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Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm pim Fox.

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Speaker 1: Along with my co host Lisa Bramowitz. Each day we

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Speaker 1: bring you the most important, noteworthy, and useful interviews for

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Speaker 1: you and your money, whether you're at the grocery store

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Speaker 1: or the trading floor. Find the Bloomberg p m L

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Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. We

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Speaker 1: did get those jobs numbers earlier today. They were great

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Speaker 1: by almost all accounts, with you participation increasing the job

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Speaker 1: right following to the lowest and two thousand and even

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Speaker 1: wages accelerating. But Kennis continue and what does this mean

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Speaker 1: about the path fed rate hikes? To answer all of

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Speaker 1: these questions for us, I want to bring in Torsten Slock.

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Speaker 1: He's chief international economist at Deutsche Bank, also a publisher

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Speaker 1: of charts that are ex jraordinary and timely tours and

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Speaker 1: thank you so much for joining us. So first, just

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Speaker 1: can you please just give us your take on today's

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Speaker 1: jobs report. No, absolutely, you just summarized it very well.

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Speaker 1: This is indeed some very good numbers, both on the headline,

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Speaker 1: of course, a number of jobs creative, the unemploying rate falling,

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Speaker 1: and most importantly we've been waiting for wages to go up,

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Speaker 1: and it's in some sense finally happening after quite some time,

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Speaker 1: and in some sense it's a really good day for

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Speaker 1: the economics profession. We have been looking for wages to

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Speaker 1: go up. We've seen in the number of indicators, the

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Speaker 1: employment cousindics have gone up, the quitch rate has been high,

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Speaker 1: and now we're finally also seeing the last few drop

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Speaker 1: here in the average old learning Stata today also checking higher.

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Speaker 1: So overall it is it is very good news both

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Speaker 1: for the American consumer and for the US economy. Are

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Speaker 1: you basically saying that the Phillips curve works? Yes, So

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Speaker 1: now of course the forensics can begin that we can

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Speaker 1: begin to discuss why has it not worked, or has

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Speaker 1: it been dead, or is it waking up, or what

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Speaker 1: was the reason why it took so long time. One

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Speaker 1: answer to that is that we have seen a structural

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Speaker 1: change over the last several years where the number of

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Speaker 1: people who are staying in their jobs. If you do that,

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Speaker 1: you tend to get basically very little weight increase. So

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Speaker 1: what we have seen more recently is that the number

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Speaker 1: of people who are quitting jobs, they have tended to

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Speaker 1: get higher weight growth, and the fact that the data

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Speaker 1: to day shows you that we are at the highest

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Speaker 1: level of people who voluntarily are leaving their jobs in

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Speaker 1: twenty years. And that's also voting quote unquote wealth for

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Speaker 1: more wage pressure going forward, simply because people who stay

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Speaker 1: in their jobs tend to get very little weight increase,

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Speaker 1: whereas if you switch jobs, that's when you get the

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Speaker 1: big wage books. And the more people who are switching jobs,

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Speaker 1: the more we will see wege increase. In some sense,

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Speaker 1: looking at it today, it does make sense to say

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Speaker 1: that wages have been going up because the Phillips curve

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Speaker 1: structurally changed so that you had to be a job

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Speaker 1: switcher to see an increase in wages. Rather if you

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Speaker 1: were a job stayer, then you would not see an

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Speaker 1: increa reacent wages. So it's implicitly a recommendation for everyone

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Speaker 1: here to go out and switch jobs, because this is

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Speaker 1: the main way today to get away increase. Okay, let's

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Speaker 1: say you don't want to switch a job. Let's say

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Speaker 1: you're just looking for a job, or indeed you're out

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Speaker 1: of the labor force. What's your thought about the labor

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Speaker 1: force participation rate? Yes, so that has as you implicitly

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Speaker 1: having your question that has been not been tacking up

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Speaker 1: as much as we all would have thought. But that

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Speaker 1: being said, there are a number of reasons why people

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Speaker 1: are still outside the labor market. Some people are structurally

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Speaker 1: difficult to get into the labor market again. But we

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Speaker 1: are beginning to see, and this was in the basebook

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Speaker 1: this week, anecdotes that the employers are beginning to relax

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Speaker 1: conditions for drug testing and also conditions for criminal records testing,

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Speaker 1: and those anecdotes are telling us very importantly that we

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Speaker 1: are beginning to reach the outer stock of the labor

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Speaker 1: force in terms of how much available labor there is.

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Speaker 1: So I understand that the participation rate could potentially be

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Speaker 1: slightly higher, but the generally speaking, the fact that wages

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Speaker 1: are going up is indeed already selling us that if

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Speaker 1: there really were all these people sitting outside the labor market,

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Speaker 1: then we would not see where just go up at

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Speaker 1: this point, So we still believe that the labor market

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Speaker 1: is very tight, and therefore that we are again going

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Speaker 1: to see more upward pressure on wages going forward, so

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Speaker 1: towards in. One thing that struck me was that the

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Speaker 1: yield curve flattened after this report. In other words, the

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Speaker 1: gap between ten and two year treasury yields flatten. It's

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Speaker 1: about the lowest since two thousands seven. It seems to

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Speaker 1: indicate the people think that the Federal Reserve is going

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Speaker 1: to high rates more frequently this year then basically stimmy

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Speaker 1: growth in the longer term and pause and not hike

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Speaker 1: more in the years after. Do you think that that

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Speaker 1: is an accurate assessment? Yeah, So the challenge here is

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Speaker 1: that the front end of the cove UT two year

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Speaker 1: rates and and even should in have been driven a

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Speaker 1: lot by fit expectations and fattic between just generally have

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Speaker 1: been and including today, driven a lot by what is

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Speaker 1: the macro data telling us for the US, and the

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Speaker 1: data today basically says, you know what, the Fed has

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Speaker 1: been right, The Fed has been on the right trajectory,

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Speaker 1: and it's actually probably likely that they will be raising

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Speaker 1: race that they have the way that they have promised us.

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Speaker 1: What's more complicated, and which is in a very important

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Speaker 1: part of of your point here, and that is to

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Speaker 1: think about what a long rate doing A long rate

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Speaker 1: in the US of course this week in particular, but

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Speaker 1: generally move around for global reasons and for reasons that

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Speaker 1: are unrelated to what's going on in the US economic data.

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Speaker 1: So the fact that the Yell curve has moved away

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Speaker 1: it has today, I think it just tells you that

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Speaker 1: for now, the market is back to believing, and you

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Speaker 1: could also see on your Bloomberg screen expectations to what

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Speaker 1: the FIT will do over the coming meetings, that the

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Speaker 1: market is back to believing, that the FIT is still

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Speaker 1: raising rates, and we are still on an upward trajectory,

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Speaker 1: and for now that continues to be a race strong

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Speaker 1: outlook for the US economy overall. That's simplicit in that Towardsten.

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Speaker 1: But I wonder if we could just switch topics for

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Speaker 1: a second and get your thoughts about Italy. We've got

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Speaker 1: the swearing in of the new government, President Sergio Mazzarella

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Speaker 1: at the Quernale Palace swearing in the new government today.

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Speaker 1: What are your thoughts about what that means for the

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Speaker 1: euro and the European Central Bank. So, of course, the

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Speaker 1: challenge for the ECB here is that they have been

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Speaker 1: for a long time now on track to say that

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Speaker 1: they would end quee later this year. You can discuss

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Speaker 1: if it's September or December, and then they would most

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Speaker 1: likely they have also been saying that several members of

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Speaker 1: the Governing Council have been saying at the ECB have

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Speaker 1: been saying that they would probably high rate sometime by

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Speaker 1: the second quarter of next year. The good news is

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Speaker 1: that we now have a government in Italy. This is

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Speaker 1: at least more clarity and much less turbulent than what

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Speaker 1: we had earlier this week, where we had a lot

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Speaker 1: more uncertainty. So in some sense that's probably a bit

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Speaker 1: of a sigh of relief at the ECB today that

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Speaker 1: then now we can go back both of the c

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Speaker 1: B and in markets and look at the economic data.

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Speaker 1: Inflation was a little bit better in Germany and the

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Speaker 1: your area this week, including also in Spain, and if

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Speaker 1: the fundamentals still justify it, which we absolutely believe, then

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Speaker 1: we do still think that the CB is on track

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Speaker 1: here to gradually exit with ending queue later this year

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Speaker 1: and raising rates sometime in the second quarter of next year.

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Speaker 1: But it is complicated situation, of course, where you have

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Speaker 1: on the one side all the economics, which in some

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Speaker 1: sense it's very simple because that's telling you should they

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Speaker 1: exit or should they not exit, and on the other

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Speaker 1: side of the table you basically have these political winds

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Speaker 1: and forces and the epp and tide of different things

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Speaker 1: that are happening. That makes a quantification of those risks

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Speaker 1: rather complicated. Thank you very much for being with us.

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Speaker 1: Touristen Slock is the chief International economist at Deutsche Bank,

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Speaker 1: talking about today's non farm payrolls report as well as

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Speaker 1: events in Europe. American workers are finally starting to see

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Speaker 1: their paychecks increase. According to the jobs numbers that we

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Speaker 1: got out earlier this morning, average hourly earnings increased by

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Speaker 1: two point seven percent from a year earlier. That is

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Speaker 1: more than projected. But are these wages increasing quickly enough?

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Speaker 1: And why have they been so slow to rise? To

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Speaker 1: answer some of these questions, I want to bring in

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Speaker 1: David While. He is dean of the Heller School for

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Speaker 1: Social Policy and Management at Brandeis University, also the former

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Speaker 1: head of the Wage in Our division of the US

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Speaker 1: Department of Labor back in two fourteen. Dean While, thank

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Speaker 1: you so much for joining us. So I want to

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Speaker 1: get your take first on the numbers that we got

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Speaker 1: out this morning. Uh from the Labor Department, pretty much

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Speaker 1: across the board solid read what's your take? Uh? Yeah,

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Speaker 1: I think that's right. I mean, it's certainly good news

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Speaker 1: when the economy adds that many jobs to the economy

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Speaker 1: and UH and when the unemployment rate falls so overall,

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Speaker 1: you know, we have the long recovery that certainly began

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Speaker 1: well into UH back in the Obama administration. UM. I

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Speaker 1: think the continuing concern is with unemployment rates as low

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Speaker 1: as they are, just the fact that wages still look

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Speaker 1: very slow in recovering, very different than what we've seen

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Speaker 1: in the past. I wonder if you could speak a

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Speaker 1: little bit about the labor force participation rate and when

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Speaker 1: maybe your students come to you and say, can you

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Speaker 1: explain why it remains low? Well, the labor force participation

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Speaker 1: rate really is about whether people's optimism about whether or

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Speaker 1: not they're going to be able to find the kind

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Speaker 1: of employment they're looking at in the labor market. And

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Speaker 1: it's measure of the difficulty and the continuing difficulty of

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Speaker 1: coaxing UM. You know, an important part of our labor

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Speaker 1: force back into the labor market. And I think one

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Speaker 1: of the reasons we again have seen what looks like

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Speaker 1: historically lower rates of labor force participation than in past recoveries, UM,

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Speaker 1: is the kinds of jobs that are out there, the

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Speaker 1: kinds of opportunities that people are seeking, um, just are

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Speaker 1: not as attractive as they once were. We've really restructured

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Speaker 1: our economy in ways that just are are less and

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Speaker 1: less favorable to working people. So, but that said, we

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Speaker 1: are seeing, uh, we are seeing what we just increase

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Speaker 1: at this point. So I'm wondering, you know, first of all,

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Speaker 1: is it enough because we have seen rents increase at

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Speaker 1: a much faster pace, for example, than wages, as well

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Speaker 1: as energy costs of late and other sort of fixed

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Speaker 1: costs in people's lives. Is a two point seven percent

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Speaker 1: increase enough in your view? Uh, well, it's not, and

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Speaker 1: it's not for both the short term reasons you site.

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Speaker 1: I mean, there's a lot of costs, particularly that lower

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Speaker 1: income households are vulnerable to, like the cost of gasoline

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Speaker 1: and housing, um. But there's even a more fundamental, longer

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Speaker 1: term reason why these levels of wage growth just aren't sufficient,

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Speaker 1: and that's that real wages for working people for decades

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Speaker 1: have stagnated and there's just an immense there's a wage

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Speaker 1: gap that we really need to recover. There's just a

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Speaker 1: big part of the growth of the economy that in

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Speaker 1: the past workers shared with people who you know, owned

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Speaker 1: own capital and and and who had labor they shared

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Speaker 1: those games. That hasn't happened. This is a really important

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Speaker 1: point why. I mean, this is not a past five

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Speaker 1: years issue of past ten years issue. This is a

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Speaker 1: decades long issue. Why that's that's exactly right it is. Uh,

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Speaker 1: it really goes back to the late nineteen seventies and

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Speaker 1: the eighties and and grew much more in the post

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Speaker 1: Great Recession period. And that the answer to your question

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Speaker 1: is employment now looks really different than it used to look.

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Speaker 1: Employers used to the major businesses that drive our economy

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Speaker 1: across the different sectors. Manufacturing service used to directly employ

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Speaker 1: millions and millions of workers. That is no longer the case.

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Speaker 1: That the whole structure of employment has shifted out, whether

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Speaker 1: And it used to just be about low wage workers. Now,

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Speaker 1: with what people like to call the gig economy that

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Speaker 1: goes way beyond just the digital platform world. Uh, there

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Speaker 1: are more and more jobs where the people who actually

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Speaker 1: employ you are no longer the main companies that really

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Speaker 1: still drive the economy. And that means the way wages

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Speaker 1: are set look really different. A lot of those gains

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Speaker 1: that go from increasing productivity and expansion of our economy

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Speaker 1: are no longer being shared because the people setting those

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Speaker 1: parties who simply cannot pass on the wage gains the

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Speaker 1: way they used to. But is it possible that they

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Speaker 1: can't pass along the increased cost because as you describe,

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Speaker 1: you have a new economy wh there's always someone else

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Speaker 1: breathing down your neck that doesn't have legacy costs or

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Speaker 1: legacy employees that they have to shoulder the burden for

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Speaker 1: absolutely right, and unfortunately many of the reasons why you

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Speaker 1: have leading companies in the retail sector and manufacturing and

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Speaker 1: hotel industry really across the board shifted out those jobs

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Speaker 1: as they wanted to get rid of those legacy costs.

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Speaker 1: They wanted to get rid of the costs of expensive

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Speaker 1: costs about employing people. Um that used to be part

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Speaker 1: of the social contract that we thought this was part

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Speaker 1: of employment. You kind of shared the burdens of whether

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Speaker 1: it was employment insurance or worker compensation or just meeting

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Speaker 1: basic wage and our requirements. That used to be my

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Speaker 1: job in the labor department. Um that has been we

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Speaker 1: our laws and the structuring of our economy have allowed

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Speaker 1: that burden to be shifted out two employers who, as

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Speaker 1: you correctly say, are in direct competition with a bunch

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Speaker 1: of other employers who are less able of doing that,

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Speaker 1: and uh, the party that bears the burden. The risks

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Speaker 1: that have been shifted more and more are on on

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Speaker 1: working people. Just quickly give you ten seconds. Is there

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Speaker 1: a role that the government will play or do you

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Speaker 1: believe that that's over as well? Well? I think uh,

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Speaker 1: you know, certainly in the next few years, I would

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Speaker 1: would doubt it, although we're seeing at the state level

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Speaker 1: government is jumping in with increases in minimum wage and

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Speaker 1: other kinds of ways of helping helping working people. In

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Speaker 1: the long term, I think government is going to have

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Speaker 1: to play a role. Uh. In really writing this, I

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Speaker 1: want to thank you for very much for spending time

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Speaker 1: with us. David Wild, dean of the Heller School for

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Speaker 1: a Social Policy and Management at Brandeis University, former head

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Speaker 1: of the Wage and Our Division of the U. S

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Speaker 1: Department of Labor. In March of our next guest UH

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Speaker 1: was before the US Senate Select Committee on Intelligence hearing

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Speaker 1: the topic disinformation, a primer in Russian active measures and

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Speaker 1: influence campaigns. Clint Wants is a Senior Fellow for the

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Speaker 1: Foreign Policy Research Institute. He's also Senior Fellow at the

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Speaker 1: Center for Cyber and Homeland Security at the George Washington University.

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Speaker 1: He can be followed on Twitter at Selected Wisdom, and

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Speaker 1: he is the author of a new book, and I

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Speaker 1: Messing with the Enemy, Surviving in a social media world

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Speaker 1: of hackers, terrorists, and Russians and fake news. Watts, thank

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Speaker 1: you very much, thanks for having Why did you write

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Speaker 1: this book? I actually had a proposal for the book

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Speaker 1: together before I testified, and no one wanted it. They

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Speaker 1: were not interested. And getting people interested in the Russian

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Speaker 1: descent fo in Sen was very difficult. Uh, the Islamic

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Speaker 1: State was the focus of everything. People weren't buying into

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Speaker 1: the Russian stuffor that it mattered, and that all changed

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Speaker 1: in about a year. And I wanted people to understand

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Speaker 1: that a lot of these phenomenons had played out repeatedly.

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Speaker 1: So the Arab spring, if you remember that was the

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Speaker 1: Facebook revolution, didn't really turn out that way. In the end, UH,

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Speaker 1: the Islamic State overtook al Qaeda on social media. If

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Speaker 1: you look at our own politics, social media populism, the

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Speaker 1: Trump wave overtook the GOP and now you look at

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Speaker 1: the resistance and sort of it's offspring, you know, with

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Speaker 1: the Democratic Party. So we're seeing the social media populism

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Speaker 1: pop up in different contexts around the world. You said

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Speaker 1: that the book introduces us to a frightening world in

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Speaker 1: which terrorists and cybercriminals don't hack your computer, they hack

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Speaker 1: your mind. What does that mean? I mean? And what's

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Speaker 1: the difference between hacking your mind and disinformation and just

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Speaker 1: a good campaign? Right, So that we used to always

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Speaker 1: worry about, for example, hackers hacking into the US power grid, uh,

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Speaker 1: you know, and turning it off or or breaking it down,

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Speaker 1: our foreign country doing it. The real art of it

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Speaker 1: now is you can convince an American potentially unwittingly to

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Speaker 1: turn the power grid off for you. That's the different

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Speaker 1: objective because it also gives you plausible deniability of actually

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Speaker 1: doing it. And you're using an unwitting ally, which is

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Speaker 1: a low cost and very effective way to achieve your objectives.

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Speaker 1: And that's really what the Russians figured out was they

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Speaker 1: combined some different techniques. If you remember anonymous and lull sect.

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Speaker 1: The original hackers, they were going around stealing people's information

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Speaker 1: and dumping it out onto the internet. The Russians understood

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Speaker 1: that too. They've they've been doing compromising information for a

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Speaker 1: long long time. So when they hit the d n C,

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Speaker 1: John Podesta, General Breed Love, they understood, I'm going to

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Speaker 1: do this out there, but rather than try and hack

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Speaker 1: just for the information, I'm going to use it to

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Speaker 1: drive influence. And it's a much more powerful technique because

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Speaker 1: you're changing the way the audience that you're targeting is

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Speaker 1: perceiving not only information, but their own politics, or own country,

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Speaker 1: their own institutions. I want to mention that you're a

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Speaker 1: graduate of West Point, US Military Academy. You served in

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Speaker 1: the infantry. Thank you very much for your your service. UH.

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Speaker 1: You also worked as a special agent for the Federal

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Speaker 1: Bureau of Investigation and served on the Joint Terrorism Task Force.

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Speaker 1: Do we face terrorism or do we face criminals? You

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Speaker 1: face both, and it really comes down to you know

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Speaker 1: what their objectives are in the objective is either money

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Speaker 1: or is it ideology? You know, changing governments, taking down

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Speaker 1: uh the United States. We face both and what's interesting

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Speaker 1: is that they learned from each other. So criminals activists

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Speaker 1: they both learned from each other in terms the tools.

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Speaker 1: You know, when we look at criminal hackers, they came

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Speaker 1: after if you remember the old activists, the hackers, you know,

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Speaker 1: the people that did it for fun and for just learning.

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Speaker 1: Criminals recognized that and said, well, you know what else

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Speaker 1: we could use this for. We see the same thing

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Speaker 1: going on now, by the way, with disinformation. The Russians

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Speaker 1: are brilliant at the art of disinformation, but now everybody

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Speaker 1: is copying their playbooks. So I've been talking a lot

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Speaker 1: about the elections. I'm not so worried about the Russians

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Speaker 1: as I am. Everybody else's copying it. And so what

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Speaker 1: you're seeing is those who can amass data from lots

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Speaker 1: of social media companies you're purchasing preferences, and use advanced

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Speaker 1: technology like machine learning. They have cutting edge ability to

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Speaker 1: do influence campaigns on steroids and do them much quicker.

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Speaker 1: So those that are you know, political public relations companies,

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Speaker 1: are political campaigns, they really will have more capability on

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Speaker 1: the horizon than any of these nation states we've been

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Speaker 1: worrying about so far. Yeah, and when you add artificial

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Speaker 1: intelligence into it, you can start to imagine that this

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Speaker 1: disinformation becomes incredibly effective. I'm just wondering, you know, what

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Speaker 1: is sort of the counterbalance to this, How how is

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Speaker 1: there anything that could kind of, I don't know, get

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Speaker 1: in the middle of this, because basically this is just

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Speaker 1: the old propaganda campaigns on steroids, right, it is just

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Speaker 1: taking it to cyberspace, where you have it's much more

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Speaker 1: cost effective and much more effective in terms of moving populations.

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Speaker 1: I think we've seen that ultimately. I think, you know,

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Speaker 1: sort of a big part of the book is what

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Speaker 1: happens to us over time when we're in this and

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Speaker 1: you start to see what I call preference bubbles, and

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Speaker 1: so you see social media nations emerge that overtake physical nations.

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Speaker 1: And by that, I mean if you're spending three to

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Speaker 1: five hours a day on your cell phone, you were

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Speaker 1: with virtual connections more than physical connections, and you're starting

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Speaker 1: to build relationships online that overtake your neighbors. And so

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Speaker 1: that is truly devastating for real companies and countries, uh

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Speaker 1: in terms of how they do their business. Who governs cyberspace?

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Speaker 1: I think we saw with social media companies there are

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Speaker 1: only they're the only ones that really understand how their

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Speaker 1: systems work. Governments are struggling to regulate them or understand

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Speaker 1: the dangers that are there. And I think for the

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Speaker 1: private sectors, a big issue with banks and law firms.

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Speaker 1: If you want to do a compromising campaign where our

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Speaker 1: secrets held and seek secrets are held at banks and

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Speaker 1: law firms, that's where the information warfare battlefield really takes place.

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Speaker 1: So the implications are devastating and will ultimately come down

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Speaker 1: to civil society to solve this. And we have to

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Speaker 1: get a you know, we have to restore a basis

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Speaker 1: of fact and fiction. You can't have policy debate if

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Speaker 1: you have your facts and I have my facts, and

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Speaker 1: we're debating about whose facts are right. You can't even

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Speaker 1: debate the policy because we don't even agree on where

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Speaker 1: the playing field is. And we're seeing that today. The

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Speaker 1: other thing is we're seeing these bubbles start to emerge

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Speaker 1: in the information space where I like you, you like me.

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Speaker 1: We build our own nation, we build our own history,

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Speaker 1: we start our own institutions which reinforce our preferred facts

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Speaker 1: and our preferred science, and we don't come together and

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Speaker 1: we don't discuss, so we'll have implications for science. They

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Speaker 1: will have amplifications for government. And really it's about do

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Speaker 1: you want to your relationships in the virtual world to

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Speaker 1: be about people who look like you and talk like you,

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Speaker 1: or do you want it to be about your fellow Americans.

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Speaker 1: And that's really the challenge moving forward. We have to

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Speaker 1: restore what we believe in as a country and and

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Speaker 1: really what we want to push around the world and

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Speaker 1: about the Is there any nation or group of people

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Speaker 1: that are doing this better than we are here in

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Speaker 1: the United States in terms of meeting these challenges. Yes,

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Speaker 1: I think European countries they are actually smaller, they move quicker, uh,

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Speaker 1: they understand how to talk to their nations and what

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Speaker 1: their value stand for. Sweden is a good example. They've

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Speaker 1: been much more resilient to this. A lot of the

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Speaker 1: Scandinavian countries in the Baltics, they've been dealing with disinformation

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Speaker 1: for a long time, so they're just better equipped to

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Speaker 1: deal with this over the over the near term at

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Speaker 1: least and maybe breaking some of the uh. I don't know,

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Speaker 1: smartphone addiction. I'm serious, it's just if you think about it,

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Speaker 1: if people spend five to six hours online. I actually

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Speaker 1: saw a survey today of him that showed that teenagers

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Speaker 1: that almost half say that they're nearly always online when

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Speaker 1: they are awake. Clint Watts, I could speak with you

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Speaker 1: for the next hour. Thank you so much for being

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Speaker 1: with us. Truly a fascinating topic and I look forward

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Speaker 1: to reading your book. Clint Watts, Senior Fellow at the

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Speaker 1: Foreign Policy Research Institute. He's also a Senior Fellow at

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Speaker 1: the Center for Cyber and Homeland Security at the George

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Speaker 1: Washington University. Author of new book, Messing with the Enemy,

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Speaker 1: Surviving in a social media world of hackers, terrorists, Russians,

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Speaker 1: and fake news. Steel and aluminum tariffs what do they

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Speaker 1: mean for producers in the United States? Well? Debbie sean

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Speaker 1: is a partner a trade lawyer at Quinn Emmanuel based

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Speaker 1: in Washington, d C. Previously, MS sean On was the

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Speaker 1: Vice president of International Trade in Public Policy at U S.

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Speaker 1: Steal and a trade official in the Clinton administration. WI Sean,

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Speaker 1: thank you very much for being with us. Uh, do

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Speaker 1: these trade is sanctions, these tariffs on on aluminum and steal,

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Speaker 1: did they actually help anyone? Well, thank you very much. UM. Well,

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Speaker 1: we know this. UM. It's not a zero sum game.

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Speaker 1: It's much too complex In the global trade community to

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Speaker 1: distill it into a winter losers situation. But we do

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00:24:33,200 --> 00:24:35,960
Speaker 1: know in the short run there are two games, and

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00:24:36,000 --> 00:24:38,960
Speaker 1: that's the political gain for an administration who's delivered on

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00:24:39,160 --> 00:24:42,800
Speaker 1: a political campaign promise which almost two years to the date,

436
00:24:43,080 --> 00:24:47,760
Speaker 1: UM he enunciated in a rally ticking off all the

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00:24:47,800 --> 00:24:50,800
Speaker 1: trade tools he was going to use commercially. As you

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00:24:50,840 --> 00:24:55,240
Speaker 1: wanted to address him. Is that for the protected industry,

439
00:24:55,280 --> 00:24:59,440
Speaker 1: so will be an uptick on sales prices will increase UH,

440
00:24:59,480 --> 00:25:03,159
Speaker 1: and their stock values will likely go up as well. UM.

441
00:25:03,280 --> 00:25:08,359
Speaker 1: The consumer UH and also the downstream UM suppliers and

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00:25:10,400 --> 00:25:14,040
Speaker 1: consumers that actually purchase steel in a luminium will see

443
00:25:14,160 --> 00:25:18,320
Speaker 1: higher prices. So that will affect the construction industry, transportation industry,

444
00:25:18,400 --> 00:25:24,960
Speaker 1: equipment industry. So the downside is UM, it will be UH.

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00:25:25,000 --> 00:25:29,080
Speaker 1: Well will also surface UM in the short term. Well, Debbie,

446
00:25:29,200 --> 00:25:31,280
Speaker 1: you know, I guess that I'm wondering what's the right

447
00:25:31,359 --> 00:25:35,240
Speaker 1: question to ask in order to understand and observe the

448
00:25:35,320 --> 00:25:38,760
Speaker 1: consequences of these tariffs. So a lot of people are

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00:25:38,800 --> 00:25:42,280
Speaker 1: pointing to the decline in economic output UH and that

450
00:25:42,359 --> 00:25:45,439
Speaker 1: it's diminimus in the long run. Other people point to

451
00:25:46,119 --> 00:25:49,640
Speaker 1: UH sort of higher steel lumber prices and other commodities

452
00:25:50,000 --> 00:25:53,639
Speaker 1: um and and sort of bleeding into higher higher consumer prices.

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00:25:53,720 --> 00:25:56,720
Speaker 1: What what metric are you looking at determine how big

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00:25:56,720 --> 00:26:00,440
Speaker 1: of effect this has? Well, we obviously all of your

455
00:26:00,480 --> 00:26:03,440
Speaker 1: show um and those economists around the globe, but that

456
00:26:03,800 --> 00:26:08,800
Speaker 1: try to um calculate um numerically what the impact will

457
00:26:08,840 --> 00:26:12,399
Speaker 1: be on different economies. As a lawyer, I look at

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00:26:12,600 --> 00:26:16,919
Speaker 1: how it impacts clients as well as the market UM.

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00:26:17,040 --> 00:26:19,359
Speaker 1: So the short term as I sort of enunciate it,

460
00:26:19,359 --> 00:26:21,639
Speaker 1: which is the commercial and the political gain, but the

461
00:26:21,720 --> 00:26:24,960
Speaker 1: damage is also incalculable on the long term. The long

462
00:26:25,080 --> 00:26:27,520
Speaker 1: term damage that is our standing in the world, which

463
00:26:27,520 --> 00:26:30,080
Speaker 1: are manifest in the view of our allies as being

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00:26:30,520 --> 00:26:35,040
Speaker 1: untrustworthy perhaps and also places at risk UM our own

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00:26:35,280 --> 00:26:38,840
Speaker 1: standing as the world's largest and most open economy. But

466
00:26:39,080 --> 00:26:45,960
Speaker 1: by erecting barriers, you diminish that the the trade um

467
00:26:46,440 --> 00:26:50,040
Speaker 1: the trade with other nations and uh and and consequently

468
00:26:50,080 --> 00:26:54,239
Speaker 1: handcuffed your own economy. UM. So we're looking at it

469
00:26:54,320 --> 00:26:57,800
Speaker 1: on not only a commercial legal but also the to

470
00:26:57,840 --> 00:27:00,919
Speaker 1: the geo political as well. But it is consistent with

471
00:27:00,960 --> 00:27:03,879
Speaker 1: this president's view of the world. I mean I'll share it.

472
00:27:03,960 --> 00:27:07,640
Speaker 1: But he's been very consistent since day one. And what's

473
00:27:07,680 --> 00:27:12,639
Speaker 1: interesting is the outliers China, and instead we are focusing

474
00:27:12,800 --> 00:27:16,760
Speaker 1: our our tariffs on our allies. So it appears at

475
00:27:16,840 --> 00:27:20,720
Speaker 1: least the optics that we're coddling our adversaries will harming

476
00:27:20,720 --> 00:27:23,920
Speaker 1: our allies. But which all the one second, I'm sorry

477
00:27:23,960 --> 00:27:26,159
Speaker 1: to break in here, but you know, the geopolitical side

478
00:27:26,240 --> 00:27:28,479
Speaker 1: is an important one. But I want to talk about

479
00:27:28,720 --> 00:27:30,240
Speaker 1: what you mentioned. I want to pick up on a

480
00:27:30,280 --> 00:27:32,199
Speaker 1: point that you said, which is when you talk to

481
00:27:32,240 --> 00:27:34,200
Speaker 1: your clients about this, and you work with some of

482
00:27:34,240 --> 00:27:36,920
Speaker 1: the biggest companies in the US, what are they saying

483
00:27:36,960 --> 00:27:41,359
Speaker 1: about this. Well, those who are in the protected industries

484
00:27:41,600 --> 00:27:48,160
Speaker 1: are have actually have actually advocated for these different political

485
00:27:48,200 --> 00:27:51,600
Speaker 1: tools to be used in order to advance and what

486
00:27:51,600 --> 00:27:55,560
Speaker 1: we what has been always stated as leveling the playing field.

487
00:27:56,000 --> 00:28:00,280
Speaker 1: Much of this happens um as a result of a

488
00:28:00,400 --> 00:28:05,080
Speaker 1: view of the of the United States and being put

489
00:28:05,200 --> 00:28:07,800
Speaker 1: upon right this is this is the view that is

490
00:28:08,040 --> 00:28:11,920
Speaker 1: articulated the narrative of grievances of how we've been taken

491
00:28:11,960 --> 00:28:16,480
Speaker 1: advantage of. Except this, what what's happening is is the

492
00:28:16,480 --> 00:28:20,440
Speaker 1: administration is actually treating a symptom, not the disease. So

493
00:28:20,760 --> 00:28:23,720
Speaker 1: if if the structure, if the In fact, I think

494
00:28:23,800 --> 00:28:27,159
Speaker 1: yesterday the director of the World Trade Organization articulated this,

495
00:28:27,520 --> 00:28:29,960
Speaker 1: it's time for these constructs to actually come into the

496
00:28:29,960 --> 00:28:32,600
Speaker 1: twenty first century and deal with a lot of the

497
00:28:32,640 --> 00:28:36,560
Speaker 1: issues that have hamstrung the domestic industries in the United

498
00:28:36,640 --> 00:28:40,320
Speaker 1: States from getting their fair share or getting their day

499
00:28:40,360 --> 00:28:43,400
Speaker 1: in court. So, whether it's the trade laws that haven't

500
00:28:43,480 --> 00:28:46,080
Speaker 1: kept up and have been written since nineteen seventy nine,

501
00:28:46,200 --> 00:28:50,360
Speaker 1: I think it's time for a modernization and and bringing

502
00:28:50,360 --> 00:28:53,640
Speaker 1: these these tools into the twenty first century because many

503
00:28:53,680 --> 00:28:55,960
Speaker 1: of the tactics that are being used were never thought

504
00:28:56,040 --> 00:28:59,880
Speaker 1: of or never even envisioned when these laws were created.

505
00:29:01,000 --> 00:29:03,200
Speaker 1: By Sean, thank you so much for being with us

506
00:29:03,200 --> 00:29:05,640
Speaker 1: t B. Sean is partner and trade lawyer at Quinn

507
00:29:05,680 --> 00:29:09,600
Speaker 1: Emmanuel Law Firm in Washington, d C. She also was

508
00:29:09,640 --> 00:29:12,760
Speaker 1: formerly the vice president of International Trade and Public Policy

509
00:29:12,840 --> 00:29:15,960
Speaker 1: at US Steel and It's a trade official in the

510
00:29:16,000 --> 00:29:22,520
Speaker 1: Clinton administration. Thanks for listening to the Bloomberg p m

511
00:29:22,600 --> 00:29:25,640
Speaker 1: L podcast. You can subscribe and listen to interviews at

512
00:29:25,680 --> 00:29:30,120
Speaker 1: Apple Podcasts, SoundCloud, or whatever podcast platform you prefer. I'm

513
00:29:30,160 --> 00:29:33,600
Speaker 1: pim Fox. I'm on Twitter at pim Fox. I'm on

514
00:29:33,640 --> 00:29:37,080
Speaker 1: Twitter at Lisa Abramowits one before the podcast. You can

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00:29:37,080 --> 00:29:39,480
Speaker 1: always catch us worldwide on Bloomberg Radio