN, and of course

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Speaker 2: they got thrown out in court. We had an experience

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Speaker 2: where we had a merger held at Evercore held up

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Speaker 2: under Syphius, which was, by the way, a merger of

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Speaker 2: two US companies had nothing to do with Syphius.

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Speaker 3: Syphius is the American law that is used just to

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Speaker 3: prevent foreign companies from taking big stakes of US company.

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Speaker 2: Yes, buying US companies. So this was two American companies

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Speaker 2: and it was held up for a long time, and

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Speaker 2: then one of the companies decided to redomicile one of

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Speaker 2: their headquarters back into the United States and lo and

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Speaker 2: behold a week later the merger got approved. Nothing to

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Speaker 2: do with law, I think the current group and Lena

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Speaker 2: Khan is the tip of the spear there, but the

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Speaker 2: Assistant Attorney General for Anti Trust is certainly part of

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Speaker 2: that as well Kaplan. They've been definitely more aggressive in

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Speaker 2: their interpretation of the law. They've gone to court a

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Speaker 2: number of times and lost, they've won a couple And

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Speaker 2: so we spend a lot of time at Evercore with

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Speaker 2: companies talking about mergers, and this is always a part

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Speaker 2: of the discussion. And I would say the prevailing view

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Speaker 2: among larger companies today is if we believe the laws

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Speaker 2: on our side, we may be challenged, but we'll go

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Speaker 2: to court and we'll win. I do think my guess

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Speaker 2: would be that there would be a somewhat moderated view

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Speaker 2: of that particular of the FTC and the assistant Attorney

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Speaker 2: General for Andy Trust under Vice President Harris, with her

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Speaker 2: legal background and sensitivity to some of the issues that

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Speaker 2: business cares about, might care a little bit more about

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Speaker 2: how those particular roles are executed.

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Speaker 3: There are some who say that it potentially more influential

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Speaker 3: than you would think. Point of disagreement between Trump and

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Speaker 3: Harris as asked you to crypto because it is gaining

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Speaker 3: so many Ficinado's, particularly in kind of demographics that Kamala

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Speaker 3: Harris is trying to attract. And Trump has changed his

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Speaker 3: view on crypto but has now been pretty positive about it.

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Speaker 3: We think that's partly why Elon Mosque is so supportive

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Speaker 3: of him, whereas Gary Goesler stands for a much more

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Speaker 3: circumspect and potentially negative approach. Do you think that is

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Speaker 3: we are underestimating how much that masses.

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Speaker 2: I would say it to me, it's a fringe issue,

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Speaker 2: not a central issue. I think the change on President

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Speaker 2: Trump's part has been definitely linked in a pretty material

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Speaker 2: way to the contributions that have been made. There's an

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Speaker 2: interest group out there that has a pack that is

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Speaker 2: giving tens of millions of not hundreds of millions of

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Speaker 2: dollars in this election cycle to crypto friendly candidates, including

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Speaker 2: former President Trump.

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Speaker 3: But you're sitting in a mainstream Wall Street maybe you'd

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Speaker 3: always say.

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Speaker 2: That I must say, I'm in the world that things

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Speaker 2: are not probably a complete paleoanthic erea troglodite. I have

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Speaker 2: said in the past that to me, the valuation of

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Speaker 2: bitcoin reminded me of the beanie baby create But I

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Speaker 2: think that's turned out to be and not necessarily correct view.

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Speaker 2: And I think it remains to be seen whether there

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Speaker 2: are any mainstream uses of these electronic monetary vehicles other

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Speaker 2: than a store of value and speculation.

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Speaker 4: I want you to ask about something else, which is

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Speaker 4: what might be briefly called woke capital, or the passion

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Speaker 4: for micro intervention in the way that businesses run themselves

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Speaker 4: THROUGHDI and ESD and the rest of it. Is Vice

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Speaker 4: President Harris an advocate of that, and if she is,

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Speaker 4: is that a problem for business?

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Speaker 2: I think the I'm very passionate about the objectives of

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Speaker 2: some of that. I think they're really good business reasons

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Speaker 2: to have a diverse workforce, and I can articulate those

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Speaker 2: for you if you want. But I do think the

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Speaker 2: prescriptive nature of this, which has been broadly thrown into

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Speaker 2: the pejorative term woke capitalism, is not necessary? Is overdone?

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Speaker 2: I really do And I stepped down as a CEO

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Speaker 2: of Evercore about two and a half years ago, and

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Speaker 2: one of the things I've said privately more than once

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Speaker 2: is that being the CEO of a public company today

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Speaker 2: is just a lot more challenging and less clear as

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Speaker 2: to what you're really trying to accomplish. Evercore is a

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Speaker 2: independent investment banking firm. We don't have any balance sheet,

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Speaker 2: we have offices, and the idea that we would be

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Speaker 2: required to file a lengthy environmental statement about whether our

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Speaker 2: buildings are eco friendly or not is in my view,

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Speaker 2: complete nonsense. Obviously, if you're a chemical company be focused

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Speaker 2: on that. If you're an energy company, should be focused

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Speaker 2: on the environmental aspects of your business. But this has

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Speaker 2: gone It has gone way too far. The goals that

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Speaker 2: they're trying to achieve are laudable. What's gone way overboard

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Speaker 2: is the prescriptive exuberance with which they pursue them.

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Speaker 3: From the sort of everical perspective, Should anyone be trading

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Speaker 3: this election? How does one trade this election?

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Speaker 2: I'm not sure how to trade even without an election,

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Speaker 2: so with an election it becomes harder. I'm just not

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Speaker 2: I think the only thing that I do think is

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Speaker 2: truly market effecting is I do believe that if Trump

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Speaker 2: were to pursue the tariff policies that he's discussed in

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Speaker 2: the campaign, and it's not clear to me that he

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Speaker 2: would pursue them, but if he were to pursue those,

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Speaker 2: which would be very high tariffs across the board and

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Speaker 2: much using that as the principal source of new revenue

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Speaker 2: for the finance the government, I think that will have

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Speaker 2: a very chilling effect on the markets, and because it

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Speaker 2: will be widely perceived to be anti trade and inflationary,

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Speaker 2: and I think neither of those things are good for

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Speaker 2: equity markets.

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Speaker 3: It's interesting you say that there is a Wall Street

437
00:26:23,600 --> 00:26:25,800
Speaker 3: view that I would say is quite common, which is

438
00:26:25,880 --> 00:26:30,200
Speaker 3: that longer term, the macroeconomic mix under Donald Trump would

439
00:26:30,280 --> 00:26:35,200
Speaker 3: undoubtedly be less sustainable, more risky band for the US,

440
00:26:35,280 --> 00:26:39,360
Speaker 3: band for the world, higher inflation, as you say, reduced

441
00:26:39,880 --> 00:26:43,920
Speaker 3: trade connections, and an enormous deficit. It's going to be

442
00:26:43,960 --> 00:26:47,000
Speaker 3: pretty large under either administration, but under a completely out

443
00:26:47,040 --> 00:26:52,800
Speaker 3: of control deficit. But I've seen plenty of notes coming

444
00:26:52,920 --> 00:26:55,960
Speaker 3: through my email saying it will be bullish for risk

445
00:26:56,040 --> 00:26:59,440
Speaker 3: assets in the first year or so. Because you would

446
00:26:59,440 --> 00:27:04,080
Speaker 3: have this text, you would have a feeling that business

447
00:27:04,160 --> 00:27:07,399
Speaker 3: was not going to be constrained by regulations, by the

448
00:27:07,400 --> 00:27:09,359
Speaker 3: long arm of the state. All these things that have

449
00:27:09,480 --> 00:27:11,560
Speaker 3: been you even just talked about just now.

450
00:27:11,880 --> 00:27:15,240
Speaker 2: I think it's interesting. I remember that in twenty sixteen

451
00:27:15,320 --> 00:27:19,639
Speaker 2: the election. I happened to be in Paris at the time,

452
00:27:20,040 --> 00:27:23,600
Speaker 2: and my phone rang at five in the morning and

453
00:27:23,680 --> 00:27:27,000
Speaker 2: it was Ed Hyman, who was the founder of ISI

454
00:27:27,119 --> 00:27:31,360
Speaker 2: and now the chairman of Evercore ISI, and the noted

455
00:27:31,920 --> 00:27:35,680
Speaker 2: I think he's won number one in institutional investor research

456
00:27:36,040 --> 00:27:39,239
Speaker 2: for over forty years as economist. And he said he

457
00:27:39,280 --> 00:27:41,919
Speaker 2: was in Tokyo and he was about to speak to

458
00:27:41,960 --> 00:27:45,520
Speaker 2: a bunch of institutional investors and at that point it

459
00:27:45,560 --> 00:27:48,639
Speaker 2: was clear that Trump was going to be elected, and

460
00:27:49,280 --> 00:27:52,359
Speaker 2: the S and P was down a thousand points futures

461
00:27:52,560 --> 00:27:54,920
Speaker 2: not the market, and he said, what should I say?

462
00:27:55,600 --> 00:27:59,680
Speaker 2: And I said, if you want to be controversial or provocative,

463
00:28:00,359 --> 00:28:02,320
Speaker 2: and I said, I really believe this, by the way,

464
00:28:02,800 --> 00:28:05,800
Speaker 2: I think you should say that notwithstanding the fact that

465
00:28:05,840 --> 00:28:08,280
Speaker 2: the S and P is down a thousand points. Futures

466
00:28:08,280 --> 00:28:10,360
Speaker 2: are down a thousand points right now. By the time

467
00:28:10,400 --> 00:28:13,679
Speaker 2: the market closes at four o'clock in New York, the

468
00:28:13,720 --> 00:28:16,280
Speaker 2: market will be up. And he said, why do you

469
00:28:16,320 --> 00:28:18,399
Speaker 2: say that? And I said, Donald Trump is going to

470
00:28:18,440 --> 00:28:21,200
Speaker 2: be for lower corporate taxes, He's going to be for

471
00:28:21,359 --> 00:28:25,400
Speaker 2: a stimulative fiscal policy, he's going to be for infrastructure investment.

472
00:28:26,040 --> 00:28:28,680
Speaker 2: And that's very bullish for the equity markets, and people

473
00:28:28,680 --> 00:28:30,879
Speaker 2: will realize that. And so he got up and said that,

474
00:28:30,960 --> 00:28:32,639
Speaker 2: and it turned out to me, I'm only telling you

475
00:28:32,680 --> 00:28:35,800
Speaker 2: this story because for once I was right, and I

476
00:28:35,880 --> 00:28:39,560
Speaker 2: do think that the initial effect. Let's take the corporate

477
00:28:39,600 --> 00:28:42,400
Speaker 2: tax rate, for example, which is a twenty one percent

478
00:28:42,480 --> 00:28:47,480
Speaker 2: right now, leaving a side state and local taxes, which

479
00:28:47,480 --> 00:28:51,200
Speaker 2: are won't be changing much. If it's a twenty one percent,

480
00:28:51,800 --> 00:28:56,520
Speaker 2: for every dollar a company makes, seventy nine cents of

481
00:28:56,560 --> 00:28:59,160
Speaker 2: it will go to its shareholders and twenty one cents

482
00:28:59,360 --> 00:29:02,960
Speaker 2: to the US government. If it's at twenty eight percent,

483
00:29:03,600 --> 00:29:06,800
Speaker 2: as Vice President Harris has suggested, and I'm not sure

484
00:29:06,840 --> 00:29:10,560
Speaker 2: it'll ever get that high again, but that's a seven

485
00:29:10,680 --> 00:29:13,640
Speaker 2: percentage point off of seventy nine, which is like a

486
00:29:13,680 --> 00:29:18,400
Speaker 2: ten percent decline in corporate earnings. Ultimately, that filters through

487
00:29:19,200 --> 00:29:23,320
Speaker 2: to the valuation of stocks. If it's at fifteen percent,

488
00:29:23,960 --> 00:29:27,440
Speaker 2: that's six points on. It's a seven and a half

489
00:29:27,480 --> 00:29:32,640
Speaker 2: percent increase in what shareholders will get. The math's pretty simple.

490
00:29:33,240 --> 00:29:37,720
Speaker 2: I think that point alone will provide if Trump is elected,

491
00:29:38,240 --> 00:29:42,120
Speaker 2: will provide a little bit of following wind to the

492
00:29:42,160 --> 00:29:42,840
Speaker 2: stock market.

493
00:29:43,120 --> 00:29:45,400
Speaker 3: But one thing we have in the UK is some

494
00:29:46,040 --> 00:29:49,240
Speaker 3: quite a lot of concern in the City of London

495
00:29:49,400 --> 00:29:53,880
Speaker 3: and elsewhere. That's the moves that the government, that the

496
00:29:53,920 --> 00:29:56,400
Speaker 3: new labor government might make to increase the amount of

497
00:29:56,400 --> 00:30:01,280
Speaker 3: money coming from the richest and from wealth already encouraging

498
00:30:01,320 --> 00:30:04,760
Speaker 3: people to leave for Italy or leave for America. Quite

499
00:30:04,760 --> 00:30:07,040
Speaker 3: a lot of concern about capital flight. Do you think

500
00:30:07,080 --> 00:30:10,640
Speaker 3: there's any issue around that if Kamala Harris stays in

501
00:30:10,720 --> 00:30:14,000
Speaker 3: just as a sort of attractiveness of the US versus

502
00:30:14,480 --> 00:30:18,160
Speaker 3: other places, as a wealthy person for wealthy people. I

503
00:30:18,240 --> 00:30:20,880
Speaker 3: may not referring to you specifically as a wealthy person,

504
00:30:20,960 --> 00:30:23,160
Speaker 3: but I bet you hang out with a few.

505
00:30:24,400 --> 00:30:26,760
Speaker 2: I'll tell you my personal view on this first. My

506
00:30:26,840 --> 00:30:30,880
Speaker 2: personal view on this is my parents were both immigrants.

507
00:30:30,920 --> 00:30:34,920
Speaker 2: My father was a bartender and I've managed to do

508
00:30:35,080 --> 00:30:38,280
Speaker 2: reasonably well in my life. I have an enormous amount

509
00:30:38,320 --> 00:30:43,240
Speaker 2: of gratitude and appreciation both for the United States and

510
00:30:43,240 --> 00:30:47,840
Speaker 2: the opportunities it provides and for New York City. I'm

511
00:30:47,880 --> 00:30:51,520
Speaker 2: not one of these people who's gonna abandon ship because

512
00:30:51,560 --> 00:30:53,720
Speaker 2: I can save a little money on or a lot

513
00:30:53,760 --> 00:30:56,560
Speaker 2: of money on taxes. I think you have to look

514
00:30:56,600 --> 00:31:01,240
Speaker 2: at for the broader question. It's pretty donning what has

515
00:31:01,320 --> 00:31:05,920
Speaker 2: happened in the world in terms of the US economy

516
00:31:06,040 --> 00:31:10,520
Speaker 2: and the US markets relative to the Europe's and relative

517
00:31:10,560 --> 00:31:14,240
Speaker 2: to the Japan's. And if you look at in two

518
00:31:14,280 --> 00:31:19,080
Speaker 2: thousand and eight, the GDP of Europe including the UK,

519
00:31:19,720 --> 00:31:24,240
Speaker 2: and the US were roughly equal. By twenty and sixteen,

520
00:31:24,880 --> 00:31:27,880
Speaker 2: the US was about fifty percent higher, and today it's

521
00:31:27,920 --> 00:31:33,040
Speaker 2: almost double. Taxes are about gee, what do you get

522
00:31:33,080 --> 00:31:37,840
Speaker 2: to keep of what you've made? The opportunities to make

523
00:31:38,560 --> 00:31:42,920
Speaker 2: are so great in the US relative to other places

524
00:31:42,960 --> 00:31:45,480
Speaker 2: in the world. Even with Lena Khan sitting in the

525
00:31:45,520 --> 00:31:48,520
Speaker 2: seat that she sits in and Gary Gensler sitting in

526
00:31:48,520 --> 00:31:52,400
Speaker 2: the seat that he sits in, I think people should

527
00:31:52,480 --> 00:31:54,960
Speaker 2: maybe people who are sitting on a lot of money

528
00:31:54,960 --> 00:31:58,840
Speaker 2: are going to attract it the places like Monaco and Litgenstein,

529
00:31:58,960 --> 00:32:01,880
Speaker 2: in places like that. But the last time I went

530
00:32:01,920 --> 00:32:05,160
Speaker 2: to the opera, I wasn't overwhelmed with the quality of

531
00:32:05,200 --> 00:32:05,960
Speaker 2: the performance.

532
00:32:07,320 --> 00:32:12,320
Speaker 4: Why hasn't that extraordinary economic growth in the US translated

533
00:32:12,360 --> 00:32:16,200
Speaker 4: into more optimistic sentiments. Why is an incumbent struggling to

534
00:32:16,200 --> 00:32:19,560
Speaker 4: be re elected after this incredible economic boom?

535
00:32:20,320 --> 00:32:25,200
Speaker 2: It is shocking. Actually, I think it's a really good question,

536
00:32:25,280 --> 00:32:31,400
Speaker 2: and I think the reason for it is the widespread

537
00:32:31,720 --> 00:32:37,520
Speaker 2: and pernicious effect on people's psyches of inflation. I was

538
00:32:38,080 --> 00:32:41,760
Speaker 2: working in the White House in between nineteen seventy seven

539
00:32:41,800 --> 00:32:45,600
Speaker 2: and nineteen early eighty one under President Carter, when we

540
00:32:45,640 --> 00:32:49,080
Speaker 2: had the greatest inflation in the history of the United States.

541
00:32:49,920 --> 00:32:52,920
Speaker 2: And I have said a number of times to people

542
00:32:52,920 --> 00:32:57,200
Speaker 2: who worked in the Biden administration that you have to

543
00:32:57,320 --> 00:33:04,040
Speaker 2: recognize that is something that touches every single person in

544
00:33:04,080 --> 00:33:09,080
Speaker 2: the country in a negative way. And when you when

545
00:33:09,080 --> 00:33:12,840
Speaker 2: your wages go up, but you're spending You go into

546
00:33:12,880 --> 00:33:15,440
Speaker 2: the grocery store every week and you're spending twenty percent,

547
00:33:15,520 --> 00:33:19,160
Speaker 2: thirty percent, forty percent more for eggs and milk and

548
00:33:19,240 --> 00:33:22,840
Speaker 2: things that you buy every week. It's or for gasoline.

549
00:33:23,320 --> 00:33:30,120
Speaker 2: It's in your face, and it's it's really discouraging and

550
00:33:30,520 --> 00:33:35,600
Speaker 2: off putting. And I think, to me, unemployment's horrible, but

551
00:33:35,720 --> 00:33:39,080
Speaker 2: it touches if unemployment's high, it's six percent or seven percent,

552
00:33:39,120 --> 00:33:42,960
Speaker 2: it touches a relatively small portion of the economy of

553
00:33:43,000 --> 00:33:46,400
Speaker 2: the voter population and their families and friends and such.

554
00:33:46,680 --> 00:33:50,520
Speaker 2: It's certainly a big issue, and its effect obviously on

555
00:33:50,600 --> 00:33:54,160
Speaker 2: those people is huge. Is more dramatic than inflation, But

556
00:33:54,240 --> 00:33:57,640
Speaker 2: inflation touches everybody, and it's a in my view, it's

557
00:33:57,640 --> 00:34:02,600
Speaker 2: a cloud over the confidence that people have about the economy.

558
00:34:03,000 --> 00:34:04,800
Speaker 3: So Ralph Rap, you've given us a lot of time.

559
00:34:05,040 --> 00:34:06,520
Speaker 3: We're going to let you go. In a second. I

560
00:34:06,560 --> 00:34:09,360
Speaker 3: can't help ask you, if you were in Paris on

561
00:34:09,440 --> 00:34:13,000
Speaker 3: the night of the twenty sixteen, where are you're planning

562
00:34:13,040 --> 00:34:16,360
Speaker 3: to be for this for this election, and maybe cast

563
00:34:16,440 --> 00:34:17,879
Speaker 3: some light on whether what you think.

564
00:34:18,800 --> 00:34:20,400
Speaker 2: I'm going to be in New York. I'm going to

565
00:34:20,400 --> 00:34:23,040
Speaker 2: be with my two children and a bunch of friends

566
00:34:23,040 --> 00:34:28,359
Speaker 2: that I'm an election party somewhere, and gosh, I have

567
00:34:28,440 --> 00:34:31,040
Speaker 2: no better insight into who's going to win than I

568
00:34:31,160 --> 00:34:34,720
Speaker 2: do into what the markets are going to do. Between

569
00:34:34,719 --> 00:34:37,719
Speaker 2: now and the end of the year, I hope it's

570
00:34:37,840 --> 00:34:42,960
Speaker 2: Vice President Harris. I actually think she's better for the country.

571
00:34:43,000 --> 00:34:46,640
Speaker 2: I think she's younger, she brings us. I think to me,

572
00:34:46,840 --> 00:34:50,520
Speaker 2: one of the great issues in our country and globally

573
00:34:51,280 --> 00:34:56,840
Speaker 2: is the widening gap of wealth between the one percent

574
00:34:57,000 --> 00:34:59,880
Speaker 2: and then the other ninety nine percent, and particularly the

575
00:35:00,040 --> 00:35:04,960
Speaker 2: eighty percent that is the middle class and those who

576
00:35:05,000 --> 00:35:07,839
Speaker 2: have less means than the middle class. And I think

577
00:35:07,880 --> 00:35:13,640
Speaker 2: she's really attentive to that, and I believe that issue, unattended,

578
00:35:14,040 --> 00:35:21,280
Speaker 2: will ultimately corrode support for capitalism and free democratic institutions.

579
00:35:21,800 --> 00:35:24,000
Speaker 3: Ralph last, thank you very much for joining us.

580
00:35:25,920 --> 00:35:29,000
Speaker 1: Thanks for listening to this week's Votonomics from Bloomberg. This

581
00:35:29,120 --> 00:35:32,520
Speaker 1: episode was hosted by me alegra Stratton with Stephanie Flanders

582
00:35:32,520 --> 00:35:36,920
Speaker 1: and Adrian Wooldridge. It was produced by Somersadi, production support

583
00:35:37,000 --> 00:35:41,360
Speaker 1: from Chris Martlu and Isabella Ward. Sound designed by Blake Maples.

584
00:35:41,880 --> 00:35:46,440
Speaker 1: Brendan Francis Newnham is our executive producer. Sage Bauman is

585
00:35:46,520 --> 00:35:50,279
Speaker 1: head of Podcasts and special Thanks to Ralph Schlosstein and

586
00:35:50,440 --> 00:35:54,640
Speaker 1: Emilie Nicole. Please subscribe, rate, and review wherever you listen

587
00:35:54,680 --> 00:36:00,920
Speaker 1: to podcasts