1 00:00:09,720 --> 00:00:12,880 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene with 2 00:00:13,560 --> 00:00:16,520 Speaker 1: David Gura. Daily we bring you insight from the best 3 00:00:16,560 --> 00:00:22,239 Speaker 1: of economics, finance, investment, and international relations. Find Bloomberg Surveillance 4 00:00:22,320 --> 00:00:27,000 Speaker 1: on Apple Podcasts, SoundCloud, Bloomberg dot Com, and of course, 5 00:00:27,320 --> 00:00:31,120 Speaker 1: on the bloomberg Ian Bremer. Here with us in our 6 00:00:31,120 --> 00:00:33,960 Speaker 1: Bloomberg eleven CEO Studios, the present of your Ratio group. 7 00:00:34,000 --> 00:00:36,560 Speaker 1: Take us to the U N Security Council meeting yesterday. 8 00:00:36,640 --> 00:00:39,680 Speaker 1: Nikki Hailey wanted to impose some sanctions on oil and 9 00:00:39,720 --> 00:00:42,040 Speaker 1: North Korea that didn't happen. Did she get most of 10 00:00:42,040 --> 00:00:44,600 Speaker 1: what she wanted yesterday? What's what's the significance of the 11 00:00:44,760 --> 00:00:47,400 Speaker 1: new sanctions the UN Security Council has implemented. I mean, 12 00:00:47,440 --> 00:00:50,040 Speaker 1: I wouldn't say she got most of what she wanted, 13 00:00:50,080 --> 00:00:54,640 Speaker 1: but she got more than any other American administration had. 14 00:00:55,040 --> 00:01:01,880 Speaker 1: They're cutting off North Korean textile exports, which is significant cash. UH. 15 00:01:01,920 --> 00:01:05,160 Speaker 1: They are limiting the amount of oil they can import, 16 00:01:05,160 --> 00:01:08,160 Speaker 1: which is critical. They're not allowing them to substitute other fuels, 17 00:01:08,200 --> 00:01:13,000 Speaker 1: and they're not allowing UH for the new signing of 18 00:01:13,120 --> 00:01:16,440 Speaker 1: contracts from North Korean expats to be working and making 19 00:01:16,440 --> 00:01:18,200 Speaker 1: money bringing back to North Korea. If you add all 20 00:01:18,200 --> 00:01:21,360 Speaker 1: that up, we're talking over a billion dollar hit, which 21 00:01:21,440 --> 00:01:24,679 Speaker 1: is big for their economy if it gets executed on. 22 00:01:25,280 --> 00:01:29,360 Speaker 1: And it's also by far a more constructive way to 23 00:01:29,440 --> 00:01:35,760 Speaker 1: proceed in dealing with the North Korean's unanimous multilateral driven 24 00:01:35,800 --> 00:01:38,560 Speaker 1: by the United States. That's not you know what, what 25 00:01:38,600 --> 00:01:41,640 Speaker 1: we've seen from Trump America first on most issues around 26 00:01:41,680 --> 00:01:44,640 Speaker 1: the world. So I think anyone sensible should applaud this 27 00:01:44,800 --> 00:01:48,320 Speaker 1: decision and applaud Mickey Hayley's role in it. But does 28 00:01:48,360 --> 00:01:52,360 Speaker 1: it get you closer to actual peace with North Korea? 29 00:01:53,160 --> 00:01:56,880 Speaker 1: I think it'd be You'd have to be ungodly optimistic 30 00:01:56,960 --> 00:02:00,000 Speaker 1: to believe that the next time they test a miss 31 00:02:00,000 --> 00:02:03,360 Speaker 1: all or they or they launch a test another nuke 32 00:02:03,960 --> 00:02:07,600 Speaker 1: um and I, or or hit others with cyber which 33 00:02:07,600 --> 00:02:10,520 Speaker 1: has been hitting the US and hitting the Chinese. Um. 34 00:02:10,880 --> 00:02:13,320 Speaker 1: We are running out of road. It's true. It's it's 35 00:02:13,360 --> 00:02:17,760 Speaker 1: getting harder and harder UM to to see how you 36 00:02:17,880 --> 00:02:20,359 Speaker 1: do all of this with stick and not offer any care. 37 00:02:20,400 --> 00:02:23,040 Speaker 1: And and the one thing that the Trump administration just 38 00:02:23,160 --> 00:02:27,000 Speaker 1: hasn't done yet is in any way tell the North 39 00:02:27,120 --> 00:02:32,480 Speaker 1: Koreans what they would get if they cooperate, and right 40 00:02:32,480 --> 00:02:35,120 Speaker 1: now the North Koreans are seeing very little reason to do. So. 41 00:02:35,320 --> 00:02:37,280 Speaker 1: How is she doing? How is Nikki Haley doing? Where 42 00:02:37,280 --> 00:02:39,519 Speaker 1: does she fit into this this pantheon of of foreign 43 00:02:39,520 --> 00:02:43,040 Speaker 1: policy professionals within the administration. After the nuclear attack and 44 00:02:43,320 --> 00:02:46,040 Speaker 1: the nuclear test rather and after the recent mistle test, 45 00:02:46,200 --> 00:02:47,440 Speaker 1: we were hearing more from her than I think we 46 00:02:47,480 --> 00:02:49,440 Speaker 1: were hearing from from Secretary State Rex Taylors. And how 47 00:02:49,480 --> 00:02:52,400 Speaker 1: does she fit into the whole apparatus? She likes the media, 48 00:02:52,520 --> 00:02:54,799 Speaker 1: She's used to it as a politician. Rex toasts and 49 00:02:54,880 --> 00:02:59,119 Speaker 1: finds the media kind of, you know, unhelpful. He never 50 00:02:59,160 --> 00:03:00,880 Speaker 1: wanted to engage with and when he was running X 51 00:03:00,919 --> 00:03:04,400 Speaker 1: on Mobile, particularly UM and UH and and they're kind 52 00:03:04,400 --> 00:03:07,840 Speaker 1: of below him. Nicki Haley has you know, worked politics 53 00:03:07,919 --> 00:03:10,840 Speaker 1: for her entire career. She's much more effective in that regard. 54 00:03:11,160 --> 00:03:15,079 Speaker 1: Doesn't mean that she'd be a better Secretary of State, UM, 55 00:03:15,160 --> 00:03:18,919 Speaker 1: but she clearly is more interested in the job than 56 00:03:18,960 --> 00:03:21,760 Speaker 1: I think Tillison is at this point. She also has 57 00:03:21,760 --> 00:03:23,560 Speaker 1: said a bunch of things that imply that she works 58 00:03:23,600 --> 00:03:26,280 Speaker 1: for a different administration. I mean, her comments on Russia 59 00:03:26,360 --> 00:03:29,120 Speaker 1: and Ukraine, were of a type that they could have 60 00:03:29,160 --> 00:03:33,120 Speaker 1: been under Obama, under Hillary Clinton. Um. Having said that, 61 00:03:33,120 --> 00:03:35,640 Speaker 1: that's also true of things we've heard from people like Maddis. 62 00:03:35,680 --> 00:03:38,360 Speaker 1: So it's not she I don't she's she's certainly not 63 00:03:38,400 --> 00:03:40,800 Speaker 1: on the chopping block. She's been reasonably effective in the 64 00:03:40,840 --> 00:03:43,760 Speaker 1: position so far. But she also says a bunch of 65 00:03:43,760 --> 00:03:45,560 Speaker 1: things that aren't necessarily policy. I mean, I don't want 66 00:03:45,560 --> 00:03:48,280 Speaker 1: to interrupt this conversation, it's too smart, but David, I 67 00:03:48,320 --> 00:03:51,360 Speaker 1: would note the Foreign Policy article of about five days ago, 68 00:03:51,400 --> 00:03:54,200 Speaker 1: which did the point that Dr Bremer just mentioned, which 69 00:03:54,240 --> 00:03:57,640 Speaker 1: is Mr Tillison appears to have no interest what's soever 70 00:03:58,480 --> 00:04:01,560 Speaker 1: in any of the Washington games plural. He just says, 71 00:04:01,680 --> 00:04:04,920 Speaker 1: you know, genuinely no interest. Don't let me interrupt you 72 00:04:04,960 --> 00:04:08,080 Speaker 1: two kids, and and you can understand and respect that 73 00:04:08,200 --> 00:04:11,160 Speaker 1: very few people would would have an interest, um in 74 00:04:11,240 --> 00:04:14,120 Speaker 1: those games. And Tillerson, of course, when he was asked 75 00:04:14,160 --> 00:04:16,040 Speaker 1: to be the Secretary of State, and remember it was 76 00:04:16,080 --> 00:04:18,760 Speaker 1: the third round of who might be that position. This 77 00:04:18,960 --> 00:04:22,360 Speaker 1: was after the you know, sort of the courting of uh, 78 00:04:22,400 --> 00:04:25,400 Speaker 1: you know, whether it was Petraeus or Jims Devritas or 79 00:04:25,839 --> 00:04:29,560 Speaker 1: Judy Giuliani. All this stuff, and he talked to his 80 00:04:29,560 --> 00:04:31,120 Speaker 1: wife and says, off his job. He didn't want to 81 00:04:31,120 --> 00:04:34,000 Speaker 1: take it. How do you respond to the Navy having 82 00:04:34,000 --> 00:04:38,680 Speaker 1: to substantial accidents with horrificness and the idea of the 83 00:04:38,720 --> 00:04:42,640 Speaker 1: Pentagon budget? Within the International Relations Study of Eurasia Group, 84 00:04:43,240 --> 00:04:47,719 Speaker 1: Where does military might and spending in smart spending fit 85 00:04:47,800 --> 00:04:50,920 Speaker 1: in in the United States of America? I I, in 86 00:04:50,960 --> 00:04:54,200 Speaker 1: some ways I'm more worried about this than most issues 87 00:04:54,480 --> 00:04:58,400 Speaker 1: because well because when we talk about the military, it's 88 00:04:58,480 --> 00:05:02,279 Speaker 1: you know, sort of the the you know, massive multi 89 00:05:02,360 --> 00:05:06,320 Speaker 1: year defense reviews. It's budgets that actually touch every single 90 00:05:06,360 --> 00:05:09,800 Speaker 1: congressional district in the United States, so you can't really 91 00:05:09,800 --> 00:05:12,640 Speaker 1: screw with them very much. It's jobs that matter. I mean, 92 00:05:12,680 --> 00:05:16,160 Speaker 1: even closing bases that didn't that had no impact whatsoever 93 00:05:16,160 --> 00:05:19,080 Speaker 1: American strategic capacity, and we're wasting money. But you just 94 00:05:19,120 --> 00:05:21,680 Speaker 1: it's so hard to do because of the impact on 95 00:05:21,720 --> 00:05:25,520 Speaker 1: local economies. And yet now you're seeing not just things 96 00:05:25,600 --> 00:05:29,240 Speaker 1: like terrorism and cyber but drone technology that can be 97 00:05:29,279 --> 00:05:33,360 Speaker 1: developed much more cheaply by you know, other states around 98 00:05:33,360 --> 00:05:36,400 Speaker 1: the world that will make things like the American infantry 99 00:05:36,440 --> 00:05:40,240 Speaker 1: completely obsolete. And yet the Americans will still be spending 100 00:05:40,440 --> 00:05:42,720 Speaker 1: for reasons that have nothing to do with national security 101 00:05:42,720 --> 00:05:45,200 Speaker 1: on a lot of these programs. So I do worry 102 00:05:45,279 --> 00:05:50,239 Speaker 1: that ten twenty years out, America's ability to project force 103 00:05:50,360 --> 00:05:53,680 Speaker 1: effectively around the world is going to look radically different 104 00:05:53,680 --> 00:05:55,200 Speaker 1: than it does today. How much of that is the 105 00:05:55,279 --> 00:05:57,920 Speaker 1: casualty of the way that budgeting and appropriations are now 106 00:05:57,960 --> 00:06:01,159 Speaker 1: done in Washington. We have this debt seal deal last week. 107 00:06:01,200 --> 00:06:03,000 Speaker 1: I gather the Senate Arm Services Committee is going to 108 00:06:03,000 --> 00:06:05,560 Speaker 1: go through its usual late night process of adding amendments 109 00:06:05,600 --> 00:06:08,480 Speaker 1: to the appropriations bill, perhaps a little bit later this week. 110 00:06:08,520 --> 00:06:10,520 Speaker 1: But we don't have regular order. We don't have the 111 00:06:10,600 --> 00:06:13,839 Speaker 1: kind of conversations we had about funding for security programs 112 00:06:13,839 --> 00:06:16,440 Speaker 1: other programs that we had in years past. Is that problematic? 113 00:06:17,200 --> 00:06:21,279 Speaker 1: The most problematic thing about the American outlook right now 114 00:06:21,560 --> 00:06:25,200 Speaker 1: is the fact that top down governance doesn't really work. 115 00:06:25,279 --> 00:06:29,679 Speaker 1: It's it's very inflexible, it's very slow, it's resistant to change. 116 00:06:29,720 --> 00:06:32,640 Speaker 1: That makes it stable. But in a world where that 117 00:06:32,760 --> 00:06:36,000 Speaker 1: becomes a disadvantage, where the Chinese are able to spend 118 00:06:36,080 --> 00:06:39,680 Speaker 1: much more, much more quickly, use all of the functions 119 00:06:39,720 --> 00:06:41,440 Speaker 1: of the state to make that happen, I mean the 120 00:06:41,520 --> 00:06:44,800 Speaker 1: Chinese economy is considerably smaller than the United States, but 121 00:06:44,839 --> 00:06:48,599 Speaker 1: I would argue that Chinese economic power, because of the 122 00:06:48,600 --> 00:06:52,479 Speaker 1: structure of the state, actually gives them more political influence 123 00:06:52,720 --> 00:06:55,159 Speaker 1: than the United States economic power does around the world 124 00:06:55,560 --> 00:06:57,880 Speaker 1: as of today with a lot of other countries. That's 125 00:06:57,920 --> 00:07:00,640 Speaker 1: a shocking thing to say. And it's not because America 126 00:07:00,680 --> 00:07:03,599 Speaker 1: isn't a much better economy it is. It's because the 127 00:07:03,600 --> 00:07:06,040 Speaker 1: ability of the American government to deploy that as a 128 00:07:06,160 --> 00:07:10,440 Speaker 1: lever is massively constrained. Now. The upside is that a 129 00:07:10,480 --> 00:07:13,880 Speaker 1: lot of decisions around the American economy aren't made in Washington. 130 00:07:14,120 --> 00:07:17,040 Speaker 1: They're made by corporations that made by entrepreneurs, and they're 131 00:07:17,040 --> 00:07:20,160 Speaker 1: made at the federal level by states and municipalities. So 132 00:07:20,200 --> 00:07:23,480 Speaker 1: there is a lot of flexibility still in the United 133 00:07:23,520 --> 00:07:27,120 Speaker 1: States holistically. But when you think about all the things 134 00:07:27,160 --> 00:07:30,200 Speaker 1: that are done by Washington, they are not just broken, 135 00:07:30,240 --> 00:07:32,960 Speaker 1: but they will be increasingly broken in ways that hurt us. 136 00:07:33,440 --> 00:07:36,600 Speaker 1: Is this administration? Okay, with what you describe, we've we've 137 00:07:36,760 --> 00:07:39,680 Speaker 1: mourned the death of of Fox Americana. With the kind 138 00:07:39,680 --> 00:07:42,360 Speaker 1: of economic influence that you were just describing on the Wayne, 139 00:07:43,120 --> 00:07:45,040 Speaker 1: do you have people in the White House in Washington, 140 00:07:45,120 --> 00:07:47,120 Speaker 1: who are content with that, who don't think that we 141 00:07:47,120 --> 00:07:49,320 Speaker 1: need to wield that kind of influence any longer. Well, 142 00:07:49,520 --> 00:07:51,120 Speaker 1: I would say a lot of the people that did 143 00:07:51,280 --> 00:07:55,360 Speaker 1: feel that way are gone. Uh certainly, you look at 144 00:07:55,360 --> 00:07:58,960 Speaker 1: Steve Bannon, Um, you look at many of those around 145 00:07:59,040 --> 00:08:01,480 Speaker 1: him that have been out did in the White House 146 00:08:01,480 --> 00:08:04,920 Speaker 1: and the senior director positions. These were people that really 147 00:08:05,000 --> 00:08:08,200 Speaker 1: believed that, um, the United States needed to go it 148 00:08:08,280 --> 00:08:13,000 Speaker 1: alone unilaterally, that these problems were not our problems. Stop 149 00:08:13,080 --> 00:08:17,520 Speaker 1: the interventions in places like Iraq, uh And and Pakistan 150 00:08:17,640 --> 00:08:19,840 Speaker 1: is not our issue. Don't play as much with the 151 00:08:19,880 --> 00:08:22,680 Speaker 1: Saudi is not gonna work. Long time Afghanistan. Please, it's 152 00:08:22,720 --> 00:08:25,440 Speaker 1: the never ending war. Why are we doing this? That's 153 00:08:25,440 --> 00:08:27,120 Speaker 1: the reason why a lot of enlisted men and women 154 00:08:27,120 --> 00:08:29,440 Speaker 1: in their families voted for Trump and voted for standards 155 00:08:29,760 --> 00:08:32,160 Speaker 1: for that matter. But if you look at the people 156 00:08:32,200 --> 00:08:35,360 Speaker 1: that are making the decisions on national security right now 157 00:08:35,800 --> 00:08:40,440 Speaker 1: one level under the Trump and Javanka complex, and you 158 00:08:40,520 --> 00:08:44,000 Speaker 1: see people that who's whose views of national security are 159 00:08:44,040 --> 00:08:49,520 Speaker 1: really functionally identical to what they would be under UM, 160 00:08:49,720 --> 00:08:54,160 Speaker 1: Hillary or under Jeb or under Bush. So really, maybe 161 00:08:54,240 --> 00:08:56,880 Speaker 1: even under Obama and I think that in that regard 162 00:08:57,400 --> 00:09:01,800 Speaker 1: when Steve Bannon was saying, you know, team Clinton, team Obama, 163 00:09:01,840 --> 00:09:05,000 Speaker 1: team Bush, these are all the same people. That's clearly 164 00:09:05,040 --> 00:09:08,079 Speaker 1: not true domestically if you look at things like impatient. 165 00:09:08,480 --> 00:09:12,680 Speaker 1: But internationally there's a lot to be said for that, 166 00:09:12,920 --> 00:09:15,280 Speaker 1: and no one's saying it. Okay, Ian Bremmer with us, 167 00:09:15,559 --> 00:09:17,320 Speaker 1: you gotta start. You're wonderful to have him. And of 168 00:09:17,360 --> 00:09:20,000 Speaker 1: course if somebody emailed it, when's the next book? The 169 00:09:20,040 --> 00:09:23,280 Speaker 1: next book, I'm told is April. He's negotiating movie rights 170 00:09:23,679 --> 00:09:27,280 Speaker 1: right now for us versus them, and itways, we'll come back, 171 00:09:27,360 --> 00:09:29,480 Speaker 1: stay with us. Too many things to speak to Ian 172 00:09:29,480 --> 00:09:31,600 Speaker 1: Bremer about. Here is with your Asia group, is new 173 00:09:31,640 --> 00:09:36,199 Speaker 1: book us versus them? Look for that in April. That's 174 00:09:36,240 --> 00:09:39,480 Speaker 1: the attitude Dr Bremer so much of Americans US versus 175 00:09:39,920 --> 00:09:43,720 Speaker 1: uh them, to too many Americans who are not participating 176 00:09:44,559 --> 00:09:49,800 Speaker 1: in our greater wealth and our greater income. It's tough 177 00:09:49,920 --> 00:09:52,400 Speaker 1: out there. How tough is it is? It is it? 178 00:09:52,480 --> 00:09:56,040 Speaker 1: Is it a an illusion or is it genuinely tough 179 00:09:56,080 --> 00:09:59,600 Speaker 1: for Americans? Um Well, in the context of the world 180 00:09:59,600 --> 00:10:02,880 Speaker 1: as a whole, of course, it's an illusion in the 181 00:10:02,960 --> 00:10:06,880 Speaker 1: sense that Americans are extraordinarily privileged to to live in 182 00:10:06,880 --> 00:10:10,680 Speaker 1: this country. Um, are you know the the wealth even 183 00:10:10,760 --> 00:10:14,320 Speaker 1: of a relatively impoverished American doesn't mean that they're starving. 184 00:10:14,400 --> 00:10:16,880 Speaker 1: And it's not like you're going to immolate yourselves as 185 00:10:16,880 --> 00:10:18,720 Speaker 1: you did like at the beginning of the Arab spring 186 00:10:18,720 --> 00:10:22,640 Speaker 1: in Tunisia. But compared to the American dream that was 187 00:10:23,840 --> 00:10:26,560 Speaker 1: talked about in his wonderful book last year, and that 188 00:10:26,760 --> 00:10:29,480 Speaker 1: you know, your and my forebears believed in, I think 189 00:10:29,480 --> 00:10:33,080 Speaker 1: the majority of Americans no longer believe the American dream 190 00:10:33,120 --> 00:10:38,679 Speaker 1: applies to them. And that is an extraordinary sadness. And 191 00:10:38,720 --> 00:10:40,439 Speaker 1: it's one that I mean, if if we were to 192 00:10:40,480 --> 00:10:45,640 Speaker 1: go around and ask Americans today, what does America stand for? Right? 193 00:10:45,760 --> 00:10:49,200 Speaker 1: I mean we beacon shining on a hill? Um? Do 194 00:10:49,280 --> 00:10:53,920 Speaker 1: we believe in rule of law and democracy and human rights? 195 00:10:53,960 --> 00:10:57,320 Speaker 1: And do we truly believe in free speech? And you know, 196 00:10:57,360 --> 00:11:00,080 Speaker 1: sort of an opera? Do we believe in capitalism? Have 197 00:11:00,120 --> 00:11:02,000 Speaker 1: to have capital to believe in capitalism? You know, when 198 00:11:02,000 --> 00:11:05,120 Speaker 1: I've seen Nancy Pelosi and the extraordinary wealth that she 199 00:11:05,240 --> 00:11:07,640 Speaker 1: has talking about the fact that all Americans are capitalist, 200 00:11:07,679 --> 00:11:10,360 Speaker 1: that doesn't resonate with the average person. And I think 201 00:11:10,360 --> 00:11:14,760 Speaker 1: that the establishment Democrat and Republican has lost the plot 202 00:11:14,840 --> 00:11:18,240 Speaker 1: for these people for for quite some time. And and 203 00:11:18,360 --> 00:11:22,199 Speaker 1: that's I think why the country doesn't feel good. I mean, 204 00:11:22,200 --> 00:11:24,600 Speaker 1: our our markets continue to be a record of guising. 205 00:11:24,679 --> 00:11:27,360 Speaker 1: Donald Trump writes about that we have. But then a question, 206 00:11:27,440 --> 00:11:30,080 Speaker 1: David Gurdy you within your political show at one PM, 207 00:11:30,120 --> 00:11:33,080 Speaker 1: to the politicians you talked to. Are they listening to 208 00:11:33,120 --> 00:11:36,679 Speaker 1: Ian Bremer? I don't know. I think they're struggling with 209 00:11:36,679 --> 00:11:38,240 Speaker 1: who to listen to. And I'd be interesting to hear 210 00:11:38,480 --> 00:11:40,000 Speaker 1: what they have to say after this long break that 211 00:11:40,040 --> 00:11:42,800 Speaker 1: they've had back home, to see what's important to them 212 00:11:42,800 --> 00:11:45,120 Speaker 1: and what they hope to accomplish here. And I and 213 00:11:45,160 --> 00:11:47,040 Speaker 1: I want to ask you about the speech the President 214 00:11:47,040 --> 00:11:49,559 Speaker 1: delivered now about a month ago, just south of d C, 215 00:11:49,760 --> 00:11:52,120 Speaker 1: or just went west of DC rather at a military base. 216 00:11:52,120 --> 00:11:55,880 Speaker 1: He talked about Afghanistan strategy and South Asia strategy. We 217 00:11:56,000 --> 00:11:58,240 Speaker 1: keep having these moments that look like turning points where 218 00:11:58,240 --> 00:12:00,960 Speaker 1: he gets serious about foreign policy. And and I remember 219 00:12:00,960 --> 00:12:02,920 Speaker 1: Tom and I following the speech he gave the next day, 220 00:12:02,920 --> 00:12:04,360 Speaker 1: wondering if there was going to be following on from 221 00:12:04,360 --> 00:12:06,880 Speaker 1: from what he had to say, and there wasn't is 222 00:12:06,920 --> 00:12:08,719 Speaker 1: the lack of continuity of problem when it comes to 223 00:12:08,760 --> 00:12:12,240 Speaker 1: how the administration charts its course. There's been continuity. Come on, um, 224 00:12:12,480 --> 00:12:16,160 Speaker 1: I mean Trump. When Trump reads a speech that someone 225 00:12:16,240 --> 00:12:20,080 Speaker 1: else has written, Um, there's it looks like that there's 226 00:12:20,080 --> 00:12:22,520 Speaker 1: a very consistent administration over the course of the past 227 00:12:22,559 --> 00:12:24,720 Speaker 1: few months. Now that those you probably shouldn't listen to 228 00:12:24,720 --> 00:12:27,720 Speaker 1: those speeches because they're not meant to be heard as 229 00:12:27,760 --> 00:12:30,199 Speaker 1: Trump delivers them. They're meant to be read and poured 230 00:12:30,280 --> 00:12:32,560 Speaker 1: over and scanned, and then you can figure out, Okay, 231 00:12:32,559 --> 00:12:34,040 Speaker 1: what are the people that actually work in the Trump 232 00:12:34,080 --> 00:12:36,719 Speaker 1: administration what are they trying to do? And then there 233 00:12:36,720 --> 00:12:40,960 Speaker 1: are campaign speeches, and the campaign speeches are Um, they're 234 00:12:41,000 --> 00:12:44,120 Speaker 1: the same thing. They don't have any residents with policy. 235 00:12:44,160 --> 00:12:45,719 Speaker 1: The things that he talks about that he tries to 236 00:12:45,760 --> 00:12:48,080 Speaker 1: get done around them, like the wall, for example, they 237 00:12:48,080 --> 00:12:51,920 Speaker 1: don't happen. They can't happen. Um. And And to the 238 00:12:51,960 --> 00:12:54,240 Speaker 1: extent that there's been a change, the only major change 239 00:12:54,280 --> 00:12:58,440 Speaker 1: there's been has been around staffing and and relatedly, in 240 00:12:58,480 --> 00:13:02,200 Speaker 1: the last two weeks, Trump has started tweeting, like tweeting 241 00:13:02,200 --> 00:13:04,920 Speaker 1: like a normal human being, um, not not like an 242 00:13:04,920 --> 00:13:08,480 Speaker 1: incredibly intelligent human being, but like a normal human being. 243 00:13:08,800 --> 00:13:11,280 Speaker 1: And that's I mean, maybe the bar is low, but 244 00:13:11,360 --> 00:13:15,360 Speaker 1: that's a massive improvement. I mean, seriously, he's not made 245 00:13:15,800 --> 00:13:17,880 Speaker 1: The main street media is at a hard time coming 246 00:13:17,960 --> 00:13:21,200 Speaker 1: up with moments to make their hair fall out over 247 00:13:21,240 --> 00:13:23,440 Speaker 1: the cast past couple of weeks. And that's probably bad 248 00:13:23,480 --> 00:13:27,440 Speaker 1: for CNN, but it's it's really good for the country, right, 249 00:13:27,679 --> 00:13:30,160 Speaker 1: And so he doesn't need to stop tweeting. He just 250 00:13:30,280 --> 00:13:33,240 Speaker 1: needs to be more constrained. He needs to have tweets 251 00:13:33,240 --> 00:13:35,680 Speaker 1: the way when he reads speeches, and that's boring, but 252 00:13:35,760 --> 00:13:38,520 Speaker 1: it kind of works very quickly. Here. We've seen his 253 00:13:38,559 --> 00:13:40,600 Speaker 1: response to I think what you're saying. In the context 254 00:13:40,600 --> 00:13:43,040 Speaker 1: of these storms, he seems to have been very engaged 255 00:13:43,080 --> 00:13:45,120 Speaker 1: with both of those things. Gonna go to Florida this week, 256 00:13:45,600 --> 00:13:48,760 Speaker 1: Uh struggle to find something good out of the disasters 257 00:13:48,760 --> 00:13:50,200 Speaker 1: that we've seen there. But it does seem like it's 258 00:13:50,200 --> 00:13:52,640 Speaker 1: focused his attention on those two places. In particularly, he 259 00:13:53,080 --> 00:13:55,800 Speaker 1: needs to be like the Queen right. People have talked 260 00:13:55,800 --> 00:13:59,120 Speaker 1: about this. It's it's a symbolic position. Everyone needs to 261 00:13:59,160 --> 00:14:02,520 Speaker 1: kiss the ring. They need to behave in this extraordinary 262 00:14:02,559 --> 00:14:05,800 Speaker 1: fashion of showing him respect and love and adulation. He 263 00:14:05,880 --> 00:14:09,280 Speaker 1: needs to be contained and cosseted and put in a palace. 264 00:14:09,600 --> 00:14:12,840 Speaker 1: But but he should not be making policy because he 265 00:14:12,920 --> 00:14:17,800 Speaker 1: doesn't have the background, the coherence um, the self discipline, 266 00:14:18,200 --> 00:14:21,600 Speaker 1: of the willingness to accept expertise to do those things. 267 00:14:21,840 --> 00:14:24,640 Speaker 1: But there are adults around him that are capable of 268 00:14:24,680 --> 00:14:26,520 Speaker 1: doing those things, and they're far more of them today 269 00:14:27,040 --> 00:14:29,840 Speaker 1: in important positions than there were a couple of months ago. Right, 270 00:14:30,240 --> 00:14:33,000 Speaker 1: And the fact that you know, whether it's mooch or 271 00:14:33,160 --> 00:14:37,280 Speaker 1: prebus or abandoned, that those people Seb Gorka, who didn't 272 00:14:37,320 --> 00:14:41,320 Speaker 1: belong in a foreign advisory position in Hungary, never mind 273 00:14:41,360 --> 00:14:43,480 Speaker 1: in the United States. Those people are gone. We gotta 274 00:14:43,520 --> 00:14:48,080 Speaker 1: go Seb Gorka's resumes into thank you so much. This 275 00:14:48,400 --> 00:15:03,040 Speaker 1: is Bloomberg. One of the original sponsors of all we 276 00:15:03,080 --> 00:15:05,560 Speaker 1: do here at Bloomberg on the Economy and Bloomberg Surveillance 277 00:15:05,600 --> 00:15:08,960 Speaker 1: was the New York University's Stern School of Business. They 278 00:15:09,000 --> 00:15:12,360 Speaker 1: were strong then, they're stronger now because of Peter Henry, 279 00:15:12,360 --> 00:15:16,360 Speaker 1: who will retire in December as dean of n y 280 00:15:16,480 --> 00:15:20,840 Speaker 1: U Stern and joins us now. Mr Henry attained mathematics 281 00:15:20,960 --> 00:15:23,800 Speaker 1: at Oxford, and I believe put a basketball through the 282 00:15:23,840 --> 00:15:27,640 Speaker 1: hoop in Oxford. I don't want to ask what Oxford. 283 00:15:28,520 --> 00:15:31,480 Speaker 1: They didn't make the Final four today. Now, being on 284 00:15:31,520 --> 00:15:33,200 Speaker 1: the basketball tay with Oxford is a little bit like 285 00:15:33,240 --> 00:15:37,840 Speaker 1: being on the surfing team. I'll take it. In your 286 00:15:37,880 --> 00:15:41,320 Speaker 1: wonderful book, you are you open it with your grandmother 287 00:15:41,440 --> 00:15:44,600 Speaker 1: on a porch in Jamaica. With all that we've seen 288 00:15:44,680 --> 00:15:49,200 Speaker 1: the last couple of weeks, did you enjoy a Caribbean hurricane? 289 00:15:49,600 --> 00:15:52,440 Speaker 1: It's different on an island, isn't it. It's very different 290 00:15:52,440 --> 00:15:53,760 Speaker 1: on an island. You know. One of the things about 291 00:15:53,760 --> 00:15:56,000 Speaker 1: being on an island, did you realize how much you 292 00:15:56,080 --> 00:16:01,840 Speaker 1: depend on people in the outside world? And now it's serious, 293 00:16:01,920 --> 00:16:05,040 Speaker 1: It's very serious. It's very serious. You know. I spent um, 294 00:16:05,080 --> 00:16:07,760 Speaker 1: you know, not only trying Jamaica going up, but I 295 00:16:07,800 --> 00:16:10,480 Speaker 1: spent a summer in St. KITT's in the Eastern Caribbean, 296 00:16:10,600 --> 00:16:13,080 Speaker 1: the really small islands, places that are of the size 297 00:16:13,080 --> 00:16:16,000 Speaker 1: of places like Barbuda, that have really been devastated by 298 00:16:16,000 --> 00:16:18,000 Speaker 1: this hurricane. And my thoughts and prayers are with with 299 00:16:18,000 --> 00:16:20,480 Speaker 1: all those those folks right now. Who comes to the rescue. 300 00:16:21,000 --> 00:16:24,160 Speaker 1: Is there any institution where they just saves the day 301 00:16:24,320 --> 00:16:27,920 Speaker 1: or is there gonna have to be some alarm twisting here. Well, 302 00:16:28,120 --> 00:16:30,720 Speaker 1: the US has traditionally been a great partner for the 303 00:16:30,720 --> 00:16:32,560 Speaker 1: Caribbean as a Caribbean really is a kind of a 304 00:16:32,600 --> 00:16:36,000 Speaker 1: third board the United States. And uh, my understanding is 305 00:16:36,040 --> 00:16:38,840 Speaker 1: that that we've we've sent some help to the region 306 00:16:39,000 --> 00:16:42,080 Speaker 1: and certainly, um the international institutions like the World Bank 307 00:16:42,120 --> 00:16:43,600 Speaker 1: will I'm sure to be coming to the aid in 308 00:16:43,680 --> 00:16:46,360 Speaker 1: terms of putting together funds for the region, but a 309 00:16:46,400 --> 00:16:48,600 Speaker 1: lot of rebuilding it had tough times. It just reminds 310 00:16:48,640 --> 00:16:50,800 Speaker 1: us all just how important it is to think about 311 00:16:51,320 --> 00:16:57,200 Speaker 1: climate issues, and and and and the vulnerability of small states. Worried? 312 00:16:57,240 --> 00:16:59,400 Speaker 1: Are you about institutions like the World Bank, with the 313 00:16:59,400 --> 00:17:01,640 Speaker 1: International mone Terry Fund. You hear the rhetoric out of 314 00:17:01,640 --> 00:17:04,720 Speaker 1: this White House, out of this administration about large multilateral 315 00:17:04,760 --> 00:17:07,960 Speaker 1: institutions that like those. You see the rise of some competitors, 316 00:17:07,960 --> 00:17:10,040 Speaker 1: I think you can call them in China in particular. 317 00:17:11,160 --> 00:17:13,359 Speaker 1: Are you are you concerned that their influence might be 318 00:17:13,400 --> 00:17:16,640 Speaker 1: it might be waning. You know, it's a tough time. 319 00:17:17,040 --> 00:17:20,000 Speaker 1: It's a tough time for multilateralism and generally, but it's 320 00:17:20,040 --> 00:17:22,560 Speaker 1: the it's the reason why we need to push really hard, 321 00:17:22,600 --> 00:17:24,800 Speaker 1: I mean more than ever if you think about the 322 00:17:24,880 --> 00:17:27,159 Speaker 1: issues facing the world. So just start to start with 323 00:17:27,160 --> 00:17:29,800 Speaker 1: the US. We are talking about how do you get 324 00:17:29,840 --> 00:17:34,320 Speaker 1: back to three growth? And if you look at the 325 00:17:34,359 --> 00:17:37,920 Speaker 1: emerging markets, who in the late nineteen nineties went through 326 00:17:37,920 --> 00:17:40,119 Speaker 1: some incredible period of growth acceleration with from three and 327 00:17:40,160 --> 00:17:43,280 Speaker 1: a half percent growth of five percent growth, they did 328 00:17:43,280 --> 00:17:46,600 Speaker 1: it largely by taking the advice of you know, very ironically, 329 00:17:46,600 --> 00:17:49,640 Speaker 1: the multilateral institutions like the IMF, no World Bank. And 330 00:17:49,720 --> 00:17:53,400 Speaker 1: so we need both the policy advice of those institutions 331 00:17:53,400 --> 00:17:56,560 Speaker 1: to to take the policy advice to heart in advanced nations. 332 00:17:57,000 --> 00:17:59,119 Speaker 1: But also we've got to realize something really important to it, 333 00:17:59,119 --> 00:18:00,840 Speaker 1: which is that growth is not to zero some game. 334 00:18:00,840 --> 00:18:04,200 Speaker 1: We've fallen into this mindset that if you know, China 335 00:18:04,280 --> 00:18:07,320 Speaker 1: grows at ten percent or India grows at eight percent, 336 00:18:07,359 --> 00:18:09,920 Speaker 1: that means less growth for US. And it's absolutely the 337 00:18:09,920 --> 00:18:12,560 Speaker 1: opposite of what's true to be the case. If the 338 00:18:12,640 --> 00:18:14,439 Speaker 1: US is gonna hit three percent growth, if Europe is 339 00:18:14,440 --> 00:18:16,880 Speaker 1: gonna get back to two percent plus growth, we need 340 00:18:16,960 --> 00:18:20,119 Speaker 1: emerging economies to start growing at six and seven percent. 341 00:18:20,119 --> 00:18:21,840 Speaker 1: And again instead of the four percent we've seen the 342 00:18:21,920 --> 00:18:23,840 Speaker 1: last couple of years, and so we've got to get 343 00:18:23,840 --> 00:18:29,000 Speaker 1: out of this mindset and multilateralism and these multilater institutions 344 00:18:29,040 --> 00:18:31,919 Speaker 1: are the embodiment of the fact that growth is in 345 00:18:31,960 --> 00:18:35,560 Speaker 1: fact a positive some game. So whether it's infrastructure UH 346 00:18:35,560 --> 00:18:38,160 Speaker 1: in the developing world. You know, you made an allusion 347 00:18:38,200 --> 00:18:40,440 Speaker 1: to the kind of the Asian Infrastructure Investment Bank. We 348 00:18:40,480 --> 00:18:42,639 Speaker 1: need these institutions and in the US needs to be 349 00:18:42,640 --> 00:18:45,280 Speaker 1: part of the conversation about how we drive growth, not 350 00:18:45,359 --> 00:18:48,360 Speaker 1: just for emerging markets, but that's growth for US as well. Yeah, 351 00:18:48,359 --> 00:18:50,000 Speaker 1: we're talking with Peter Henry, the dean of the Stern 352 00:18:50,040 --> 00:18:51,960 Speaker 1: School of Business at n y U. We were talking 353 00:18:51,960 --> 00:18:54,080 Speaker 1: a bit about d M from the World Bank having 354 00:18:54,119 --> 00:18:55,760 Speaker 1: a focus here on d C, and I know that 355 00:18:55,800 --> 00:18:58,000 Speaker 1: the Stern School now has a new focus on DC 356 00:18:58,119 --> 00:18:59,920 Speaker 1: as well. You're starting a new program there, I believe 357 00:19:00,320 --> 00:19:04,040 Speaker 1: making that announcement today, who's making the case for multilateralism 358 00:19:04,080 --> 00:19:06,119 Speaker 1: or globalization? You've seen it take Knox here over the 359 00:19:06,119 --> 00:19:08,080 Speaker 1: course of the the last election cycles. Certainly we've heard the 360 00:19:08,119 --> 00:19:11,800 Speaker 1: red rick about trade policy moved toward more bilateral deals. 361 00:19:12,840 --> 00:19:14,520 Speaker 1: Who's going to make the case for it who's making 362 00:19:14,560 --> 00:19:17,760 Speaker 1: the case for for globalization today. Well, I know one 363 00:19:17,760 --> 00:19:21,520 Speaker 1: business school that's speaking. You mentioned our programming executive program 364 00:19:21,600 --> 00:19:23,240 Speaker 1: and dec we're very excited about that. UM, you know, 365 00:19:23,280 --> 00:19:28,040 Speaker 1: thinking globally and acting locally and launching that program. But seriously, UM, 366 00:19:28,080 --> 00:19:30,879 Speaker 1: our faculty and I know a number of other economists 367 00:19:30,920 --> 00:19:33,720 Speaker 1: who feel very very strongly about this. It's frankly one 368 00:19:33,720 --> 00:19:36,359 Speaker 1: of the reasons why I'm going back to research and teaching. 369 00:19:36,400 --> 00:19:38,560 Speaker 1: I think that UM, you know, not not to sound 370 00:19:38,600 --> 00:19:42,600 Speaker 1: a honest but there is a need for in our 371 00:19:42,640 --> 00:19:44,800 Speaker 1: our profession. As a whole. The econmics profession is not 372 00:19:44,880 --> 00:19:48,320 Speaker 1: done a very good job of communicating UM, the benefits 373 00:19:48,320 --> 00:19:51,639 Speaker 1: of globalization and frankly, how we deal with UM the 374 00:19:51,680 --> 00:19:56,359 Speaker 1: transition cost of globalization. So we have to make the 375 00:19:56,359 --> 00:19:58,439 Speaker 1: case and help people understand that. Whether you're an acron 376 00:19:58,520 --> 00:20:03,040 Speaker 1: Ohio or Kragana, if you want more shared prosperity, the 377 00:20:03,119 --> 00:20:06,600 Speaker 1: only way to achieve that is by embracing trade. Think 378 00:20:06,600 --> 00:20:10,000 Speaker 1: about the United States economy, UH, where the U S 379 00:20:10,119 --> 00:20:12,320 Speaker 1: is basically five percent of the world's population and almost 380 00:20:12,320 --> 00:20:14,640 Speaker 1: a quarter of the world's GDP. That doesn't happen without 381 00:20:14,680 --> 00:20:17,600 Speaker 1: global trade. But the issue is as you look at 382 00:20:17,680 --> 00:20:19,679 Speaker 1: across the country. Tom and I were talking about this 383 00:20:19,720 --> 00:20:24,800 Speaker 1: earlier on television, the rise and the opiate addiction across 384 00:20:24,800 --> 00:20:26,920 Speaker 1: the countention, you see a direct correlation in the rise 385 00:20:26,920 --> 00:20:29,720 Speaker 1: and opiate addiction and the decline in manufacturing in certain 386 00:20:29,760 --> 00:20:32,880 Speaker 1: parts of the country. And the answer is not to 387 00:20:32,880 --> 00:20:36,800 Speaker 1: close our borders because we benefit from cheaper goods. That 388 00:20:36,840 --> 00:20:39,440 Speaker 1: helps everybody. But the answer is how do you is 389 00:20:39,520 --> 00:20:42,640 Speaker 1: to retrain workers. And you know, one of the things 390 00:20:42,680 --> 00:20:45,000 Speaker 1: I like us to see is have in a national 391 00:20:45,040 --> 00:20:48,960 Speaker 1: conversation to UH is to think about the two flo 392 00:20:48,960 --> 00:20:53,080 Speaker 1: point five trillion dollars sitting offshore with companies. Um, let's 393 00:20:53,119 --> 00:20:55,240 Speaker 1: talk about you know, tax holiday bringing that back home. 394 00:20:55,240 --> 00:20:57,280 Speaker 1: But let's say take five percent off the top to 395 00:20:57,320 --> 00:21:00,160 Speaker 1: create a two or fifty billion dollar endowment too, who 396 00:21:00,320 --> 00:21:06,440 Speaker 1: have a fund to to drive skills development, for instance, 397 00:21:06,480 --> 00:21:09,879 Speaker 1: for what well trained for twenty century jobs. That's the 398 00:21:09,920 --> 00:21:13,000 Speaker 1: key point, Tom, we don't know exactly what. We don't 399 00:21:13,000 --> 00:21:14,879 Speaker 1: know what those jobs are. That's the key thing. We 400 00:21:14,880 --> 00:21:16,399 Speaker 1: don't know what the jobs. We know the skills that 401 00:21:16,440 --> 00:21:19,800 Speaker 1: are required. That's the key point. We need people who 402 00:21:19,840 --> 00:21:24,399 Speaker 1: can think analytically. We need folks who can communicate. Uh, 403 00:21:24,440 --> 00:21:27,160 Speaker 1: and we need people who can work in teams. And 404 00:21:27,160 --> 00:21:30,000 Speaker 1: and it's gonna sound funny, we need people with empathy 405 00:21:30,119 --> 00:21:32,520 Speaker 1: meaning the following thing. People who understand how to put 406 00:21:32,560 --> 00:21:35,719 Speaker 1: themselves in the shoes of clients and customers. These are 407 00:21:35,720 --> 00:21:38,120 Speaker 1: the key skills from the point for century. Albert Schenker, 408 00:21:38,240 --> 00:21:40,520 Speaker 1: I've quoted this for years. Folks. If I'm boring you, 409 00:21:40,520 --> 00:21:42,720 Speaker 1: you know, drive off the road or turn your switch off. 410 00:21:43,400 --> 00:21:48,200 Speaker 1: Albert Schenker, Teachers Union, Rolling Stone magazine. Excuse me, it 411 00:21:48,240 --> 00:21:49,919 Speaker 1: was in the New York Times, his column that he 412 00:21:49,960 --> 00:21:55,240 Speaker 1: did years ago. Should waitresses learning calculus? Okay, I get 413 00:21:55,440 --> 00:21:58,440 Speaker 1: what you just said in critical thinking skills? What about 414 00:21:58,480 --> 00:22:01,920 Speaker 1: the rest of America that doesn't want to learn new 415 00:22:01,960 --> 00:22:06,960 Speaker 1: Toonian mechanics? Not everybody, not everybody is going to become 416 00:22:07,000 --> 00:22:15,560 Speaker 1: a physicist everything. Okay, But if you want to be employable, 417 00:22:15,640 --> 00:22:18,399 Speaker 1: But let's let's look at Amazon is looking to open 418 00:22:18,440 --> 00:22:21,680 Speaker 1: a new headquarters. Right. If you want to be competitive 419 00:22:21,720 --> 00:22:23,840 Speaker 1: for a job in Amazon, you've got to be able 420 00:22:23,880 --> 00:22:26,280 Speaker 1: to do more than carry boxes. Right. You've gotta be 421 00:22:26,320 --> 00:22:28,760 Speaker 1: able to think strategically. You've gotta be able to think, 422 00:22:29,480 --> 00:22:32,879 Speaker 1: uh logically, You've gotta be You gotta be employable, and 423 00:22:32,920 --> 00:22:37,240 Speaker 1: being employable in century means being extremely numerous, not Newtonian physics, 424 00:22:37,359 --> 00:22:41,040 Speaker 1: but very numerous and very literate. You and and and 425 00:22:41,040 --> 00:22:43,200 Speaker 1: we've just got we've got to push that message right. 426 00:22:44,480 --> 00:22:46,679 Speaker 1: It's very easy to talk about the jobs of yesterday. 427 00:22:46,760 --> 00:22:49,600 Speaker 1: It's much harder to tell people know, you're not qualified 428 00:22:49,600 --> 00:22:50,919 Speaker 1: to work right now. This is what you have to 429 00:22:50,920 --> 00:22:52,719 Speaker 1: do to get there. And that's what our leaders need 430 00:22:52,760 --> 00:22:55,160 Speaker 1: to need, need to need to be talking about. You. 431 00:22:55,160 --> 00:22:57,159 Speaker 1: You advised the previous president, you had a job in 432 00:22:57,240 --> 00:23:00,680 Speaker 1: the White House, doing that outside the white outside the 433 00:23:00,680 --> 00:23:04,000 Speaker 1: way you are advising with the president. What's your sense 434 00:23:04,040 --> 00:23:05,240 Speaker 1: of when you when you look at students at the 435 00:23:05,280 --> 00:23:08,119 Speaker 1: Sturring School, of the enthusiasm for public service or for 436 00:23:08,200 --> 00:23:10,040 Speaker 1: going into government right now. I still think there's a 437 00:23:10,119 --> 00:23:13,720 Speaker 1: layer of confusion over Washington right now about who's doing what, 438 00:23:14,440 --> 00:23:16,960 Speaker 1: if certain jobs are going to get filled. Has the 439 00:23:16,960 --> 00:23:20,200 Speaker 1: appetite for public service, for working in government changed here 440 00:23:20,240 --> 00:23:23,080 Speaker 1: over the last year, eighteen months, two years. I think 441 00:23:23,119 --> 00:23:25,040 Speaker 1: there's still a lot of there's a lot of sentences 442 00:23:25,040 --> 00:23:26,840 Speaker 1: of no question, but one of the great privileges I 443 00:23:26,880 --> 00:23:29,800 Speaker 1: had in being an outside Advisor to the President was 444 00:23:30,320 --> 00:23:33,200 Speaker 1: serving as a commissioner in the White House Fallwers program, 445 00:23:33,240 --> 00:23:35,120 Speaker 1: And the What House Fallows program is are a great 446 00:23:35,119 --> 00:23:37,080 Speaker 1: best of the best which you have which really attracts 447 00:23:37,080 --> 00:23:40,560 Speaker 1: the best of the best late twenties, early thirty something 448 00:23:40,600 --> 00:23:42,679 Speaker 1: year olds who want to serve at the highest level government. 449 00:23:43,080 --> 00:23:45,800 Speaker 1: And my view from that program tells me that there's 450 00:23:45,800 --> 00:23:49,320 Speaker 1: still lots of young Americans who are very enthusiastical public service. 451 00:23:49,560 --> 00:23:50,880 Speaker 1: And what we've got to do is just to make 452 00:23:50,920 --> 00:23:55,080 Speaker 1: sure that we continue to create change the conversation so 453 00:23:55,119 --> 00:23:57,720 Speaker 1: that those who have enthusiasm and a desire to actually 454 00:23:57,720 --> 00:24:01,200 Speaker 1: serve their countries um find it easier to do do that, 455 00:24:01,680 --> 00:24:05,280 Speaker 1: UM and and find the climate a little bit, a 456 00:24:05,359 --> 00:24:07,920 Speaker 1: little bit more rewarding, because right now I think that 457 00:24:08,040 --> 00:24:12,000 Speaker 1: students see our leaders not really talking about the issues 458 00:24:12,520 --> 00:24:16,359 Speaker 1: that are so fundamental to century prosperity. What did you 459 00:24:16,400 --> 00:24:19,360 Speaker 1: do when you got the Taylor series that third semester 460 00:24:19,440 --> 00:24:24,280 Speaker 1: of engineering calculus? Do you remember Taylor? Not John Taylor? 461 00:24:24,320 --> 00:24:28,160 Speaker 1: You economists, These are Taylor series, you know. I basically 462 00:24:28,240 --> 00:24:30,600 Speaker 1: had a Jenny Creemil in my hand. I tried to 463 00:24:30,640 --> 00:24:33,359 Speaker 1: figure these What did you do with Taylor series, did 464 00:24:33,440 --> 00:24:36,600 Speaker 1: you master him? Tell us he's kind of fun. Actually, 465 00:24:38,560 --> 00:24:43,159 Speaker 1: thank you. We say that with great esteem, and we 466 00:24:43,280 --> 00:24:45,760 Speaker 1: just Peter Henry truly one of our academics. I should 467 00:24:45,760 --> 00:24:48,080 Speaker 1: point out at Rhodes Scholar a few years he got 468 00:24:48,080 --> 00:24:52,800 Speaker 1: that for basketball tayment. Peter Henry, thank you so much. 469 00:24:52,920 --> 00:24:55,320 Speaker 1: If I would like to think we will speak to 470 00:24:55,359 --> 00:24:58,000 Speaker 1: you before December. Would love to come back and please 471 00:24:58,000 --> 00:24:59,840 Speaker 1: tell us when you announce what you're going to be 472 00:24:59,880 --> 00:25:02,679 Speaker 1: do just so we can have our break exclusive as 473 00:25:02,720 --> 00:25:07,119 Speaker 1: we have a Bloomberg surveillance Dean herything is and we 474 00:25:07,200 --> 00:25:14,480 Speaker 1: say thank you. Tanya Chen slipped through, you know, I 475 00:25:14,520 --> 00:25:18,640 Speaker 1: think it was I mean, I think it was uh 476 00:25:18,680 --> 00:25:21,520 Speaker 1: Brad Hints who she Brad Hints came out with a 477 00:25:21,600 --> 00:25:24,840 Speaker 1: D plus for Tinya Chen and Henry called up and said, 478 00:25:25,080 --> 00:25:29,600 Speaker 1: you can't do that tour anyways. Congratulating to n y 479 00:25:29,720 --> 00:25:32,199 Speaker 1: u Stern and Ellien Friend and Tanya Chen and all 480 00:25:32,240 --> 00:25:34,439 Speaker 1: the others of our team that have gotten really a 481 00:25:34,440 --> 00:25:37,600 Speaker 1: lot wiser, truly within the rigor of what we see 482 00:25:37,600 --> 00:25:52,639 Speaker 1: in the mathematics at n y U ab Stern. He 483 00:25:52,760 --> 00:25:54,880 Speaker 1: was walking down Central Park South the other day, Rick 484 00:25:54,920 --> 00:25:59,320 Speaker 1: Sherlin luck By, who for years owned the coverage of Microsoft. 485 00:25:59,800 --> 00:26:02,080 Speaker 1: My could be said about Walter Pick and bt I 486 00:26:02,160 --> 00:26:05,480 Speaker 1: G and the coverage of Apple. You say, how does 487 00:26:05,520 --> 00:26:07,840 Speaker 1: Walter P do it? The way he does it, Folks, 488 00:26:08,040 --> 00:26:13,920 Speaker 1: is with detailed notes, hyper detailed notes, loaded with gorgeous 489 00:26:14,040 --> 00:26:18,280 Speaker 1: shirts of the emotions and dynamics of Apple. Again, we 490 00:26:18,359 --> 00:26:21,639 Speaker 1: protect the copyright of our guests. We will not send 491 00:26:21,640 --> 00:26:25,320 Speaker 1: out the B T I G research. Walter, good morning. UM. 492 00:26:25,640 --> 00:26:27,159 Speaker 1: I want to get to the heart of the matter. 493 00:26:27,200 --> 00:26:31,720 Speaker 1: I totally disagree with the media hysteria about a thousand 494 00:26:31,720 --> 00:26:36,359 Speaker 1: dollars of phone. What portion of these new toys will 495 00:26:36,400 --> 00:26:40,560 Speaker 1: be bought on a monthly plan where parents will go, yeah, okay, 496 00:26:40,560 --> 00:26:45,320 Speaker 1: sure we can do that. I mean, the US them 497 00:26:45,440 --> 00:26:48,920 Speaker 1: and oh thank you. The payment plans you know, lead 498 00:26:48,960 --> 00:26:51,320 Speaker 1: to Apple offering them. But you know, again, you're right, 499 00:26:51,359 --> 00:26:53,280 Speaker 1: a thousand dollars, it won't make such a big deal 500 00:26:53,320 --> 00:26:56,280 Speaker 1: about it. But if it's ten dollars or twenty dollars 501 00:26:56,320 --> 00:26:59,200 Speaker 1: a month with some additional promotions and trading values, it's 502 00:26:59,280 --> 00:27:03,439 Speaker 1: it's um, it's nothing, It's not a big deal. Okay. 503 00:27:03,480 --> 00:27:05,840 Speaker 1: The other thing I get nuts on, Folks is the 504 00:27:06,240 --> 00:27:09,760 Speaker 1: you know, the hysteria, not hysteria, but the managed hype 505 00:27:09,760 --> 00:27:12,600 Speaker 1: of all these events. And to me, Walter, it's always 506 00:27:12,640 --> 00:27:15,840 Speaker 1: been about the underlying engineering. Do you have any knowledge 507 00:27:15,840 --> 00:27:19,560 Speaker 1: of the A eleven chip that's inside these toys and 508 00:27:19,680 --> 00:27:21,399 Speaker 1: is it going to be a jump condition as the 509 00:27:21,480 --> 00:27:25,800 Speaker 1: last big upgrade was. I don't certainly have any information 510 00:27:25,800 --> 00:27:28,240 Speaker 1: about what is gonna be launched later today, but certainly 511 00:27:28,240 --> 00:27:31,360 Speaker 1: a lot of anticipation and interest in what they're doing. 512 00:27:31,400 --> 00:27:34,000 Speaker 1: And the operators care a lot about this kind of stuff. 513 00:27:33,880 --> 00:27:38,040 Speaker 1: If certain things are enabled, then they can offer the you, 514 00:27:38,240 --> 00:27:41,520 Speaker 1: the end user, faster speeds and more capacity. A lot 515 00:27:41,520 --> 00:27:44,960 Speaker 1: of us complained about how our phones work on the streets, 516 00:27:44,960 --> 00:27:48,199 Speaker 1: and there's things that Apple can do that help the 517 00:27:48,240 --> 00:27:51,720 Speaker 1: operators offer you more like WiFi, likage and all that 518 00:27:51,760 --> 00:27:56,199 Speaker 1: stuff using WiFi frequencies and experience. Very hopeful for a 519 00:27:56,240 --> 00:27:59,760 Speaker 1: technology called HPU. If you're a Sprint easer out there, 520 00:27:59,760 --> 00:28:02,280 Speaker 1: you'd love to have that technology. And there are certain 521 00:28:02,880 --> 00:28:05,520 Speaker 1: spectrum there's something called band sixty six if we really 522 00:28:05,560 --> 00:28:09,120 Speaker 1: want to get technical, that all these operators spent billions 523 00:28:09,200 --> 00:28:12,280 Speaker 1: of dollars for that. They're hopeful that the spectrum in 524 00:28:12,359 --> 00:28:15,000 Speaker 1: the phone. Why because we're all staring at the phone, 525 00:28:15,000 --> 00:28:17,320 Speaker 1: but you wanted to work, and everyone's using it more. 526 00:28:17,440 --> 00:28:20,439 Speaker 1: They need this stuff in this lated version of the phone, 527 00:28:21,000 --> 00:28:24,679 Speaker 1: so everyone still is a very positive experience. I can't emphasize, folks, 528 00:28:24,760 --> 00:28:28,919 Speaker 1: this is the adult conversation that pros have on these toys, 529 00:28:29,000 --> 00:28:31,359 Speaker 1: David Gura, rather than oh my god, it's got a 530 00:28:31,400 --> 00:28:35,000 Speaker 1: stainless steel edge, you know. I mean it's just one example. Well, 531 00:28:35,000 --> 00:28:36,439 Speaker 1: what can you tell when you when you look at 532 00:28:36,440 --> 00:28:38,640 Speaker 1: one of these things when you learn about the architecture. 533 00:28:38,680 --> 00:28:41,120 Speaker 1: Tom was just discussing a moment ago about where this 534 00:28:41,200 --> 00:28:43,480 Speaker 1: company's headed service wise. In other words, they're gonna they're 535 00:28:43,480 --> 00:28:46,120 Speaker 1: gonna announce some new stuff today. But but what can 536 00:28:46,160 --> 00:28:50,760 Speaker 1: you forecast out based on the architecture that's in there. Well, 537 00:28:50,960 --> 00:28:55,000 Speaker 1: based on the architecture, some of this additional functionality when 538 00:28:55,000 --> 00:29:00,200 Speaker 1: you talk about like facial recognition and artificial intelligence, um, 539 00:29:00,760 --> 00:29:03,640 Speaker 1: you know, things like that actually require additional componentry. So 540 00:29:03,680 --> 00:29:05,480 Speaker 1: I think people get excited when they see some of 541 00:29:05,480 --> 00:29:09,560 Speaker 1: that stuff in there because it for tens apples intent 542 00:29:09,720 --> 00:29:11,840 Speaker 1: to do more on the services side, which is growing 543 00:29:11,920 --> 00:29:15,040 Speaker 1: faster than the phone business and carries a much higher margin. 544 00:29:15,200 --> 00:29:17,480 Speaker 1: So if you have a bunch of people using the 545 00:29:17,520 --> 00:29:20,160 Speaker 1: messaging service as an example, and you can put some 546 00:29:20,280 --> 00:29:22,680 Speaker 1: type of services through there that are generating in correll 547 00:29:22,720 --> 00:29:24,640 Speaker 1: revenue to the company, that that's what people are going 548 00:29:24,720 --> 00:29:27,239 Speaker 1: to care about. It's certainly something that some people at 549 00:29:27,320 --> 00:29:30,040 Speaker 1: least are using to try and find new way to 550 00:29:30,120 --> 00:29:33,920 Speaker 1: continue to recommend Apple stoff to go higher. You look 551 00:29:33,960 --> 00:29:36,560 Speaker 1: at all the reportings surrounding this from from Bloomberg and 552 00:29:36,560 --> 00:29:38,120 Speaker 1: other outlets. I look at the New York Times as 553 00:29:38,120 --> 00:29:40,600 Speaker 1: piece on this today, and such a huge focuses on Brazil, 554 00:29:40,800 --> 00:29:44,160 Speaker 1: where Apple has had a tough time making inroads. What's 555 00:29:44,200 --> 00:29:46,200 Speaker 1: it going to take for Apple to get more Apple 556 00:29:46,280 --> 00:29:48,680 Speaker 1: smartphones in the hands of Brazilians or people in other 557 00:29:48,680 --> 00:29:51,680 Speaker 1: emerging markets. Well, in the emerging markets, I think what's 558 00:29:51,680 --> 00:29:55,880 Speaker 1: been happening is legacy products, older models have been discounted 559 00:29:55,960 --> 00:29:58,680 Speaker 1: and sent into those in those markets. But look even 560 00:29:58,720 --> 00:30:02,479 Speaker 1: in those markets where LPE is a technology which enables 561 00:30:02,480 --> 00:30:06,520 Speaker 1: you to use data, um it has gotten Internet used 562 00:30:06,520 --> 00:30:08,640 Speaker 1: to doing your phone to be more important. So if 563 00:30:08,640 --> 00:30:11,480 Speaker 1: you look at the data usage in Brazil or in Mexico, 564 00:30:12,000 --> 00:30:14,960 Speaker 1: it's up significant. So so people in these markets are 565 00:30:15,320 --> 00:30:17,600 Speaker 1: are finding the important of these products and willing to 566 00:30:17,640 --> 00:30:19,960 Speaker 1: spend more. But there's only so such, you know, so 567 00:30:20,040 --> 00:30:22,040 Speaker 1: much money that a lot of the people, a lot 568 00:30:22,080 --> 00:30:24,360 Speaker 1: of the population in these markets can afford. So it's 569 00:30:24,360 --> 00:30:27,040 Speaker 1: really going to be reliant on them providing some of 570 00:30:27,080 --> 00:30:28,960 Speaker 1: the legacy products that at this kind of price. What 571 00:30:29,040 --> 00:30:31,880 Speaker 1: will the financials look like? I mean, there is a 572 00:30:31,960 --> 00:30:34,960 Speaker 1: revenue guests, and people will be right, people will be wrong. 573 00:30:35,120 --> 00:30:37,160 Speaker 1: What we'll do to margins? Do you have a lot 574 00:30:37,200 --> 00:30:43,000 Speaker 1: of variability in your margin guesses? Out of here? Um, 575 00:30:43,040 --> 00:30:45,920 Speaker 1: it's getting easier. I mean that was a concern four 576 00:30:46,000 --> 00:30:47,520 Speaker 1: or five years ago. I mean, look, if we went 577 00:30:47,560 --> 00:30:50,840 Speaker 1: back to the days of Nokia Motorola, people will be 578 00:30:50,920 --> 00:30:53,200 Speaker 1: excited if they could get a ten percent operating margin. 579 00:30:53,320 --> 00:30:55,360 Speaker 1: These guys are you know, more than twice that. So 580 00:30:56,000 --> 00:30:59,320 Speaker 1: the margin concerns have faded because the theory that could 581 00:30:59,360 --> 00:31:03,600 Speaker 1: be the retention lee of an Apple user buying another 582 00:31:03,680 --> 00:31:06,600 Speaker 1: Apple phone every two or three years is higher than 583 00:31:06,640 --> 00:31:09,440 Speaker 1: any consumer electroducts electronic product out there. So they have 584 00:31:09,520 --> 00:31:12,160 Speaker 1: such pricing power in the market for their existing base 585 00:31:12,720 --> 00:31:15,440 Speaker 1: continue to upgrade their phones, and that enables them to 586 00:31:15,560 --> 00:31:19,240 Speaker 1: maintain margins when they add the services business on top 587 00:31:19,280 --> 00:31:21,560 Speaker 1: of that, which is growing at a faster rate. At 588 00:31:21,600 --> 00:31:25,360 Speaker 1: the mobile phone business, that only helps margins further because 589 00:31:25,360 --> 00:31:27,640 Speaker 1: that's the higher margin business for them. How do you 590 00:31:27,760 --> 00:31:30,959 Speaker 1: define improvement in the Apple world. I just picked up 591 00:31:31,080 --> 00:31:33,240 Speaker 1: a new phone a couple of weeks back. The home 592 00:31:33,360 --> 00:31:36,000 Speaker 1: button works just fine for the four year from the 593 00:31:36,120 --> 00:31:39,480 Speaker 1: four year old exactly. But you know, so this new phone, 594 00:31:39,520 --> 00:31:41,560 Speaker 1: say it doesn't have a home button. Why why is 595 00:31:41,640 --> 00:31:44,360 Speaker 1: that an improvement per se? But the improvement might be 596 00:31:44,440 --> 00:31:46,520 Speaker 1: because your three year old phone is this cracked screen 597 00:31:46,960 --> 00:31:51,240 Speaker 1: improvement of your legacy product that you've had for for years. 598 00:31:51,520 --> 00:31:54,840 Speaker 1: So your point, though, is accurate, and that there's marginal 599 00:31:55,000 --> 00:31:57,840 Speaker 1: changes relative to the big changes that we saw. And 600 00:31:58,000 --> 00:32:00,400 Speaker 1: you know back our tisle and the iPhones forward launched 601 00:32:00,600 --> 00:32:02,520 Speaker 1: five and of course the big one of the six 602 00:32:02,600 --> 00:32:04,640 Speaker 1: and the success you know there aren't going to be 603 00:32:05,080 --> 00:32:07,720 Speaker 1: some you know again the facial recognition stuff that people 604 00:32:07,800 --> 00:32:11,600 Speaker 1: have talked about, um greater integration with with perhaps health 605 00:32:11,720 --> 00:32:15,760 Speaker 1: and having greater functionality into the watching gel So there's 606 00:32:15,760 --> 00:32:19,120 Speaker 1: other stuff. I descend into the stupidity of all this. 607 00:32:19,880 --> 00:32:24,200 Speaker 1: Why do I care about facial recognition? I don't think 608 00:32:24,240 --> 00:32:28,240 Speaker 1: you you necessarily care about that service in itself, because 609 00:32:28,400 --> 00:32:30,680 Speaker 1: you know, it's basically logging on the phone fast. It's 610 00:32:30,680 --> 00:32:33,960 Speaker 1: like a snap chance thing. It's the first wave of 611 00:32:34,040 --> 00:32:36,920 Speaker 1: a functionality in the phone that the camera is going 612 00:32:37,000 --> 00:32:39,920 Speaker 1: to be able to do things not only with your face, 613 00:32:40,000 --> 00:32:43,320 Speaker 1: but recognizing in the environment around you that it hasn't 614 00:32:43,400 --> 00:32:45,200 Speaker 1: up to this point been able to do. I just 615 00:32:45,320 --> 00:32:47,440 Speaker 1: want to like a monochrome m you know, can they 616 00:32:47,480 --> 00:32:50,960 Speaker 1: put a ten dollar camera? Uh? Can they put a 617 00:32:51,000 --> 00:32:56,280 Speaker 1: ten thousand dollar camera into um into an iPhone? Give 618 00:32:56,320 --> 00:32:58,160 Speaker 1: me a bi hood cell Walter, before we let you 619 00:32:58,200 --> 00:33:00,600 Speaker 1: go on to your festivities to where are you buy 620 00:33:00,640 --> 00:33:04,440 Speaker 1: old cell on them? Were by with a dollar target, 621 00:33:04,480 --> 00:33:06,600 Speaker 1: which is still a discount to the to the market 622 00:33:06,680 --> 00:33:08,840 Speaker 1: multiple of the free cash fowl and this thing at 623 00:33:08,880 --> 00:33:15,440 Speaker 1: that price, it's still the swing factor in going is 624 00:33:15,480 --> 00:33:19,640 Speaker 1: going to be can sp I think continunalize Walter? Thank 625 00:33:19,680 --> 00:33:23,520 Speaker 1: you so much, greatly appreciated as well. Uh this morning 626 00:33:23,600 --> 00:33:27,600 Speaker 1: Walter pissick with bt I g on Apple And again 627 00:33:27,600 --> 00:33:29,680 Speaker 1: I'm gonna say this folks with great spirit. One of 628 00:33:29,720 --> 00:33:32,520 Speaker 1: the things we do when you look at securities research, 629 00:33:32,600 --> 00:33:44,160 Speaker 1: as we protect the copyright of our guests. Thanks for 630 00:33:44,280 --> 00:33:48,360 Speaker 1: listening to the Bloomberg Surveillance Podcast. Subscribe and listen to 631 00:33:48,480 --> 00:33:54,480 Speaker 1: interviews on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. 632 00:33:55,080 --> 00:33:58,040 Speaker 1: I'm on Twitter at Tom Keene David Gura. Is that 633 00:33:58,280 --> 00:34:03,040 Speaker 1: David Gura? Before the podcast? You can always catch us worldwide. 634 00:34:03,320 --> 00:34:04,320 Speaker 1: I'm Bloomberg Radio