WEBVTT - Bonus: How Is Trump Changing US Economic Competitiveness? 0:00:00.160 --> 0:00:07.520 Bloomberg Audio Studios, Podcasts, radio News. 0:00:16.560 --> 0:00:19.600 I'm Stephanie Flanders, head of Government and Economics at Bloomberg, 0:00:19.880 --> 0:00:23.480 and welcome to a bonus episode of Trumpanomics, the podcast 0:00:23.480 --> 0:00:26.200 that looks at the economic world of Donald Trump, how 0:00:26.200 --> 0:00:29.040 he's already shaped the global economy and what on earth 0:00:29.120 --> 0:00:31.600 is going to happen next. And we thought we would 0:00:31.640 --> 0:00:34.239 just throw your way another panel I did at the 0:00:34.280 --> 0:00:38.920 twenty eighth annual Milken Institute Global Conference called US Economic 0:00:38.960 --> 0:00:43.520 Competitiveness in a Changing World, with guest Gary Cone, vice 0:00:43.600 --> 0:00:47.520 chairman of IBM but former senior player in the first 0:00:47.600 --> 0:00:52.400 Trump administration, Peter Orsag, CEO and chairman of Blazard, but 0:00:52.560 --> 0:00:58.000 also previously budget director for Barack Obama, and Kevin McCarthy, 0:00:58.040 --> 0:01:00.560 the former Speaker of the US House of represent Sentives. 0:01:02.280 --> 0:01:05.000 My opening question, given the title of the panel, was 0:01:05.319 --> 0:01:08.240 what kind of US economy did they think would emerge 0:01:08.440 --> 0:01:10.880 from the policies of Donald Trump? Would it be more 0:01:10.959 --> 0:01:14.319 or less competitive and resilient than the US economy that 0:01:14.400 --> 0:01:16.640 Donald Trump inherited at the start of the inn. 0:01:22.280 --> 0:01:25.319 So, look, we're going to come out of this just fine, 0:01:26.000 --> 0:01:28.080 go back and take a reflection on the US economy 0:01:28.200 --> 0:01:30.959 let me see. We've lived through depressions, We've lived through recessions, 0:01:31.000 --> 0:01:33.960 we've lived through COVID, we've lived through the financial crisis, 0:01:34.280 --> 0:01:36.839 and every time when we thought it was really bad, 0:01:37.440 --> 0:01:40.000 it got a lot better. If you go ten years forward, 0:01:40.000 --> 0:01:42.520 twenty years forward, if you have any duration of time, 0:01:43.120 --> 0:01:47.080 this is an unbelievably resilient economy. The United States where 0:01:47.120 --> 0:01:48.920 the reserve currency of the world. We're going to stay 0:01:48.960 --> 0:01:52.640 the reserve currency of the world. We have huge capital here. 0:01:52.760 --> 0:01:55.960 We've got a great corporate system that wants to invest 0:01:55.960 --> 0:01:59.840 in this country. Look, we all have short term concerns. 0:02:00.120 --> 0:02:02.080 Long term, we should be really excited where. 0:02:01.880 --> 0:02:05.480 We're going with this country, Miss Speaker Kevin mccaffee. 0:02:06.400 --> 0:02:08.239 Look, they all talk economics. I think you ought to 0:02:08.240 --> 0:02:11.480 get in the brains of the president. He's different this 0:02:11.520 --> 0:02:16.360 time than the last time. Trump is a populist, but 0:02:16.400 --> 0:02:20.919 there's two things that are principal to him. I always 0:02:20.960 --> 0:02:25.800 have been tariffs and drugs cost too much. When he 0:02:25.919 --> 0:02:27.840 says he's going to put a ten percent tariff on, 0:02:27.919 --> 0:02:30.359 he'll put a ten percent terrify when he says it's 0:02:30.360 --> 0:02:33.280 going to be twenty five or higher. That's all about negotiations. 0:02:33.720 --> 0:02:36.240 We are in the middle of negotiations. He's also not 0:02:36.400 --> 0:02:41.000 a rigid person that will not adapt. He's always negotiating. 0:02:41.040 --> 0:02:43.320 So if you take him exactly what he's saying, you're 0:02:43.360 --> 0:02:46.640 going crazy. But what's happening is at the end of 0:02:46.680 --> 0:02:49.880 the day, he's not going to have the shelves empty. 0:02:50.000 --> 0:02:52.320 He knows he's got about sixty days to do something. 0:02:52.919 --> 0:02:53.799 I actually think we're. 0:02:53.639 --> 0:02:55.399 Going to be a lot better off, And I would 0:02:55.440 --> 0:02:58.000 point to one part of the history for the same 0:02:58.080 --> 0:03:01.440 reason we open the three communicates with China when we're 0:03:01.440 --> 0:03:04.760 dealing in a cold war. This is going to be 0:03:04.760 --> 0:03:08.400 a reset in China. When we get an agreement with 0:03:08.480 --> 0:03:12.400 India and Japan and the UK, it's going to be 0:03:12.480 --> 0:03:13.960 much more positive for America. 0:03:14.120 --> 0:03:14.880 Is their adjustment. 0:03:14.960 --> 0:03:18.320 Is there disruption, yes, but in the long run it 0:03:18.360 --> 0:03:19.280 will make us stronger. 0:03:20.720 --> 0:03:21.440 Feed site. 0:03:22.520 --> 0:03:26.040 Let's see three four really quick points on resilience. I 0:03:26.080 --> 0:03:30.320 think we will be more micro resilient and less macro resilient, 0:03:30.360 --> 0:03:34.040 by which I mean certain supply chains in pharma, etc. 0:03:34.440 --> 0:03:38.280 Will be more secure, but from a macro perspective in 0:03:38.360 --> 0:03:41.720 terms of our ability to project power abroad and our 0:03:41.760 --> 0:03:44.920 ability to sustain the fiscal trajectory that we're on and 0:03:44.960 --> 0:03:45.720 so on, I think. 0:03:45.560 --> 0:03:46.680 We will be more vulnerable. 0:03:47.080 --> 0:03:54.200 Second, we will have marginally higher manufacturing activity and manufacturing employment, 0:03:54.240 --> 0:03:58.000 but nothing like the nineteen fifties shares of either. 0:03:57.840 --> 0:03:59.440 The economy or employment. 0:04:00.320 --> 0:04:03.760 Third, I think we need to be a bit careful 0:04:04.000 --> 0:04:08.040 about I saw Simon Johnson in the hallway. The Nobel 0:04:08.040 --> 0:04:13.080 Prize in Economics was awarded for the last year for 0:04:13.880 --> 0:04:15.360 what drives long term growth? 0:04:15.880 --> 0:04:17.480 And rule of law. 0:04:18.760 --> 0:04:23.200 Inclusive rather than extract of approaches to policy making are 0:04:23.279 --> 0:04:26.960 all core to long term economic growth. And so we 0:04:27.080 --> 0:04:28.880 just need to keep that in mind. And then final 0:04:28.920 --> 0:04:34.040 point is, despite all of the discussion about tariffs, as 0:04:34.120 --> 0:04:38.880 Nuriel Rabini put it, tech Trump's tariffs, if you look 0:04:38.920 --> 0:04:41.560 out over the next three to five years, so what 0:04:41.640 --> 0:04:45.560 is happening on the digital payment stack, what is happening 0:04:45.800 --> 0:04:50.000 on the AI race, What is happening in quantum that 0:04:50.200 --> 0:04:52.080 is going to turn out to be more important than 0:04:52.120 --> 0:04:53.760 the next two or three months. 0:04:54.279 --> 0:04:59.400 Gary Kahn, whether it's IBM or anywhere else, can you 0:04:59.560 --> 0:05:04.200 respond into this changing incentives and support the kind of 0:05:04.200 --> 0:05:07.680 investments that the government administration wants to see. When you 0:05:07.720 --> 0:05:10.400 have zero clarity about what the twists rates are going 0:05:10.440 --> 0:05:11.560 to be and what the future is going to be. 0:05:12.279 --> 0:05:14.560 Look, I think all of us who run big companies, 0:05:14.560 --> 0:05:18.040 who have run big companies, we have to think long term, 0:05:18.279 --> 0:05:20.440 like no one's thinking of like we're thinking about the 0:05:20.440 --> 0:05:22.880 next ninety days because we have to. But honestly, we're 0:05:22.880 --> 0:05:27.760 making investments for a generational cycle. You know, everyone's talking 0:05:27.760 --> 0:05:30.760 about AI today AI. A lot of the investment that 0:05:30.800 --> 0:05:32.600 you're seeing in AI today didn't happen the last two, 0:05:32.680 --> 0:05:35.440 three or four years. We'll get the quantum. I mean, 0:05:35.480 --> 0:05:37.919 the amount of money that IBM and others are putting 0:05:37.920 --> 0:05:41.560 in the quantum today is just extraordinary. Quantum will pay 0:05:41.600 --> 0:05:44.960 results five years I'll say, five years from now. So 0:05:45.000 --> 0:05:49.240 we are making extraordinary investments in this country, in this economy. 0:05:49.440 --> 0:05:51.839 The one place I'll caution, because I think we need 0:05:51.839 --> 0:05:55.600 to talk about this to some extent, tax policy drives 0:05:55.720 --> 0:05:58.719 investment decisions in this country. It's if you want to 0:05:58.760 --> 0:06:02.360 boil down to any one major factor that drives decision 0:06:02.400 --> 0:06:05.000 making in this country, it is tax policy. When we 0:06:05.160 --> 0:06:09.880 changed our taxes in twenty seventeen, we affected corporate policy 0:06:09.960 --> 0:06:11.880 more than anything else that's happened in this country in 0:06:11.880 --> 0:06:14.800 the last thirty or forty years, when we deemed repatriation 0:06:14.839 --> 0:06:17.240 of money back to the United States, we forced a 0:06:17.240 --> 0:06:20.120 lot of this money back. When we changed the corporate 0:06:20.160 --> 0:06:23.360 tax rate, we became competitive with the OECD. We changed 0:06:23.360 --> 0:06:26.440 the way people thought about manufacturing and building businesses in 0:06:26.440 --> 0:06:29.200 the United States. When we look at accelerated appreciation, when 0:06:29.240 --> 0:06:31.920 we look at R and D credits, all of these 0:06:31.960 --> 0:06:35.560 things matter and they will drive policy more than anything 0:06:35.600 --> 0:06:38.200 else we're actually talking about. Because at the end of 0:06:38.200 --> 0:06:41.360 the day, when you're running big companies, you're a fiduciary 0:06:41.360 --> 0:06:44.400 for shareholder. You're trying to maximize the turn over a 0:06:44.400 --> 0:06:46.960 long period of time, and taxes will drive a lot 0:06:47.040 --> 0:06:49.680 of those decisions. So, look, one of the most important 0:06:49.680 --> 0:06:52.040 things that has to happen this year is we have 0:06:52.120 --> 0:06:56.159 to at a minimum extend the Trump tax cuts the job. 0:06:56.720 --> 0:06:58.760 So that to me is a minimum. If we can 0:06:58.800 --> 0:07:01.400 put something additional, they're great. If we can bring back 0:07:01.400 --> 0:07:03.440 we have, bringing back the R and D credits, bringing 0:07:03.480 --> 0:07:06.760 back to acceler depreciation, those have more impacts than anything 0:07:06.760 --> 0:07:09.280 else we're actually talking about here. 0:07:10.160 --> 0:07:15.720 No, Gary won't be Look, I think there's a large 0:07:15.840 --> 0:07:19.600 empirical literature on this question, and taxes matter, but it's 0:07:19.720 --> 0:07:22.520 not even close to the most important factor. A lot 0:07:22.520 --> 0:07:26.080 of things go into the future cash flows and expectations 0:07:26.080 --> 0:07:29.360 of future cash flows, part of which is taxes, but 0:07:29.400 --> 0:07:33.600 there are lots of other pieces that are arguably more important. 0:07:33.880 --> 0:07:35.720 And on that point, I do think we need to 0:07:36.000 --> 0:07:40.640 also highlight that a lot of the benefits that we 0:07:40.680 --> 0:07:44.520 are we have experienced historically in the United States comes 0:07:44.560 --> 0:07:48.640 from being the world leader in technology in particular, that 0:07:48.840 --> 0:07:53.240 is where a disproportionate share of the productivity growth has occurred. 0:07:53.240 --> 0:07:55.840 That is where, to the extent there are any differences 0:07:55.840 --> 0:07:56.320 with Europe. 0:07:56.720 --> 0:08:00.240 That is where the differences have shown up most. 0:08:00.200 --> 0:08:04.840 Prominently, and we need to be cognizant of that because 0:08:04.960 --> 0:08:08.320 there is some risk that we will disrupt the apple cart. 0:08:09.280 --> 0:08:14.720 I completely understand and empathize with the perspective that our 0:08:14.880 --> 0:08:20.000 leading universities went far off Kilture and how they handled 0:08:20.040 --> 0:08:23.480 the aftermath of October seventh in particular, But I think 0:08:24.160 --> 0:08:29.560 slashing the NIH budget, slashing funding to the leading universities 0:08:29.960 --> 0:08:33.600 of the United States, risks exactly what we're already seeing, 0:08:33.640 --> 0:08:37.840 which is Europeans and others are saying, come here, we 0:08:37.920 --> 0:08:39.160 will invest in science. 0:08:39.240 --> 0:08:40.440 We don't want that, So. 0:08:41.160 --> 0:08:44.200 That is just as important, if not more important, than 0:08:44.640 --> 0:08:45.319 tax policy. 0:08:45.320 --> 0:08:46.480 But obviously everything matters. 0:08:47.080 --> 0:08:51.040 Since we've got onto AI and technology. What outcomes were 0:08:51.040 --> 0:08:52.960 you hoping for from the Chips Act and was it 0:08:53.000 --> 0:08:58.240 successful and revitalizing US microchip manufacturing at Sir Georgia's posito, 0:08:58.320 --> 0:09:01.080 and also wondering what the next act like that would be. 0:09:01.120 --> 0:09:03.479 I think, I mean you a speaker, when the Bipartisan 0:09:03.559 --> 0:09:07.320 Chips Act was passed, there's been sort of different signals 0:09:07.400 --> 0:09:09.560 around it. But as far as you're concern, was it 0:09:09.600 --> 0:09:11.280 successful in doing what it was supposed to do? 0:09:12.160 --> 0:09:12.800 Not completely? 0:09:12.880 --> 0:09:17.640 No, I mean the company government invested in the most 0:09:18.240 --> 0:09:20.319 I don't know is going to make it all the way. 0:09:22.320 --> 0:09:23.120 AI is going to do. 0:09:23.160 --> 0:09:25.880 One thing for America is going to get our energy 0:09:25.920 --> 0:09:29.040 policy right, because we'll never capture AI without getting energy 0:09:29.040 --> 0:09:31.200 policy right. You'll do more than any climate change has 0:09:31.240 --> 0:09:35.280 ever done to our energy policy. Getting chips made in 0:09:35.320 --> 0:09:39.880 America is going to be an agreement with government and Taiwan. 0:09:40.840 --> 0:09:43.760 Taiwan is never going to give the full fobs here 0:09:43.880 --> 0:09:46.360 unless they get an agreement that they're going to get 0:09:46.400 --> 0:09:50.160 some type of support and that's actually happening now. 0:09:50.679 --> 0:09:53.320 So I believe there is enough capital out there. 0:09:53.400 --> 0:09:56.640 It's more a government view that in the Senate if 0:09:56.679 --> 0:09:59.080 they just throw money at Chips. I think there's a 0:09:59.080 --> 0:10:01.520 lot of capital in the market to get money for Chips. 0:10:01.559 --> 0:10:03.720 I don't think government needed to make that investment. 0:10:04.320 --> 0:10:08.760 This isn't normal. I tell my friends in Congress, China 0:10:08.800 --> 0:10:10.720 has a congress too. No one knows who they are. 0:10:11.080 --> 0:10:15.199 All the power has usurped to the White House. Trump 0:10:15.280 --> 0:10:18.360 has one term. You can tell them, oh, if you 0:10:18.400 --> 0:10:21.120 went really smooth. None of that's going to matter to him. 0:10:21.360 --> 0:10:24.080 He's got one term to get something done. He has 0:10:24.120 --> 0:10:25.920 his ten thousand hours that he knows how to do 0:10:25.960 --> 0:10:28.440 the job. He picked the cabinet that he wants that 0:10:28.480 --> 0:10:32.079 will follow what he wants to do. I believe investment 0:10:32.120 --> 0:10:35.760 is important, but under Republicans we increased in IH. But 0:10:35.800 --> 0:10:38.040 I don't think any of these colleges have been audited. 0:10:38.240 --> 0:10:41.960 Did you really think taxpayer money should give Harvard nine 0:10:42.080 --> 0:10:45.920 billion dollars? What are they doing with it? I actually 0:10:45.960 --> 0:10:50.000 believe coming after him will make every single college to 0:10:50.040 --> 0:10:51.400 start auditing. 0:10:51.360 --> 0:10:53.280 What are we doing with this money? 0:10:53.440 --> 0:10:57.920 And it will drive more towards research and development than prior. 0:10:58.559 --> 0:11:01.520 I firmly believe in the tax and it will get done, 0:11:01.559 --> 0:11:04.560 but it won't get done perfectly on the timeline that 0:11:04.600 --> 0:11:07.280 Congress does right now, but it's too much pain that 0:11:07.360 --> 0:11:14.520 they not do it. But Trump will cut regulation he 0:11:14.559 --> 0:11:18.520 did last time, even faster than Reagan. That combination will 0:11:18.520 --> 0:11:22.720 help energy more and AI will drive energy to do 0:11:22.800 --> 0:11:25.959 it more than anything of it. 0:11:26.040 --> 0:11:26.920 Yeah. 0:11:26.960 --> 0:11:29.600 Look, I think there is a very positive agenda here 0:11:29.679 --> 0:11:32.840 that has to do with expanding the supply, not only 0:11:32.840 --> 0:11:37.000 of energy, where honestly, the myth of the immaculate transition 0:11:37.520 --> 0:11:40.679 has dominated for too long, and I'm glad, I am 0:11:40.679 --> 0:11:44.240 glad we are past that in housing, which admittedly is 0:11:44.280 --> 0:11:48.520 mostly local, but is a huge impediment to the upward 0:11:48.600 --> 0:11:52.120 mobility of many families. By the way, people have not realized, 0:11:52.160 --> 0:11:54.800 but the mobility rates in the United States have been 0:11:55.280 --> 0:11:57.360 declining over the past two to three decades. 0:11:57.880 --> 0:12:00.319 And you know part of that is is. 0:12:00.320 --> 0:12:05.480 The rock and effects and the difficulty of finding housing 0:12:05.520 --> 0:12:06.800 and wherever you want to move to. 0:12:07.160 --> 0:12:09.680 This is a problem that needs to be addressed. 0:12:09.679 --> 0:12:13.160 And you can go down the list of expanding supply 0:12:13.280 --> 0:12:16.000 as a I mean EZRA client and Derek Thompson just 0:12:16.000 --> 0:12:19.840 wrote a book called Abundance, which is fundamentally about let's 0:12:19.840 --> 0:12:23.960 stop subsidizing demand and let's really focus on expanding supply. 0:12:24.480 --> 0:12:26.840 That is an agenda that you know, I'm one hundred 0:12:26.840 --> 0:12:27.480 percent behind. 0:12:28.679 --> 0:12:30.640 I just wanted to want to shift a little bit 0:12:30.679 --> 0:12:32.760 of that follows on from that, if you have a 0:12:32.760 --> 0:12:35.520 supply side approach to the economy. One of the things 0:12:35.520 --> 0:12:39.600 that investors and others were very were excited about in 0:12:39.720 --> 0:12:45.079 looking at this incoming administration was around deregulation and that 0:12:45.120 --> 0:12:48.359 whole agenda. But we also saw in the previous administration 0:12:48.440 --> 0:12:51.840 quite an aggressive approach to corporate power, which actually was 0:12:51.840 --> 0:12:55.320 also associated with an analysis of what was reducing labor moability, 0:12:55.400 --> 0:12:59.079 non compete clauses. You know, the corporate concentration was itself 0:12:59.520 --> 0:13:04.600 imped being economic competitiveness. So I just wonder how would 0:13:04.679 --> 0:13:08.360 you judge where the administration is on that and whether 0:13:08.400 --> 0:13:11.080 it's right to kind of be more relaxed about corporate 0:13:11.360 --> 0:13:13.440 concentration if that's if that's the case. 0:13:15.240 --> 0:13:19.080 The frustration I've had in past administrations, if one administration 0:13:19.160 --> 0:13:21.199 did something, the other one has to be opposed to it, 0:13:22.559 --> 0:13:23.600 which I didn't think good. 0:13:23.520 --> 0:13:24.760 Was when it comes to China. 0:13:24.880 --> 0:13:28.840 Maybe China has united everybody, and this isn't about preparing 0:13:28.880 --> 0:13:32.760 for war. We've become too dependent. This is about making 0:13:32.840 --> 0:13:35.199 sure we don't go to war and pure dependency. And 0:13:35.240 --> 0:13:37.920 it's the most bipartisan committee. And when the President of 0:13:37.960 --> 0:13:40.160 Taiwan came to see me, I held the meeting at 0:13:40.160 --> 0:13:44.160 the Reagan Library simply for the symbolism of defeating communists 0:13:44.200 --> 0:13:46.080 without going to war. And when we sat and had 0:13:46.120 --> 0:13:48.520 a press conference together with the Berlin Wall behind us, 0:13:49.160 --> 0:13:52.840 Andrew Mitchell gave the first question and she said, I cried, 0:13:53.480 --> 0:13:55.520 and I was with Reagan. We said, tear down this wall. 0:13:55.600 --> 0:13:58.160 And I feel just emotional as today that you are 0:13:58.200 --> 0:14:00.160 so united without Paul. 0:14:00.559 --> 0:14:02.480 And I think it's been one of the most positive things. 0:14:02.760 --> 0:14:03.760 And dependency. 0:14:04.000 --> 0:14:06.920 Just like they control ninety percent of the critical minerals, 0:14:06.920 --> 0:14:09.720 but ninety five percent of the processing, and that really 0:14:09.720 --> 0:14:11.800 comes down to Congress. Are they going to allow us 0:14:11.880 --> 0:14:14.120 if we have our own resources to be able to 0:14:14.160 --> 0:14:16.480 do that? And I think this is a place, this 0:14:16.559 --> 0:14:19.360 is where the TikTok band came from. This is going 0:14:19.480 --> 0:14:21.200 to be a very positive situation. 0:14:21.200 --> 0:14:25.320 Well happn't to that, but I did actually distract you 0:14:25.360 --> 0:14:26.880 from Kary Kayan? Do you want or do you want 0:14:26.920 --> 0:14:30.840 to take on the Batsy trust question. 0:14:32.040 --> 0:14:36.280 Look, I'm always troubled by this topic to some of 0:14:36.280 --> 0:14:38.640 the great because, look, we clearly want our companies to 0:14:38.640 --> 0:14:40.560 play within the rules. We don't want anyone to have 0:14:40.600 --> 0:14:43.040 an unfair advantage. So that's that's a given. On the 0:14:43.040 --> 0:14:46.280 flip side, you know, we sit here and we talk 0:14:46.320 --> 0:14:48.600 about we have to compete against China, which we do, 0:14:48.920 --> 0:14:51.440 and we have to win the battle. China's trying to 0:14:51.440 --> 0:14:53.320 build the largest companies in the. 0:14:53.240 --> 0:14:54.800 World to take over the world. 0:14:55.040 --> 0:14:57.960 We're trying to break up the larger companies they're successful 0:14:57.960 --> 0:15:00.480 in the United States. I think we got to decide 0:15:00.480 --> 0:15:02.480 which side this equation we want to come out on. 0:15:02.920 --> 0:15:05.560 I think we want to be able to compete globally. 0:15:05.920 --> 0:15:08.920 And if some of our companies are really successful, it 0:15:09.000 --> 0:15:12.320 happen to be very large, it's okay. It's probably good 0:15:12.320 --> 0:15:14.600 for us in this country, and they probably bring home 0:15:14.640 --> 0:15:16.480 a lot of tax revu and they probably employ a 0:15:16.480 --> 0:15:19.240 lot of people. As long as they're not prohibiting other 0:15:19.320 --> 0:15:22.240 people from competing in the space. I don't think we 0:15:22.280 --> 0:15:24.320 as Americans to that problems with it. We should actually 0:15:24.400 --> 0:15:27.080 be very prideful in the fact that we can build 0:15:27.120 --> 0:15:29.800 these companies from nothing. And the companies we're talking about, 0:15:29.920 --> 0:15:31.840 and I know we're smiling, a lot of these companies 0:15:31.880 --> 0:15:35.280 didn't exist thirty years ago, forty years fifty years ago, 0:15:35.360 --> 0:15:39.040 none existed. So you think about the creativity and this 0:15:39.080 --> 0:15:41.560 is why I started out being so bullish on this economy. 0:15:41.760 --> 0:15:45.120 You think of the creativity and the entrepreneurial spirit that 0:15:45.200 --> 0:15:48.000 exists in this country. We've built some of the largest 0:15:48.000 --> 0:15:51.240 companies in the last twenty years. Let's allow them to 0:15:51.280 --> 0:15:54.640 continue to thrive as long as they're playing within the laws. 0:15:54.720 --> 0:15:56.320 That's why we have loss in this country. 0:15:56.760 --> 0:16:02.640 So the biggest divergence that the biggest bad crowd had 0:16:03.720 --> 0:16:06.120 was because it's easy to kind of just say it's 0:16:06.160 --> 0:16:09.080 across the board, it's really quite specifically with regard to 0:16:09.160 --> 0:16:12.080 vertical integration. So that is a firm that is buying 0:16:12.120 --> 0:16:17.280 something that's a supplier or a distributor as opposed to 0:16:17.320 --> 0:16:22.000 merging horizontally. And there I think, honestly, there was a 0:16:22.000 --> 0:16:24.600 lot of rhetoric, often without a lot of evidence, and 0:16:24.640 --> 0:16:27.640 you're going to find that's where the differences will be. 0:16:28.000 --> 0:16:30.400 The most significant is a little bit of backing off 0:16:30.480 --> 0:16:34.120 from the all vertical integration is bad. 0:16:34.560 --> 0:16:35.120 And let me just. 0:16:35.200 --> 0:16:38.760 Highlight one area where this tension is paramount. 0:16:38.920 --> 0:16:42.080 I saw doctor Oz yesterday. He's here. 0:16:43.000 --> 0:16:46.320 I believe that CMS under doctor Oz will push very 0:16:46.360 --> 0:16:49.240 hard on value based care and healthcare, which is fantastic. 0:16:49.280 --> 0:16:51.720 We should pay for value and not for quantity. 0:16:52.440 --> 0:16:56.200 But as you do that, you're creating incentives for insurance 0:16:56.240 --> 0:17:00.800 companies and providers to act as one because that's effectively 0:17:00.880 --> 0:17:03.600 what most of the incentive undervalue based care does. 0:17:03.880 --> 0:17:04.719 And we have evidence. 0:17:04.760 --> 0:17:07.720 We're here in California, Kiser Pernaminity is a good example 0:17:08.119 --> 0:17:13.720 of fully vertically integrated healthcare players that perform better than others. 0:17:14.040 --> 0:17:17.200 So if you go after vertical integration, but you also 0:17:17.240 --> 0:17:20.399 want value based healthcare, which, by the way, the administration, 0:17:20.520 --> 0:17:25.160 the prior administration was saying simultaneously you have massive cognitive dissonance. 0:17:25.840 --> 0:17:27.920 One arm of the government saying don't do this, in 0:17:28.000 --> 0:17:30.280 the other arm saying do it. I think that will 0:17:30.280 --> 0:17:31.800 be better going forward. 0:17:32.720 --> 0:17:34.320 I'm going to change the subject, but I did mention 0:17:34.640 --> 0:17:36.640 the start. I mean, one of the things that economists 0:17:36.640 --> 0:17:41.159 had been quote unquote concerned about given how much it 0:17:41.200 --> 0:17:43.080 had been part of the growth model in the last 0:17:43.080 --> 0:17:47.119 few years. Was the much tougher stance towards immigration of 0:17:47.119 --> 0:17:51.040 this administration. Now, obviously the focus has been illegal administration 0:17:51.440 --> 0:17:55.119 immigration and companies don't tend to kind of stand up 0:17:55.160 --> 0:17:57.400 for the right to have loads of illegal immigrants working 0:17:57.400 --> 0:17:59.800 for them, and really want to get past that and 0:17:59.880 --> 0:18:03.120 just to a sort of core of what has been 0:18:03.160 --> 0:18:05.440 a source of economic strength for the US over the 0:18:05.520 --> 0:18:08.160 last few years, which is to be a very opening. 0:18:09.280 --> 0:18:11.800 Environment for legal immigrations. 0:18:11.840 --> 0:18:14.240 So foreign citizens, no, But if we have people who 0:18:14.240 --> 0:18:17.639 are now being we have foreign if foreign students who 0:18:17.720 --> 0:18:22.040 are studying here, maybe contributing potentially to entrepreneurship and inventions 0:18:22.040 --> 0:18:25.320 in the US and down the road, are being intimidated. 0:18:25.440 --> 0:18:28.240 If people are worried about I mean, we will know 0:18:28.320 --> 0:18:31.120 people here who have been told actually, if you don't 0:18:31.119 --> 0:18:32.920 need to come to the US, don't come, or do 0:18:33.000 --> 0:18:35.080 just take a burner phone. I mean, all of this 0:18:35.160 --> 0:18:37.760 is I'm sure exaggerated, but just about the sort of 0:18:37.800 --> 0:18:40.840 atmosphere that it creates for a country that's trying to 0:18:40.920 --> 0:18:43.879 attract foreign talent. I mean, Peter, do do you worry 0:18:43.880 --> 0:18:46.159 about it? It's not about these specific cases. 0:18:46.200 --> 0:18:50.560 There is I agree that we need to have secure borders, 0:18:50.560 --> 0:18:53.159 and I agree that you know no one can or 0:18:53.240 --> 0:18:55.479 should be in favor of a legal immigration. So let 0:18:55.520 --> 0:18:59.680 me just say that, However, even if the burner phone 0:18:59.720 --> 0:19:06.080 finalmon is anecdotal, anecdotes can become the telephone game and 0:19:07.160 --> 0:19:10.720 affect our ability to attract top talent. The number of 0:19:10.760 --> 0:19:14.399 foreign CEOs with whom I've spoken who say that they 0:19:14.440 --> 0:19:16.359 are going to be bringing a burner fund to the 0:19:16.480 --> 0:19:18.399 US is much higher than it should be. 0:19:18.920 --> 0:19:20.160 So I very much hope. 0:19:20.000 --> 0:19:23.240 That whatever's causing that changes because that is not good 0:19:23.240 --> 0:19:24.040 for our economy. 0:19:25.760 --> 0:19:29.480 Misspeaking, do you think do you just worry about the again, 0:19:29.920 --> 0:19:32.840 the tone of what's happened over the last few months, 0:19:32.840 --> 0:19:36.280 and maybe the overreach by some people in individual bits 0:19:36.320 --> 0:19:40.920 of homeland security, which then contributes to these stories. 0:19:41.400 --> 0:19:44.000 Look, I think the greatest strength of America is not 0:19:44.000 --> 0:19:48.960 our aircraft carri is the idea of America. Okay, But 0:19:49.240 --> 0:19:52.240 President Trump got elected on two main factors, the border 0:19:52.520 --> 0:19:55.879 and the economy, and I think eighty percent of America 0:19:55.880 --> 0:19:58.199 believes the border was out of control. So just like 0:19:58.280 --> 0:20:01.840 everything else, you have to actually make this statement to 0:20:01.920 --> 0:20:06.000 stop the illegal from coming. We're the most generous nation 0:20:06.080 --> 0:20:08.120 in the world. More than a million people go. Now 0:20:08.160 --> 0:20:09.919 you're going to get a gold cart, so you're going 0:20:09.960 --> 0:20:12.679 to get a whole other set. I think this is 0:20:12.720 --> 0:20:17.120 a small part. I think it'll make people rethink. I'm 0:20:17.160 --> 0:20:21.280 more concerned the relationship with Canada and Mexico because I 0:20:21.280 --> 0:20:23.960 believe that's a great deal of strength, and I think 0:20:24.160 --> 0:20:26.240 that has to be we have an agreement with them. 0:20:26.240 --> 0:20:27.080 We need to work through it. 0:20:27.119 --> 0:20:29.600 Because if you can't work with your neighbors that you 0:20:29.640 --> 0:20:31.919 have in agreement with, it's hard to make agreements with 0:20:32.000 --> 0:20:32.560 other people. 0:20:35.200 --> 0:20:36.960 Okay, and I want to go back to we started 0:20:37.000 --> 0:20:39.480 right at the beginning. You mentioned about debt, and you 0:20:39.480 --> 0:20:42.400 also about the importance of making the tax cuts permanent. 0:20:43.880 --> 0:20:46.160 You know, that is one of the things that if 0:20:46.160 --> 0:20:48.720 you're again just doing a sort of classic economic health 0:20:48.800 --> 0:20:51.199 check of the US, you'd say, that's the kind of 0:20:51.240 --> 0:20:54.520 scariest bit of the scariest chart is what happens to 0:20:54.560 --> 0:20:59.199 debt under any reasonable assumptions. So do you see a 0:20:59.320 --> 0:21:04.480 path given the relatively modest gains of DOGE, given the 0:21:04.600 --> 0:21:09.040 kind of cuts that are on the table in Congress, 0:21:09.680 --> 0:21:14.960 do you see a path to meaningfully flattening the US trajectory. 0:21:16.160 --> 0:21:20.200 There's always a path. Do we want to take the path? 0:21:20.720 --> 0:21:22.760 We're going to have no choice. I think we're going 0:21:22.800 --> 0:21:24.480 to have to get to the point where we take 0:21:24.520 --> 0:21:27.879 the path. So if you look at what DOE is 0:21:27.920 --> 0:21:30.960 trying to do in like waste frauden abuse, as the 0:21:31.000 --> 0:21:34.080 Governor said, as the Speaker said, there's waste broaden abuse everywhere, 0:21:34.880 --> 0:21:37.520