Speaker 1: Bloomberg Audio Studios, podcasts, radio News. Welcome back to voter Nomics,
Speaker 1: where politics and markets collide. This year, voters around the
Speaker 1: world have had the ability to move markets, countries, and
Speaker 1: economies like never before. Now the biggest of those votes
Speaker 1: has happened, and we've just got a couple more episodes
Speaker 1: left to help you make sense of it all. I'm
Speaker 1: Stephanie Flanders.
Speaker 2: And I'm adrim Woodrich Well Adrian.
Speaker 1: As you know, I spent last week in Washington, DC,
Speaker 1: which I think geographically was one of the less happy
Speaker 1: places in the US. On the morning of November sixth,
Speaker 1: I was looking it up. It's nearly ninety three percent
Speaker 1: of Washington DC residents who cast their ballots chose Karmala Harris.
Speaker 1: And when I left my hotel around six pm on
Speaker 1: election night, as the ribbons and balloons were being put
Speaker 1: up in the downstairs lobby of the hotel for a
Speaker 1: victory celebration for Kamala Harris, donors and people were all
Speaker 1: checking in very enthusiastically, and I have to say many
Speaker 1: hours later, I think it was about three AM that
Speaker 1: I came back to my hotel room. There wasn't a
Speaker 1: lot of that going on. But in the past week,
Speaker 1: the entire world has weighed in on how and why
Speaker 1: Donald Trump won the election so decisively, including our own
Speaker 1: Big Take podcast which went out on this feed. We're
Speaker 1: going to be much more forward looking and focused primarily
Speaker 1: on the economy and business in this episode. But first, Adrian,
Speaker 1: I did have one more fun voting statistic which I
Speaker 1: thought you'd like, though the margin of victory overall was
Speaker 1: not that large. Donald Trump did win decisively, and he
Speaker 1: won ninety percent of the counties in the US last week,
Speaker 1: nine to zero, but the roughly ten percent of counties
Speaker 1: that the Democrats won account for around seventy percent of
Speaker 1: US GDP. So I think you know, one of the
Speaker 1: things that that tells you is, you know, the big
Speaker 1: fact of American politics these days, at least when you
Speaker 1: look at last week, is that in terms of their
Speaker 1: electoral coalition, the Democrats are now the party of the
Speaker 1: economic winners and the Republicans, relatively speaking, other party of
Speaker 1: the comparative economic losers.
Speaker 2: Yeah. Absolutely, the Democrats do incredibly well among the educated elites.
Speaker 2: And one of the biggest divides now in America is
Speaker 2: not over class, not over race, but between the educated,
Speaker 2: particularly the hyper educated and the rest of the population.
Speaker 2: And I think that the Democrats' job is to try
Speaker 2: and hold together a coalition of the elites with ethnic minorities. Essentially,
Speaker 2: that's been what they've been trying to do, and this
Speaker 2: time around they failed to do that. I wasn't as
Speaker 2: glamorous as you during an election night. I was watching
Speaker 2: the election from Clapham in London. But one of the
Speaker 2: weird things about it, and I think it tells us
Speaker 2: something about the ninety percent versus the ten percent, is
Speaker 2: that the British commentariat was absolutely convinced that Kamalo is
Speaker 2: going to win, and many of them, I'm a fred,
Speaker 2: made complete fools of themselves. But that's because they visit
Speaker 2: that ten percent and they don't visit the other ninety percent.
Speaker 2: So there's a whole America out there, you know, the
Speaker 2: right nation, as a couple of journalists once called it,
Speaker 2: that wasn't really given a look in in party much
Speaker 2: of the coverage of what's going on. And we need
Speaker 2: to focus ourselves on the fly of a territory, not
Speaker 2: to understand what's going on in America.
Speaker 1: The other big fact about the economy, which Donald Trump
Speaker 1: has promised to fix and has complained about so vciferously
Speaker 1: on the campaign. Is that the US is doing pretty well.
Speaker 1: And so I think one of the things that we'll
Speaker 1: want to get into with our guests is, you know,
Speaker 1: whether and how he might be able to break that
Speaker 1: economy and what it means for those voters.
Speaker 2: Well, there's two questions really. One is whether he can
Speaker 2: break that economy, but the other is whether he can
Speaker 2: take credit for that economy. There's nothing more sensible for
Speaker 2: a politician than to than to find a victory parade
Speaker 2: and put yourself at the front of this, and he
Speaker 2: may be doing that over the US economy. It's not
Speaker 2: at all at bad time to be coming in as president.
Speaker 2: Whatever the longer term implications of his policies.
Speaker 1: Let's get into some of that now. So Trump two
Speaker 1: point zero might mean for the economy, for interest rates,
Speaker 1: for the Federal Reserve. More broadly, I guess for the
Speaker 1: future of business and with us to talk about some
Speaker 1: of that. Two friends of the Pod, John Author's senior
Speaker 1: editor for Markets and Bloomberg opinion columnist as well as
Speaker 1: author of The Fearful Rise of Markets, and Tim O'Bryant,
Speaker 1: head of Bloomberg opinion and author of Trump Nation, The
Speaker 1: Art of Being the Donald. It's an embarrassment of riches.
Speaker 1: We've not managed to have both of you at the
Speaker 1: same time before, but we have had you multiple times. John,
Speaker 1: Why don't we start with the Federal Reserve. They had
Speaker 1: a meeting where they were meeting the day after the election.
Speaker 1: The chairman had a press conference that was after a
Speaker 1: massive market rally that we'd seen, which is largely still continuing,
Speaker 1: and not just in Tesla. Investors seem to think Trump
Speaker 1: two point zero will be fabulous for US companies and
Speaker 1: not so bad for inflation. And if you look at
Speaker 1: the cost of borrowing currently for the government, are they right?
Speaker 3: That is absolutely open for question at this point. This
Speaker 3: was the landmine that blew up the Biden presidency. What
Speaker 3: he wanted to do was deliver for exactly the people
Speaker 3: who feel most passionately that he didn't deliver for them.
Speaker 3: And the main reason that the various things he tried
Speaker 3: to do didn't work was because inflation took off. And
Speaker 3: there is a risk that Trump two point zero might
Speaker 3: just fall into the same trap. If you do have
Speaker 3: big tax cuts and big tariffs, you're playing with fire.
Speaker 3: If your mandate is coming from people who are absolutely
Speaker 3: furious that your predecessor let inflation get out of control
Speaker 3: when inflation isn't absolutely totally unambiguous under control. Now that said,
Speaker 3: he's got a lot of adults in the room with
Speaker 3: him this time, and they are one hundred percent aware
Speaker 3: that that is the issue. And so obviously there are
Speaker 3: going to be some fascinating polls when they decide exactly
Speaker 3: how high they're going to hit tariffs, how aggressively they're
Speaker 3: going to try to cut taxes, and the way the
Speaker 3: market will move and the way inflation moves over the
Speaker 3: next few months will inform that in terms of the FED,
Speaker 3: it could be the final moment in which the economic
Speaker 3: order of reassociate with Paul Volka and Margaret Thatcher and
Speaker 3: Order Egan finally absolutely disappears. Post Bretton Woods, the replacement
Speaker 3: for the gold standard was basically an independent federal Reserve
Speaker 3: who you could trust, run by somebody like Paul Volka,
Speaker 3: and for some decade that was a very adequate replacement
Speaker 3: for the gold standard. There's any number of reasons to
Speaker 3: question whether the current version of the FED and its
Speaker 3: independence is working. Powell's term comes up in he has
Speaker 3: to leave in May twenty six. That gives eighteen months
Speaker 3: to have a very interesting discussion about exactly how much
Speaker 3: Trump and his administration wants to limit and change FED independence.
Speaker 3: FED is a very unpopular organization with exactly the people
Speaker 3: who have just voted for Trump. Markets would be very,
Speaker 3: very nervous about a reduction in FED independence that left
Speaker 3: somebody like Donald Trump having the last interest rangth that
Speaker 3: would be scared.
Speaker 1: After having what you might call a predictable response on
Speaker 1: his election win. You know, you had the stock market
Speaker 1: go up, but actually but the bond yields going up,
Speaker 1: people concerned about arising interest rates, and then I guess
Speaker 1: the way that moderated and where we've sort of ended up,
Speaker 1: and sort of more generally, the mood around it, you know,
Speaker 1: given how much we've talked about the risk of to
Speaker 1: FED independence in the run up to this election, the
Speaker 1: risk of higher inflation coming out of taris. So I
Speaker 1: was just relatively surprised that people seem to be betting
Speaker 1: on those grown ups in the room, though we aresured
Speaker 1: that there aren't going to be as many as them
Speaker 1: were last time, that they will somehow be moderating Donald
Speaker 1: Trump's behavior. I mean, maybe, Tim, I'll bring you in
Speaker 1: because people who have spent a long time looking at
Speaker 1: Donald Trump, and you among them, have always said to me, well,
Speaker 1: it depends on whether he really cares, because anything he
Speaker 1: doesn't really care about, he's quite happy to just change
Speaker 1: his view. Is this something that he's quite happy to
Speaker 1: change his view on, or does he really care about
Speaker 1: the FED?
Speaker 4: I think he'd be happy to change his view on
Speaker 4: the FED. I don't think he's going to go to
Speaker 4: war over FED independence. He'll go to war over immigration.
Speaker 4: I think he's deadly serious about deporting millions of migrants
Speaker 4: if he can, and I think he hasn't thought through
Speaker 4: the consequences of that. In addition to the list that
Speaker 4: John had of slationary pressures on the US economy during
Speaker 4: Trump two point zero, should they drive you know, eleven
Speaker 4: million undocumented immigrants out of the United States. It's going
Speaker 4: to have a devastating impact on small businesses, medium sized businesses,
Speaker 4: and it'll be very much like what happened in the
Speaker 4: restaurants and hotels in England after Brexit came crashing down
Speaker 4: on the British economy. The US needs a lot of
Speaker 4: those workers and if they're not around, it's going to
Speaker 4: be inflationary. It's going to raise inflationary pressures along with
Speaker 4: if tariffs are in play, if the debt piper is
Speaker 4: coming to, the receipts on the US debt are coming due.
Speaker 4: And I do think he will just see that through.
Speaker 4: It's so core to what his political message was. Among
Speaker 4: his earliest cabinet appointments are immigration warriors. You know, I'm
Speaker 4: glad that we're talking about the economy because I think
Speaker 4: it explains the electoral forces that are mystifying people more
Speaker 4: than anything else. I think the big force that is
Speaker 4: landed on both of these parties is that the white
Speaker 4: middle class working coalition that got built during the New
Speaker 4: Deal in the nineteen thirties and lasted until Ronald Reagan
Speaker 4: has been falling apart of the seams because the economy changed,
Speaker 4: you know, in the same way that the US went
Speaker 4: through upheaples in the eighteen nineties when industrialization overran the
Speaker 4: agrarian economy. We are now in the midst of the
Speaker 4: service and technology economies overrunning the industrial economy, and workers
Speaker 4: are getting displaced en moss and real wages and a
Speaker 4: living wage, not just a low ball kind of subsistence wage,
Speaker 4: but living wages of the United States are not where
Speaker 4: they should be for huge swaths of the American population.
Speaker 4: And it's been that way and it's been degrading that
Speaker 4: way since the nineteen eighties, and those voters have been
Speaker 4: looking for a home, and essentially both the Republicans and
Speaker 4: the Democrats have ignored them. And I think you run
Speaker 4: into the two thousand and eight financial crisis and this
Speaker 4: just accelerates, and Donald Trump is an outcome and an
Speaker 4: acceleerate of these things.
Speaker 2: Wait a minute, Tim, I don't want to be a
Speaker 2: spokesman for Trump, but I would say that they would
Speaker 2: claim that they've tried to service those people by doing
Speaker 2: two things that Trump, yes, one is addressing the problem
Speaker 2: of outsourcing, and the other is addressing the problem of immigration,
Speaker 2: both of which they would say with the downward pressure
Speaker 2: on the earnings of non educated people not entirely wrongly.
Speaker 4: The real pressure on uneducated people is their wages, and
Speaker 4: immigration plays a role in that in driving wages down.
Speaker 2: And so does outsturcing player role in that.
Speaker 4: You know, it drives wages down, and it creates competition
Speaker 4: in the workplace. I don't think that Trump administration has
Speaker 4: offered authentic solutions for that population, and they're about to
Speaker 4: find that out. I don't think that Democrats have come
Speaker 4: up with long term solutions, and so I think you
Speaker 4: have this very malleable voting block that moves from party
Speaker 4: to party because they're desperate. But people who are complaining
Speaker 4: about inflation weren't just complaining about bread and gas prices.
Speaker 4: It was really an affordability problem. That population of people
Speaker 4: can't afford college, that can't afford homes, that can't afford
Speaker 4: sending funding their own retirement, and they just aren't getting
Speaker 4: their piece of the American dream, and justifiably they're angry
Speaker 4: about it, and they take it out on both parties
Speaker 4: and Trump was the beneficiary of it this time. But
Speaker 4: it's very interesting if you look at some split ballots
Speaker 4: all across the recent electoral map, where people voted for
Speaker 4: Trump at the top of the ticket and Democrats down ballot. AOC,
Speaker 4: a prominent left member of the Democratic Party, posted a
Speaker 4: little chart to Instagram noting that in her own district,
Speaker 4: the voters who voted her into office as a progressive
Speaker 4: Democrat also voted for Donald Trump as president, and the
Speaker 4: common thread in those voters who voted for both of
Speaker 4: them was anti institutionalism. They feel like American institutions aren't
Speaker 4: servicing their needs and meeting their needs quite rightly. So,
Speaker 4: and that's the challenge the US faces going forward.
Speaker 1: I think, I guess one question is whether the economy
Speaker 1: that he's inherited was already delivering a bit more for
Speaker 1: those people, and whether it will continue to deliver despite
Speaker 1: or potentially with some help from Donald Trump's policies. You know,
Speaker 1: we've tended to think that he should just not wreck
Speaker 1: what he's inherited with a lot of uncertainty and a
Speaker 1: lot of and the tariffs and everything else. But you know,
Speaker 1: some of his policies could potentially help parts of America
Speaker 1: if it brings business back, manufacturing back to different parts
Speaker 1: of America. Do you see any scope for that.
Speaker 2: Because I'm really struck by the comparison with the nineteen twenties,
Speaker 2: whereby you had a you know, you had a policy
Speaker 2: of tariffs, and you had a policy of restricting immigration
Speaker 2: from you know, nineteen twenty four onwards, and you've got
Speaker 2: an enormous economic boom in the short term and one
Speaker 2: that benefited big, big, big junction of the population. Of course,
Speaker 2: in the long term it was a disaster, but in
Speaker 2: the shorter term it led to higher living standards and
Speaker 2: the biggest productivity growth in American history. I'm just not
Speaker 2: certain that in the shorter term that this will be
Speaker 2: such a disaster.
Speaker 3: That's not my reading of what's happened in the nineteen
Speaker 3: twenties and nineteen thirties. Protectionism starts in a much much
Speaker 3: bigger way after the Wall Street Crash, which is an
Speaker 3: perfect example of how allowing free market capitalism to go
Speaker 3: a little too far with too little regulation can create dangers.
Speaker 3: I think, if you wanted to, if there is one
Speaker 3: figure that we're seeing to that Trump might be trying
Speaker 3: to air, this goes back to very deep history. It's
Speaker 3: Louis the fourteenth Minister Colbert, who is regarded as the
Speaker 3: inventor of mechantilism, which is a sort of precursor of capitalism,
Speaker 3: the idea of trade as much as you can with
Speaker 3: your colonies and don't buy any stuff. It's about maximizing
Speaker 3: trade balance as the way to grow an economy, and
Speaker 3: that isn't a ridiculous idea. It didn't go too badly
Speaker 3: for Louis the fourteenth for a long period of time.
Speaker 3: Although I'm not a great expert, I think the way
Speaker 3: Trump might make this really work. And this comes out
Speaker 3: from something he said to John Mecklelthwaite when he was
Speaker 3: interviewed at the Economic Club. He said that there will
Speaker 3: be no tariffs at all if you build your stuff
Speaker 3: in America. I think what he's hoping for, in an
Speaker 3: incorrect way, is a grand deal where he tells people
Speaker 3: this is not unlike what happens under Thatcher in Britain
Speaker 3: with Asian carmakers coming to Britain once the unions had
Speaker 3: been broken in Britain. You can come here and I
Speaker 3: don't mind you taking some of the profits, providing you
Speaker 3: employ Americans to do it. And that's a very difficult
Speaker 3: deal to pull off, but that seems to be what
Speaker 3: he's interesting. He's very angry about near shoring. I used
Speaker 3: to cover Mexico. The Mexicans horrified because at one point
Speaker 3: things look great for Mexico. And it seems that he's
Speaker 3: going to try very hard. He's going to try very
Speaker 3: hard not to allow foreign producers to get away with
Speaker 3: moving from China to Mexico. He wants to make sure
Speaker 3: they come to the States. There's definitely a way that
Speaker 3: could work out spectacularly well for rebuilding certain parts of
Speaker 3: American industry that have been in decline. It's hazardous and
Speaker 3: it's risky, but there certainly is a logic to it.
Speaker 3: If we don't like globalization, if globalization has created inequality
Speaker 3: at a level that democracies continue to show they can't tolerate,
Speaker 3: then what are you going to do instead? Something like
Speaker 3: a coherent Colbertise merchantilism logically might be one of the
Speaker 3: things that's relatively high on the list to try next.
Speaker 1: I mean, I think you're right, John, and it did
Speaker 1: come through in that interview that he did with the
Speaker 1: editor in chief. It's an entirely consistent, sort of internally
Speaker 1: coherent view of America. First and the use of tariffs,
Speaker 1: and he also was talking about making money from some tariffs,
Speaker 1: you know, low level of tariffs on lots of goods,
Speaker 1: just as a sort of cash machine, and then as
Speaker 1: you say, other high levels of tariffs if you really
Speaker 1: want to move production at home and those two things.
Speaker 1: You can't use the same tariff to achieve both those things,
Speaker 1: but you can certainly do different things in different markets.
Speaker 1: The bet that the financial markets. Investors seem to be
Speaker 1: making comparisons with twenty eight A side. I mean, maybe
Speaker 1: we're just all heading for a fall. Is that the
Speaker 1: sort of deregulation, the let rip, the Elon Musk being
Speaker 1: in a high position pro business approach transactionalism will on
Speaker 1: balance be good for American capitalism, Whereas I guess the
Speaker 1: other the argument against would be, you know what, you
Speaker 1: can have too much transactionalism. If you treat everything as
Speaker 1: a transaction with individual businesses, You're creating a lot of uncertainty.
Speaker 1: You're undermining the rule of law because you don't have
Speaker 1: any kind of level playing field. It's just who can
Speaker 1: pick up the phone to Donald Trump? And I just
Speaker 1: wanted the investor's bet at the moment seems to be
Speaker 1: that's not going to be bad for Wall Street to
Speaker 1: have that kind of transactionalism all the way down. Ultimately,
Speaker 1: who's going to pay a price for that?
Speaker 4: Do you think taxpayers? If they're you know, ultimately it'll
Speaker 4: be taxpayers if a bailout is needed. I think that's
Speaker 4: what happened, you know, nineteen twenty nine we ended up
Speaker 4: having to have a World war to resolve the economic
Speaker 4: dislocations that the nineteen twenties produced. I hope and don't
Speaker 4: think it's going to come to that. But you know,
Speaker 4: Bob Burgess, some Bloomberg opinion wrote a very instructive or
Speaker 4: column about you can look at the equity markets as
Speaker 4: one barometer, but if you look at what's happening to
Speaker 4: the dollar, and what's happening in debt markets, and what's
Speaker 4: happening with credit derivatives, you know, the dollar's going in
Speaker 4: the exact opposite direction that Trump's wanted it to go in.
Speaker 4: It's strengthening. He's wanted it to weaken in order to
Speaker 4: make US exporters more or competitive overseas. However, much Wall
Speaker 4: Street wanted Donald Trump in office, they now have to
Speaker 4: live with him, and he is a mess of contradictions
Speaker 4: with no really clear philosophic grounding other than saber rattling
Speaker 4: for the sake of saber rattling. And in financial markets,
Speaker 4: it's like nitroglycerine. And sometimes that can be useful to
Speaker 4: blow through walls when you want to do new construction,
Speaker 4: and sometimes it can just blow up in your hands.
Speaker 4: And I think we don't know which way this will go,
Speaker 4: but I think it also depends on who he brings
Speaker 4: into the administration. Right, there's some big jobs that aren't filled.
Speaker 4: Ja Clayton has been mentioned as a possible SEC chair
Speaker 4: that would I think feel a bit like an adult
Speaker 4: in the room in a way that people may not
Speaker 4: have expected.
Speaker 1: Remind us who that is.
Speaker 4: He's a Wall Streeter with some regulatory experience in Washington
Speaker 4: in the securities markets. He's looking to Wall Street for
Speaker 4: the Treasury Department as well. And I don't think anybody
Speaker 4: is interested in just creating a toxic stew of deregulation
Speaker 4: and mismatched financial policies that end up becoming explosive. But
Speaker 4: you never know, because the difference in Trump two point
Speaker 4: zero from Trump one point zero is he is on
Speaker 4: a very profound revenge tour this time, and he's got
Speaker 4: a long enemies list, and so there's just going to
Speaker 4: be a lot of non rational, non capitalistic approaches the
Speaker 4: problem solving that will surprise people.
Speaker 2: I think I think we should focus a little bit
Speaker 2: more on the non capitalistic side as well, because I
Speaker 2: think if you go back to the nineteen nineties, you
Speaker 2: had two parties that were both absolutely pro business in
Speaker 2: their hearts. Now I think you have two parties in
Speaker 2: some ways that have big anti business elements. That's obviously
Speaker 2: true with the progressive Bernie Sanders wing, but there is
Speaker 2: a wing of the Republican Party now that is very
Speaker 2: anti business, that thinks businesses hollow out the middle classes.
Speaker 2: Exported job jd Vance being a spokesman for that to
Speaker 2: some extent, mart Marco Rubio, who would be quite happy
Speaker 2: to squeeze business in all sorts of ways, to impose
Speaker 2: tariffs that business doesn't want, because they think business has
Speaker 2: had it too good. And that's one reason why they
Speaker 2: attracted a certain chunk of the voters, because they wanted
Speaker 2: to stick it to business. So you have business is
Speaker 2: in a much much more delicate position than it was
Speaker 2: in the nineteen nineties, and Trump, partly for personal reasons,
Speaker 2: would quite like to stick it to chunks of corporate America.
Speaker 1: Until they pick up the phone and kind of give
Speaker 1: him a few compliments. He's been quite clear to us
Speaker 1: that you know, if you pick up the phone to
Speaker 1: Donald Trump, he admires your hoodspur and he gives you
Speaker 1: a deal like Tim Cook.
Speaker 2: But he also wants to give a hard time to business.
Speaker 2: So as I say, is it's almost a person who
Speaker 2: operates above class interests, partly in his own interests and
Speaker 2: partly meeting out justice or meeting out rewards, according to him.
Speaker 2: So the anti business section of the listener, as I
Speaker 2: said with JG. Vans, is it's quite a spokesman for
Speaker 2: it's quite a powerful group and could be used to
Speaker 2: bring business in line at the very least.
Speaker 4: And Elon Musk is at mar A Lago helping Donald
Speaker 4: Trump hand pick cabinet members, so there is a you know,
Speaker 4: the Silicon Valley contingent has someone deeply imbedded in the
Speaker 4: White House. And you made such a great point, Adrian,
Speaker 4: about where both parties are with business. I think the
Speaker 4: Democrats are bad at framing all of the opportunity and
Speaker 4: innovation that comes with the American business community, and the
Speaker 4: Republicans have lost sight of that. And there's a lot
Speaker 4: of vilification around both parties messaging towards the business community.
Speaker 4: And I think, as with any professional class, some of
Speaker 4: it's justified, including the media. We all make mistakes, but
Speaker 4: I think, you know, the having a whole group be
Speaker 4: put in the doghouse that is essentially the fuel of
Speaker 4: the US economy is going to be really problematic. And
Speaker 4: I think this will really come home to roost in
Speaker 4: the Trump administration view of big tech, because they're broadly
Speaker 4: interested in defanging the FTC and anti trust movements, and
Speaker 4: yet they really want the big tech monopoly to be
Speaker 4: broken up. So you have this philosophic contradiction there. And
Speaker 4: then Silicon Valley has been the hotbed of American innovation
Speaker 4: now in a profound and revolutionary way for a few decades,
Speaker 4: with Musk himself being an ambassador for that through Tesla
Speaker 4: and everything else. And yet there's also this hostility towards
Speaker 4: the power it now wields. And you can't really have
Speaker 4: it both waves. And I don't think the Trump administration
Speaker 4: has figured out how to you know, split the baby.
Speaker 2: There you'll have in oligarchs and out oligarchs, you know,
Speaker 2: all competing for the attention of the Sun king. If
Speaker 2: you go back to the coldbet just like Russia analogy.
Speaker 3: Yes, there's a convergence in different countries of the way
Speaker 3: things are going to do that if you try to
Speaker 3: remember my you know, my undergraduate economics. But the Nash
Speaker 3: equilibrium or whatever, the point where everybody is comfortable is
Speaker 3: where everybody does their own mechantialist thing that seems to
Speaker 3: be the moderately stable equilibrium that we might be heading towards.
Speaker 3: I think the mention of anti trust is fascinating in
Speaker 3: that it's one of the places where, under the weird
Speaker 3: political realignment that we're seeing, that you've actually had Amy Klobisher,
Speaker 3: a very impressive Democratic senator, and Josh Hawley, who was
Speaker 3: fairly clarion of the trumpet right, very bright Republican senator
Speaker 3: from Missouri, were drafting really very aggressive anti trust bills together.
Speaker 3: And it seemed to me that this was a kind
Speaker 3: of thing that there was a possibility of a meeting,
Speaker 3: not unlike with Theodor Roosevelt over a century ago, of yes,
Speaker 3: we sort of believe in capitalism, but this is accept
Speaker 3: something needs to be done to rein it in and
Speaker 3: make it fair. That seemed to be a version that
Speaker 3: might come through as a new consensus. I don't myself
Speaker 3: think if we're getting rid of Lena Kahan and empowering
Speaker 3: Elon Musk, I assume that's less likely than it was.
Speaker 3: But I can, as I was saying, I can quite
Speaker 3: easily imagine Donald Trump deciding a year from now, actually, yes,
Speaker 3: let's split up some monopolies and do anti.
Speaker 1: Truck I think the problem with that is I think
Speaker 1: there's just be too many of the big businesses that
Speaker 1: have donors that have supported Donald Trump would stand to
Speaker 1: lose from continuing that kind of pro competition thrust. But
Speaker 1: it is interesting. I think if Jadie Vance ended up
Speaker 1: being more influential and Donald Trump got fed up with
Speaker 1: Elon Musk, which I guess a lot of people suspect
Speaker 1: might happen. Jady Vance obviously has talked favorably about Lena Kahn,
Speaker 1: and I think does have more of that focus as
Speaker 1: you suggest.
Speaker 4: Think about Steve Schwartzmann, right, another huge Trump backer, stalwart
Speaker 4: of the Republican Party, founder and chairman of Blackstone. I
Speaker 4: think it's now probably the biggest private equity firm in
Speaker 4: the world. His portfolio companies, his firm's companies span the
Speaker 4: entire spectrum of the American business landscape in every way imaginable,
Speaker 4: and its viability as a firm depends on that, and
Speaker 4: his investments depend on it. And he is not you
Speaker 4: gonna want to see Donald Trump taking a bulldozer to
Speaker 4: ninety five percent of Blackstone's portfolio. Having said that, even
Speaker 4: if he doesn't want to see it happen. The random
Speaker 4: thing with Trump is it could anyway.
Speaker 1: Thank you, Tim and John, Thank you so much. That
Speaker 1: was all good fun. Well, if nothing else, we've raised
Speaker 1: the tone on this podcast. You take your common garden
Speaker 1: references to the nineteen twenties, nineteen thirties, We pooh poo those,
Speaker 1: We take them and we raised them to Louis the
Speaker 1: fourteenth star mercantilism. Although I should say, just to clarify
Speaker 1: people who were listening to John Author's earlier, that Colbert
Speaker 1: he referenced in the context of mechantilism was Jean Baptiste
Speaker 1: Colbert and not Stephen Colbert, who we can see quite
Speaker 1: often on American television. Thanks for listening to this week's
Speaker 1: photon Nomics from Bloomberg. This episode was hosted by me
Speaker 1: Stephanie Flanders with Adrian Wildridge, and it was produced as
Speaker 1: ever by Summer Sadi, with sound design by Blake Maples
Speaker 1: and special thanks to John Author's and Tim O'Brien. Please subscribe, rate,
Speaker 1: and review highly this podcast wherever you found it