Speaker 1: Brought you by Bank of America Mary Lynch. Investing in
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Speaker 1: Member s I p C. Welcome to the Bloomberg Surveillance Podcast.
Speaker 1: I'm Tom Keene with David Gura. Daily we bring you
Speaker 1: insight from the best in economics, finance, investment and international relations.
Speaker 1: Find Bloomberg Surveillance on iTunes, SoundCloud, Bloomberg dot Com, and
Speaker 1: of course on the Bloomberg. We begin with Sebastian Galley.
Speaker 1: He's a senior currency strategy of Boutsche Bank and he's
Speaker 1: kindly joined us here on Bloomberg eleven. Three Oh studios,
Speaker 1: Let's start with Breggsit. We're looking ahead to April five,
Speaker 1: when the EU Parliament begins to take up what we've
Speaker 1: seen working its way from London to Brussels. What was
Speaker 1: your sense of what reason they had to say in
Speaker 1: her speech and sort of how this is all going
Speaker 1: to play out over these next these next two years. Well,
Speaker 1: what do you have is typical incoherence between one party
Speaker 1: and the second and when they send you to a
Speaker 1: training in the Europe in EU for negotiation and actually
Speaker 1: was one of these officials. The first thing they teach
Speaker 1: you is that the beginning is a high divergence and
Speaker 1: one next step is basically too showing what each of
Speaker 1: the parties wants to show. And this is what the
Speaker 1: UK has done. It's shown this roadmap. The Europeans have
Speaker 1: leaked their own road maps. It's all very helpful and
Speaker 1: very civilized, and both of the road maps actually are
Speaker 1: completely incoher and this is absolutely normal. What you show
Speaker 1: is you show your cards and then you do the exchange.
Speaker 1: So what is are you willing to exchange? Apparently the
Speaker 1: British are having a bit of a sense of humor
Speaker 1: and suggesting that Gibraltar is off the map, and so
Speaker 1: I don't think that's what the Europeans were looking for.
Speaker 1: But the exchange will happen and the right. The problem
Speaker 1: is that they only have two years to figure out
Speaker 1: what they can give and on each side, and it
Speaker 1: looks like it's politically difficult for the British to accept
Speaker 1: some realities. Um and they'll take them to sometime basically
Speaker 1: to diffuse the reality through the UK political system. They
Speaker 1: already have accepted that they will actually contribute monies uh
Speaker 1: to the European Union, which for conservative is extremely hard
Speaker 1: to do UM. And so there's a nice, decent process.
Speaker 1: Will will it happen within two years? And very few
Speaker 1: people expected, particularly the European typical negotiations the last five
Speaker 1: to up to ten years, and so this is probably
Speaker 1: more what we should look forward to. The UK is
Speaker 1: doing his job, Europe is doing his job. There's going
Speaker 1: to be a lot of noise UM, which is typical
Speaker 1: at the beginning of the process. That noise will eventually
Speaker 1: start to settle down and converge towards some form of solution.
Speaker 1: It will be very painful in detail. It will go
Speaker 1: into Spanish fishermen going into uh UK territorial waters and
Speaker 1: the likes and the usual stuff we've been dealing with
Speaker 1: in Europe for a long time. So very European. Actually,
Speaker 1: how does this affect your world over these next these
Speaker 1: next two years. You've got these two disparate maps, as
Speaker 1: you say, a lot of noise in the fore x space.
Speaker 1: How do you approach what's happening? Well, what it does
Speaker 1: suggest is the for now in the UK is kind
Speaker 1: of fine from a legal point of view in terms
Speaker 1: of its access and everything. So that might actually continue
Speaker 1: for longer than anyone would would expect. So it's a
Speaker 1: less of a concern I guess from a short term
Speaker 1: tactical point of view, from the point of view of
Speaker 1: somebody investing into the UK as uh, these uh, you know,
Speaker 1: these different negotiations clarify themselves and that might may take
Speaker 1: up to a year, and then the in terms of
Speaker 1: FDI and the like, it is actually going to be
Speaker 1: a decent story. The pound by some measures is undervalued. Uh,
Speaker 1: and so it might be attractor for people investing in
Speaker 1: commercial real estate real estate into into the United Kingdom.
Speaker 1: Might be interesting for some sovereign wealth funds and reserve
Speaker 1: managers to to build up some positions in the in
Speaker 1: the UK. And so it's it's not such a bad
Speaker 1: story for the UK. The market has vastly priced the
Speaker 1: Brexit story for good reasons and uh, and you know,
Speaker 1: they does offer some considerable opportunities for for the UK
Speaker 1: has not necessarily a manufacturing base, but a base of
Speaker 1: services which is somewhat cheaper. It allows them to keep
Speaker 1: the city because it has reduced the cost of holding
Speaker 1: the city, uh in the UK versus you know, moving
Speaker 1: a lot of their people out into Ireland, UH, France
Speaker 1: or Germany for that matter, but some of it will happen.
Speaker 1: You had the EU commissioned President, you Council president rather
Speaker 1: talking about how united in front these twenty seven nations
Speaker 1: we're gonna we're gonna present. Is this an opportunity for
Speaker 1: more cohesiveness or does the fractiousness of the EU continue
Speaker 1: to play role that that's going to make it difficult
Speaker 1: for these negotiations take place. I like to think of
Speaker 1: it as UH and for some reason why Irish accident
Speaker 1: is coming back. But the this probably goes I'm thinking
Speaker 1: about rugby, but it's it's like a big rugby team
Speaker 1: and none of the players individually or are quite similar
Speaker 1: body shape, attitude or the likes, but they do act
Speaker 1: under crunch as as one unit. And this is typically
Speaker 1: what you do see. And in the case of the UK,
Speaker 1: is a pretty clear story. Um and it's not a
Speaker 1: very divisive one. There are always outliers, are always better
Speaker 1: places than others, but broadly speaking they actually do behave
Speaker 1: as a whole. One of the reasons is it's not
Speaker 1: necessary to punish the UK is to make it more difficult.
Speaker 1: You're colleing. Allen Ruskin is the one that I guess
Speaker 1: has provided leadership on an outlier call of weaker sterling.
Speaker 1: How do you get to a Deutsche Bank weaker sterling?
Speaker 1: It is an abrupt I'm sorry. It's a game changing
Speaker 1: decline for the United Kingdom, isn't it. There are two
Speaker 1: components to it. One is a strong dollar view, which
Speaker 1: of course would push sterling lord a. Number two is
Speaker 1: a recognition that some of the impulse we've seen in
Speaker 1: the UK is actually quite temporary from cyclical point of view,
Speaker 1: and as it fades lower um, the the b o
Speaker 1: E is de wish and probably will end up being
Speaker 1: more do wish than people expect um. And the combination
Speaker 1: relatively weak growth and to some extend a stronger dollar,
Speaker 1: as well as some of the improvement that we've seen
Speaker 1: on the cure and account reversing that generally is not
Speaker 1: particularly good. So from a cyclical point of view, there
Speaker 1: there is a claim to be made, which we do
Speaker 1: that sterling should headlore Having said that the this is
Speaker 1: a view which is held by the market. One on Brexit,
Speaker 1: it has made a lot of money on that number
Speaker 1: two because there are positions related to France, which are
Speaker 1: yours sterling positions? People have been basically being short year
Speaker 1: and long sterling, and that, of course is is not
Speaker 1: helpful if you if you want to have an outright
Speaker 1: sterling position, The bet there is on a McCrone win
Speaker 1: when you look at it, when you look at euros sterling. Yeah,
Speaker 1: there are very heavy bets apparently in the market which
Speaker 1: are done through your sterling, your yen short bounds, as
Speaker 1: well as on the O A t U there then
Speaker 1: through equities basically a bet that Mr mccorn will it
Speaker 1: will actually win. How do you adjust that to what
Speaker 1: we observed? I forget about September August twenty, August thirty one,
Speaker 1: September two, September four, and then ten pm September eight?
Speaker 1: Is there any humility about poles in France? Given what
Speaker 1: we witnessed in the United States? You you wouldn't believe
Speaker 1: the amount of work we actually spend on on poles
Speaker 1: in general and pulsar spend on poles in general. We
Speaker 1: do know it's actually very useful. So what do we
Speaker 1: do is we look at they do what do they
Speaker 1: call rolling polls, so which basically UH is statistically superior.
Speaker 1: Number two they use what we call stratified polling, which
Speaker 1: is you're going to look at every type of worker,
Speaker 1: for example, every type of age, and you look in
Speaker 1: extreme details, um and then there are different companies competing
Speaker 1: against each other to see basically if we actually get
Speaker 1: the same numbers. And then the journalists of course do
Speaker 1: not believe whatsoever with the polls are and they have
Speaker 1: decided in France that they would send people across the
Speaker 1: field to check and see if there are basically trends
Speaker 1: which are being missed by the polls. We know that
Speaker 1: there are bosses the poles. These poles, for example, exclude
Speaker 1: the people like me, the French outside of the France,
Speaker 1: as well as their French outside of metropolitan France, and
Speaker 1: that gives actually bias of roughly plus one percent to
Speaker 1: MA on the second round because they tend to be
Speaker 1: a more right way leading. Thank you so much at
Speaker 1: your bank this morning. Just lots to talk about here
Speaker 1: and really are re caliber for for April? Are you
Speaker 1: in tomorrow morning? David girl? This is this is I'm
Speaker 1: you know, feeling sick. I'm feeling like if you feel typhoid.
Speaker 1: Starts at nine. The tip off for this national championship game.
Speaker 1: Is it really? I did not know? Which does me
Speaker 1: no favors here have to watch the surveillance replay the following.
Speaker 1: I'm in the eleventh percentile. I feel pretty good. I'm
Speaker 1: like walking around, strutting around, seb I do this as
Speaker 1: like rugby. I do it off the color of the jersey.
Speaker 1: That's that's how I do it. And Michael Barr, I'm
Speaker 1: in the eleventh percentile. And then sat Rachel walked in
Speaker 1: this morning. Do you realize she is number four out
Speaker 1: of people in in all of Bloomberg Bloomberg Land. Ya.
Speaker 1: This is our executive producer Folks, who often sits between
Speaker 1: me and David and radio to keep us apart. I
Speaker 1: knew it wasn't me because that when I walked in
Speaker 1: the door I heard typhoid. Do you know that Rachel
Speaker 1: even had Purdue going long and she's still like kills
Speaker 1: her even though her boiler makers went down flames. It's extraordinary. Yeah, well,
Speaker 1: I had to look up for Gonzaga. Is this weekend?
Speaker 1: To be honest, Good morning Eastern Washington. No thrill, that's thrilled.
Speaker 1: You're listening in Washington State, in Idaho and Spokane or Spokeane,
Speaker 1: I think I watched a tip off. Don't wake up
Speaker 1: when the game has finished. What's what the Rangers are doing? Now? Okay,
Speaker 1: folks had fun with this. I mean, I gotta hate
Speaker 1: mail this weekend from Manila. You know nothing about basketball,
Speaker 1: I said, You're right, David Gern Tom Kane, good morning everyone.
Speaker 1: I appreciate your attendance in Washington in our FM news bureau. Uh.
Speaker 1: Ted Alden of the Council on Foreign Relations, This book
Speaker 1: is Failure to a just can't say enough about it
Speaker 1: on trade, Jed. All of my reading on China is
Speaker 1: that they have ever advantage to wait and wait and wait.
Speaker 1: Do they outweigh this president to the next president? Oh? I,
Speaker 1: I think there's no question. You know, they're they're playing
Speaker 1: the long game. They're very patient. I think if you
Speaker 1: look at the way they reacted to Trump after the election,
Speaker 1: during the transition period, he was firing off some provocative tweets.
Speaker 1: UH call with the president of Taiwan. He did a
Speaker 1: number of provocative things, and the Chinese responded quite calmly
Speaker 1: and steadily. So yeah, I think they will wait as
Speaker 1: long as they need to wait. Ted. I talked to
Speaker 1: Wilba Ross, the Secretary of Commerce, on Friday, and I
Speaker 1: asked him what was going to be on the agenda
Speaker 1: for these meetings in Florida. He said, trade is gonna
Speaker 1: be high up there. What is this administration? What what's
Speaker 1: the outcome they hope for out of this this meet
Speaker 1: and greet that's this two day meeting at mar Lago.
Speaker 1: I do not think they have any particular deliverables in mind.
Speaker 1: I think they want to try to get some sense
Speaker 1: that the Chinese are wanting to cooperate on North Korea,
Speaker 1: which is obviously at something of a crisis point in
Speaker 1: terms of North Korea's ability to to develop a deliverable
Speaker 1: nuclear missile. I think on trade, I think all they
Speaker 1: want is an acknowledgement that it's a big issue between
Speaker 1: the United States and China, that the trade deficit is
Speaker 1: a problem, and that they're going to deal with it.
Speaker 1: I don't expect anything more specific than that out of
Speaker 1: this meeting. Secretary Ross was at his most animated when
Speaker 1: I asked him about this letter, this draft of a
Speaker 1: letter that was leaked by congressional staffers. UH to to
Speaker 1: get anaf to talk started again, you have to give
Speaker 1: ninety days notice. I I gather, what's your sense of
Speaker 1: the timetable there. This administration seems eager to reopen conversations
Speaker 1: about what happens to NAFTA. Do we know more about
Speaker 1: what provisions in particular they hope to see changed. Well,
Speaker 1: that that letter is a bit of a laundry letter.
Speaker 1: Stand there are things in there that have been on
Speaker 1: the agenda for a long time. There's a bunch of
Speaker 1: things in there, ironically that we're renegotiated as part of
Speaker 1: the Transpacific Partnership that President Trump walked away from on
Speaker 1: day one. And there are other items that I think
Speaker 1: would be very controversial, um, you know, taking a look
Speaker 1: at at tax issues, the dispute settlement process, over trade cases,
Speaker 1: anti dumping, countervailing duty cases, that US wants a kind
Speaker 1: of snap back provision where it can reimpost tariffs. So
Speaker 1: so there are some pretty explosive items in that list.
Speaker 1: We just don't know what the priority is. It's a
Speaker 1: bit of a laundry list at this point, a bit
Speaker 1: of a laundry list. And I was surprised as well,
Speaker 1: drawing from that conversation the degree to which Secretary Ross
Speaker 1: said that the the TPP would provide some starting points
Speaker 1: for these negotiations. So I suppose the t p P
Speaker 1: lives on. What do you think will will continue to
Speaker 1: shape trade policy from that that trade bill that we've
Speaker 1: stepped out of. I I think that this administration is
Speaker 1: just in this period where it's trying to figure out
Speaker 1: where the openings are. I mean, Donald Trump has made
Speaker 1: a lot of big promises on trade that he's gonna
Speaker 1: change direction in some fundamental ways, and and everything that
Speaker 1: we've seen so far is rather modest. I mean Paul
Speaker 1: Krugman in his column this morning called the executive actions
Speaker 1: on Friday a couple of nothing burgers, and I think
Speaker 1: that was largely correct. Um, I don't think that there
Speaker 1: there's anything there, so so I I continue to be
Speaker 1: puzzled what kinds of specifics they're they're gonna go for.
Speaker 1: They've got more cautious, which may be a good thing. Well,
Speaker 1: if we all understand anybody listen to this, whatever their politics.
Speaker 1: Multilateral is gone. It was from another time and place.
Speaker 1: And then I guess there's bilateral, and then there's unilateral.
Speaker 1: And to pick up by nothing burgers, is there no lateral?
Speaker 1: Is the basic idea here is we have a party
Speaker 1: or a theology that says, we don't want to do trade,
Speaker 1: we don't want to argue with anybody. Well, I mean
Speaker 1: you you could. I mean you you could have an
Speaker 1: administration that says, look, we're gonna live with the status
Speaker 1: quo in terms of the agreements, and we're going to
Speaker 1: try to do better in terms of exporting using the
Speaker 1: as we have. There's nothing wrong with that. I mean,
Speaker 1: there's nothing that says that every agreement has to be
Speaker 1: superseded by another agreement and another agreement. We've been doing
Speaker 1: that for fifty or sixty years, but there's no ironclad
Speaker 1: law that you have to keep doing that. You could
Speaker 1: just work in the rules you've got. Right now, what's
Speaker 1: this document gonna look like that Secretary Ross and his
Speaker 1: colleagues are going to prepare over these next ninety days?
Speaker 1: He called it unprecedented degree to which he's gonna look
Speaker 1: at this on a company by company basis. Helped me
Speaker 1: with the history. How unprecedented is it? And then what
Speaker 1: what's a what's that ninety ninety day document gonna look like? Well?
Speaker 1: I don't think it is all that unprecedented. I mean,
Speaker 1: the US Trade Representatives Office every year releases what's called
Speaker 1: the National Trade Estimates, and it looks into foreign trade bearers.
Speaker 1: It's a five hundred plus page document of all the
Speaker 1: places that we think our trading partners aren't living up
Speaker 1: to their obligations. I presume it's going to repeat a
Speaker 1: lot of that. The only difference maybe a bit more
Speaker 1: of a focus specifically on the countries with which the
Speaker 1: US runs a large trade deficit. But but of course,
Speaker 1: I mean, as you know, trade deficits are not all
Speaker 1: driven by trade policy. A lot of it has to
Speaker 1: do with savings and balances and big macro economic question.
Speaker 1: I don't know whether they're gonna get into that. I
Speaker 1: don't know where they're include currency. That's treasury territory historically,
Speaker 1: a lot of unknowns. Again, Ted Alton, thank you so
Speaker 1: much with the consolant Foreign Relations is Important book as
Speaker 1: Failure two Adjustment, brought you by Bank of America. Mary Lynch,
Speaker 1: dedicated to bringing our clients insights and solutions to meet
Speaker 1: the challenges of a transforming world. That's the power of
Speaker 1: global connections. Mary Lynch, Pierce feederin Smith Incorporated, Member s
Speaker 1: I p C. Mr renn is with the Scott Wren
Speaker 1: when we won't ask about Scott Rens Brackett. Scott help
Speaker 1: me with the equity market bracket if you would. Uh,
Speaker 1: we're just talking with Lindsay Bell of c f r
Speaker 1: A about the the double digit reality we live in.
Speaker 1: When does that end? Well, Tom Lee, let's talk about
Speaker 1: the market, because my best ball bracket was a complete disaster.
Speaker 1: But you know, our view really hasn't changed in terms
Speaker 1: of what the market's going to do this year since
Speaker 1: late September of last year when we set our targets.
Speaker 1: You know, we've been looking for the SMP five to
Speaker 1: hit its annual high for somewhere around the middle of
Speaker 1: the year. Um. You know, we have an upper end
Speaker 1: of our target ranges. We thought it would be at
Speaker 1: our our slightly above that. We've been slightly above that.
Speaker 1: So for us, um, you know, could the market trade
Speaker 1: a little bit higher? Sure? Is it going to trade
Speaker 1: a lot higher? We don't think so. We think we're
Speaker 1: going to see a fade um you know, end up
Speaker 1: somewhere somewhere like that at the end of the year.
Speaker 1: So you know, our views really have not changed over
Speaker 1: the last uh, you know, six months or so. I
Speaker 1: thought your sense of the economy Scott Rent. Well, you know, David,
Speaker 1: I think it's still you know, you're grinding and out.
Speaker 1: You're in a modest growth economy. You don't have a
Speaker 1: lot of inflation, although I think we're gonna see a
Speaker 1: little bit of wage push here and I think that's
Speaker 1: going to be the head wind really for the market
Speaker 1: in the second half here. Um, But you know, the
Speaker 1: economy continues to chug along, labor market continues to slowly improve,
Speaker 1: consumer spending is okay. So I don't think there's really
Speaker 1: been much of a change in the economy at all,
Speaker 1: not just versus twenty sixteen, but really thirteen. I mean
Speaker 1: this has been a you know, this has been a
Speaker 1: two on a calendar year kind of recovery for the
Speaker 1: most part. And and I think Throughen that's not going
Speaker 1: to change. And and really, um, probably as well. We're
Speaker 1: talking about healthcare with Lindsay at Bell. How much was
Speaker 1: was the when investors looked at that healthcare healthcare bill,
Speaker 1: the potential for a healthcare at how much was that
Speaker 1: about healthcare versus something else? How much investors actually care
Speaker 1: that had to do with healthcare. I don't think investors
Speaker 1: had very much that had to do with health care,
Speaker 1: and I think that it was just an overall feel
Speaker 1: for Okay, is this is you know, what does this
Speaker 1: mean for the rest of the agenda. Are we going
Speaker 1: to see anything at all? We're going to see any
Speaker 1: cooperation with the president from the Republicans. We know we're
Speaker 1: not going to get much from the Democrats. So I
Speaker 1: think it was the market took it as a little
Speaker 1: bit of a broader signal, and I think overall, you know,
Speaker 1: the market has been more optimistic, or at least some
Speaker 1: investors have been more optimistic, thinking we would actually see
Speaker 1: some economic effects from some proposals in which you know,
Speaker 1: we just don't see that. I look, Scott Ram where
Speaker 1: we are and to me, is this miracle of single
Speaker 1: digit organic revenue growth becoming double digit? Wondered down the
Speaker 1: income statement. Have you been surprised at that? Have you
Speaker 1: been surprised at the persistency of leverage, good instructive use
Speaker 1: of leverage to operating margin expansion? Well, I think that,
Speaker 1: you know, margins have have really hung in here. We've
Speaker 1: looked for them to continue to hang in here. We
Speaker 1: still think they're going to be rather high. You know,
Speaker 1: the consensus Earrings estimate we've been at a hundred and
Speaker 1: twenty seven dollars. Uh, you know, I don't think it
Speaker 1: was that long ago where the consensus was at a
Speaker 1: hundred and thirty five or so. You know, now we're
Speaker 1: down to a hundred and thirty. I think we're probably
Speaker 1: gonna see estimates come off. There's about a ten percent
Speaker 1: uh ten percent expectation for the first quarter something like that.
Speaker 1: I think that's okay, but net net, the consensus I
Speaker 1: think for a little too optimistic, David. I I find
Speaker 1: it remarkable lectures, the panels of speeches I've been added
Speaker 1: part of where everybody was certain about five or six
Speaker 1: of the most eight or nine percent return on necrews
Speaker 1: just stunning. Scott R. How much of a driver are
Speaker 1: earnings at this point when you're looking well, you know, David,
Speaker 1: it's kind of funny because I don't think, you know,
Speaker 1: earnings were absolutely zero driver all through because people were
Speaker 1: looking for landeen for you know, at least a year
Speaker 1: ahead of time. I think this year earnings will be
Speaker 1: a little bit more important. Um. I don't think that
Speaker 1: you know, these modest expectations that's what we're going to see. Um,
Speaker 1: you know, to three dollars of earnings over the course
Speaker 1: of the year. You're splitting hairs there. But I think
Speaker 1: what's going to continue to to drive things and what
Speaker 1: people are going to be thinking about is what policies
Speaker 1: might be implemented. Is the magnitude going to be enough
Speaker 1: to move the needle on an eighteen trillion dollar economy? Um?
Speaker 1: And what kind of cooperation of course, all that means
Speaker 1: for you know, between Congress and new administration. So you know, earnings,
Speaker 1: you know, when you're growing two, I mean the chance
Speaker 1: of a big, big beat or a big miss. Overall,
Speaker 1: it's it's really slim um. So I don't think earnings
Speaker 1: are going to be a big driver here. But help
Speaker 1: me here with where I go. I mean bonds. Can
Speaker 1: you find a coupon that justifies ownership of bonds? Given
Speaker 1: word Cherry Yellin's heading, Well, I think that's pretty tough.
Speaker 1: And I think our you know, our fixed income guys
Speaker 1: would tell you that you still want to own some bonds.
Speaker 1: But you know, on the stock market, we're not looking
Speaker 1: for the end of the cycle. We're just looking for
Speaker 1: some headwinds, some a little bit of fear of wage
Speaker 1: inflation in a little bit of a fear that the
Speaker 1: FED might be behind the curve. Um, we've had a
Speaker 1: good run here obviously over the course of the last
Speaker 1: six or seven years, and so I think this is more.
Speaker 1: This will be when you look at the market on
Speaker 1: December thirty one versus where it was on January one,
Speaker 1: you know, this will be more of a stall year.
Speaker 1: Maybe you see till the return of low single digit
Speaker 1: six something like that, which you know, that's fine. I mean,
Speaker 1: this is like you said, the economy is grinding it out.
Speaker 1: This is kind of a grinded out kind of market. Um,
Speaker 1: we want to still lean towards those sectors that are
Speaker 1: sensitive to a continuation of the recovery. Now, if we'd
Speaker 1: see a run up here to something, we may make
Speaker 1: some adjustment, a little less cyclical that kind of thing.
Speaker 1: But you know, I think you still have to lean
Speaker 1: for lean towards those cyclical sectors still out performance. So
Speaker 1: give me an example that narrow that down. Give me
Speaker 1: that would be industrials, the consumer discretionary sector. Financials. We
Speaker 1: also like healthcare, but obviously is toothpaste discretionary. Two is
Speaker 1: not discretionary, It's not really Give us an example of
Speaker 1: the consumer discretion people, it is, I guess, but but yeah,
Speaker 1: so we want we want things that, um that are
Speaker 1: going to benefit from, you know, continuation of good consumer cinema,
Speaker 1: continuation of a decent labor market, better growth internationally, a
Speaker 1: little bit better, better growth here, a little bit better.
Speaker 1: You know, those kinds of things. Cardinals opening day, Oh
Speaker 1: you know when you know when you when you win
Speaker 1: in the bottom of the night um on your home
Speaker 1: opener versus the reigning world champions um. That's a good feeling,
Speaker 1: I guess. So, Scott Wren, thank you so much, greatly
Speaker 1: appreciate it. With Wills Fargo, Uh say, those Cardinals for
Speaker 1: three Yankees I've seen. I've seen like fourteen surveys in
Speaker 1: a row. Michael bar they have a red Sox taking everything.
Speaker 1: My radar is so up, I don't even know if
Speaker 1: I can get to the problem. I have to count
Speaker 1: it in my fantasy baseball league, and I'm like, oh no,
Speaker 1: and he was great in in spring training. He just
Speaker 1: he lights out and then all of a sudden, Sharon
Speaker 1: had or Susan Weather Yankees Radio, I think it's the
Speaker 1: r A three for those of you global, that's not
Speaker 1: a good number. I want it to be three or
Speaker 1: four work would be your earns run average? What are
Speaker 1: the responsibilities of interns at NPR is on Friday afternoons
Speaker 1: to pick up Ejdon from the lobby and bring him
Speaker 1: up to All Things Considered where he regularly appears with
Speaker 1: David Brooks for a week and review segment was a
Speaker 1: real highlight that right, It's a real highlight for me
Speaker 1: when I wasn't interned at NPR well over a decade ago.
Speaker 1: Eachdon joins us now he's a columnist for the Washington Post,
Speaker 1: the author of Why the Right Went Wrong? Conservatism from
Speaker 1: Goldwater to Trump and beyond. Senior fellow at the Brooklyn Institution, ZJ.
Speaker 1: Great to speak with you again. Thanks for appearing on
Speaker 1: the program. And let's start with with what we learned
Speaker 1: over the course of the last few weeks. Here about
Speaker 1: Washington from the debate over this healthcare law. Less interested
Speaker 1: here in what happens with healthcare and more just about
Speaker 1: the way that Washington is functioning or not under this
Speaker 1: new president. What's your takeaway? Well, first, thank you for
Speaker 1: those very kind words. You'll be pleased to know that
Speaker 1: Mr doesn't waste intern time atty more picking us up
Speaker 1: and we go right out. But that was really good.
Speaker 1: Nice to you to say thank you. Here's what I
Speaker 1: think you saw. You saw first that Donald Trump really
Speaker 1: doesn't care that much about what's in a policy. I
Speaker 1: think one of the best pieces on this was written
Speaker 1: by a young and actually conservative journalist called Tim Alberta
Speaker 1: who used to write for National Works Right Political. And
Speaker 1: there was a moment where Trump was being asked serious
Speaker 1: questions about by some members of the Freedom Caucus and
Speaker 1: he just missed all substantive questions using a barnyard epithet.
Speaker 1: I don't want to spoil your air time by using
Speaker 1: the actual word he used. And he didn't care what
Speaker 1: really what was in the Billy was just looking for
Speaker 1: a win. This bill basically contradicted his zone promises. I
Speaker 1: think on the Paul Ryan's side, what you saw is
Speaker 1: Paul Ryan is far more interested in tax cuts than
Speaker 1: he is in UH in healthcare policy. And this bill,
Speaker 1: you know, according to the CBO, would have led twenty
Speaker 1: four million people to lose their health insurance over a decade. UH.
Speaker 1: That didn't seem to matter much to Rhyme, but it
Speaker 1: did to a lot of members. And here's here's the
Speaker 1: third thing that we've been talking a lot about how
Speaker 1: the Freedom Caucus sank this bill, the right wing members
Speaker 1: of the House. But the New York Times did a
Speaker 1: very interesting analysis that showed that by their account, they
Speaker 1: had thirty three no votes that they had counted, and
Speaker 1: of those a majority were not Freedom Caucus members. A
Speaker 1: lot of them came from either they were either somewhat
Speaker 1: more moderate or sent a right in their views. Some
Speaker 1: of them came from districts that voted for Clinton, and
Speaker 1: they voted against the bill for what you might call
Speaker 1: liberal reasons, which is they didn't want to throw all
Speaker 1: these people off healthcare. So you really had an incoherent
Speaker 1: approach to repealing Obamacare. And I've been quoting my favorite philosopher,
Speaker 1: Joni Mitchell. Actually she's a folk singer, as you know,
Speaker 1: and she said, uh, famously, you don't know what she
Speaker 1: got till it's gone. And a lot of people looked
Speaker 1: at Obamacare and said, gee, we didn't like it because
Speaker 1: we didn't like the label. These were people who didn't
Speaker 1: like President Obama. Um. But they realized that this law
Speaker 1: covers a whole lot of people and so it's not perfect.
Speaker 1: It needs fixing. But this wouldn't have fixed it, This
Speaker 1: would have gotten rid of it. E J. What do
Speaker 1: you make of the White House's approach to healthcare? What
Speaker 1: does it tell us about its approach to tax reform
Speaker 1: is what we look to see. How fulsomely this White
Speaker 1: House would embrace a piece of legislation that was drafted
Speaker 1: by legislators on the Hill is a lesson to be
Speaker 1: learned here that the White House should take a greater
Speaker 1: role in defining what it wants out a tax reform. Absolutely,
Speaker 1: and what's interesting about tax reform is that it splits, uh,
Speaker 1: not only Republicans in Congress, uh, it also splits Republicans
Speaker 1: in the White House. So it's apparently a real war
Speaker 1: going on between those who favor Paul Ryan's proposal, which
Speaker 1: would in effect tax imports by levying the corporate tax
Speaker 1: in different ways domestically, you know, on exports, which would
Speaker 1: be free uh from tax, and on imports, which would
Speaker 1: have a tax. This splits business very much. Importing businesses
Speaker 1: like Walmart really don't like this way of doing corporate
Speaker 1: tax reform. Um, so they're gonna have to make hard choices.
Speaker 1: I just don't think tax reform is easy. The way
Speaker 1: a lot of Republicans seem to be saying it is
Speaker 1: e J. November seven, nineteen seventy two. I believe you
Speaker 1: were exiting stage right Portsmouth Priory, up in Rhode Island,
Speaker 1: on your way to journalism, journalism and literature glory. Mr
Speaker 1: McGovern went down in Flames McGovern Shriver. What does your
Speaker 1: Democrat party do now? Bill Mayor was really heated about
Speaker 1: the Clintons this weekend. What should the Clintons do? And
Speaker 1: what should the Democrats do to regroup? First of all,
Speaker 1: you made me younger than I am. I really appreciate it.
Speaker 1: I worked at college on that election day, but thank you. UM.
Speaker 1: A couple of things. One is UM is sometimes in
Speaker 1: politics we forget the power of negative thinking. Ronald Reagan
Speaker 1: his program was built on three big negatives anti communist,
Speaker 1: anti government, anti tax uh. And I think in this
Speaker 1: period to be opposed to Donald Trump is to be
Speaker 1: in the situation where you can rally the vast majority
Speaker 1: of Americans. Right now, Trump's approval rating is running between
Speaker 1: as low as thirty five percent recently and galloped to
Speaker 1: forty percent. So I don't think you should underestimate the
Speaker 1: power of opposing Trump. Second, I think what Democrats should do,
Speaker 1: and I have a hunt she'll see it is that
Speaker 1: they need to oppose what Trump is putting forward when
Speaker 1: it is not in line with what they want, which
Speaker 1: is in most cases, Uh, it is not in line
Speaker 1: with what they want. Um. But they should be putting
Speaker 1: out proposals on infrastructure, on how they would fix Obamacare
Speaker 1: to make it work better, on what they would do
Speaker 1: for working class voters, white and black, who were at
Speaker 1: the center of the conversation of the last campaign. So
Speaker 1: they should just say this is what we would do
Speaker 1: if Trump wants to come to them. If Trump says,
Speaker 1: g I can support some of this, then you have
Speaker 1: a different political situation. Uh. In the meantime, I think
Speaker 1: they should continue to say, we're not going to repeal
Speaker 1: the Affordable Care Act. That's one of our great achievements.
Speaker 1: We're gonna fight repeal of Wall Street Reform, that's another
Speaker 1: significant achievement. Uh. And we're gonna fight Trump where he
Speaker 1: seems to be abusing his power, whether it's on conflicts
Speaker 1: of interest or in seeming not to want this investigation
Speaker 1: on the Russian connection to go forward. When you look
Speaker 1: at how the Democrats performed during the last campaign, What
Speaker 1: are the biggest deficits as you as you see them,
Speaker 1: and how's the party learning from them? And further, how
Speaker 1: deep is their bench when when you look at sort
Speaker 1: of rising stars in the party, who are you looking at?
Speaker 1: Um we in l selection. You know, I am one
Speaker 1: of those who thinks that the Comy intervention tipped it.
Speaker 1: Of course, it's easy to say when an election is
Speaker 1: decided by seventy seven thousand votes in three states, Uh,
Speaker 1: to say, almost anything you point to could decide. But
Speaker 1: I think Comey mattered. Clearly the Clinton campaign should have
Speaker 1: seen the problems uh in Michigan and Wisconsin coming. She
Speaker 1: lost the primary in Wisconsin by a huge margin to
Speaker 1: Bernie Sanders. She also, to her surprise, lost Michigan. Uh.
Speaker 1: And I think they, you know, they just made a
Speaker 1: you know, a tactical mistake. But I think the other
Speaker 1: thing is what the Democrats need to do, and what
Speaker 1: the Clinton campaign failed to do is to present a
Speaker 1: sort of a compact message to working class voters who
Speaker 1: were hurting in this economy. There are a lot of places,
Speaker 1: including my dear hometown of Fall River, that have been
Speaker 1: hammered by the industrialization. Clinton had a lot of specific proposals,
Speaker 1: but she didn't focus on them enough. They counted on
Speaker 1: Trump's disabilities to elect them. You know, in my view,
Speaker 1: that should have been enough in principle, but in fact
Speaker 1: voters wanted to hear what she was going to do
Speaker 1: about these lingering problems in the economy. And I think
Speaker 1: that's a place where the Democrats and everybody really have
Speaker 1: to put a lot of attention. There was this study
Speaker 1: that came out a couple of weeks ago from you know,
Speaker 1: paper sponsored by Brookings, the Case of Deaton paper that
Speaker 1: talked about despair, deaths of despair among working class people,
Speaker 1: white working class and uh, this is a national crisis.
Speaker 1: And I think similarly, the same forces that are hurting
Speaker 1: towns like Fall River or Reading, Pennsylvania are hurting um
Speaker 1: inner cities as well. And so I think, uh, they
Speaker 1: need a message that crosses racial lines, but that talks
Speaker 1: about those parts of the economy that aren't prospering. You know,
Speaker 1: big cities. Many of our big cities are prospering. Many
Speaker 1: parts of the country are, but there are parts that
Speaker 1: have been left badly behind, and they deserve to be Madjon,
Speaker 1: thank you so much, greatly appreciated with Brookings and of
Speaker 1: course The Washington Post. Thanks for listening to the Bloomberg
Speaker 1: Surveillance Podcast. Subscribe and listen to interviews on iTunes, SoundCloud,
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