Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: With us now in Washington, d C. The senior Senator
Speaker 2: from Massachusetts, Senator Elizabeth Warren, is with us. It's great
Speaker 2: to see you, Senator, welcome.
Speaker 1: Thank you.
Speaker 2: Good to be here here at Bloomberg. Of course, we've
Speaker 2: had some big news about anti trust this week that
Speaker 2: we're looking forward to talking with you about. But we're
Speaker 2: also getting a lot of questions about whether the government
Speaker 2: is going to start shutting down on Friday. I realize
Speaker 2: you might not have the answer to that, but there's
Speaker 2: an effort underway right now, I guess, a last ditch
Speaker 2: following this meeting at the White House with the four
Speaker 2: leaders to get something done. We're hearing from Mitch McConnell's
Speaker 2: office that there could be a minibus that comes up
Speaker 2: for a vote. Would you support that to keep the government?
Speaker 1: Yes? Look, can I just be clear, this is the
Speaker 1: craziest kind of negotiation you would ever see, and that
Speaker 1: is that, as far as I can tell, everybody wants
Speaker 1: to deal keep the government open. We've all agreed on
Speaker 1: what the numbers are. It's a budget deal, right, and
Speaker 1: everyone's agreed on it, and the Republicans in the House
Speaker 1: are just saying no. And it's hard to sit out
Speaker 1: and negotiate with somebody when you see because you want
Speaker 1: what and then some crazy thing flies in that the
Speaker 1: majority of Republicans don't even want much less that you'll
Speaker 1: get Democrats on. So we're kind of in this shutdown
Speaker 1: the government for what purpose? What are the Republicans trying
Speaker 1: to accomplish here? It's a kind of dysfunction that is
Speaker 1: not about Democrats and Republicans fighting each other. It's just
Speaker 1: Republicans who just can't seem to get their act together
Speaker 1: so that we do the most basic basic job of government,
Speaker 1: and that is fund it and keep it going well.
Speaker 2: The goalposts, as we keep hearing, are moving on a
Speaker 2: couple of matters, including the supplemental emergency funding request for Ukraine,
Speaker 2: for Israel, for Taiwan. There's an effort in the House
Speaker 2: now to subvert the Speaker that involves Democrats and Republicans
Speaker 2: a discharge petition that would bring defense, only it's a
Speaker 2: little different than the one you passed, and we'll see
Speaker 2: what they get on the border. Would you support an
Speaker 2: approach like that if it got the money to Ukraine?
Speaker 1: Look, I think the key thing, right now, and we
Speaker 1: were just talking about this among the Democrats just an
Speaker 1: hour ago. Pass the bill that's already passed the Senate.
Speaker 1: We have Republicans, we have Democrats who voted for it.
Speaker 1: Ukraine needs the money now. The Ukrainians are running out
Speaker 1: of ammunition. Literally, they need the help right now. This
Speaker 1: thing has already been vetted, It's gotten strong support from
Speaker 1: Republicans in the Senate. There are Republicans in the House
Speaker 1: who want to do it, There are Democrats in the
Speaker 1: House who want to do it. The path is there.
Speaker 1: All you have to do is just take it. Come on,
Speaker 1: Elire Johnson, MA could happen?
Speaker 3: Well, of course, it's not just aid for Ukraine in question,
Speaker 3: it's aid for Israel as well. You have previously said
Speaker 3: the US should be conditioning aid to Israel to protect
Speaker 3: civilian life in Palestine. And that is very much a
Speaker 3: topic of discussion in Michigan right now, where there is
Speaker 3: a primary underway and an effort for voters to back
Speaker 3: uncommitted rather than President Biden because of his policy and
Speaker 3: support Israel. Despite what we're seeing happen in Gaza. Does
Speaker 3: the president deserve to lose those votes?
Speaker 1: The president is doing, he is working hard, and the
Speaker 1: president deserves our support. He has earned it, and he
Speaker 1: has earned it across the board. I want to be clear, though,
Speaker 1: when we're talking about what's happening right now in Israel,
Speaker 1: that the Nittya Who government in response to terrorist attacks,
Speaker 1: the fact that there are still hostages that are held
Speaker 1: the Nittanya Who government has created a humanitarian disaster, and
Speaker 1: it's a disaster that gets worse every single day. In
Speaker 1: addition to that, the Nittya Who government has said no
Speaker 1: to a long term peace solution that is a two
Speaker 1: state solution, which is the official policy of the United
Speaker 1: States of America and the one way that we can
Speaker 1: make certain that two states for two peoples who are
Speaker 1: able to live in dignity and security and with self determination.
Speaker 1: We know what we need to do right now. We
Speaker 1: need to get those hostages back, we need to cease
Speaker 1: fire in place, we need to open up that humanitarian
Speaker 1: relief big time, and we need to be pushing both
Speaker 1: parties toward a two state solution where everyone in the
Speaker 1: region can live in dignity, security and self determination.
Speaker 2: The economy is, of course a big part of Joe
Speaker 2: Biden's pitch in Michigan and all over the country right now,
Speaker 2: because the data are undeniable. The strength of this economy
Speaker 2: despite the debate that seems to be being had around
Speaker 2: whether we're going to have a recession or not. But
Speaker 2: it's interesting, the more the Fed hikes interest rates, it
Speaker 2: seems the stronger this job market gets. Somehow, And I
Speaker 2: recall some pretty tough conversations you had with Jay Powell
Speaker 2: in senate hearings. We call them a dangerous man because
Speaker 2: the idea was that this job market might not survive
Speaker 2: such intense rate hikes.
Speaker 1: Do you feel differently, not only might not remember that
Speaker 1: the Fed put out a report a year ago this
Speaker 1: past December that said they were targeting watching the unemployment
Speaker 1: rate go up, they were going to keep raising interest
Speaker 1: rates until more people millions of people were unemployed. Now
Speaker 1: it turned out they raised those interest rates and that
Speaker 1: didn't happen. And it's the reminder the Fed has basically
Speaker 1: one tool on inflation, right it raises interest rates. That
Speaker 1: works for some kinds of inflation problems. But this was
Speaker 1: a time when price is shot up, in part because
Speaker 1: we were coming out of COVID, we had supply chain canks,
Speaker 1: in part because the war in Ukraine had disrupted both
Speaker 1: food and energy supplies, and in part and it's still
Speaker 1: happening because in concentrated industries we've watched big increases in
Speaker 1: profit margins as companies have engaged in price gouging. The
Speaker 1: FED can't touch any of those and in fact, I've
Speaker 1: asked your own Powell about this in hearings and he's
Speaker 1: admitted they can't do anything about it. Right now, those
Speaker 1: high interest rates are actually increasing costs for families because
Speaker 1: one of the big parts of cost for families is housing.
Speaker 1: And with interest rates high, we know it's more expensive
Speaker 1: to buy a home. We also know it's more expensive
Speaker 1: to finance an apartment building or finance any new housing construction,
Speaker 1: and all of that gets passed on to consumers. It's
Speaker 1: time to get those interest rates down.
Speaker 3: So you would like to see the FED start cutting
Speaker 3: rates as soon as the next meeting. Yes, despite what
Speaker 3: may happen to the fight against inflation as.
Speaker 1: A result, well, you know they're off supposedly fighting inflation.
Speaker 1: They are not fighting some, not all, of the principal
Speaker 1: causes of inflation. Besides, let's keep in mind six out
Speaker 1: of the last seven months inflation has been at two
Speaker 1: percent or lower. We've watched the numbers. They're in a
Speaker 1: pretty good place. And what matters, I think is that
Speaker 1: we pay attention to how families are experiencing this economy.
Speaker 1: The Fed's job is not just a bunch of papers
Speaker 1: and numbers on a sheet of paper. It's about how
Speaker 1: families are living this economy, and keeping families so stressed
Speaker 1: on housing not good for our country.
Speaker 3: Of course, here at Bloomberg we talk a lot about
Speaker 3: the Federal Reserve. We also talk a lot about deals,
Speaker 3: as we have seen a lot of news within the
Speaker 3: last week, the FTC yesterday filing suit to block the
Speaker 3: merger between Kroger and Albertson's. Of course, within the last
Speaker 3: week and change, we've had news of the Capital One
Speaker 3: Discover Financial merger, both of which I know you are
Speaker 3: against on anti competitive grounds. But what these companies argue
Speaker 3: is that is how they're able to compete against a
Speaker 3: Visa or a MasterCard, or an Amazon or a Walmart.
Speaker 3: Is it not anti competitive to not allow consolidation to
Speaker 3: compete with the largest players that are out there.
Speaker 1: So let me just start with this is not the
Speaker 1: first time we've heard this argument. This argument has been
Speaker 1: used pretty much since the beginning of time in Eddie
Speaker 1: trust law. Oh please, just let me get bigger so
Speaker 1: I can compete with the other giants. But let's unpack
Speaker 1: these just a little bit. So, for example, in the
Speaker 1: case of the Kroger Albertson's merger, we've now in earlier
Speaker 1: lawsuits that have been brought and now information that's coming
Speaker 1: out through discovery, we see that those two giants have
Speaker 1: been communicating with each other about how to keep wages
Speaker 1: down for grocery workers at both stores. Potentially a violation
Speaker 1: of the law, but it tells us what they want.
Speaker 2: They don't want to con agreement.
Speaker 1: Yeah, these are the no poachr agreements, right, Which is
Speaker 1: just a way to say, I'm paying these folks seven
Speaker 1: dollars and fifty cents an hour, eleven dollars and fifty
Speaker 1: cents an hour, and I don't have to worry they're
Speaker 1: going to get hired away for twelve dollars or twelve
Speaker 1: and a half dollars, right, I don't have to worry
Speaker 1: about that. This is another way to say that this
Speaker 1: is how the giants see their way to improve profits.
Speaker 1: Do they improve profits by offering better service? Do they
Speaker 1: improve profits by lowering costs. Now, that's not where they're going.
Speaker 1: They're looking at ways to reduce competition. And I got
Speaker 1: to say right now, particularly in the grocery business, where
Speaker 1: we've actually seen margins increase dramatically, both for the individual
Speaker 1: items you buy and at the stores, this is not
Speaker 1: a time for the FTC to say, sure, go ahead
Speaker 1: and merge. Let's just have one grocery store in each
Speaker 1: of these areas, setting prices and setting wages wherever they
Speaker 1: want to set them. Bad idea.
Speaker 3: There's another issue you're very passionate about in addition to antitrust,
Speaker 3: and that is crypto. You have just the last week
Speaker 3: gotten a new challenger for your Senate seat in Massachusetts,
Speaker 3: John Deeton, a pro crypto attorney. There is tens of
Speaker 3: millions of dollars in crypto backpacks that could be weaponized
Speaker 3: against you in this election cycle. As the industry sees
Speaker 3: that you are pushing legislation in your anti money laundering
Speaker 3: legislation that would essentially apply the bank secretcy atky SEE
Speaker 3: restrictions to this industry. That that is something that could
Speaker 3: completely wipe it out in the United States. Clearly, this
Speaker 3: relationship is antagonistic. Why not try to collaborate with the
Speaker 3: industry to fix the issues.
Speaker 1: I just want to collaborate with the industry. What I
Speaker 1: don't understand is why the industry seems to be saying
Speaker 1: that the only way that they can survive is if
Speaker 1: there's plenty of space for the drug traffickers and the
Speaker 1: human traffickers, oh and the terrorists and the ransomware scammers
Speaker 1: and the consumer scammers, and the rogue nations North Korea
Speaker 1: that is financing about half of its nuclear missile program
Speaker 1: with crypto, that all of that has to be left open.
Speaker 1: You know, keep in mind, in our financial system, pretty
Speaker 1: much everybody follows the same set of rules. I'm talking
Speaker 1: banks and credit unions and credit card companies, gold traders
Speaker 1: and stockbrokers, private ec he now has to follow the
Speaker 1: rules precious metal dealers, Venmo, Western Union, but not crypto.
Speaker 1: My view of the world is same kind of activity,
Speaker 1: same kind of risk, should have the same regulation. I'm
Speaker 1: not looking for fancy or regulation for them. I'm not
Speaker 1: looking for anything tougher for them. I just want to
Speaker 1: level playing field here where if you're part of the
Speaker 1: financial system moving around literally billions of dollars that remember
Speaker 1: my bill is not a regulatory bill. It's a bill
Speaker 1: about law enforcement that law enforcement has the same tools
Speaker 1: that it has anywhere else to be able to shut
Speaker 1: down the terrorists and the drug traffickers and the scammers.
Speaker 1: I think that's the right thing, and I welcome anybody
Speaker 1: who wants to come in and make that happen. And frankly,
Speaker 1: I don't understand a defense that says no, no, We've
Speaker 1: got to make sure that there is a place for
Speaker 1: those guys to play without getting caught.