1 00:00:02,520 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is the Bloomberg 2 00:00:13,840 --> 00:00:17,920 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:22,000 Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business App. 4 00:00:22,360 --> 00:00:25,680 Speaker 1: Listen on demand wherever you get your podcasts, or watch 5 00:00:25,760 --> 00:00:27,000 Speaker 1: us live on YouTube. 6 00:00:27,080 --> 00:00:27,840 Speaker 2: We're gonna look. 7 00:00:27,720 --> 00:00:30,960 Speaker 3: Here right now with Stephen Stanley at the American economy. 8 00:00:31,040 --> 00:00:36,879 Speaker 3: Stephen Stanley's just fabulous. It taken Fisherian macroeconomics and bringing 9 00:00:36,960 --> 00:00:39,160 Speaker 3: it down to where we are right now. 10 00:00:40,159 --> 00:00:42,559 Speaker 2: There's been an underestimation of GDP. 11 00:00:43,200 --> 00:00:49,279 Speaker 3: Is a productivity miracle still in place? You know. 12 00:00:49,360 --> 00:00:52,520 Speaker 4: I think that there's been a lot of talk about 13 00:00:52,560 --> 00:00:56,480 Speaker 4: a big acceleration productivity, and of course AI is a 14 00:00:56,520 --> 00:00:59,720 Speaker 4: big part of that conversation, and I think we might 15 00:00:59,760 --> 00:01:02,400 Speaker 4: get there, but I don't think we're there yet. It 16 00:01:02,440 --> 00:01:05,120 Speaker 4: takes a long time for these sorts of revolutions to 17 00:01:06,920 --> 00:01:08,840 Speaker 4: kind of take hold in the economy. You think back 18 00:01:08,840 --> 00:01:11,360 Speaker 4: to the nineties and how long it was after the 19 00:01:11,480 --> 00:01:14,520 Speaker 4: NASDAC began to shoot up until the productivity numbers actually 20 00:01:14,600 --> 00:01:17,480 Speaker 4: showed it. So I think at the moment productivity is 21 00:01:18,520 --> 00:01:22,480 Speaker 4: okay but not great. And you know, the question is 22 00:01:22,959 --> 00:01:25,760 Speaker 4: when and by how much might it accelerate going forward? 23 00:01:25,920 --> 00:01:29,000 Speaker 3: The split between hard and soft data. Michael McKee's completely 24 00:01:29,040 --> 00:01:33,360 Speaker 3: focused on this right now. One shows oomph, the other not. 25 00:01:33,800 --> 00:01:34,640 Speaker 3: Which is right. 26 00:01:35,440 --> 00:01:38,760 Speaker 4: Well, I think at this point generally I'm a big 27 00:01:38,800 --> 00:01:43,039 Speaker 4: believer in the hard data, and for example, I think 28 00:01:43,040 --> 00:01:46,280 Speaker 4: that the correlation between consumer confidence and consumer spending is 29 00:01:46,319 --> 00:01:50,480 Speaker 4: pretty weak over time. But when things are moving fast, 30 00:01:51,320 --> 00:01:54,160 Speaker 4: sometimes the soft data is telling you something and in 31 00:01:54,160 --> 00:01:56,720 Speaker 4: a more timely manner than the hard data. And I 32 00:01:56,800 --> 00:02:00,400 Speaker 4: think right now we're just waiting for the hammer to 33 00:02:00,480 --> 00:02:04,040 Speaker 4: drop from the impact of tariffs, and you can see 34 00:02:04,040 --> 00:02:06,280 Speaker 4: that in the soft data. You haven't seen it yet 35 00:02:06,280 --> 00:02:09,200 Speaker 4: in the hard data. I'm very interested to see what 36 00:02:09,240 --> 00:02:12,480 Speaker 4: the May data look like, because I have to say 37 00:02:12,520 --> 00:02:15,800 Speaker 4: I was surprised at how little, really, almost not at all, 38 00:02:16,120 --> 00:02:20,799 Speaker 4: the April hard data was affected by tariffs. We had, 39 00:02:21,000 --> 00:02:23,680 Speaker 4: you know, the employment number was good, retail sales was fine, 40 00:02:24,040 --> 00:02:27,720 Speaker 4: the CPI was normal. So I am expecting to see 41 00:02:27,720 --> 00:02:30,040 Speaker 4: some of that washed through in the May data. 42 00:02:30,080 --> 00:02:32,919 Speaker 5: Are you concerned about inflation, are you concerned about slowing 43 00:02:32,919 --> 00:02:35,320 Speaker 5: economic growth associated with the tariffs, or are they just 44 00:02:35,400 --> 00:02:38,520 Speaker 5: so I don't know, I mean, they're out there, and 45 00:02:38,560 --> 00:02:40,960 Speaker 5: there are some real tariffs on real goods and services. 46 00:02:41,360 --> 00:02:43,040 Speaker 5: How do you expect that the blow through? 47 00:02:43,680 --> 00:02:46,239 Speaker 4: Well, my hope is that on both counts, both of 48 00:02:46,360 --> 00:02:49,680 Speaker 4: inflation and for growth, that the impact will be mostly temporary. 49 00:02:49,880 --> 00:02:52,800 Speaker 4: We'll see, I mean, obviously all of this remains to 50 00:02:52,840 --> 00:02:56,400 Speaker 4: be seen at this point, but certainly, I think for 51 00:02:56,440 --> 00:02:58,880 Speaker 4: the FED, the key question is, I think on the 52 00:02:58,880 --> 00:03:05,320 Speaker 4: inflation side, really focused on how long the inflation impetus lasts. 53 00:03:06,000 --> 00:03:09,399 Speaker 5: So what's our federal reserve to do, if anything, as 54 00:03:09,440 --> 00:03:10,960 Speaker 5: a result of some of this uncertainty. 55 00:03:11,360 --> 00:03:14,080 Speaker 4: Well, right now I think they're you know, as they've said, 56 00:03:14,080 --> 00:03:16,160 Speaker 4: they're being patient, they're in wait and see mode. I 57 00:03:16,160 --> 00:03:20,720 Speaker 4: think they feel like they're in relatively good position coming 58 00:03:20,760 --> 00:03:22,760 Speaker 4: into the But you know, before any of the tariff 59 00:03:22,800 --> 00:03:26,560 Speaker 4: stuff began, the idea was, Okay, we're modestly restrictive, and 60 00:03:26,600 --> 00:03:28,600 Speaker 4: that's where we want to be because inflation is above 61 00:03:28,600 --> 00:03:31,320 Speaker 4: our target. We need to see more progress on inflation. 62 00:03:32,160 --> 00:03:35,560 Speaker 4: That all that whole narrative was interrupted by the tariff situation, 63 00:03:35,720 --> 00:03:38,640 Speaker 4: and now you know, we'll we'll see how long that 64 00:03:38,680 --> 00:03:41,200 Speaker 4: inflation data continues to run high. 65 00:03:41,360 --> 00:03:42,680 Speaker 2: This is what surveillance is about. 66 00:03:42,680 --> 00:03:46,880 Speaker 3: We got Blanchard coming on on Stanley Fisher with all 67 00:03:46,960 --> 00:03:51,360 Speaker 3: that excellence of academic theory and thinking about where we're going. 68 00:03:51,880 --> 00:03:54,160 Speaker 2: You are a definitive. 69 00:03:53,400 --> 00:03:57,800 Speaker 3: Acclaim market economist out of Washington and Lee. Do the 70 00:03:57,880 --> 00:04:03,160 Speaker 3: models that Blenchard and Fisher invented, codified and move forward? 71 00:04:03,560 --> 00:04:06,400 Speaker 3: Are they working today? Or is the FED and others? 72 00:04:06,440 --> 00:04:08,160 Speaker 3: Are we just making it up as we go? 73 00:04:08,920 --> 00:04:09,160 Speaker 2: Well? 74 00:04:09,200 --> 00:04:12,200 Speaker 4: I think that, you know, certainly the models provide a 75 00:04:12,240 --> 00:04:16,640 Speaker 4: good backdrop on how to interpret things, but there's always 76 00:04:16,720 --> 00:04:22,640 Speaker 4: something new, right every every cycle, every episode. Right now, technology, well, 77 00:04:22,680 --> 00:04:26,360 Speaker 4: I think it's the it's the uncertainty around policy right 78 00:04:26,520 --> 00:04:28,839 Speaker 4: in the moment, in the short term, you know, in 79 00:04:28,839 --> 00:04:30,840 Speaker 4: the long run, as you say, I mean, technology is 80 00:04:31,480 --> 00:04:34,679 Speaker 4: a big question. But I think in the near tournament's 81 00:04:34,680 --> 00:04:37,680 Speaker 4: the uncertainty around policy and how that's likely to impact 82 00:04:37,720 --> 00:04:38,320 Speaker 4: the economy. 83 00:04:38,440 --> 00:04:46,159 Speaker 3: Steven Sandley, thank you so much, greatly appreciate him. 84 00:04:46,200 --> 00:04:49,760 Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live 85 00:04:49,839 --> 00:04:53,040 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 86 00:04:53,080 --> 00:04:56,760 Speaker 1: Applecarplay and Android Auto with the Bloomberg Business app, or 87 00:04:56,920 --> 00:04:58,360 Speaker 1: watch us live on YouTube. 88 00:04:58,480 --> 00:05:02,720 Speaker 3: Charles Schwarz, Kathy Jones, who had an eventful weekend of 89 00:05:02,839 --> 00:05:06,279 Speaker 3: ambiguity a weeker dollar, but the news flow it was 90 00:05:06,320 --> 00:05:08,679 Speaker 3: sort of incomplete this weekend. 91 00:05:08,720 --> 00:05:10,640 Speaker 2: There was this, that, and the other thing. 92 00:05:11,120 --> 00:05:14,280 Speaker 3: Do we have confidence in acquiring full faith in credit 93 00:05:14,960 --> 00:05:17,400 Speaker 3: out the curve this morning? I just don't see it. 94 00:05:17,560 --> 00:05:19,599 Speaker 6: Yeah, we don't go We're not going out the curve 95 00:05:19,720 --> 00:05:23,440 Speaker 6: very far. And the reason is simply that there is 96 00:05:23,480 --> 00:05:27,080 Speaker 6: all that uncertainty. The risk premium has increased, the term 97 00:05:27,120 --> 00:05:28,920 Speaker 6: premium has moved up, So you do you get paid 98 00:05:28,960 --> 00:05:31,960 Speaker 6: a little bit more to take that risk, But I 99 00:05:31,960 --> 00:05:34,920 Speaker 6: don't think you get paid enough until we get some 100 00:05:35,040 --> 00:05:39,360 Speaker 6: sort of clarity. And clarity is the word at this 101 00:05:40,080 --> 00:05:41,320 Speaker 6: the fad uses all the time. 102 00:05:41,360 --> 00:05:42,040 Speaker 2: It's a word we. 103 00:05:42,000 --> 00:05:45,560 Speaker 6: All want to use because we're waiting to see where 104 00:05:45,560 --> 00:05:46,160 Speaker 6: a policy goes. 105 00:05:46,200 --> 00:05:49,440 Speaker 3: I mean clarity. Friday, Paul had I had clarity. The 106 00:05:49,520 --> 00:05:52,960 Speaker 3: Knicks are on a roll, things are great, red Sox 107 00:05:53,040 --> 00:05:56,160 Speaker 3: maybe who would win one game? And then boom June 108 00:05:56,240 --> 00:06:01,240 Speaker 3: came along. Everything changed and it to me it's this morning. 109 00:06:00,960 --> 00:06:03,839 Speaker 5: Book absolutely is Kathy. 110 00:06:03,960 --> 00:06:04,360 Speaker 7: I mean. 111 00:06:06,080 --> 00:06:08,640 Speaker 5: Credit risk? Do I need to take credit risk here? 112 00:06:08,680 --> 00:06:10,760 Speaker 5: When I considered it to your treasure and get almost 113 00:06:10,760 --> 00:06:12,360 Speaker 5: four percent here you. 114 00:06:12,320 --> 00:06:14,320 Speaker 6: Don't necessarily have to, but I don't think it's a 115 00:06:14,320 --> 00:06:17,760 Speaker 6: big problem if you do. In investment grade credit, we're 116 00:06:17,839 --> 00:06:20,480 Speaker 6: I'm pretty cautious on high yield, growing. 117 00:06:20,160 --> 00:06:23,080 Speaker 5: More cautious some of the best performance. 118 00:06:22,720 --> 00:06:24,960 Speaker 6: It has because the coupon is that okay, So you know, 119 00:06:25,000 --> 00:06:28,000 Speaker 6: we're really meandering in terms of the rates right now, 120 00:06:28,080 --> 00:06:30,560 Speaker 6: just going sideways, up and down, up and down. They're 121 00:06:30,600 --> 00:06:34,719 Speaker 6: going sideways, but that puts the emphasis and returns on 122 00:06:34,760 --> 00:06:38,080 Speaker 6: the coupon. So high yield has high coupons, so that's 123 00:06:38,560 --> 00:06:42,160 Speaker 6: performing well. The other area that's performing well is international, 124 00:06:42,240 --> 00:06:45,760 Speaker 6: and that's because the dollar is weakened. But otherwise you're 125 00:06:45,760 --> 00:06:48,279 Speaker 6: earning the coupon. That's all that's going on right now. 126 00:06:48,440 --> 00:06:52,239 Speaker 5: What's the important driver for the fixed income market today? 127 00:06:52,440 --> 00:06:54,400 Speaker 5: It doesn't feel like it's the FED. It feels like 128 00:06:54,400 --> 00:06:57,240 Speaker 5: it might be more of I don't know, t tariffs 129 00:06:57,360 --> 00:06:59,560 Speaker 5: and tax bills and things like that. How do you 130 00:06:59,560 --> 00:07:03,360 Speaker 5: think about Washington, DC as you think about the bond market. 131 00:07:03,520 --> 00:07:06,240 Speaker 6: I try not to think, but good to see as 132 00:07:06,320 --> 00:07:10,920 Speaker 6: much as possible, But obviously it's the factor there. I 133 00:07:10,960 --> 00:07:13,560 Speaker 6: think at the end of the day, treasure yields are 134 00:07:13,640 --> 00:07:17,200 Speaker 6: driven by what the Fed's doing, what inflation's doing, what 135 00:07:17,280 --> 00:07:20,760 Speaker 6: economic growth is doing. And I do think in the 136 00:07:20,840 --> 00:07:24,320 Speaker 6: long run, if we do have these tariffs, and that's 137 00:07:24,360 --> 00:07:27,480 Speaker 6: the question mark, what will the tariffs be, how long, 138 00:07:27,600 --> 00:07:31,800 Speaker 6: how big, we will get slower economic growth and we'll 139 00:07:31,840 --> 00:07:35,920 Speaker 6: get lower inflation from that. But the offsets are that 140 00:07:36,040 --> 00:07:39,440 Speaker 6: tariffs initially bump up prices and give us that inflation, 141 00:07:40,040 --> 00:07:42,800 Speaker 6: and a week or dollar gives us some important inflation. 142 00:07:43,000 --> 00:07:46,440 Speaker 6: So this is why we're going nowhere. Because you have 143 00:07:46,600 --> 00:07:49,760 Speaker 6: one one policy that does one thing, you have another 144 00:07:49,800 --> 00:07:51,040 Speaker 6: policy does another thing. 145 00:07:51,320 --> 00:07:52,840 Speaker 5: So do we just are we kind of in a 146 00:07:52,880 --> 00:07:54,920 Speaker 5: trading range here? For the treasuries, I mean, what do 147 00:07:55,000 --> 00:07:57,080 Speaker 5: I do here? I guess I just buy them and 148 00:07:57,120 --> 00:07:57,920 Speaker 5: clip the coupons. 149 00:07:57,960 --> 00:08:01,400 Speaker 6: I guess, yeah. I think you stay benchmark are lower 150 00:08:01,600 --> 00:08:04,720 Speaker 6: in terms of duration. There's not really a lot of 151 00:08:05,680 --> 00:08:08,600 Speaker 6: enough reward for the risk to go too far out 152 00:08:08,680 --> 00:08:12,400 Speaker 6: the curve. A same story and credit. You get paid 153 00:08:12,440 --> 00:08:15,640 Speaker 6: pretty decently in investment grade credit. If you want to 154 00:08:15,680 --> 00:08:17,640 Speaker 6: take risk in high yield, I just say stay at 155 00:08:17,640 --> 00:08:20,520 Speaker 6: the upper end of high yield, and then you can 156 00:08:20,560 --> 00:08:23,480 Speaker 6: look at international Because we do see the dollar continuing 157 00:08:23,520 --> 00:08:24,679 Speaker 6: to weaken from here. 158 00:08:24,840 --> 00:08:26,440 Speaker 3: I look at this and I want you to talk 159 00:08:26,480 --> 00:08:28,840 Speaker 3: about Lizzie Saunders world. I know, you know, you get it. 160 00:08:28,840 --> 00:08:32,719 Speaker 3: There's a Chinese wall, folks, between what Kathy Jones is doing. 161 00:08:32,760 --> 00:08:33,400 Speaker 2: But there isn't. 162 00:08:34,240 --> 00:08:38,200 Speaker 3: And the answer is there's dividend or share buyback as 163 00:08:38,200 --> 00:08:42,160 Speaker 3: a yield proxy. There's the enthusiasms peoples this weekend, Paul 164 00:08:42,280 --> 00:08:44,240 Speaker 3: saying heavy into mag seven. 165 00:08:44,240 --> 00:08:47,240 Speaker 2: Da da da da da. Folks, these are just opinions here. 166 00:08:47,280 --> 00:08:50,240 Speaker 3: Now, do you sense a point where there is a 167 00:08:50,360 --> 00:08:55,120 Speaker 3: shift to people finding value in the coupon versus the 168 00:08:55,200 --> 00:08:56,520 Speaker 3: game of equities? 169 00:08:56,800 --> 00:08:59,199 Speaker 6: Yeah, we do. We see a lot of investors who 170 00:08:59,240 --> 00:09:02,760 Speaker 6: have just gotten very cautious because of the volatility in 171 00:09:02,800 --> 00:09:06,640 Speaker 6: the equity market and they have and the concern about 172 00:09:06,640 --> 00:09:09,240 Speaker 6: all these policies and not knowing where it goes. So 173 00:09:09,280 --> 00:09:13,679 Speaker 6: we have seen people shifting more into fixed income, clipping 174 00:09:13,679 --> 00:09:17,640 Speaker 6: the coupon, reducing some of the volatility and risk in 175 00:09:17,679 --> 00:09:18,359 Speaker 6: the portfolio. 176 00:09:19,280 --> 00:09:22,679 Speaker 5: So again to my Federal Reserve, they can just sit 177 00:09:22,720 --> 00:09:25,439 Speaker 5: on their hands for there a while. Now it seems like. 178 00:09:25,559 --> 00:09:27,640 Speaker 6: Yeah, it looks like that's the name of the game. 179 00:09:27,720 --> 00:09:30,199 Speaker 6: They sit on their hands for a while. Maybe September, 180 00:09:30,800 --> 00:09:33,600 Speaker 6: wait and see if unemployment goes up. I mean that's 181 00:09:33,640 --> 00:09:36,000 Speaker 6: going to be They've talked about the dual mandate a lot, 182 00:09:36,200 --> 00:09:37,760 Speaker 6: and that's going to be the driver. 183 00:09:37,920 --> 00:09:42,480 Speaker 5: I think undergraduate from Northwestern and an NBA from Northwestern. 184 00:09:42,600 --> 00:09:43,600 Speaker 5: There are other schools out. 185 00:09:43,480 --> 00:09:48,000 Speaker 6: There, you now, I mean, yes, I know, but I'm 186 00:09:48,040 --> 00:09:49,680 Speaker 6: on Midwestern A. 187 00:09:50,080 --> 00:09:53,120 Speaker 2: I've never asked you this. Did you study with Robert Gordon? 188 00:09:53,480 --> 00:09:54,280 Speaker 6: Yes? 189 00:09:54,840 --> 00:09:58,560 Speaker 3: Tell our audience, folks, we more in Stanley Fisher. The 190 00:09:58,800 --> 00:10:04,439 Speaker 3: giant of midw growth economics was Robert Gordon. Massive influence. 191 00:10:04,480 --> 00:10:07,760 Speaker 3: Good morning, Jim Glass and formerly with JP Morgan out 192 00:10:07,760 --> 00:10:10,920 Speaker 3: on the left coast. Tell me about being in a 193 00:10:10,960 --> 00:10:14,679 Speaker 3: classroom with the great Midwest growth economist. 194 00:10:14,800 --> 00:10:19,120 Speaker 6: Yeah, he was a fantastic professor, so smart and so nice. 195 00:10:19,200 --> 00:10:22,320 Speaker 3: He believed in the manufacturing process. Did he believe that 196 00:10:22,400 --> 00:10:26,520 Speaker 3: manufacturing was different and it created a multiplier of jobs, 197 00:10:26,559 --> 00:10:29,960 Speaker 3: just different than all these other service sector Bologney jobs 198 00:10:30,160 --> 00:10:34,079 Speaker 3: like what Paul and I do me. 199 00:10:34,760 --> 00:10:37,160 Speaker 6: Yeah, No, I think he did believe in that. You remember, 200 00:10:37,360 --> 00:10:40,600 Speaker 6: you know, growing up in the Midwest, the rust belt 201 00:10:40,640 --> 00:10:42,559 Speaker 6: and all that, and I think he had a real 202 00:10:42,600 --> 00:10:45,880 Speaker 6: affinity for that and felt that the widening of the 203 00:10:45,920 --> 00:10:48,679 Speaker 6: trade deficit. The loss of those jobs which were right 204 00:10:48,960 --> 00:10:52,400 Speaker 6: producing solid middle class incomes was a big problem. 205 00:10:52,600 --> 00:10:54,720 Speaker 3: We'll touch on this today, Kathy Joes, thank you so 206 00:10:54,840 --> 00:10:57,920 Speaker 3: much for those comments, Professor Gordon. With the death the 207 00:10:57,960 --> 00:11:01,280 Speaker 3: passing of Stanley a fisherman, we'll find some other people 208 00:11:01,280 --> 00:11:03,920 Speaker 3: in the coming days to speak to, honest. 209 00:11:04,559 --> 00:11:08,440 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 210 00:11:08,480 --> 00:11:11,880 Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto 211 00:11:11,920 --> 00:11:14,880 Speaker 1: with the Bloomberg Business App. You can also listen live 212 00:11:14,960 --> 00:11:18,520 Speaker 1: on Amazon Alexa from our flagship New York station, Just 213 00:11:18,600 --> 00:11:21,080 Speaker 1: say Alexa Play Bloomberg eleven thirty. 214 00:11:21,240 --> 00:11:24,240 Speaker 3: Joining us justin di you are this morning is Maya 215 00:11:24,320 --> 00:11:29,120 Speaker 3: McGuinness Committee for Responsible Federal Budget. We're thrilled Mia mckindness, 216 00:11:29,120 --> 00:11:32,120 Speaker 3: really an authority on the mess we're in, could join 217 00:11:32,240 --> 00:11:38,199 Speaker 3: us here. Maya. The critics of your world say CBO 218 00:11:38,440 --> 00:11:42,000 Speaker 3: is too gloomy in their growth, and that we will 219 00:11:42,040 --> 00:11:46,080 Speaker 3: continue to grow our way out of this mess, or 220 00:11:46,160 --> 00:11:47,400 Speaker 3: at least sustain it. 221 00:11:47,960 --> 00:11:48,719 Speaker 2: Do you buy it? 222 00:11:50,240 --> 00:11:55,640 Speaker 8: Yeah, there's a lot of CBO bashing going on these days. No, certainly, 223 00:11:55,720 --> 00:11:57,760 Speaker 8: I wish it were true. I think everyone wishes that 224 00:11:57,800 --> 00:12:00,600 Speaker 8: you could cut taxes and that would unleash such huge 225 00:12:00,600 --> 00:12:03,480 Speaker 8: growth that it would fix our fiscal problems. But clearly 226 00:12:03,520 --> 00:12:06,559 Speaker 8: that's not the case. There are a number of outside 227 00:12:06,679 --> 00:12:09,880 Speaker 8: estimators who are looking at the tax bill, the reconciliation bill, 228 00:12:09,920 --> 00:12:11,680 Speaker 8: and trying to figure out what the effects on economic 229 00:12:11,720 --> 00:12:12,360 Speaker 8: growth would be. 230 00:12:12,760 --> 00:12:13,920 Speaker 9: And here's the way it works. 231 00:12:14,000 --> 00:12:18,760 Speaker 8: Tax cuts have positive effects on growth, but not enough 232 00:12:18,800 --> 00:12:22,880 Speaker 8: to generate enough revenues that they offset all of the 233 00:12:23,000 --> 00:12:26,600 Speaker 8: loss from the tax cuts themselves, usually about twenty percent. 234 00:12:27,000 --> 00:12:29,880 Speaker 8: The problem is that this tax bill in particular isn't 235 00:12:29,880 --> 00:12:32,199 Speaker 8: as pro growth as what we saw in twenty seventeen 236 00:12:32,320 --> 00:12:33,480 Speaker 8: the corporate tax rate cuts. 237 00:12:33,520 --> 00:12:34,800 Speaker 9: Those were very pro growth. 238 00:12:34,920 --> 00:12:37,199 Speaker 8: This less so chops up the tax base in a 239 00:12:37,240 --> 00:12:40,280 Speaker 8: lot of ways, and our debt is now so large 240 00:12:40,600 --> 00:12:44,640 Speaker 8: that the negative effects of that even outweigh those positive 241 00:12:44,640 --> 00:12:47,000 Speaker 8: effects of tax cuts. So the bashing is just like 242 00:12:47,480 --> 00:12:49,040 Speaker 8: angry parents yelling at the ref. 243 00:12:49,640 --> 00:12:51,320 Speaker 3: I love that sounds like my weekend. 244 00:12:52,120 --> 00:12:53,080 Speaker 2: Maa McGuinness. 245 00:12:53,320 --> 00:12:56,920 Speaker 3: Henrietta Trees was with us, And the basic idea is 246 00:12:56,960 --> 00:12:59,760 Speaker 3: we dashed to the Senate for the big, beautiful bill, 247 00:13:00,360 --> 00:13:03,720 Speaker 3: that there will be moderate Republicans out there to save 248 00:13:03,880 --> 00:13:08,280 Speaker 3: the budget. Day does that beast exist or are they prehistoric? 249 00:13:08,360 --> 00:13:10,120 Speaker 3: And they off the room. 250 00:13:10,760 --> 00:13:12,920 Speaker 8: Yeah, no, I wish that's how I thought it were 251 00:13:12,920 --> 00:13:15,160 Speaker 8: going to play out. I'm worried because I think the 252 00:13:15,200 --> 00:13:18,240 Speaker 8: moderate Republicans, just like we saw in the House, may 253 00:13:18,280 --> 00:13:20,400 Speaker 8: actually be pushing to make the bill worse. So the 254 00:13:20,440 --> 00:13:24,360 Speaker 8: bill has a tax cuts and the medium spending cuts, 255 00:13:24,640 --> 00:13:26,400 Speaker 8: and what you're seeing from the moderates is they're more 256 00:13:26,440 --> 00:13:31,360 Speaker 8: concerned about fewer spending cuts than more fiscal responsibility. And 257 00:13:31,400 --> 00:13:33,600 Speaker 8: then on the very conservative side, where you have people 258 00:13:33,640 --> 00:13:35,640 Speaker 8: who are willing to do the spending cuts you would need, 259 00:13:35,880 --> 00:13:38,880 Speaker 8: they also are more prone to believe the myths of 260 00:13:38,920 --> 00:13:41,600 Speaker 8: the fairy tale that growth can fix everything and you 261 00:13:41,640 --> 00:13:43,960 Speaker 8: don't have to make any structural changes. So the problem 262 00:13:44,040 --> 00:13:46,720 Speaker 8: is nobody makes hard choices in the budget anymore. We 263 00:13:46,760 --> 00:13:49,760 Speaker 8: can do tax Right's stop. 264 00:13:50,120 --> 00:13:51,599 Speaker 3: Paul wants to get in here, But I'm going to 265 00:13:51,640 --> 00:13:55,080 Speaker 3: ask the rude question, by what did God's name happened 266 00:13:55,400 --> 00:13:59,199 Speaker 3: in Washington? Where is the adultness of this debate? 267 00:14:00,880 --> 00:14:05,240 Speaker 8: You know what killed adultness? I think partisan polarization. We 268 00:14:05,360 --> 00:14:10,640 Speaker 8: are so much more focused on Republican versus Democratic preferences 269 00:14:10,960 --> 00:14:13,120 Speaker 8: than we are How you fix the country. It's not 270 00:14:13,200 --> 00:14:15,840 Speaker 8: just fiscal we're not fixing any of the big problems 271 00:14:15,840 --> 00:14:18,520 Speaker 8: where there's anything you actually have to do, because the 272 00:14:18,559 --> 00:14:21,160 Speaker 8: political calculation of don't let that other side have a 273 00:14:21,200 --> 00:14:25,080 Speaker 8: win is outweighing the calculations of compromise and country first. 274 00:14:25,120 --> 00:14:28,960 Speaker 8: And I'm deeply concerned about it. Just like polarizations undermining 275 00:14:29,000 --> 00:14:32,320 Speaker 8: everything are weak fiscal positions keeping us from being prepared 276 00:14:32,360 --> 00:14:34,960 Speaker 8: for the AI race we're in. Then you need to 277 00:14:35,000 --> 00:14:39,200 Speaker 8: fix our social contract, global national security issues that are 278 00:14:39,280 --> 00:14:41,320 Speaker 8: riskier than they used to be, all of these things. 279 00:14:41,720 --> 00:14:44,680 Speaker 8: I think our polarization is put so much stand in 280 00:14:44,680 --> 00:14:47,000 Speaker 8: the wheels. We're not getting anything done, and that's not 281 00:14:47,200 --> 00:14:51,080 Speaker 8: allowing the adults to come forward. They exist behind closed doors. 282 00:14:51,080 --> 00:14:53,680 Speaker 8: They're talking about it, but politically it's not rewarded right 283 00:14:53,720 --> 00:14:57,040 Speaker 8: now in this populist and polarized moment, and we got 284 00:14:57,080 --> 00:14:58,240 Speaker 8: to figure out a fix for that. 285 00:14:59,000 --> 00:15:01,640 Speaker 5: I've been in this market sas nineteen eighty six. Nobody 286 00:15:01,680 --> 00:15:04,920 Speaker 5: cares about deficits in a national debt. Why should we 287 00:15:05,800 --> 00:15:06,240 Speaker 5: real estate? 288 00:15:06,320 --> 00:15:09,760 Speaker 8: Well, you know, the bond market is starting to be 289 00:15:09,800 --> 00:15:11,480 Speaker 8: a bit of a reminder. We actually are hearing so 290 00:15:11,480 --> 00:15:12,360 Speaker 8: many more reminders. 291 00:15:12,400 --> 00:15:12,840 Speaker 9: I'm with you. 292 00:15:12,920 --> 00:15:16,120 Speaker 8: It's been just deafening in terms of people being concerned 293 00:15:16,120 --> 00:15:18,280 Speaker 8: about it other than those of us who work on 294 00:15:18,320 --> 00:15:20,560 Speaker 8: this all the time for the past years. But you're 295 00:15:20,600 --> 00:15:24,440 Speaker 8: hearing many more concerns right now, with warnings, with downgrades, 296 00:15:24,480 --> 00:15:28,240 Speaker 8: with problems in the bond markets, with other countries looking 297 00:15:28,320 --> 00:15:30,520 Speaker 8: at the US debt and thinking this isn't as great 298 00:15:30,640 --> 00:15:32,640 Speaker 8: a this isn't as sure thing as it used to be. 299 00:15:32,760 --> 00:15:35,440 Speaker 8: We have the reserve currency where the safe haven. The 300 00:15:35,480 --> 00:15:37,440 Speaker 8: central Bank did a lot that kept rates down for 301 00:15:37,480 --> 00:15:41,400 Speaker 8: a long time. Many of these trends could gradually be shifting. 302 00:15:41,680 --> 00:15:44,160 Speaker 8: And the whole point is we should not wait to 303 00:15:44,200 --> 00:15:46,760 Speaker 8: find out if and when we get ourselves into trouble. 304 00:15:47,000 --> 00:15:49,240 Speaker 8: We should fix the situation where we still have all 305 00:15:49,280 --> 00:15:50,160 Speaker 8: of those privileges. 306 00:15:50,200 --> 00:15:52,880 Speaker 5: And it's much easier to do so as long as 307 00:15:52,880 --> 00:15:55,680 Speaker 5: people keep showing up at our debt auctions. Maya we 308 00:15:55,720 --> 00:15:57,840 Speaker 5: don't have a problem. What do you say to those folks? 309 00:15:58,520 --> 00:16:00,960 Speaker 8: Yeah, I say that those folks made that argument, and 310 00:16:01,000 --> 00:16:04,400 Speaker 8: as a result, we borrowed more when interest rates were low. 311 00:16:04,720 --> 00:16:07,200 Speaker 8: We now have trillions more in debt, and just small 312 00:16:07,280 --> 00:16:11,440 Speaker 8: increases in interest rates have huge impacts on our interest 313 00:16:11,480 --> 00:16:13,560 Speaker 8: payments as a result, which is why it's the largest 314 00:16:13,560 --> 00:16:15,920 Speaker 8: growing part of the budget, the second line item in 315 00:16:15,960 --> 00:16:19,280 Speaker 8: the budget. Those interest payments are much more possible to 316 00:16:19,400 --> 00:16:22,360 Speaker 8: changing interest rates because of the arguments. Don't worry, be happy, 317 00:16:22,480 --> 00:16:24,280 Speaker 8: keep borrowing. We shouldn't have done it then and we 318 00:16:24,320 --> 00:16:24,960 Speaker 8: shouldn't now. 319 00:16:25,200 --> 00:16:26,840 Speaker 3: My don't be a stranger. We got to get you 320 00:16:26,920 --> 00:16:28,520 Speaker 3: on he or somehow. This is going to get worser 321 00:16:28,560 --> 00:16:32,239 Speaker 3: through this summer. And articulate as always with the Committee 322 00:16:32,280 --> 00:16:35,520 Speaker 3: for a Responsible Federal Budget. Brilliant work, Miami Guinness. 323 00:16:40,960 --> 00:16:44,840 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 324 00:16:44,880 --> 00:16:47,880 Speaker 1: starting at seven am Eastern on Apple Cockplay and Android 325 00:16:47,920 --> 00:16:50,960 Speaker 1: Auto with the Bloomberg Business app. You can also watch 326 00:16:51,000 --> 00:16:53,960 Speaker 1: us live every weekday on YouTube and always on the 327 00:16:53,960 --> 00:16:55,040 Speaker 1: Bloomberg Terminal. 328 00:16:55,160 --> 00:17:01,280 Speaker 3: Billion years ago, I decided I wouldn't learn Senate parliamentarian rules. 329 00:17:01,320 --> 00:17:04,560 Speaker 3: Paul good idea. It's just like the only one that 330 00:17:04,600 --> 00:17:06,840 Speaker 3: ever nailed this was Robert bird Well. 331 00:17:06,880 --> 00:17:09,479 Speaker 2: I don't know we have of the Virginia. I mean, 332 00:17:10,320 --> 00:17:13,119 Speaker 2: Henrietta Trace is in studio now to explain. 333 00:17:13,520 --> 00:17:17,879 Speaker 3: Henrietta. I thought a quiet weekend for our elected officials. 334 00:17:17,920 --> 00:17:21,920 Speaker 3: They're all pondering what's next for the Senate. Is they 335 00:17:21,920 --> 00:17:26,760 Speaker 3: look at a big, beautiful bill the parliamentary the procedure 336 00:17:26,920 --> 00:17:28,360 Speaker 3: of it, Will it be smooth? 337 00:17:29,600 --> 00:17:29,840 Speaker 2: Yeah? 338 00:17:29,840 --> 00:17:33,520 Speaker 7: The parliamentarian is one of my favorite jobs for sure, 339 00:17:33,560 --> 00:17:35,880 Speaker 7: So I will take on that burden for you because 340 00:17:35,920 --> 00:17:36,920 Speaker 7: I think it's a blast. 341 00:17:37,640 --> 00:17:39,760 Speaker 9: The Senators are about to come in hot. 342 00:17:39,840 --> 00:17:42,560 Speaker 7: It is all eyes on them for the next four 343 00:17:42,600 --> 00:17:46,760 Speaker 7: to six weeks, and they have trillions of dollars literally 344 00:17:47,240 --> 00:17:53,280 Speaker 7: with taxes, the medicaid cuts, all the various. 345 00:17:53,040 --> 00:17:55,240 Speaker 9: Sanctions packages, and the tariff bills. 346 00:17:55,280 --> 00:17:57,880 Speaker 7: All these pieces are before them right now and all 347 00:17:57,920 --> 00:17:58,879 Speaker 7: eyes are going to be on them. 348 00:17:58,880 --> 00:18:01,520 Speaker 9: The parliamentarian is going to be very busy, as you know. 349 00:18:01,600 --> 00:18:04,320 Speaker 7: The Democrats and the Republicans get an opportunity to go 350 00:18:04,400 --> 00:18:06,679 Speaker 7: before her and explain what it is they'd like to 351 00:18:06,680 --> 00:18:08,920 Speaker 7: see taken out this bill. It's really a game of 352 00:18:08,960 --> 00:18:10,879 Speaker 7: who knows the rule is the best who's the best 353 00:18:11,359 --> 00:18:14,800 Speaker 7: player right now? And that really makes million dollar difference, 354 00:18:14,880 --> 00:18:17,040 Speaker 7: billions of dollars difference thirteen years. 355 00:18:17,359 --> 00:18:23,200 Speaker 3: Elizabeth McDonough m ACD. Elizabeth McDonough is the most powerful 356 00:18:23,280 --> 00:18:28,879 Speaker 3: person in America. Who's that she's a parliamentary. It's like 357 00:18:29,040 --> 00:18:30,919 Speaker 3: Alice at Wonderland. I mean, they have to go in 358 00:18:30,960 --> 00:18:32,000 Speaker 3: front of her, Henrietta. 359 00:18:32,040 --> 00:18:36,199 Speaker 5: Are we going to hear from the Democrats ever in 360 00:18:36,240 --> 00:18:38,679 Speaker 5: this congress? Here, it's such a time for the Democrats 361 00:18:38,680 --> 00:18:41,520 Speaker 5: to make themselves useful at all. 362 00:18:42,359 --> 00:18:44,240 Speaker 9: I mean, it would be about time. 363 00:18:44,359 --> 00:18:48,440 Speaker 7: I continues to be shocked at how absent Democrats are. 364 00:18:49,080 --> 00:18:52,119 Speaker 7: I mean, Republicans are putting taxes on cans of beer? 365 00:18:52,400 --> 00:18:54,720 Speaker 7: How is that not an immediate talking point? But here 366 00:18:54,760 --> 00:18:59,240 Speaker 7: we have over the weekend, Majority Minority Leader Schumer sending 367 00:18:59,240 --> 00:19:01,080 Speaker 7: a letter to his college saying, hey, y'all, it's time 368 00:19:01,119 --> 00:19:02,840 Speaker 7: to get in the game. And as you point out, 369 00:19:02,840 --> 00:19:05,119 Speaker 7: Elizabeth McDonough has been in the Senate since the nineteen 370 00:19:05,200 --> 00:19:08,919 Speaker 7: nineties and has worked for some really esteemed folks and 371 00:19:09,119 --> 00:19:11,120 Speaker 7: is now going to be the key arbiter or Democrats 372 00:19:11,160 --> 00:19:12,840 Speaker 7: are going to go in there and say X, Y 373 00:19:12,840 --> 00:19:16,280 Speaker 7: and Z is not permissible. Strike it from the bill, 374 00:19:16,480 --> 00:19:19,960 Speaker 7: and that's going to hit the tax plans of the 375 00:19:20,000 --> 00:19:22,399 Speaker 7: Republican Conference. One of the reasons that the bill has 376 00:19:22,440 --> 00:19:25,240 Speaker 7: to get more expensive and that even more to the deficit, 377 00:19:25,280 --> 00:19:29,119 Speaker 7: is because it doesn't have an economic impact by using 378 00:19:29,160 --> 00:19:31,480 Speaker 7: the current policy baseline, which is the strategy that Senate 379 00:19:31,520 --> 00:19:34,520 Speaker 7: Republicans are going to use, which will effectively write off 380 00:19:34,520 --> 00:19:36,800 Speaker 7: three point eight trillion dollars worth of this package and 381 00:19:36,840 --> 00:19:40,760 Speaker 7: say the cost is zero. You cannot pass legislation through 382 00:19:40,840 --> 00:19:45,080 Speaker 7: reconciliation instructions unless it has a budget impact, So they 383 00:19:45,119 --> 00:19:46,639 Speaker 7: kind of shoot themselves in the foot here. You get 384 00:19:46,680 --> 00:19:48,800 Speaker 7: three point eight trillion dollars in free money, but it's 385 00:19:48,800 --> 00:19:51,240 Speaker 7: not permissible under reconciliation. So that's going to be one 386 00:19:51,280 --> 00:19:53,040 Speaker 7: of the core things that Democrats try to go off 387 00:19:53,080 --> 00:19:56,760 Speaker 7: the works with with the parliamentarian and Leader Thoon. And 388 00:19:56,800 --> 00:19:59,119 Speaker 7: it's about time DEM's getting the game. So yeah, I 389 00:19:59,440 --> 00:20:01,159 Speaker 7: would be watching both for that. 390 00:20:01,200 --> 00:20:03,359 Speaker 5: Who is a Democratic voice? Would you say? Is it 391 00:20:03,720 --> 00:20:06,560 Speaker 5: Senator Chuck Schumer or is there somebody else in Democratic 392 00:20:06,600 --> 00:20:09,840 Speaker 5: Party that I don't know? Maybe they're looking to step 393 00:20:09,920 --> 00:20:10,280 Speaker 5: up here. 394 00:20:11,400 --> 00:20:13,600 Speaker 7: I mean, I think the Democratic Party is at war 395 00:20:13,640 --> 00:20:16,399 Speaker 7: with itself, trying to figure out if mckem Jeffries is 396 00:20:16,400 --> 00:20:20,080 Speaker 7: the kind of speaker or minority leader that Nancy Pelosi 397 00:20:20,119 --> 00:20:24,520 Speaker 7: could be or was. Certainly that's shown some lacking components. 398 00:20:24,720 --> 00:20:25,600 Speaker 9: At a minimum. 399 00:20:25,720 --> 00:20:27,720 Speaker 7: The party over there on the House side is warring 400 00:20:27,760 --> 00:20:30,080 Speaker 7: between the young folks and the older folks, and they 401 00:20:30,119 --> 00:20:33,320 Speaker 7: can't get a clearance or on committee chairs and on 402 00:20:33,359 --> 00:20:35,600 Speaker 7: the Senate side, they're struggling just to have relevance or 403 00:20:35,600 --> 00:20:36,360 Speaker 7: find a message. 404 00:20:36,359 --> 00:20:38,080 Speaker 9: As I mentioned, I don't think it's too hard to 405 00:20:38,080 --> 00:20:38,440 Speaker 9: come up. 406 00:20:38,400 --> 00:20:41,359 Speaker 7: With a message against tariffs and taxes on really obvious 407 00:20:41,400 --> 00:20:42,760 Speaker 7: things like back fool items. 408 00:20:42,760 --> 00:20:44,720 Speaker 9: But they're nowhere. They have a lot of work to do. 409 00:20:45,080 --> 00:20:47,760 Speaker 3: What do we not understand about the impact of the 410 00:20:47,800 --> 00:20:52,480 Speaker 3: president and a new fifty percent tariff on quote unquote steel? 411 00:20:52,800 --> 00:20:54,920 Speaker 3: What's the hendriy Ott of Trey's insight there. 412 00:20:55,720 --> 00:20:58,679 Speaker 7: What's fascinating to me about that is that Lutnik and 413 00:20:58,800 --> 00:21:01,840 Speaker 7: Bessent and Greer keep throwing the same playbook at all 414 00:21:01,880 --> 00:21:04,680 Speaker 7: of these tariff actions that the President obviously wants. 415 00:21:04,680 --> 00:21:06,840 Speaker 9: So the one I'm really ruminating on today is. 416 00:21:06,760 --> 00:21:09,520 Speaker 7: This idea that Secretary Besson has trotted out that he 417 00:21:09,640 --> 00:21:11,399 Speaker 7: and President She are going to get on the phone 418 00:21:11,400 --> 00:21:11,919 Speaker 7: this week. 419 00:21:12,200 --> 00:21:14,639 Speaker 9: That seems very unlikely. But also what is that going 420 00:21:14,720 --> 00:21:16,960 Speaker 9: to resolve? They spoke on the phone four months ago. 421 00:21:16,960 --> 00:21:19,120 Speaker 7: And now we see hundreds of billions of dollars worth 422 00:21:19,160 --> 00:21:21,760 Speaker 7: of goods tariffed at you know, at some points one 423 00:21:21,840 --> 00:21:23,800 Speaker 7: hundred and forty five percent coming in from China. So 424 00:21:24,080 --> 00:21:26,560 Speaker 7: they have this playbook that's like, get Trump involved, but 425 00:21:26,600 --> 00:21:29,080 Speaker 7: then also make sure he's not involved, because we don't 426 00:21:29,119 --> 00:21:30,879 Speaker 7: know if we're going to get fifty percent tyres on 427 00:21:30,920 --> 00:21:31,840 Speaker 7: steel overnight. 428 00:21:32,080 --> 00:21:33,800 Speaker 2: Henriette a hugely valuable. 429 00:21:34,000 --> 00:21:38,920 Speaker 3: The Surveillance Parliamentarium will send you a fruit masket. 430 00:21:39,080 --> 00:21:42,280 Speaker 2: We really appreciate it. Henrietta Trey's Vada Partners. 431 00:21:42,560 --> 00:21:46,480 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 432 00:21:46,520 --> 00:21:49,560 Speaker 1: starting at seven am Eastern on Apple, Cocklay and Android 433 00:21:49,560 --> 00:21:52,600 Speaker 1: Auto with the Bloomberg Business app. You can also listen 434 00:21:52,680 --> 00:21:55,960 Speaker 1: live on Amazon Alexa from our flagship New York station. 435 00:21:56,480 --> 00:21:59,119 Speaker 1: Just say Alexa, play Bloomberg eleven thirty. 436 00:21:59,200 --> 00:22:02,640 Speaker 3: The newspaper make me smile, Lisa, I will try my best. 437 00:22:02,680 --> 00:22:02,920 Speaker 5: Okay. 438 00:22:02,920 --> 00:22:04,440 Speaker 10: So this one's in the Wall Street Journal. If you 439 00:22:04,440 --> 00:22:06,840 Speaker 10: take a look at it, the headline is how much 440 00:22:06,880 --> 00:22:09,000 Speaker 10: of the world's richest men get paid? Right, So we're 441 00:22:09,000 --> 00:22:13,159 Speaker 10: talking about Elon Musk. Tesla has to decide, no, not 442 00:22:13,320 --> 00:22:15,960 Speaker 10: at all. Tesla has to decide right how much to 443 00:22:15,960 --> 00:22:19,000 Speaker 10: pay him. He's commanding this bigger steak. So he's actually 444 00:22:19,000 --> 00:22:21,639 Speaker 10: the lowest paid chief executive of an S and P 445 00:22:21,720 --> 00:22:24,200 Speaker 10: five hundred company. Last year, Tesla paid him zero because 446 00:22:24,200 --> 00:22:26,080 Speaker 10: of that legal battle. Right, so he's been back and 447 00:22:26,119 --> 00:22:28,840 Speaker 10: forth over this big stock award back in twenty eighteen. 448 00:22:29,359 --> 00:22:34,520 Speaker 10: So they go through basically how much different founder CEOs make, 449 00:22:34,720 --> 00:22:36,520 Speaker 10: Like the Wall Street Journal they ranked it and they 450 00:22:36,520 --> 00:22:38,800 Speaker 10: said the top one makes about one hundred and sixty 451 00:22:38,840 --> 00:22:41,600 Speaker 10: five million. But then you go to metas Mark Zuckerberg, 452 00:22:41,640 --> 00:22:43,960 Speaker 10: you made twenty seven million last year. Michael Dell got 453 00:22:44,000 --> 00:22:48,040 Speaker 10: three point one million, mostly cash. So they say they 454 00:22:48,040 --> 00:22:50,320 Speaker 10: go through a couple options like well, what do you do? 455 00:22:50,400 --> 00:22:51,199 Speaker 10: How do you approach this? 456 00:22:51,320 --> 00:22:51,480 Speaker 5: Right? 457 00:22:51,480 --> 00:22:53,639 Speaker 10: So they say you either make him show up and 458 00:22:53,680 --> 00:22:56,119 Speaker 10: go big, you pay him like a CEO, or you 459 00:22:56,160 --> 00:22:58,120 Speaker 10: pay him like everyone else. So this is the big 460 00:22:58,160 --> 00:23:01,119 Speaker 10: struggle that Tesla has to deal with coming up. But 461 00:23:01,240 --> 00:23:04,000 Speaker 10: it's it's a lot of the company world. 462 00:23:03,880 --> 00:23:06,760 Speaker 5: Is richest person, correct, correct? Okay, I just want to 463 00:23:06,760 --> 00:23:07,320 Speaker 5: make sure I can. 464 00:23:07,359 --> 00:23:09,720 Speaker 3: I just say to take an issue that they include 465 00:23:09,800 --> 00:23:13,800 Speaker 3: stock awards is compensation because if the stock goes down, 466 00:23:14,600 --> 00:23:15,960 Speaker 3: there's not much compensation. 467 00:23:16,440 --> 00:23:17,440 Speaker 2: You know, there's a risk. 468 00:23:17,320 --> 00:23:21,800 Speaker 5: To it, right, and that's always because it ties aps 469 00:23:21,840 --> 00:23:23,360 Speaker 5: growth or market whatever. 470 00:23:23,359 --> 00:23:25,639 Speaker 2: They can The critics would say they rigid. 471 00:23:27,280 --> 00:23:32,159 Speaker 10: Right the world's riches, Okay, to make sure you have that. Okay, Yeah, 472 00:23:32,240 --> 00:23:35,639 Speaker 10: so this one too. It's talking about Meta how they 473 00:23:35,640 --> 00:23:40,080 Speaker 10: want to fully automate ads using AI. So advertising makes 474 00:23:40,160 --> 00:23:42,880 Speaker 10: up the bulk of Meta's business, right, So Meta, their 475 00:23:42,880 --> 00:23:46,439 Speaker 10: ad platform already has a couple AI tools. But the 476 00:23:46,520 --> 00:23:49,440 Speaker 10: debate behind all this is that some brands worry that 477 00:23:49,520 --> 00:23:52,720 Speaker 10: these AI generated ads they won't match the human made 478 00:23:52,800 --> 00:23:54,960 Speaker 10: quality because it's not being made by human it's being 479 00:23:54,960 --> 00:23:58,440 Speaker 10: made by you know, a computer. But but smaller businesses say, 480 00:23:58,440 --> 00:24:00,639 Speaker 10: you know, we could benefit because it just makes it 481 00:24:00,680 --> 00:24:03,800 Speaker 10: easier for us to create the ads. So that's a 482 00:24:03,800 --> 00:24:11,960 Speaker 10: battle going on AI for the creative correct to create it, 483 00:24:12,119 --> 00:24:14,480 Speaker 10: to greet it. Basically, you just punching what you want 484 00:24:14,560 --> 00:24:16,520 Speaker 10: and you know the video comes up. So I will 485 00:24:16,520 --> 00:24:21,359 Speaker 10: help them do that, but you know it's a I 486 00:24:21,680 --> 00:24:23,879 Speaker 10: use it for checking quick thing, but I always have 487 00:24:23,920 --> 00:24:26,240 Speaker 10: to fact check it. But I have seen a lot 488 00:24:26,280 --> 00:24:27,919 Speaker 10: of these, like the Wall Street Journal did this and 489 00:24:27,960 --> 00:24:31,080 Speaker 10: they made like an entire movie trailer just AI like 490 00:24:31,440 --> 00:24:33,520 Speaker 10: you see this, and how they're able to do that 491 00:24:33,560 --> 00:24:34,760 Speaker 10: and make you sit back and why. 492 00:24:34,640 --> 00:24:37,439 Speaker 3: When I started using it this weekend and it's it's 493 00:24:38,480 --> 00:24:41,680 Speaker 3: it's it's you know, I'm sure I'm way behind everyone else. 494 00:24:41,720 --> 00:24:43,840 Speaker 3: It's like, wow, do one what else it is? 495 00:24:43,920 --> 00:24:47,240 Speaker 10: Okay, have you been to let's say, like a casual 496 00:24:47,320 --> 00:24:50,879 Speaker 10: dining place lately, like an outback steakhouse or an Applebee's 497 00:24:50,920 --> 00:24:54,400 Speaker 10: or anything like that. So these casual dining places, they're 498 00:24:54,440 --> 00:24:57,840 Speaker 10: starting to attract more gen Z customers. And the reason 499 00:24:57,880 --> 00:25:00,800 Speaker 10: why is because gen Z actually says they like going 500 00:25:00,840 --> 00:25:04,959 Speaker 10: back to the whole family, you know, sit down dinner. 501 00:25:05,680 --> 00:25:08,240 Speaker 10: It's more stable. It's tough economic time, so they like 502 00:25:08,320 --> 00:25:10,760 Speaker 10: that instead of going to like the fast casual, you know, 503 00:25:10,880 --> 00:25:13,320 Speaker 10: going to like a Kava or like a Chipotle. You know, 504 00:25:13,400 --> 00:25:16,399 Speaker 10: as far as you know, what's more economically friendly to 505 00:25:17,560 --> 00:25:19,240 Speaker 10: So just trying to figure that out. They say that 506 00:25:19,280 --> 00:25:21,760 Speaker 10: they enjoy going to like the sit down place. They 507 00:25:21,760 --> 00:25:24,040 Speaker 10: want to talk to people. Gen Z wants to sit 508 00:25:24,119 --> 00:25:26,160 Speaker 10: down and have conversation. 509 00:25:29,640 --> 00:25:30,080 Speaker 7: I don't know. 510 00:25:30,600 --> 00:25:34,600 Speaker 2: Can I report on the instaurant quality. We had the 511 00:25:34,640 --> 00:25:38,000 Speaker 2: after prom party this weekend and it was catered. 512 00:25:37,600 --> 00:25:41,520 Speaker 3: By LaBelle to Talk. I'm pleased to tell you that 513 00:25:41,560 --> 00:25:46,840 Speaker 3: the taco bell salsa sauce, it was ground beautifully into 514 00:25:46,880 --> 00:25:50,720 Speaker 3: the Chinese oriental carpet. I mean the way that somebody 515 00:25:50,800 --> 00:25:54,240 Speaker 3: got there stillttly right into it and got that salsa 516 00:25:54,280 --> 00:25:55,560 Speaker 3: sauce right in there. 517 00:25:55,600 --> 00:25:56,840 Speaker 5: Did it come with the margaritas? 518 00:25:56,880 --> 00:25:59,440 Speaker 2: Though, no, it did not come with the margharitas. That's 519 00:25:59,480 --> 00:26:02,560 Speaker 2: thank you. I would be in trouble if it had 520 00:26:02,560 --> 00:26:04,439 Speaker 2: come with the markert read as well. 521 00:26:04,480 --> 00:26:07,640 Speaker 3: Lisa Mateo, the newspapers, thank you so much. 522 00:26:08,080 --> 00:26:12,919 Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify, 523 00:26:13,040 --> 00:26:17,320 Speaker 1: and anywhere else you get your podcasts. 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