Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2: This is Bloomberg Business Week Insight from the reporters and
Speaker 2: editors that bring you America's most trusted business magazine, plus
Speaker 2: global business, finance and tech news. The Bloomberg Business Week
Speaker 2: Podcast with Carol Masser and Tim Stenoveek on Bloomberg Radio.
Speaker 1: Hi, everyone, Welcome to the Bloomberg Business Wee Weekend Podcast.
Speaker 1: We began a new chapter in American politics as this
Speaker 1: past Monday, Donald Trump was sworn in for a second time,
Speaker 1: and this time around as the forty seventh president of
Speaker 1: the United States. The President got right to work implementing
Speaker 1: many of his campaign pledges on immigration, energy, the military,
Speaker 1: the federal workforce, and more, many reversing the policies of
Speaker 1: his predecessor, Joe Biden.
Speaker 3: Some of these signed executive orders are aimed at ending
Speaker 3: automatic US citizenship for the children of undocumented migrants, withdrawing
Speaker 3: the US from the Paris Agreement on Climate change, and
Speaker 3: eliminating diversity, equity and inclusion efforts in the federal government.
Speaker 1: President Trump also signaled plans to impose previously threatened tariffs
Speaker 1: of as much as twenty five percent on Mexico and
Speaker 1: Canada and even widened his tariff threats to include China
Speaker 1: and the European Union. So for the next two hours
Speaker 1: we address some of President Trump's agenda and possible impacts,
Speaker 1: everything from the outlook for a third World war and
Speaker 1: the future of US supremacy to the Trump Trade.
Speaker 3: Also, as la continued to battle fires and the US
Speaker 3: South faced the worst snowstorm at one hundred and thirty years,
Speaker 3: extreme weather was top of mind. One former EPA administrator
Speaker 3: weighs in on what a second Trump term may mean
Speaker 3: for US climate policy, and with a new leader in
Speaker 3: the White House, we take a look at leadership, those
Speaker 3: who inspire and those who infuriate.
Speaker 1: And there are leaders that kind of do both, but
Speaker 1: we'll get into that a little bit later. On all
Speaker 1: of that to come, We begin, though, with the US
Speaker 1: economic and geopolitical policy Donald Trump. Details are just starting
Speaker 1: to trickle in on what sort of tariff's, immigration policies
Speaker 1: and tax cuts the new administration will implement, and with
Speaker 1: a Republican controlled Congress, albeit with a slim margin, it
Speaker 1: is likely many a President Trump's policies will be enacted.
Speaker 3: Looking at the geopolitical landscape, as Ed Price, a former
Speaker 3: British trade official, now non resident senior Fellow at NYU,
Speaker 3: ED has advised members of the European and British parliaments
Speaker 3: and writes regularly about politics, economic policy, and more. He
Speaker 3: joined US along with Bloomberg's David Gura on Inauguration Day.
Speaker 4: Donald Trump is right when he says he could probably
Speaker 4: avoid World War three, but the transaction in exchange for
Speaker 4: World War three is probably something to do with the republic,
Speaker 4: something to do with existing US soft power, So it's
Speaker 4: not a freebie. What I mean by that is that
Speaker 4: he has introduced this idea of an imperium, you know,
Speaker 4: absolutely bold, absolutely simple. There it is on the table.
Speaker 4: If we take Greenland and Panama, Panama SLA different.
Speaker 5: But if we take that, we treat those seriously.
Speaker 4: His team used to say take him seriously, but not literally.
Speaker 4: I think we should take him literally and seriously. Now, honestly,
Speaker 4: I do think that's that's something that he could do,
Speaker 4: might do, would do. Truman thought about it during the
Speaker 4: Second World War. Johnson, President Johnson back in the nineteenth century,
Speaker 4: thought about it. It's a meme. But if he did that,
Speaker 4: of course, I'm not sure that we wouldn't lose more
Speaker 4: in our soft power with this, you know, China and
Speaker 4: Russia and them turning around and saying, well, look it's
Speaker 4: fine to do that sort of thing. Then then we
Speaker 4: would gain I don't know what it is in Greenland
Speaker 4: that we would gain versus that.
Speaker 6: Was listening to Pods Save the World and Ben Rhodes,
Speaker 6: who hosts that, was talking a bit about presents through
Speaker 6: history and how acquisition of territory is something that kind
Speaker 6: of puts somebody into the history books automatically, and I
Speaker 6: was kind of listening to this speech watching it unfold
Speaker 6: with kind of an eye to that. Do you see
Speaker 6: similarly a president here who is more cognizant of his
Speaker 6: place in history than he might have been the first
Speaker 6: time around?
Speaker 4: Yes, absolutely, absolutely. I think that's a good observation. Donald
Speaker 4: Trump would like nothing more than to be added to
Speaker 4: Mount Rushmore. I've been there their space, and he would
Speaker 4: like nothing more than to be considered a strong leader.
Speaker 4: I almost said strong man. Okay, So I think he
Speaker 4: is thinking about that now. If we want to be
Speaker 4: entirely balanced, there is some sense to expanding territory right
Speaker 4: inverted commas that has been done in US history Louisiana,
Speaker 4: purchase Mexico, California and so on. It's just as I
Speaker 4: said before, what would be the cost now now that
Speaker 4: we are in twenty twenty five and we have a
Speaker 4: predominantly rules based order, at least for now, what is
Speaker 4: it that we gain from Greenland and Panama that we
Speaker 4: lose with Taiwan, Ukraine and wherever else? And I guess,
Speaker 4: like you know, I came in and said on the
Speaker 4: global elite, I don't think that's a good trade.
Speaker 3: We'll help us unpack that a little bit. Specifically with
Speaker 3: regard to Greenland. What would we get as Greenland as
Speaker 3: an asset to the US, and would the US be
Speaker 3: able to do that with soft power?
Speaker 4: The way I would have done it is I would
Speaker 4: have called Denmark. I would have said to them, listen,
Speaker 4: you're tiny, we're huge. Why don't we give you the
Speaker 4: six hundred million or whatever it is, or double it
Speaker 4: every year. You don't have to worry. We already have bases.
Speaker 4: We can finagle it. And I think there are many
Speaker 4: ways that the United States does that around the world
Speaker 4: today anyway, the United Kingdom in some ways is a garrison.
Speaker 4: Germany is a garrison. Japan was basically conquered, right, so
Speaker 4: we already do this. We don't need to say that
Speaker 4: we're doing it now. If we did. You know, again,
Speaker 4: this is science fiction. But if we did say, right,
Speaker 4: turn the troops over to Greenland, it's ours now, that
Speaker 4: would inaugurate all sorts of hell in the world. Because,
Speaker 4: of course other people would do exactly the same thing
Speaker 4: you'd have. Japan would have to get nuclear weapons immediately,
Speaker 4: probably Germany as well. God knows what Aram would do,
Speaker 4: and the Monroe doctri aforementioned would have to be enforced.
Speaker 1: Okay, so let's go to Panama and your anticipation of
Speaker 1: what happens there.
Speaker 5: Does he have some points to be made here?
Speaker 4: Or I think the Panama Canal was designed from naval purposes, right,
Speaker 4: so that we can move our fleet around the world.
Speaker 4: That was the original Roosevelt's idea. I don't see that
Speaker 4: it's necessary right now to say that we can't do that.
Speaker 4: I think we can. He said something about China controlling
Speaker 4: the conc I mean goodness.
Speaker 6: For goodness speech and the inaugural part two.
Speaker 4: Yes, yes, what an address that will ask to echo
Speaker 4: through the ages. No, I don't and I sort of
Speaker 4: I've been googling that trying to find out if that's true.
Speaker 4: I don't think it is true, right, So no, I
Speaker 4: don't think it's true. So there's all sorts of nonsense.
Speaker 4: And as I understand it, the treaty does allow us
Speaker 4: to go back anyway if we really need to. But
Speaker 4: but I guess the point for me is that as
Speaker 4: we look at Trump's vision of this American imperium, it
Speaker 4: contradicts so many of the macroeconomic policies that he's actually
Speaker 4: also floating. For example, keeping the dollar standard, this is one.
Speaker 4: I mean, I know you guys think about this, but
Speaker 4: he says, on the one hand, I want to maintain
Speaker 4: the international dollar standard. That's critical. But on the other hand,
Speaker 4: I'm going to start denying other countries, you know, the
Speaker 4: dollar through these incredible new tariffs. I mean, that ultimately
Speaker 4: doesn't jibe, right, So there are these huge contradictions running
Speaker 4: through this thing. I think we should take him seriously
Speaker 4: in everything that he says, but they don't make sense.
Speaker 6: We've talked a little bit about tariffs and trade policy,
Speaker 6: and I wonder how you see that factoring into the
Speaker 6: conversation that we're having here. So if we take your
Speaker 6: lead here on this American imperium. What do you make
Speaker 6: of what he's floated thus far? Do you see the
Speaker 6: rhetoric as punitive for the point of negotiation, putitive because
Speaker 6: he intends to show force to these allies and whatever come,
Speaker 6: whatever may. How do you process sort of what he's
Speaker 6: said so far? How much does that bombas to or
Speaker 6: a rhetoric translate to actual policies?
Speaker 4: Do you think, Listen, I don't think he understands what
Speaker 4: a tariff is, Okay, get in trouble saying this. I
Speaker 4: think he thinks that a tariff is a great big
Speaker 4: stick that you can permanently beat your opponent over the
Speaker 4: head with. I don't think he understands that the supply
Speaker 4: side over time would shift and these supply chains would change,
Speaker 4: and that goes the same for these you know, the
Speaker 4: currency that other countries need, they wouldn't get. Okay, So
Speaker 4: it really doesn't make sense if he wants to take
Speaker 4: his own tariff policy seriously, he needs to continue you
Speaker 4: and expand Joe Biden's industrial policy, right, because then you
Speaker 4: quickly develop your US supply side. You get these cars
Speaker 4: he's talking about, You get all that going and so
Speaker 4: I would suggest that he takes this seriously because he
Speaker 4: doesn't understand what he's saying. All right, So that's all
Speaker 4: very well and good for me to sit in your
Speaker 4: studio and say that as a commentator, right, as a punt,
Speaker 4: But it doesn't make sense, particularly not against what he's
Speaker 4: saying about the dollar standard at all.
Speaker 1: So okay, So markets certainly are and investors are pretty
Speaker 1: smart and they will parse through some of this. But
Speaker 1: when you're getting conflicting messages, what do investors do in
Speaker 1: that environment?
Speaker 5: Like, how do you figure out what's reality?
Speaker 4: I would imagine that sophisticated investors, more sophisticated than I,
Speaker 4: are wondering about when to get out of anything. Right,
Speaker 4: And you can follow this narrative, this Trump narrative, this
Speaker 4: Trump curve up, and we saw that with equities. But
Speaker 4: you're going to start seeing these contradictions appear, and at
Speaker 4: that point, I think people will start getting out of things.
Speaker 4: They exit. I'll give you an example. Scott Besant. Okay,
Speaker 4: Treasury secretary pick, extremely smart, erudite guy. He's heads recently
Speaker 4: that tariffs are not inflationary in the aggregate, making reference
Speaker 4: to the Chicago School of monetarism, and you scratch your
Speaker 4: head and think, well, my goodness, me, like, that's not
Speaker 4: how Trump supporters or voters think, right, So there is
Speaker 4: this sugar rush. I think there will be some excitement.
Speaker 4: We've seen that in markets. You're right, But as these
Speaker 4: contradictions start working their way through the system, as you
Speaker 4: see this potential civil war between the sort of Trump purists,
Speaker 4: MAGA purists, and the established sensible Republicans who are also
Speaker 4: in the cabinet, as you see that sort of come
Speaker 4: to a head, I think that you'll see that in markets.
Speaker 4: And I'm not runing out of financial crisis at some
Speaker 4: point in his term.
Speaker 3: Truly, what would what would what would trigger that financial
Speaker 3: crist and what kind of crisis?
Speaker 4: Well, first of all, it might be that the FED
Speaker 4: turns around and says, look, CPI is going in the
Speaker 4: right direction. It's okay right now.
Speaker 1: Like three point two gave a story in the terminal
Speaker 1: that it's not popular that the idea that the next
Speaker 1: FED moves or possibly in the future could be higher.
Speaker 4: Well, this is what I'm saying. I think they could
Speaker 4: be higher. Right if they're watching the economy, unemployment of
Speaker 4: four percent of that lobby's against that, but I'm not
Speaker 4: ruling this out. And then at that point of course,
Speaker 4: japower would have to pull the rug out of anything
Speaker 4: that's considered a bubble. So jpow not Trump's friends, and
Speaker 4: markets nobody's friend if they decide that they're going to
Speaker 4: pull the rub on you.
Speaker 6: Anyway, when do you look at the international order as
Speaker 6: it stands? Who are the individuals that Donald Trump can
Speaker 6: have a conversation with or I guess conversely, who feels
Speaker 6: like he or she can have a frank conversation with
Speaker 6: this new president about multilateralism international affairs more broadly than that,
Speaker 6: who has his ear with whom does he have a
Speaker 6: kind of can he have a dialogue about the international order?
Speaker 6: More broadly?
Speaker 4: I was going to answer nobody. I was going to
Speaker 4: answer nobody. I don't think that's his plan. I was
Speaker 4: going through the list of world leaders in my head. Obviously,
Speaker 4: he wants to sit down with Putin and talk about
Speaker 4: ending the war in Ukraine. He probably wants to call
Speaker 4: She or visits she and talk about Taiwan. But I
Speaker 4: don't get the sense that this is the art of
Speaker 4: the deal. I get the sense that this is the
Speaker 4: art of the Act and he's just going to start
Speaker 4: doing things. He's also on the clock, right, I mean
Speaker 4: two years from now there'll be Senate elections. If he
Speaker 4: loses four seats, that's trouble too. So it's a really
Speaker 4: good question, but I think the answer is a bit disingenuous.
Speaker 4: Nobody he's not intending to do that.
Speaker 1: So then what does it mean for something like the
Speaker 1: Russia Ukraine War? So if he does sit down with
Speaker 1: President Putin, how do you possibly see that scenario playing out?
Speaker 1: Because the US, as we know, has been a big
Speaker 1: backer in terms of financial weapons right in terms for Ukraine.
Speaker 1: So how might that ultimately end?
Speaker 7: Well? Does it? Well?
Speaker 4: This is the question. I don't think we were a
Speaker 4: big enough backer. I think the United States fundamentally mishandled
Speaker 4: this question. In Ukraine. We seemed to accept Putin's nuclear framing.
Speaker 4: He said, listen, I've got these nuclear weapons, so I'm
Speaker 4: going in and we sort of said, all right, then
Speaker 4: we'll give out little bits and bobs of weapons. I
Speaker 4: think I said this before for in your show. I
Speaker 4: just would have handed everything to the Ukraine all in all,
Speaker 4: in long range go for it.
Speaker 3: Would you have sent American troops to.
Speaker 4: Absolutely I would have closed the airspace. Absolutely I would have.
Speaker 4: And I think if you if you present weakness to dictators,
Speaker 4: history has taught us that you get you get more
Speaker 4: in the way of annexations, you get more in the
Speaker 4: way of aggression. So I think so to answer your.
Speaker 5: Question exactly what Putt did right around.
Speaker 4: Exactly what he did, and we should have slapped him
Speaker 4: in twenty fourteen over the CRIMEA to be honest with you,
Speaker 4: so I don't know how it ends, probably at the
Speaker 4: negotiating table, probably not in a good way for Ukraine.
Speaker 2: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 2: Live weekday afternoons from two to five pm Eastern Listen
Speaker 2: on Apple CarPlay and Android Auto with the Bloomberg Business app,
Speaker 2: or watch us Live on YouTube.
Speaker 1: We've been talking with Ed Price, former British trade official,
Speaker 1: well non resident senior fellow over at NYU and as
Speaker 1: we mind you, he has advised members of the European
Speaker 1: and British parliaments.
Speaker 5: We were talking in the break about kind of where
Speaker 5: we wanted to go next.
Speaker 1: Ed, and I do think a lot about US China relations,
Speaker 1: I mean the United States and China, the two biggest
Speaker 1: global economies when they do different things, A lot of
Speaker 1: other countries, a lot of companies feel it, a lot
Speaker 1: of investors feel it. How do you anticipate that relationship
Speaker 1: evolves during the next couple of years with Donald Trump?
Speaker 4: It's a great question, Carol. So you have two emperors
Speaker 4: eyeballing each other across the ocean, both of whom think, believe,
Speaker 4: indeed that the other should bow down to the other.
Speaker 4: That is a way of saying, of course, that Shi
Speaker 4: Jinpin and Trump believe themselves to be powerful individuals who
Speaker 4: deserve respect from the other. And it's another way of
Speaker 4: saying that both China and the US consider themselves to
Speaker 4: be the conservative power. It depends on the horizon, right,
Speaker 4: So if you look at things from a sort of
Speaker 4: one hundred year horizon, the United States is the conservative
Speaker 4: power in the region, trying to uphold the existing order.
Speaker 4: If you look at things from a three hundred or
Speaker 4: more year horizon, of course, China was their first and
Speaker 4: who on earth are we right? We're sort of flash
Speaker 4: in the pan. So China US relations are extremely complex.
Speaker 4: I think they will get more combative, and ultimately the
Speaker 4: pinch point will be something in the south China Sea
Speaker 4: or Taiwan. When the Chinese come to the United States,
Speaker 4: my interpretation is that we're having an argument. I don't
Speaker 4: think that they would come if we weren't, And if
Speaker 4: they weren't here, I would be more relaxed about the
Speaker 4: forward path of our relationship.
Speaker 7: It's axiomatic they weren't here, Yeah, I'd be.
Speaker 4: Like, okay, So you know, when you really argue with someone,
Speaker 4: you go over to their house and say we need
Speaker 4: to talk, right And I would assume that's why they're here.
Speaker 4: Sigin Pin was invited, by the way and didn't come,
Speaker 4: which probably would have been a breach of protocol on
Speaker 4: some level.
Speaker 2: But there is a.
Speaker 4: Fundamental difference between the United States current interest in the
Speaker 4: South China Sea and in the world versus what the
Speaker 4: Chinese are proposing. Right now, we are on a collision course.
Speaker 4: As I said earlier, Donald Trump, President Trump, to be
Speaker 4: fair to him, sees this, understands this. It probably takes
Speaker 4: a con man to spot a con and I think
Speaker 4: that's why he put his hand up earlier in history
Speaker 4: in twenty sixteen, seventeen eighteen about tariffs. But to be
Speaker 4: fair to him, he sees the world through real politique lens.
Speaker 4: He sees the world through a power lens. He knows
Speaker 4: what the Chinese want to do. He might avoid a
Speaker 4: conflict with China, but it would probably mean giving them
Speaker 4: what they want in exchange for a freer hand in
Speaker 4: the rest of the world. I don't think that trade
Speaker 4: works because I think we're already on top.
Speaker 6: I had an opportunity to have some conversations with the
Speaker 6: outgoing Secretary of State and Treasury Secretary, and what each
Speaker 6: of them stressed is the importance of rebuilding and reanimating
Speaker 6: a conduit of communication, because I think that they saw
Speaker 6: what you were alluding to, that is this collision course,
Speaker 6: a fear that if there was no red phone to
Speaker 6: pick up or way to contact a Chinese official or
Speaker 6: an American official, vice versa, that could be really cataclysmic.
Speaker 6: And something both of those individuals tall was they were
Speaker 6: really trying to impress upon their successors the importance of
Speaker 6: having that Are you at all optimistic that that view
Speaker 6: one out that there can be this kind of pugilistic rhetoric,
Speaker 6: but there may be in a Marco Rubio or it
Speaker 6: as Scott Bess and an awareness of the fact that
Speaker 6: at least, having any means by which you can talk
Speaker 6: to your counterpart is useful from a negotiating standpoint.
Speaker 4: So the wonderful thing about the Bloomberg terminal is that
Speaker 4: it is information rich, as our markets and your market
Speaker 4: listeners have so much information at the fingertips. My limited
Speaker 4: experience of policy and policy making is that it is
Speaker 4: information low, information poor. And I don't see that we
Speaker 4: have enough of a conduit with the Chinese right now
Speaker 4: to avoid that sort of thing. I mean, Christ Jeff
Speaker 4: basically sent Kennedy a facts right or two factxes, and
Speaker 4: I don't know that we are at that level of
Speaker 4: communication or understanding. There was an equilibrium between the United
Speaker 4: States and the Soviet Union. Both of them were enlightenment
Speaker 4: projects in a sense. One of them was a bit perverse,
Speaker 4: but they were about managing a country essentially, right. The Chinese,
Speaker 4: I think, have a different view of the world. They
Speaker 4: have a civilizational view of the world. And I don't know,
Speaker 4: and this is our fault. I don't know that we
Speaker 4: understand them promptly that or that we truly understand them
Speaker 4: or are always respectful. Again, I mean, there's there's one
Speaker 4: word that you can throw out their opium and you know,
Speaker 4: tell an entire story of how the West hasn't always
Speaker 4: been respectful to the Chinese. That's a long winded way
Speaker 4: of saying, I don't think that we are communicating with
Speaker 4: them properly, and I don't I don't feel confident that
Speaker 4: we can.
Speaker 5: You know, to be fair.
Speaker 1: You know, President Trump, you know, pushed back with tariffs
Speaker 1: on China in his first term.
Speaker 5: They were carried over into President Biden's term.
Speaker 1: And if you think about China, I think that's fair
Speaker 1: to say that both sides of the aisle agree that
Speaker 1: there needs to be some pushback. So having said that,
Speaker 1: are we just at this point where, you know, for
Speaker 1: what twenty twenty five years? I feel like from the
Speaker 1: beginning of my career in business news, it was all
Speaker 1: about making sure that global multinationals were in China, US
Speaker 1: big firms were in China.
Speaker 5: And now we're starting to rethink what needs to be
Speaker 5: going forward.
Speaker 1: And I just whether it's the pushback against globalization, push
Speaker 1: back against China specifically. I mean, is it just a
Speaker 1: new chapter that's being created in the US China relationship
Speaker 1: that lasts for I don't know the next it could be.
Speaker 4: I think it's I think it's a bit of a
Speaker 4: conundrum because on the one hand, businesses and American capital
Speaker 4: need as much positive exposure to the Chinese economy of
Speaker 4: scale as they can get still still absolutely and I
Speaker 4: think they would be both. I mean, if you look
Speaker 4: at I don't know, JP Morgan, what have you like,
Speaker 4: they would be loath to unilaterally pull out, particularly if
Speaker 4: their competitors were still there. So this is economics right,
Speaker 4: And ultimately JP Morgan pays a lot of tax and
Speaker 4: that goes into the US military, So there's a there's
Speaker 4: a conduit there. On the other hand, at some point,
Speaker 4: either through uncertainty or through executive order or what have you,
Speaker 4: there will be a moment that there is a strong
Speaker 4: case to be the first out and to cut your
Speaker 4: losses and to get a from a negative exposure to China.
Speaker 4: I think that businesses are in a constant statum uncertainty
Speaker 4: right now. They don't know how to comply. This is
Speaker 4: very similar to the Brexit process, which I sort of
Speaker 4: saw someone from the inside, where the commission would say
Speaker 4: some European commission would say something, and then the British
Speaker 4: financial services would think, should we just overcomply because we're
Speaker 4: not sure. So I don't know that China and the
Speaker 4: US have a clear glide path in either direction. I
Speaker 4: think it's a conundrum. It's a dilemma, and there are
Speaker 4: and it's a trade off that either way there's going
Speaker 4: to be losses somewhere.
Speaker 3: And I want to step back a little bit and
Speaker 3: talk about you know, we're talking investment, talk about the
Speaker 3: investment environment here for Americans and for people in the
Speaker 3: US during this next administration. During this current administration, you
Speaker 3: wrote in a recent column for FDI Intelligence over at
Speaker 3: the Ft that there could be this Orange gold rush
Speaker 3: if certain Biden policies are kept in place, but also
Speaker 3: certain Trump policies are enacted, but other Trump policies are
Speaker 3: not enacted. Sort of this perfect storm of like, okay,
Speaker 3: don't go too hard when it come to deportations and
Speaker 3: immigration controls, but also go ahead with those tax cuts.
Speaker 3: What's the what's the sort of best case scenario here?
Speaker 4: Well, I would remind you of very erudyte listeners that
Speaker 4: the gold Rush was a disaster and not many people
Speaker 4: got rich. I think the best case policy is that
Speaker 4: Trump sort of redoes Reagan, that there is sensible deregulation,
Speaker 4: that maybe we pull back on Basil three a little bit,
Speaker 4: and all the all the rest of it, we've we've
Speaker 4: read it. It's in my column, it's and everyone's writing
Speaker 4: about what he could do that would make sense. And
Speaker 4: if that and if he manages to say we're going
Speaker 4: to get out of the hair of business a little bit,
Speaker 4: we're going to calm down on tariffs, we're going to
Speaker 4: remove criminals, but not the labor upon which this country
Speaker 4: is foundationally built, by the way that labor is not
Speaker 4: always American, then there is a way of sort of
Speaker 4: reading the Trump ruins where you can say this might
Speaker 4: be quite good. And I think that's what's happening now
Speaker 4: with the markets. Back to your earlier point, Carol, the
Speaker 4: problem is if you if you blow more dust off
Speaker 4: this big tablet that I've now invented, and there are
Speaker 4: further runs you can see again it doesn't add up.
Speaker 4: There is a fundamental contradiction between cutting people's taxes and
Speaker 4: lowering the available number of goods. I mean, that's the
Speaker 4: money goods ratio. As everyone points out, that's inflationary. So
Speaker 4: we're in a spot of bother with Trump. I think
Speaker 4: if you scrutinize what he says. If you just feel
Speaker 4: happy about it and have a nice can of orange soda,
Speaker 4: you should be fine.
Speaker 6: I want to go back to something we heard from
Speaker 6: Tina Fordham, that is, there's going to be this European
Speaker 6: summit in a few weeks time, and whatever agenda might
Speaker 6: have been in places has been scuttled now and I
Speaker 6: wonder sort of what the consequences of that are of
Speaker 6: all of these other global powers having to kind of
Speaker 6: comport themselves in a different way because of the president
Speaker 6: who's in the White House. And I think back on
Speaker 6: when I was covering the G twenty, the US had
Speaker 6: this very reduced presence there on the ground in Rio,
Speaker 6: and you could kind of see those other countries reconfiguring
Speaker 6: the kind of magnetism they have with other countries. So
Speaker 6: the alliances were really shifting in real time there in
Speaker 6: terms of who was meeting with whom. What are the
Speaker 6: consequences sort of exclusive of the US, to having the
Speaker 6: US take up so much oxygen and so much bandwidth
Speaker 6: under this president.
Speaker 4: There are only there are only a couple of sensible
Speaker 4: things that other countries can do now. Germany, which is
Speaker 4: basically the EU needs to re arm, which as an
Speaker 4: Englishman I think is an astonishing thing to say. You know,
Speaker 4: I'll be getting some emails later, I'm sure, as does Japan.
Speaker 4: And that's that's a way of saying that countries. It's
Speaker 4: like this, like asymmetric risk. Right, If there's only a
Speaker 4: five percent chance ten percent chance that Trump is serious
Speaker 4: about half of this stuff, then you have to put
Speaker 4: more than five or ten percent of your resources into
Speaker 4: thinking about how to deal with it. I mean, imagine
Speaker 4: if Trump sits down with Putin and says, Okay, what
Speaker 4: parts of Ukraine do you want? That's fine with me.
Speaker 4: I don't care, they're yours, and then Putin thinks, well, okay,
Speaker 4: the Bultics or Poland annexed Germany has to stop making
Speaker 4: cars and start making tanks, right, and I think the
Speaker 4: same is true of Japan. So what are the consequences
Speaker 4: for the US taking up so much oxygen? Ironically, we're
Speaker 4: going to have to go back to world that probably
Speaker 4: previously existed closer to nineteen ten, which is that regional
Speaker 4: powers try and look after their own interests and have
Speaker 4: a battle plan effectively for looking after themselves.
Speaker 1: So there's a lot still to be known, and you know,
Speaker 1: we'll have another election, We'll have midterms in two years,
Speaker 1: We'll have another election, presidential election four years. So I
Speaker 1: just wonder. And we have a government that has so
Speaker 1: many people in there so that things kind of move
Speaker 1: more slowly. We have checks and balances, although we're now
Speaker 1: questioning whether or not all those checks and balances are
Speaker 1: in place. What's the thing that you're most concerned about
Speaker 1: that will be a long, you know, lasting effect. I mean,
Speaker 1: we haven't even talked about climate change or ai which
Speaker 1: are some of the other big issues that are facing
Speaker 1: our world.
Speaker 4: So I said this before I say it again. I
Speaker 4: don't think Donald Trump is a threat to democracy. I
Speaker 4: think he is a threat to the republic, which is
Speaker 4: ever so slightly different, but is an important distinction to make.
Speaker 4: He degrades the way we do things, codified or otherwise
Speaker 4: that we could previously have counted on to be a
Speaker 4: part of the checks and balance system. Right, for example,
Speaker 4: firing Comy back in the day, right, firing Comy wild
Speaker 4: and so law. But the rule of law is this
Speaker 4: sort of ethereal thing, right, because it's a spirit and
Speaker 4: the letter. And I think that he's not always a
Speaker 4: threat to the letter he took the oath. Today he
Speaker 4: is the constitutionally elected president of the United States. But
Speaker 4: I don't think he likes the spirit. And this is
Speaker 4: the thing that I would really watch carefully, which is
Speaker 4: the extent to which his comportment, his manner, his worldview
Speaker 4: start to seep into the American establishment, and you start
Speaker 4: to make assumptions about, well, how would JD. Vance behave
Speaker 4: were he president in the future.
Speaker 5: We don't know, right, We don't know at all.
Speaker 4: Of course, I can come back later and tell you
Speaker 4: I'm completely wrong. If you like, I mean, that might be,
Speaker 4: that might be wise.
Speaker 1: Is it wise for us to assume that someone's going
Speaker 1: to pick up the mantle from him and continue.
Speaker 4: Something that has been let out of the box in
Speaker 4: the American body politic? Okay? And it's it's hyper democracy.
Speaker 4: It's the sort of democracy the founding fathers did not want,
Speaker 4: which is that someone who is quite combative, quite crude,
Speaker 4: and not necessarily in favor of the spirit of the
Speaker 4: Constitution is now in power. And I blame me and
Speaker 4: all of the other people. I mean, I'm a registered independent,
Speaker 4: but all of the Democratic voters, Let's be honest, who
Speaker 4: thought for a very long time, twenty five years that
Speaker 4: we know best sitting around on the coasts sipping frappuccinos. Okay,
Speaker 4: guilty is charged, and we completely took our eye off
Speaker 4: the ball as to what matters to a lot of Americans,
Speaker 4: and this is their response.
Speaker 3: We're speaking with Ed Price, former British trade official, now
Speaker 3: non resident senior Fellow at NYU. He's advised members of
Speaker 3: the European and British Parliament. He writes regularly about politics,
Speaker 3: economic policy and more. As a reminder too, we're also
Speaker 3: keep an eye on what's happening at the Capitol One
Speaker 3: Arena in Washington, DC, where we do expect to hear
Speaker 3: from the President in just a few minutes.
Speaker 8: Ed.
Speaker 3: What happens though, if it doesn't work? What happens if
Speaker 3: the Americans who you spoke to and you met throughout
Speaker 3: your road trip this summer we've had you want to
Speaker 3: speak of that, You've written a lot about it. What
Speaker 3: happens if the policies from this Trump administration do not
Speaker 3: improve their lives? What's the next iteration?
Speaker 4: I think the next iteration could be past populism, And
Speaker 4: then you would be appropriate if you were talking about
Speaker 4: fascism this has happened in history time and time again.
Speaker 4: There is a solid backbone of good, honest people in
Speaker 4: this country who have followed the rules and really seriously
Speaker 4: been let down in the last quarter century. And that
Speaker 4: is a fundamental observation that Trump made. He's promised them
Speaker 4: the world, He's promised them to get back on their feet.
Speaker 4: They've believed him. You're asking exactly the right question. If
Speaker 4: he lets them down now and we go into this
Speaker 4: kind of like dystopia tech overlord's situation, then they are
Speaker 4: going there's going to be hell to pay from them,
Speaker 4: and rightly so. Now, I wish that there was some
Speaker 4: third way of doing this. I wish there was a
Speaker 4: romanticized small L liberalism, small R republicanism like the aforementioned
Speaker 4: tr Roosevelt. We could get Americans interested in again. But
Speaker 4: the choice between Trump and the Democratic Party isn't working.
Speaker 1: We are a young democracy, as you reminded us, versus
Speaker 1: something like China or just not a demand even if
Speaker 1: in terms of government, I mean, is this just kind
Speaker 1: of what we need to go through to get to
Speaker 1: a better end. I don't think to make our government evolve.
Speaker 4: I think that the fundamental mistake we made was twofold
Speaker 4: one in the seventies of Fiat dollar without a better
Speaker 4: way of controlling it. We can get into that if
Speaker 4: you want or not. And the second one was allowing
Speaker 4: China into the WTO and allowing it to be a
Speaker 4: developing rather than developed country status for too long. So
Speaker 4: these are really structural, huge structural problems. There are now
Speaker 4: too many dollars in in existence. We've enriched a potential adversary.
Speaker 4: We are in a precarious position. We imported deflation, so
Speaker 4: we're in trouble.
Speaker 6: Yeah, Price, great to speak with you. Thank you very
Speaker 6: much for an extended period time with dead Price, thinking
Speaker 6: of NYU for a British trade official now non resident
Speaker 6: senior fellow at n YU.
Speaker 2: This is the Bloomberg Business Week podcast. Listen live each
Speaker 2: weekday starting at two pm Eastern on Apple car Play
Speaker 2: and Android Auto with the Bloomberg Business App. You can
Speaker 2: also listen live on Amazon Alexa from our flagship New
Speaker 2: York station, Just Say Alexa played Bloomberg eleven thirty.
Speaker 1: President Donald Trump signaled plans to impose previously threatened tariffs
Speaker 1: of as much as twenty five percent on Mexico and Canada,
Speaker 1: possibly by February first, reiterating his contention that America's closest
Speaker 1: neighbors and largest trading partners are letting undocumented migrants and
Speaker 1: drugs flood into the United States.
Speaker 3: The President also widened his tariff threats to include China
Speaker 3: and the European Union. For more on what this might
Speaker 3: mean for US companies, we checked in with Gina Martin
Speaker 3: Adams Bloomberg Intelligence as director of Equity Strategy and a
Speaker 3: chief equity strategist.
Speaker 8: Right now, it's still relatively speculative, but the one thing
Speaker 8: we can hang our hat on is the fact that
Speaker 8: the dollar has been rallying since late September, in fits
Speaker 8: and starts, of course, but at its peak just a
Speaker 8: week or so ago, the dollar was up ten percent
Speaker 8: from its low in late September.
Speaker 5: The dollar is a.
Speaker 8: Signal for portions of the US market, especially the S
Speaker 8: and P five hundred's most multinational stocks, which tend to
Speaker 8: experience ripple effects of currency in their earnings outlook.
Speaker 5: Now these happened to.
Speaker 8: Be also the stocks that were largely leading the S
Speaker 8: and P five hundred earnings recovery in twenty twenty three
Speaker 8: and twenty twenty four. They now face the most difficult
Speaker 8: comparisons and the highest earnings expectations going into twenty twenty five.
Speaker 8: So I would anticipate that at the very least you
Speaker 8: have some currency concerns start to eat away a little
Speaker 8: bit at multinational stocks earnings outlook, which could create another
Speaker 8: bout of volatility or indigestion in stocks as those emerge.
Speaker 3: Gin we have sort of a playbook here in recent history.
Speaker 3: We saw what happened in the first Trump administration, We
Speaker 3: saw certain tariffs continue in the Biden administration. How were
Speaker 3: the stocks that were affected, the sectors that were affected,
Speaker 3: how were they hit, and how does that play unto
Speaker 3: your analysis over at Bloomberg Intelligence.
Speaker 5: Yeah, I think it's a great point.
Speaker 8: There is a precedent, but pass is not necessarily a
Speaker 8: perfect precedent for what.
Speaker 5: To expect in that.
Speaker 8: In twenty eighteen, the tariffs were pretty targeted at China.
Speaker 8: This time around, it looks like the tariffs could be
Speaker 8: considerably more widespread, wrapped up with as you mentioned at
Speaker 8: the onset and immigration issues targeted at least in the
Speaker 8: short run at Mexico and Canada predominantly. China seems to
Speaker 8: be kind of put on the back burner, or at
Speaker 8: least temporarily on the back burner. Let's see where that
Speaker 8: goes over time. Nonetheless, there's one indicator that I think
Speaker 8: is really the most important for investors to follow regarding
Speaker 8: the potential market implications, and that is the operating margin
Speaker 8: forecast from analysts. This is one of the single best
Speaker 8: indicators of coming performance in the equity market. Operating margins
Speaker 8: obviously have been expanding for the better part of the
Speaker 8: last two years. In twenty eighteen, we saw operating margin
Speaker 8: forecasts turnover very quickly, not only because of tariffs, but
Speaker 8: also because the FED was tightening interest rates and we
Speaker 8: had some operating issues at the largest tech companies emerge.
Speaker 8: And so I think you want to watch this operating
Speaker 8: margin forecast pretty carefully. If analysts start to lose face,
Speaker 8: that face that companies can pass through prices onto their
Speaker 8: ultimate consumers, that they can maintain pricing power, that is
Speaker 8: usually pretty problematic for stocks going forward. We saw that
Speaker 8: in twenty eighteen. We may say that again now now
Speaker 8: on the products and areas that could experience the greatest
Speaker 8: operating margin pressure, it could be quite different. But the
Speaker 8: important thing to know for the markets at large is
Speaker 8: that operating margins are the.
Speaker 1: Key also fair to say, And I was thinking about
Speaker 1: a conversation Tim and I and David Gora had yesterday
Speaker 1: following the inauguration, and this was with Stefan Seelig. He
Speaker 1: was Under Secretary of Commerce for International Trade at Commerce
Speaker 1: during the Obama administration. He was also head of the
Speaker 1: International Trade Administration, and he said, when we talked about.
Speaker 5: Tarrifs, he said, they're complicated.
Speaker 1: They are not all one thing. And as you made
Speaker 1: that distinction between twenty eight team and the tariffs were
Speaker 1: very targeted at China versus maybe something here that's more
Speaker 1: like a blanket tariff, it does become a different issue.
Speaker 1: So we have to be smart about kind of the
Speaker 1: devil in the details we do.
Speaker 8: And I think the other thing to consider is that
Speaker 8: tariffs target at economies often impact markets through companies, and
Speaker 8: economies and markets are not the same thing. Economies companies
Speaker 8: are really a microcosm of economies are certainly related to
Speaker 8: the economies, but the companies are the ones that oftentimes
Speaker 8: pay the tariffs. A good example is, you know, these
Speaker 8: tariffs targeted at Canada, how much of that is actually
Speaker 8: going to impact US auto manufacturers who are some of
Speaker 8: the biggest exporters of products from Canada into the US.
Speaker 8: Is a huge question, and I think we have to
Speaker 8: consider that companies are very multinational in nature. Many of
Speaker 8: the US companies that are multinational will ultimately be the
Speaker 8: payers of these tariffs. So we want to be really
Speaker 8: careful and conscientious in not suggesting that tariffs that are
Speaker 8: targeted at economy are paid by those economies exclusively. They're
Speaker 8: generally paid by companies, and companies are often multinational in
Speaker 8: nature and can sit on various exchanges across the world,
Speaker 8: don't necessarily represent those economies.
Speaker 3: Gina, in your analysis, does any of the transformation that
Speaker 3: the president is hoping actually happen. The idea that maybe
Speaker 3: because of tariffs, companies based here in the US will
Speaker 3: manufacture goods closer to home in the US, employ more Americans,
Speaker 3: and make it work as the whole idea behind these
Speaker 3: being implemented is well.
Speaker 8: I think there have to be a lot of other
Speaker 8: changes that happen to get US companies to relocate into
Speaker 8: the United States beyond simply an acceleration and cost. Companies
Speaker 8: tend to find lowest cost labor around the world. They
Speaker 8: will not necessarily relocate to the US. They may relocate
Speaker 8: to other nations. They may find other ways to path
Speaker 8: through costs. There are a lot of different avenues by
Speaker 8: which companies can flexibly approach a sanctions or a tariff's environment,
Speaker 8: such as the one that we're likely to go into.
Speaker 8: I think you can see some relocations to the degree
Speaker 8: that's in the best interest of profitability of the company.
Speaker 8: But that profitability is most important for public companies to
Speaker 8: keep an eye on, obviously, and if it's not in
Speaker 8: the best interest of their shareholders, if it's not in
Speaker 8: the most interest of seeking profits, then why would they
Speaker 8: relocate to the United States. There has to be a
Speaker 8: pretty compelling reason beyond tariffs. One of the biggest reasons
Speaker 8: companies locate outside of the United States is it's just
Speaker 8: more efficient, more effective, and better for their cost structure.
Speaker 8: Will tariffs ultimately overwhelm that decision. It seems unlikely, given
Speaker 8: that labor is such a huge portion ultimately of company costs.
Speaker 8: But we'll see you can also see efficiencies gained in
Speaker 8: other ways, another by relocating into other regions of the world,
Speaker 8: particularly when we're selling into other regions of the world.
Speaker 8: As a corporation. So I think it is very complicated.
Speaker 8: I think that a blund instrument of tariffs can be
Speaker 8: effective in certain instances, particularly protecting domestic industries, but it's
Speaker 8: not one big broad brush that we can paint, and
Speaker 8: I think that each company decision will be made on
Speaker 8: a profitability perspective of that independent company.
Speaker 1: Hey, gin know, one thing I want to ask you,
Speaker 1: and one of the things that we've talked about over
Speaker 1: the last couple of years is some of the spending
Speaker 1: plant programs that Congress passed, that Biden initiated, that Congress
Speaker 1: ultimately passed and put investment dollars certainly into the US economy,
Speaker 1: spending on infrastructure, green initiatives, and so on.
Speaker 5: Chips.
Speaker 1: Donald Trump is expected to announce an Open AI SoftBank
Speaker 1: Oracle AI investment. We've been talking about this news out
Speaker 1: of CBS reports, and I just wonder how you were
Speaker 1: thinking about or watching the Trump administration for other things
Speaker 1: that you think could potentially increase kind of the liquidity
Speaker 1: and cashets out there to put to work that would
Speaker 1: impact the markets, the equity market as well.
Speaker 8: Yeah, I think federal spending programs have become a really
Speaker 8: big bogie to watch for companies. Over the course of
Speaker 8: the last several years, the Chips Act was very consequential.
Speaker 8: The Inflation Reduction Act was also pretty consequential to certain
Speaker 8: industries profitability trends. So any sort of fiscal spending package
Speaker 8: or public private partnership dedicated to elevating investment into certain
Speaker 8: sectors can be very meaningful. I think we have to
Speaker 8: watch rather than speculate as to what may happen.
Speaker 5: I think we want to watch for.
Speaker 8: The details of each of these packages to assess the
Speaker 8: viability and certainly the market impact. But nonetheless, we are
Speaker 8: in an era where federal spending and targeted federal spending
Speaker 8: is having real economic and market consequences.
Speaker 1: I feel like I'm going to make up t shirts
Speaker 1: watch operating margins because I feel like that's my big
Speaker 1: message from you right now.
Speaker 8: Overall, it is the big message this year.
Speaker 5: One percent great stuff. Thank you so much.
Speaker 1: Bloomberg Intelligence Director of Equity Strategy. She is also the
Speaker 1: chief equity strategist of our team there at BI.
Speaker 5: She's Gina Martin.
Speaker 1: So Tim, that's really the big picture when it comes
Speaker 1: to tariffs and just the overall equity trade.
Speaker 2: You're listening to the Bloomberg Business Week Podcast. Catch us
Speaker 2: live weekday afternoons from two to five pm Eastern. Listen
Speaker 2: on Apple CarPlay and Android Auto with the Bloomberg Business app,
Speaker 2: or watch us live on YouTube.
Speaker 1: Plenty Ahead in our second hour of the weekend edition
Speaker 1: of Bloomberg Business Week, as President Trump kicks off his
Speaker 1: first full week in the White House, that's this coming week,
Speaker 1: and as we continue to report on his early initiatives
Speaker 1: that may impact trading and the business environment, as well
Speaker 1: as our society overall, as he looks to reign in
Speaker 1: DEI and green initiatives.
Speaker 3: The leader of the free world and the world's biggest
Speaker 3: economy is top of mind this hour, as are those
Speaker 3: leaders he appoints to his administration and to run key
Speaker 3: offices of the US government, which God is thinking about
Speaker 3: what it means to be a leader.
Speaker 1: That's Adam Golinski's specialty. He is a social psychologist and
Speaker 1: professor of leadership and Ethics at Columbia Business School. Adam
Speaker 1: has spent his career building a quantifiable method of determining
Speaker 1: who is inspiring versus who is infuriating. He joined us
Speaker 1: to talk about his new book, Inspire, The Universal Path
Speaker 1: for Leading yourself and others.
Speaker 9: So I've been studying leadership and teaching leadership since two
Speaker 9: thousand and two. Originally I was at the calleg School
Speaker 9: of Management, taught at Berkeley and then at Columbia, and
Speaker 9: around two thousand and six I was actually teaching the FBI,
Speaker 9: the Federal Bureau of Investigation. We had a program at
Speaker 9: Kellogg for agents to come in, about sixty agents at
Speaker 9: the time, and one of them just started talking about
Speaker 9: a leader that inspired them, and I was really struck
Speaker 9: immediately by the transformation in physical transformation.
Speaker 7: His eyes lit up.
Speaker 9: Right, he almost looked a smiled, he got expressive, his
Speaker 9: voice spoke really quickly, with a little higher pitch, and
Speaker 9: it was clearly that he had been fundamentally affected and
Speaker 9: impacted by this leader. Then the next year, a different
Speaker 9: FBI agent, ironically enough, started saying, I don't want to
Speaker 9: talk about an inspiring person, I want to tell you
Speaker 9: about all the infuriating leaders I had. And then so
Speaker 9: I started asking hundreds and thousands, and probably tens of
Speaker 9: thousands of people across the globe a very simple question,
Speaker 9: tell me about a leader that inspired you, and tell
Speaker 9: me about a leader that infuriated you, and notice both
Speaker 9: both types of leaders transform you inside.
Speaker 7: Right.
Speaker 9: One is like a well spring, the other is, you know,
Speaker 9: a seething cauldron. And one of the things I realized
Speaker 9: really quickly is that they're basically mirror images of each other.
Speaker 9: So the inspiring leader, right, has that optimistic, big, big vision.
Speaker 9: The infuritying leader is a pessimist, pedantic, right, you know,
Speaker 9: the inspiring leader's courageous infering leaders cowardly inspiring leader is
Speaker 9: elevates people and friendly leader diminishes people. And so you
Speaker 9: can start to understand that this happened. The second really
Speaker 9: fascinating thing about this research is I started asking people
Speaker 9: all over the world, so every continent that you can
Speaker 9: think of, you know, dozens of countries, And what I
Speaker 9: discovered was there wasn't a single inspiring or fruiting characteristic
Speaker 9: that wasn't mentioned in every single country in the world.
Speaker 9: So there's something universal in the very tapestrying fabric of
Speaker 9: the human mind that really captures this.
Speaker 5: Anything between men and women differences.
Speaker 7: I have not found any. It's a great question, you know.
Speaker 9: That's that's another one, which is that you know, you know,
Speaker 9: women find you know, courageous, big picture, you know, generous
Speaker 9: people inspiring, you know, and so do men. And it
Speaker 9: doesn't really vary that much by it doesn't vary by gender,
Speaker 9: by ethnicity, by country, by culture. There's something really fundamental
Speaker 9: about about that. I think there's some variations sometimes in
Speaker 9: like you can see Democrats and Republicans right where Democrats
Speaker 9: put a little bit more emphasis, let's say, on the
Speaker 9: empathy side, and Republicans might put a little bit more
Speaker 9: emphasis on the strength side of the equation.
Speaker 3: Well to that point, and I want to jump right
Speaker 3: into it because I want to go we do want
Speaker 3: to go over some leaders at a certain point, and
Speaker 3: you know, whether they're inspiring or infuriating. But I think
Speaker 3: to myself, here you are telling us about these different
Speaker 3: leadership qualities or the way that people view leaders that
Speaker 3: they've encountered in their lives. I think of somebody's top
Speaker 3: of mind. President Trump to many people, to you know,
Speaker 3: more than seventy million voters, he's an inspiring leader to
Speaker 3: many people who didn't vote for him, and even some
Speaker 3: people who've worked in previous administrations. In his previous administration,
Speaker 3: he's not. He's an infuriating leader. How can one single
Speaker 3: person be both of those things to different people.
Speaker 9: So I'll say three things about that. The first is
Speaker 9: that one of the things that I think my research
Speaker 9: has discovered is that there's these three universal factors, and
Speaker 9: I'll sort of go through them talking about Trump in
Speaker 9: a second. But it also tells us something fundamental. We're
Speaker 9: not inspiring infuriating born that way, and we're not forever
Speaker 9: that way.
Speaker 7: We can be inspiring.
Speaker 9: Today and infuriating tomorrow, and we can be inspiring on
Speaker 9: some dimensions and infer it in other dimensions.
Speaker 7: So in some ways you can say all of.
Speaker 9: Us, every one of us both inspiring and infuritying, or
Speaker 9: has the potential to be both at different times, right,
Speaker 9: And so I think that's one thing. The second thing
Speaker 9: I would say is that there's two things about Trump
Speaker 9: that I think.
Speaker 7: Everyone would agree with.
Speaker 9: One is that he has a simple, compelling visual vision
Speaker 9: that people everyone can understand, right, make America great again.
Speaker 7: It's even an acronym, right.
Speaker 9: And the second thing is that no one will contend
Speaker 9: with the fact that he presents himself as a strong
Speaker 9: and courageous protector. And two is that he comes across
Speaker 9: as authentically passionate. And so those two are to the
Speaker 9: fundamental of like how we are in the world, this
Speaker 9: exemplar thing. And so he has this very clear vision
Speaker 9: and he is very clear presents himself as this strong, courageous, passionate,
Speaker 9: you know, protector. Now where he falls on the infuritying
Speaker 9: side is I think two things. Some people find the
Speaker 9: vision itself to be infuriating, like exclusionary it only includes
Speaker 9: a certain category of Americans, for example, and find it
Speaker 9: to be maybe harsh.
Speaker 7: And then the second thing is I.
Speaker 9: Don't think any person would argue with the fact that
Speaker 9: the third fact, so the three universal factors are being visionary,
Speaker 9: how we see the world, being an exemplar how we
Speaker 9: are in the world, and then the final one is
Speaker 9: mentor how we treat people in the world. And I
Speaker 9: don't think anyone would argue with the fact that Trump
Speaker 9: doesn't treat people very well. Right. You know, he had
Speaker 9: more turnover in his first term than any other president
Speaker 9: in terms of you know, the main leaders within his administration.
Speaker 9: He is notorious, right for throwing people under the bus.
Speaker 7: Right.
Speaker 9: And when I ask people around the world, you know,
Speaker 9: describe an inspiring leader, it's always someone who share success
Speaker 9: but takes on blame and burden. But with Trump, right,
Speaker 9: he forever steals success. It's me, me, me, me me
Speaker 9: when things.
Speaker 7: Go well, and it's you you u uu when it
Speaker 7: goes bad.
Speaker 1: Well and you know, And yet step back for a second,
Speaker 1: and whether he took accountability for this or or said that,
Speaker 1: you know, some of the policies that he implemented or
Speaker 1: had people implement, whether it's tariff's on China, many would
Speaker 1: say this was long and coming, Like there are certain
Speaker 1: things he's done that actually people applaud him for, right,
Speaker 1: and those terriffts with China and push back on China
Speaker 1: carried over to the Biden administration. Now we're like getting
Speaker 1: ready for kind of what comes next. But I'm just
Speaker 1: saying that, is it only inspiring leaders that actually get
Speaker 1: some stuff done? Is it infuriating leaders well also, and
Speaker 1: you know, or leaders that maybe you know, people.
Speaker 5: Don't want to be around that still bring about some changes.
Speaker 7: Absolutely.
Speaker 9: I mean, I think if you look at some of
Speaker 9: the most famous leaders in our world, you know, for example,
Speaker 9: Steve Jobs right, even in some ways Elon Musk right,
Speaker 9: that they fit that mold right being sort of you know,
Speaker 9: very clear vision, you know, authentic and passionate, but not
Speaker 9: always treating people very well, right, and so those people
Speaker 9: might be great top of the top leaders, but they
Speaker 9: wouldn't be very good for example, you know, And I
Speaker 9: think that really makes the difference. One thing I'll say
Speaker 9: about Trump, though, is that the things that he's concerned,
Speaker 9: he's very good at recognizing what other people's concerns and
Speaker 9: fears are, right, and so he's able then to package
Speaker 9: those in a way like I think everyone would agree
Speaker 9: we need to have a very clear immigration policy to
Speaker 9: have an effective United States. Now we may disagree with
Speaker 9: some of those elements, but he's very good at simplifying it, right,
Speaker 9: like we need to shut our border down, you know,
Speaker 9: to figure out what's going on, and we could maybe
Speaker 9: then sensibly reopen it at a later point.
Speaker 7: And I think you see that.
Speaker 9: The trans issue is another one that he really expertly understood,
Speaker 9: which is that people are concerned about fairness and athletics.
Speaker 9: They're concerned about could someone show open a bathroom that
Speaker 9: would make me you know, could a man schopen a
Speaker 9: woman's bathroom, you know, using this issue as a ruse.
Speaker 9: And so he understood people's fears around that and was
Speaker 9: able to articulate them.
Speaker 1: Well, what do you think corporate leaders need to do
Speaker 1: going forward, because often they'll have their employees they listen.
Speaker 5: I'm uncomfortable. I don't think of our employee base as
Speaker 5: male or female. I think there's other choices.
Speaker 1: What do you think is going to how this is
Speaker 1: going to play out in corporate America?
Speaker 9: I mean, that's a great question. I mean, I'll say
Speaker 9: the first thing I'll say is, I do think that
Speaker 9: one of the reasons why Kamala Harris lost the election
Speaker 9: was two things that are on vision. She never articulated
Speaker 9: the true state of the economy, which.
Speaker 1: Was that it was much better than the economy stupid, right, Like, yeah,
Speaker 1: there's a reason why people say.
Speaker 9: That she didn't defend it. She didn't come out and say, yeah,
Speaker 9: prices are higher than they should be. But like she
Speaker 9: should have said every single day about drab growth. That's
Speaker 9: what Trump would have done, right, every single day. And
Speaker 9: the second thing is she never articulated at any point
Speaker 9: what her vision around let's say, gender identity was, Like
Speaker 9: I have no idea, Like I know that she generally
Speaker 9: supports the rights, but like, are there limits to that?
Speaker 9: Like what is the fabric of that? Like Trump was
Speaker 9: very clear and when you when you look at some
Speaker 9: of the exit polling, you see two things. People with
Speaker 9: accurate information on the economy voted for Biden, and they
Speaker 9: voted for Trump. If they didn't, if they're concerned about
Speaker 9: the trans issue, they voted for Trump. And so I
Speaker 9: think those are two things. Now, what should corporate leader?
Speaker 3: Well, I was just going to say, we have plenty
Speaker 3: of time at least until we start to hear from
Speaker 3: the president, and we are awaiting that at the White House.
Speaker 3: I do want to ask, because your book it's not
Speaker 3: just about leaders on the international stage and leaders in
Speaker 3: the border. I mean, you talk about parenting and being
Speaker 3: a leader in the home. What are some takeaways that
Speaker 3: people who are not necessarily in managerial positions right now
Speaker 3: can take from the book.
Speaker 9: Yeah, well, you know, I coined a phrase that I
Speaker 9: use in the book called the leader amplification effect. And
Speaker 9: the leader amplification effect is that when you're a leader,
Speaker 9: you're essentially on stage.
Speaker 7: Eyes are on you.
Speaker 9: And one of the things we know from cognitive psychology,
Speaker 9: and I know you've had a lot of cognitive psychologists
Speaker 9: on this show, is that attention amplifies signals and then
Speaker 9: those also intensify reactions. So when you're on stage, your signals,
Speaker 9: whatever they could be verbal, nonverbal, good, bad, small, big,
Speaker 9: are going to get at amplified, and then people's reactions
Speaker 9: are going to be intensified. And so what is a leader, Well,
Speaker 9: leader is someone who has power and status. Those are
Speaker 9: two of the things I've studied the most in my
Speaker 9: career social hierarchy for twenty years. And essentially it's someone
Speaker 9: with some authority, right, and also people look up to
Speaker 9: that person. That's what parents are, right. Parents are they
Speaker 9: have authority over their kids, and their kids generally look
Speaker 9: up to them, or at least look to them for information.
Speaker 9: And so I have coined a phrase that I call
Speaker 9: the parent amplification effect, a corollary of the leadership.
Speaker 7: Which is like they pick up on things.
Speaker 9: I'll tell you a very short story about this that
Speaker 9: I really love about a former doctoral student at Columbia
Speaker 9: who worked with some people you've had on, like Sondra Motz.
Speaker 9: But when she was twelve years old, she overheard her
Speaker 9: mom say to someone else, both girls are great at piano,
Speaker 9: but I can't remember right now. Her sister's has a
Speaker 9: real knack for it. Abby I think was their sister.
Speaker 9: Abbey has a real knack for it, and she was
Speaker 9: so incensed she never played piano again. She was like,
Speaker 9: you know, basically, f you, mom. You think she's got
Speaker 9: better thing? And you know, I saw her mom. And
Speaker 9: this is what's great about the leader amplification effect is
Speaker 9: that we can be totally unaware that we're we're we're
Speaker 9: having this impact.
Speaker 7: And you know, you know, I told her mom the story.
Speaker 9: She's like, I had no idea why she quit PIATO,
Speaker 9: Like that happened like twenty years earlier. And Barry Salzburg,
Speaker 9: who is a he was CEO of Global Deloitte. About
Speaker 9: six months after being CEO, he noticed there was bananas
Speaker 9: at every meeting. He's like, huh, like, is banana is
Speaker 9: an important symbol of Deloitte? I've been here thirty years
Speaker 9: or someone else?
Speaker 3: Did he bring a banana to a media No?
Speaker 9: No, what happened was is his first meeting he went too.
Speaker 9: He picked up a banana with a little bit of enthusiasm,
Speaker 9: and his the executive assistant was like, have bananas at
Speaker 9: every meeting. Barry's at you know, he didn't even say anything, right,
Speaker 9: and so you know, whether it's your parent, whether it's
Speaker 9: you know, and That's why I always say it's not
Speaker 9: about a position of leadership. It's like whenever you matter
Speaker 9: to someone else, right, it could be a spouse, it
Speaker 9: could be in the dating relationship, when you care about
Speaker 9: the opinion of another person, right, all of their expressions
Speaker 9: and could you're paying attention right intentions? Really that currency
Speaker 9: well with kids, I think about that a lot. We've
Speaker 9: talked about this, how kids can be branded as well.
Speaker 1: You're a math kid or you're really not a math kid,
Speaker 1: and they just kind of get it in their head
Speaker 1: and and kind of go that route. We want to
Speaker 1: ask you about a couple of different leaders. You have
Speaker 1: mentioned Elon Musk. You know, it's interesting. We're just coming
Speaker 1: off the inauguration. We saw these big tech CEOs, so
Speaker 1: they're kind of top of mind for me when you
Speaker 1: think of Elon, when you think of Jeff Bezos, Mark Zuckerberg,
Speaker 1: Sundar Pichai of Alphabet. I don't know inspira inspiring leaders,
Speaker 1: infuriating leaders.
Speaker 9: I mean I think there, you know, they can be
Speaker 9: a little bit of both, right, and some of them,
Speaker 9: you know clearly any you know, one of the things
Speaker 9: that we are inspired by is people who do amazing
Speaker 9: things right, right, Like, think of Steph Curry, Like, how
Speaker 9: many people are you know, I Steph Curry is my
Speaker 9: favorite player, right, he can just do things that no
Speaker 9: one else can do. Josh Allen on the football field, right,
Speaker 9: is the same way. And so you know, people who
Speaker 9: create things are always going to hold, you know, a
Speaker 9: big attention in the world. And that's true and throughout
Speaker 9: history of the United States, you know, you go back
Speaker 9: to you know, some of the famous people in eighteen hundreds,
Speaker 9: you know, And and so I think that there's a
Speaker 9: way that we really get captivated by that that vision
Speaker 9: and that super competence. But also they can start veering
Speaker 9: off into the wrong vision, right, and they can also
Speaker 9: start not really paying attention to other people. So one
Speaker 9: of the problems of the leader amplification effect is sometimes
Speaker 9: we aren't aware of the impact.
Speaker 7: Right.
Speaker 9: That's exactly what happened with Erica's mother. She had no
Speaker 9: idea this all in comment would have that impact.
Speaker 1: And so you know, so those employee surveys about your
Speaker 1: bosses are really good.
Speaker 9: Yeah, I mean I think they're really good. I think
Speaker 9: so I'm a huge fan of three sixty feedback, right,
Speaker 9: and I think it's you know, I created I actually
Speaker 9: created a thing called you know, an are you an
Speaker 9: am I inspiring scale that people can sort of measure.
Speaker 9: But the best way to use it is to take
Speaker 9: it yourself and then have other people take it, and
Speaker 9: then you can say, I might think I'm visionary, but
Speaker 9: they don't see me as visionary. And that's the you know,
Speaker 9: that's what we want, is we want accurate understanding of
Speaker 9: how other people perceive us.
Speaker 3: So I'm thinking about other leaders out there who are
Speaker 3: in our world. We talked about Lelon Musk, we talked
Speaker 3: about some of the other tech leaders. We just celebrated
Speaker 3: the life of Jimmy Carter, and a lot of people
Speaker 3: in remembering Jimmy Carter talked about how he had these
Speaker 3: qualities that you know, really inspired people around him, but
Speaker 3: he was an ineffective president because he was a micromanager
Speaker 3: and he didn't play the politics game. How do you
Speaker 3: how do you balance where do you balance on this
Speaker 3: continue to be effective?
Speaker 7: Yeah? I think that's right.
Speaker 9: I think, well, if we just got you know, the
Speaker 9: last chapter of the book talks about actually the connection
Speaker 9: between Jimmy Carter and Donald Trump.
Speaker 7: They both lost.
Speaker 9: Reelection, you know, and you know, Fortunately I was able
Speaker 9: to get in a couple of paragraphs about Donald Trump
Speaker 9: becoming president again, you know, after that. But you know,
Speaker 9: they lost because I think different different parts of what
Speaker 9: I call the VEM diagram of inspiring leadership, visionary, exemplar
Speaker 9: and mentor Donald Trump. Sorry, Jimmy Carter was clearly he
Speaker 9: was deficient on the visionary end, right, he never articulated
Speaker 9: a clear vision first presidency. And there's an amazing quote
Speaker 9: by I can't remember exactly what it was, but it
Speaker 9: was about even cabinet secretaries need a vision in order
Speaker 9: to execute within their departments, and Jimmy Carter never gave
Speaker 9: him that vision, so they couldn't execute effectively. And the micromanagement,
Speaker 9: you know, the famous story of Jimmy Carter approving the
Speaker 9: tennis schedule everything, you know. You know, it's unclear whether
Speaker 9: it's actually true or what role he played, but it
Speaker 9: fit the the image of who he was, which was
Speaker 9: someone who was lost in the weeds, a micromanager couldn't
Speaker 9: see the thing. But all those other qualities, right, his
Speaker 9: his courage, his calmness, his humanity, those shoone brightly outside
Speaker 9: of the Oval office, and so in many ways, right,
Speaker 9: his entire image was rehabilitated in that process. And you know,
Speaker 9: Donald Trump, you know, really benefited from the fact that
Speaker 9: distance left him.
Speaker 7: He lost because he was a poor mentor, but.
Speaker 9: The distance allowed people to forget how he treated people well.
Speaker 1: So much in this book you cover a lot of ground. Adam,
Speaker 1: Thank you so much, Adam Galinsky. Paul Kalello, Professor of
Speaker 1: Leadership and Ethics at the Columbia Business schal His new
Speaker 1: book Inspire, The Universal Path for Leading yourself and others.
Speaker 1: It is out and really gives you a lot of
Speaker 1: things to think about in terms of leadership today.
Speaker 2: This is the Bloomberg Business Week Podcast. Listen live each
Speaker 2: weekday starting at two pm Eastern on applecar Play and
Speaker 2: Android Auto with the Bloomberg Business App. You can also
Speaker 2: listen live on Amazon Alexa from our flagship New York
Speaker 2: station Just Say Alexa played Bloomberg eleven.
Speaker 1: Safe to say leaders around the country will be answering
Speaker 1: some questions about DEI policies following a move this past
Speaker 1: week by President Trump. The President ramped up his assault
Speaker 1: against diversity, equity and inclusion policies to corporate America, targeting
Speaker 1: federal contractors and publicly traded companies for practices he labeled
Speaker 1: quote dangerous, demeaning and immoral.
Speaker 3: Someone who is working to achieve racial and gender equity
Speaker 3: across investing is Darren Dodson, managing partner at a lumin Capital.
Speaker 10: I think that the challenge of those that would be
Speaker 10: fully against DEI is that they're also against what, from
Speaker 10: what we've analyzed at illuming capital economic return, also market optimization.
Speaker 10: They're against Nobel Prize winning economic value within corporations. Also
Speaker 10: we also see there against some of the basic underlying
Speaker 10: principles of modern portfolio theory. So I think that what
Speaker 10: leadership looks like now is figuring out ways to embrace
Speaker 10: some of the important ways of addressing biases towards people
Speaker 10: who are overlooked and underestimated within corporations and unlocking that
Speaker 10: to achieve prosperity. Like like Martin Luther King so poignantly
Speaker 10: put in in a in a very similar in a
Speaker 10: very similar way, from a similar place in Washington, d C.
Speaker 10: That Trump is in.
Speaker 6: Now, darn, where are we on this spectrum of companies
Speaker 6: adopting and embracing DEI policies. We're talking here, of course
Speaker 6: about this in the context of of the new, the
Speaker 6: new and past president, but more broadly, I mean there
Speaker 6: have been so many changes of foot I think back
Speaker 6: on that interview that Mark Zuckerber gave with Joe Rogan
Speaker 6: in which you talked about the need for more masculine
Speaker 6: energy in companies. It strikes me that there really has
Speaker 6: been a regression, a move backward here, and I wonder
Speaker 6: how you process that and sort of are thinking about
Speaker 6: ways in which to again get this back on the
Speaker 6: radar of executives and boards and make it something that's
Speaker 6: not seen as I mean even a hot button issue
Speaker 6: is putting it mildly here, but something that I think
Speaker 6: a lot of companies are kind of studiously avoiding at
Speaker 6: this point in time.
Speaker 10: I think one way to put it back on the
Speaker 10: radar is to do what Wharton and Stanford Business School
Speaker 10: have done, which has put excellent leaders at the helm,
Speaker 10: including Dean Eric James and as of last week, Dean
Speaker 10: Sarah soul the first woman in one hundred year history
Speaker 10: of Stanford Business School, where I have the pleasure of
Speaker 10: serving on the faculty. So every young person around the country,
Speaker 10: whether they're women or men, or boys or girls, looking
Speaker 10: at the future of business leadership can see themselves either
Speaker 10: being managed by an extraordinary woman in leadership or also
Speaker 10: you know, seeing that they could become, you know, dean
Speaker 10: or CEO. I think that's why companies like Apple and
Speaker 10: Costco are stepping forward at this moment. And what I've
Speaker 10: always learned is that when we're in moments like this,
Speaker 10: it's not that character is built in moments like this,
Speaker 10: it's that it's revealed. And I think it's powerful to
Speaker 10: see these companies revealing their character and not just kind
Speaker 10: of unfolding what they've stepped forward and committed to over
Speaker 10: the last several years.
Speaker 2: Darren, what are you.
Speaker 1: Seeing though, on the financial side of things when it
Speaker 1: comes to racial and gender equity?
Speaker 5: Are you still seeing.
Speaker 1: Initiatives the money, you know, follow the money. Is it
Speaker 1: going towards those efforts? Does it continue to are you
Speaker 1: seeing a slowing down.
Speaker 10: We've seen a number of foundations, and you know, Apple
Speaker 10: seems like a good company that has created a lot
Speaker 10: of economic value over the years to be continuing along
Speaker 10: the journey. So economic value and DEI I think for
Speaker 10: a very long period of time, especially as we look
Speaker 10: at the biases and heuristics that Warren Buffett and Charlie
Speaker 10: Munger talk about within investment decision making and processes and
Speaker 10: detail out in innumerable different biases. But we still think
Speaker 10: that one of the greatest overlooking and underestimating of financial
Speaker 10: value in economic markets is when race and gender is present.
Speaker 10: So that's a really important aspect of continuing down the
Speaker 10: process and enabling investors, some of the largest investors in
Speaker 10: the world, to continue to find latent value in economic markets.
Speaker 3: Darren, I'm wondering if you think that this could end
Speaker 3: up being a problem the market solves itself without actually
Speaker 3: regulations or rules coming into focus. Because you've been on
Speaker 3: with us many times over the past few years and
Speaker 3: you've shared with us outperformance of investments that you've made
Speaker 3: and that you haven't made as a result of who
Speaker 3: is leading these funds or who is leading these companies.
Speaker 3: Is this something that the market can solve because people
Speaker 3: understand there is value there, So it really.
Speaker 10: Can't be solved without some type of intervention. And the
Speaker 10: reason why is bias is something that's unseen. So by
Speaker 10: naming that and working effortfully and monitoring it, as Daniel
Speaker 10: Kaneman talked about it as Nobel Prize winning research we're
Speaker 10: able to really ascertain what those biases are and then
Speaker 10: build systems to address them. So one point three percent
Speaker 10: of eighty two trillion dollars is managed by women and
Speaker 10: people of coloring global asset management and global asset management
Speaker 10: business right now. And part of what we see is
Speaker 10: despite forty years of or above performance of women and
Speaker 10: people of color, asset flows are not going to match
Speaker 10: that out performance like we would expect in an efficient market.
Speaker 10: So what that tells us that we have to double
Speaker 10: click and look at those biases that asset allocators, many
Speaker 10: of them unintentionally apply and miss economic opportunities to grow
Speaker 10: their beneficiaries portfolios and to really unlock economic value for
Speaker 10: their clients, et cetera.
Speaker 1: Hey, listen just ten seconds, Darren, Are you more hopeful?
Speaker 5: Are you more nervous?
Speaker 11: Well?
Speaker 10: One of the things that I think, well, on a
Speaker 10: day like today, in celebrating Martin Luther King's birthday, a
Speaker 10: person who was assassinated for the things that he believed in,
Speaker 10: it's great to be working on a mission to address
Speaker 10: these fundamental problems of bias in the global asset market
Speaker 10: management business.
Speaker 1: Agreed, Agreed, So glad to get some time with you
Speaker 1: on this very important day, and thank you. Darren Dotson,
Speaker 1: maaging partner at a Lumen Capital, joining us from Oakland, California.
Speaker 2: This is the Bloomberg Business Week Podcast. Listen live each
Speaker 2: weekday starting at two pm Eastern on Applecarplay and the
Speaker 2: Android Auto with the Bloomberg Business App. You can also
Speaker 2: listen live on Amazon Alexa from our flagship New York station,
Speaker 2: Just Say Alexa played Bloomberg eleven thirty.
Speaker 1: This past week, a deep free straining power supplies across
Speaker 1: the Eastern United States, sending demand on the country's largest
Speaker 1: electric grid to an all time winter high. As the
Speaker 1: US South dug out from one of the worst snowstorms
Speaker 1: in one hundred and thirty years.
Speaker 3: We also saw New La wildfires breakout and a constant
Speaker 3: tracking of weather conditions and wins that impact fire conditions
Speaker 3: in the area and then out. At Davos, the Secretary
Speaker 3: General of the World Meteorological Organization urged businesses to work
Speaker 3: harder to provide early warnings on extreme weather and help
Speaker 3: connect the dots with climate change. The Climate Panel at
Speaker 3: Davos happening only days after President Trump moved to exit
Speaker 3: the Paris Agreement and to back down from the US
Speaker 3: International Climate Finance Plan.
Speaker 1: Tim That was all this past week, and then the
Speaker 1: week before we actually caught up with Gena McCarthy. She's
Speaker 1: a former EPA administrator in the United States, the first
Speaker 1: White House National Climate Advisor. She's also managing co chair
Speaker 1: of America Is All In Coalition, a group of leaders
Speaker 1: from all over the United States that supports climate action
Speaker 1: and is supported by Michael R. Bloomberg and Bloomberg Philanthropies.
Speaker 1: Gina is also a senior advisor at Bloomberg Philanthropies, the
Speaker 1: philanthropic arm of Bloomberg LP, the parent company of Bloomberg
Speaker 1: Television and Bloomberg Radio.
Speaker 3: She's also operating advisor at Pegas's Capital Advisors and a
Speaker 3: senior advisor at TPG Rise Climate Fund.
Speaker 11: My heart does go out to everybody in this area.
Speaker 11: It's really feels.
Speaker 12: Like I'm watching climate change crisis in action when I'm
Speaker 12: looking at what's happening in the devastation.
Speaker 11: Look.
Speaker 12: Twenty twenty four was the warmest year on record globally,
Speaker 12: and what we saw in California was extreme heat and
Speaker 12: a lack of rain. We saw one hundred miles per
Speaker 12: hour winds and that just led.
Speaker 11: To a recipe for disaster, and I think we have
Speaker 11: to be prepared.
Speaker 12: We have to understand how we can be more resilient,
Speaker 12: how we can adapt, and look at some opportunities. We
Speaker 12: have to really begin to tackle these issues and stop
Speaker 12: the climate denial that keeps holding people back. You know,
Speaker 12: these extreme weather events cost American families more than one hundred.
Speaker 11: And fifty billion dollars every year. Isn't it time for
Speaker 11: us to really recognize this and take action?
Speaker 3: Administrator, you said we have to be prepared. Was Los
Speaker 3: Angeles not sufficiently prepared for this latest round of wildfires?
Speaker 11: No, that wasn't what I was suggesting.
Speaker 12: I mean it was a confluence of the issues that
Speaker 12: actually led to this challenge. But my point is that
Speaker 12: we have to moving forward understand that with the advent
Speaker 12: of climate change and with the challenges that we're facing,
Speaker 12: we have to understand that a shift to clean energy
Speaker 12: is essential.
Speaker 11: Reduction in our need.
Speaker 12: For fossil fuels is essential, because we cannot allow this
Speaker 12: to continue to exacerbate. This is just the start of
Speaker 12: this problem. This is not yet answered, and it's time
Speaker 12: for us to develop a strategy in the United States
Speaker 12: to work with other countries to really start focusing on
Speaker 12: this clean energy zoom that we need to advance.
Speaker 1: Donald Trump, of course, has talked about more drilling in
Speaker 1: terms of fossil fuels, and certainly seems to be a
Speaker 1: much more simpathetic sympathetic ear in terms of the fossil
Speaker 1: fuel industry, having said that time will tell in terms
Speaker 1: of whatever policies we see. But any increase in reliance
Speaker 1: on fossil fuels, that's a problem in your view, I'm
Speaker 1: asking with a question marks.
Speaker 12: It's inconsistent with what we know we need to do
Speaker 12: to address climate change and keep people healthy. That's the
Speaker 12: major challenge here. And so the good news is that
Speaker 12: we have the answers here. You know, clean energy is
Speaker 12: literally booming. We now have federal investments.
Speaker 11: That are really changing the game here.
Speaker 12: We have the BIPOD it's an infrastructure of the Inflation
Speaker 12: Reduction Act. All that means that we now have more
Speaker 12: than four hundred thousand new clean energy jobs that have
Speaker 12: already grown.
Speaker 11: Just in the past two years.
Speaker 12: We have seven hundred and fifty one new clean energy
Speaker 12: projects out there. We're talking about and jobs and rural communities.
Speaker 12: We're talking about the in low income communities, and this
Speaker 12: is our opportunity. This is how we're going to prevent
Speaker 12: the continued devastation that we're seeing and begin to realize
Speaker 12: that clean energy is our answer and.
Speaker 11: It is cheaper for families.
Speaker 12: I mean, we are talking about great news here on
Speaker 12: clean energy investments because it is lowering costs, but it's
Speaker 12: also opening the.
Speaker 11: Door to a whole lot more energy choices.
Speaker 12: Like solar, which is thirty three percent cheaper than gas
Speaker 12: power that translates into a ninety five percent reduction in
Speaker 12: utility costs. This is a big deal and it is
Speaker 12: an opportunity, but we still not.
Speaker 1: But you know, you know, we rely still so much
Speaker 1: on fossil fuels at this point, right, And many would argue,
Speaker 1: even green energy folks will say, you know, we still
Speaker 1: kind of need a hybrid approach in terms of energy
Speaker 1: because everything on the alt side, whether it's increasingly people
Speaker 1: are pointing to things.
Speaker 5: Like nuclear or geothermal.
Speaker 1: But even so learned wind it can't meet the demand
Speaker 1: that is out there today, and that we still need
Speaker 1: to rely on fossil fuels. Unfortunately, some might say for
Speaker 1: a few more years.
Speaker 12: Well, part of the challenge that we saw. You're absolutely right,
Speaker 12: I am not suggesting that we reduce our energy demand
Speaker 12: or our energy in a way that's going to impact families.
Speaker 12: We need to address our energy challenges, but we don't.
Speaker 12: We can do that over time by increasing clean energy
Speaker 12: and watching fossil fuels be higher price, which they already
Speaker 12: are now and phase out. So this is not in
Speaker 12: all enoughing, nor is this an opportunity to threaten people's lives.
Speaker 12: We have to keep energy.
Speaker 11: Out there and moving and strong. But we can.
Speaker 12: Do that in a way that saves families money. We
Speaker 12: can do that in a way that lowers our air
Speaker 12: pollution challenges. We can do it in a collaborative way
Speaker 12: internationally so that we meet our responsibility to other countries
Speaker 12: as well. And so I'm excited about the opportunities now.
Speaker 12: I am not looking to shut the Spicott off of
Speaker 12: fossil fuel tomorrow. I am looking at this as an
Speaker 12: opportunity to ensure that clean energy can progress, because it
Speaker 12: is the winner. It's the winner for our families, it's
Speaker 12: the winner for our pocketbooks, and it is certainly a
Speaker 12: winner in terms of the health and safety of our
Speaker 12: country and how to move forward.
Speaker 7: Do you think it?
Speaker 11: So we just have to continue to be leaders on this.
Speaker 3: Do you think we can continue to be leaders on
Speaker 3: it during the next Trump administration given the way that
Speaker 3: the President elect has been outspoken about his disdain for
Speaker 3: renewable energy and his support of the fossil fuel industry.
Speaker 12: You know, I think it's going to be very challenging.
Speaker 12: It was very challenging during the Trump administration. But one
Speaker 12: of the reasons I've been working with Bloomberg Philanthropies, as
Speaker 12: you indicated, is that we're working on a program called
Speaker 12: America Is All In. It's an unbelievable opportunity for governors
Speaker 12: and mayors, local community leaders to work together to fill
Speaker 12: in the blanks when the new administration might want to waiver. Look,
Speaker 12: most of the money and the IRA the Inflation Reduction
Speaker 12: Act is actually going to Republican districts. You can see it.
Speaker 12: That's when most of the projects are being built. So
Speaker 12: they would have to be sort of challenged to not
Speaker 12: realize that we have to move this forward, and it's
Speaker 12: just as important in Republican districts, if not more so,
Speaker 12: than ENDEMA.
Speaker 5: So you know, one thing I want to ask you.
Speaker 1: You're a senior advisor at TPG Rise Climate Fund, operating
Speaker 1: advisor at Pegasus Capital Advisors. You know, we have spent
Speaker 1: so much time I feel like over the last decade
Speaker 1: even talking about the intersection of you know, money from
Speaker 1: you know financial mark, it's capital markets, the private sector,
Speaker 1: working with the public sector. What are you hearing from
Speaker 1: your experiences and working with those folks who manage a
Speaker 1: ton of money and can put it to work and
Speaker 1: make things move in the green space. We understand there
Speaker 1: are commitments and then there are really strong initiatives that
Speaker 1: move the needle. And especially under Trump administration, where I
Speaker 1: think many would argue too that they don't necessarily want
Speaker 1: to make the incoming president look at them negatively and
Speaker 1: get negative attention. So I don't know what's your hope
Speaker 1: for the next couple of years. And that intersection I
Speaker 1: think of money that moves things.
Speaker 12: Yeah, I think you're going to see continued investment in
Speaker 12: the private sector. No, they may not be standing up
Speaker 12: and saying, you know, I'm doing this or that, but
Speaker 12: there's no question about it that we are not seeing
Speaker 12: private sector investment or public sector money waning. It is
Speaker 12: actually an opportunity of our lifetime. And I think that
Speaker 12: you know, even if President Trump doesn't want.
Speaker 11: To admit it.
Speaker 12: We are highly dependent now on clean energy.
Speaker 11: We have to be.
Speaker 12: We can not go back. We don't have that as
Speaker 12: a choice.
Speaker 11: And the exciting thing is we don't have to, you know.
Speaker 12: So right now, we know that Republican districts are heavily
Speaker 12: invested in this, as are the Democrats. We know we
Speaker 12: have governors, We know we have leaders in cities and
Speaker 12: communities that are going to keep pushing forward. So this
Speaker 12: is all about the entire United States of America recognizing
Speaker 12: that we're facing a world's challenge that we not only
Speaker 12: helped to instigate, but can actually become leaders and moving forward.
Speaker 12: And the companies that I'm working with are all in
Speaker 12: on making that shift to clean energy and recognizing that
Speaker 12: that's were we're going to actually make the most benefit
Speaker 12: for our communities today and build a stronger America tomorrow.
Speaker 3: Administrator Donald Trump's pick to lead the EPA Lee Zelden.
Speaker 3: He did tell a CENTI panel that he believes that
Speaker 3: climate change is real. What are your thoughts on him
Speaker 3: as the pick?
Speaker 11: Well, that was better than the answers I've seen from
Speaker 11: other people.
Speaker 12: Look, Lee leez Elden is a bit of an unknown.
Speaker 11: I know that he has made.
Speaker 12: Some decisions in New York that seem to be very
Speaker 12: good ones from both an environmental and climate perspective, but
Speaker 12: I've also seen him do work that seemed very negative
Speaker 12: around around climate change and making progress.
Speaker 11: So we'll have to wait and see.
Speaker 12: You know, it's very easy to go in front of
Speaker 12: a committee and answer questions and now it apparently avoid
Speaker 12: most of them.
Speaker 11: But we have to work together. We have to understand
Speaker 11: about people, not politics.
Speaker 1: Well, we so appreciate getting time with you again. Jeana McCarthy,
Speaker 1: former us EPA administrator, first White House National also White
Speaker 1: Climate Advisor, should Say and she's also an advisor senior
Speaker 1: advisor at Bloomberg Philanthropy.
Speaker 2: This is the Bloomberg Business Week podcast, available on Apple, Spotify,
Speaker 2: and anywhere else you get your podcasts. Listen live weekday
Speaker 2: afternoons from two to five pm Eastern on Bloomberg dot Com,
Speaker 2: the iHeartRadio app, tune In, and the Bloomberg Business App.
Speaker 2: You can also watch us live every weekday on YouTube
Speaker 2: and always on the Bloomberg terminal