1 00:00:01,480 --> 00:00:06,200 Speaker 1: Now from our nation's capital. This is Bloomberg Sound On. 2 00:00:07,360 --> 00:00:09,639 Speaker 1: If people think the country is on the wrong track 3 00:00:09,760 --> 00:00:12,440 Speaker 1: and are upset, it's usually really bad news to the 4 00:00:12,440 --> 00:00:15,960 Speaker 1: party in Valley. The Democrats had a very difficult challenge 5 00:00:15,960 --> 00:00:17,800 Speaker 1: on their hands when it comes to the mid term 6 00:00:17,960 --> 00:00:23,240 Speaker 1: Bloomberg Sound On, Politics, Policy and Perspective from DC's top names. 7 00:00:23,400 --> 00:00:25,560 Speaker 1: I think there's a lot of pet up demand for 8 00:00:25,600 --> 00:00:28,800 Speaker 1: electing a woman hand I two could be the year 9 00:00:28,840 --> 00:00:30,600 Speaker 1: of the world, and I see this demand that you 10 00:00:30,680 --> 00:00:33,240 Speaker 1: have today as the baseline for the future. Could means 11 00:00:33,280 --> 00:00:37,360 Speaker 1: our economy is roaring Bash Bloomberg Sound On with Joe 12 00:00:37,479 --> 00:00:43,479 Speaker 1: Matthew on Bloomberg Radio. As the earth shifts again thanks 13 00:00:43,479 --> 00:00:46,760 Speaker 1: to the Federal Reserve leaning into the battle against inflation. 14 00:00:46,800 --> 00:00:49,080 Speaker 1: You've been hearing about it near on Bloomberg last couple 15 00:00:49,120 --> 00:00:53,240 Speaker 1: of hours. Accelerating the taper and signaling now three interest 16 00:00:53,320 --> 00:00:57,280 Speaker 1: rate hikes in two We'll discuss what that means for 17 00:00:57,360 --> 00:01:01,080 Speaker 1: the rest of the Biden economic agenda with Betsy Stevenson 18 00:01:01,120 --> 00:01:04,080 Speaker 1: at the University of Michigan, former member of the Council 19 00:01:04,080 --> 00:01:08,160 Speaker 1: of Economic Advisors, the CEOs of the major airlines testifying 20 00:01:08,200 --> 00:01:11,320 Speaker 1: today in Washington, they're still at at lawmakers asking what 21 00:01:11,400 --> 00:01:15,120 Speaker 1: they did with the emergency COVID money that was doled 22 00:01:15,160 --> 00:01:18,560 Speaker 1: out last year and why there were still widespread cancelations. 23 00:01:18,560 --> 00:01:21,839 Speaker 1: Will talk about that later with Dan Katz, former senior 24 00:01:21,840 --> 00:01:25,120 Speaker 1: advisor at the U. S. Treasury, who questioned this program 25 00:01:25,120 --> 00:01:28,200 Speaker 1: in a Bloomberg opinion piece last April. We have the 26 00:01:28,240 --> 00:01:30,840 Speaker 1: signature panel today and it's a good thing. Bloomberg Politics 27 00:01:30,840 --> 00:01:33,479 Speaker 1: contributors Jeanie Chanzano and Rick Davis are with us here 28 00:01:33,760 --> 00:01:36,399 Speaker 1: on the fastest hour in politics. What a day. We 29 00:01:36,440 --> 00:01:38,399 Speaker 1: are drinking from the fire hose here. We've got a 30 00:01:38,400 --> 00:01:40,520 Speaker 1: lot to talk about. It seemed inevitable to many here 31 00:01:40,520 --> 00:01:45,040 Speaker 1: in Washington and on Wall Street, of course, and well 32 00:01:45,200 --> 00:01:47,800 Speaker 1: the Fed share J. Pale confirmed it today. Problems have 33 00:01:48,120 --> 00:01:53,080 Speaker 1: been larger and longer lasting than anticipated, exacerbated by waves 34 00:01:53,120 --> 00:01:56,880 Speaker 1: of the virus. As a result, overall, inflation is running 35 00:01:56,920 --> 00:02:00,520 Speaker 1: well above our two longer run goal and will likely 36 00:02:00,560 --> 00:02:03,440 Speaker 1: continue to do so well into next year. J. Powell 37 00:02:03,840 --> 00:02:07,240 Speaker 1: recalling now, if you listen to this broadcast, what Senator 38 00:02:07,320 --> 00:02:10,720 Speaker 1: Joe Manchin said on Monday came out of his office, 39 00:02:11,120 --> 00:02:13,520 Speaker 1: big gaggle of reporters waiting for him when asked about 40 00:02:13,560 --> 00:02:16,920 Speaker 1: his view of the President's build back Better plan. Remember this, 41 00:02:17,240 --> 00:02:21,160 Speaker 1: my grandfather should say, unmanaged debt will make a coward 42 00:02:21,160 --> 00:02:24,040 Speaker 1: out of the decisions you make. And we're now twenty 43 00:02:24,120 --> 00:02:26,600 Speaker 1: nine Trill. You know we'll be pushing on the thirty Troy. 44 00:02:26,680 --> 00:02:29,840 Speaker 1: And I'm sure that Mr Powell with the FEDS that 45 00:02:29,880 --> 00:02:32,320 Speaker 1: they're going to make some decisions pretty soon here. And 46 00:02:32,360 --> 00:02:36,280 Speaker 1: I'm understanding that he is considering things that we've talked about. 47 00:02:36,400 --> 00:02:41,639 Speaker 1: Quantato easy should be reduced or eliminated as quickly as possible, 48 00:02:41,639 --> 00:02:44,040 Speaker 1: and not that and the interest rates going to affect 49 00:02:44,040 --> 00:02:46,120 Speaker 1: all of us if he has to get increase interests 50 00:02:46,120 --> 00:02:48,360 Speaker 1: to try to control You know, it's real when lawmakers 51 00:02:48,440 --> 00:02:53,400 Speaker 1: quote their grandparents. And indeed Mr Powell has made some changes. 52 00:02:54,560 --> 00:02:57,160 Speaker 1: It looks like Senator Mansion can cross his end QE 53 00:02:57,440 --> 00:03:01,760 Speaker 1: demand off the top of the now famous memo. And look, 54 00:03:01,760 --> 00:03:03,680 Speaker 1: as you heard from Charlie Pellett, this news moved the 55 00:03:03,680 --> 00:03:06,800 Speaker 1: markets for the better. But is it moving anything here 56 00:03:07,639 --> 00:03:11,040 Speaker 1: inside the bubble because I'm not done yet. I started 57 00:03:11,040 --> 00:03:13,480 Speaker 1: by telling you the earth shifted again. It just shifted again. 58 00:03:13,480 --> 00:03:15,600 Speaker 1: In the last five minutes. President Biden just spoke to 59 00:03:15,680 --> 00:03:18,160 Speaker 1: reporters in Kentucky, as we told you, that's where he 60 00:03:18,240 --> 00:03:22,120 Speaker 1: is today, touring areas devastated by the tornadoes earlier this week. 61 00:03:22,639 --> 00:03:25,280 Speaker 1: And he just added a big old wrinkle to all this. 62 00:03:27,919 --> 00:03:31,720 Speaker 1: President Biden is now offering to delay the agenda, to 63 00:03:31,919 --> 00:03:36,720 Speaker 1: literally set aside his Build Back Better plan if Democratic 64 00:03:36,800 --> 00:03:40,160 Speaker 1: leaders think they can pass voting rights legislation. There's nothing 65 00:03:40,200 --> 00:03:43,880 Speaker 1: domestically more important than the voting arts, the single biggestation. 66 00:03:48,640 --> 00:03:51,920 Speaker 1: That's it. Okay, move right along. As I read on 67 00:03:51,960 --> 00:03:54,880 Speaker 1: the terminal from Jenny Leonard, our White House team, Senate 68 00:03:54,920 --> 00:03:58,240 Speaker 1: Democrats discussing delaying a vote on Billback Better until next 69 00:03:58,320 --> 00:04:04,280 Speaker 1: year instead for focusing on voting rights legislation. Senator Mansion 70 00:04:04,320 --> 00:04:07,320 Speaker 1: has refused to commit to supporting the plan, the economic plan, 71 00:04:07,440 --> 00:04:10,200 Speaker 1: leaving Democrats, as I read here, at least one vote short. Well, 72 00:04:10,240 --> 00:04:13,280 Speaker 1: that part hasn't changed. So it's a little bit hard 73 00:04:13,320 --> 00:04:17,560 Speaker 1: to tell where we're going here, everybody, as we head 74 00:04:18,000 --> 00:04:22,320 Speaker 1: into the great uncertainty together once again, let's get into 75 00:04:22,360 --> 00:04:25,680 Speaker 1: it now with Betsy Stevenson been looking forward to this conversation. 76 00:04:25,720 --> 00:04:28,440 Speaker 1: Professor of economics and public Policy at the University of 77 00:04:28,480 --> 00:04:33,400 Speaker 1: Michigan former member of the Council of Economic Advisors. Betsy, 78 00:04:33,480 --> 00:04:35,080 Speaker 1: I'm glad you're here. I'm gonna just back up a 79 00:04:35,120 --> 00:04:37,359 Speaker 1: little bit and ask you, did the FED change the 80 00:04:37,440 --> 00:04:40,840 Speaker 1: rules today for build back better? Did they underscore the 81 00:04:40,920 --> 00:04:46,080 Speaker 1: fear of inflation that could challenge this in the long run? Oh? I, 82 00:04:46,080 --> 00:04:48,159 Speaker 1: I don't think so at all. I think the Fed 83 00:04:48,200 --> 00:04:51,680 Speaker 1: did exactly what everybody expected them to do today, which 84 00:04:51,880 --> 00:04:55,119 Speaker 1: was to speed up the taper um. I think, in fact, 85 00:04:55,200 --> 00:04:58,680 Speaker 1: why you saw such a positive reaction was that the 86 00:04:58,720 --> 00:05:02,960 Speaker 1: FED didn't uh speed the taper up even further. It 87 00:05:03,040 --> 00:05:07,599 Speaker 1: didn't do anything outside of what people expected in terms 88 00:05:07,600 --> 00:05:13,960 Speaker 1: of leaning more heavily into fighting inflation. Federals are policy. 89 00:05:13,960 --> 00:05:18,320 Speaker 1: Monetary policy right now is still incredibly dubbish, meaning that 90 00:05:18,720 --> 00:05:23,080 Speaker 1: there's still actively trying to boost demand to make up 91 00:05:23,120 --> 00:05:26,719 Speaker 1: for the pandemic. And the thing everyone's concerned about is 92 00:05:26,800 --> 00:05:30,040 Speaker 1: that we have too much demand in the economy right now. 93 00:05:30,320 --> 00:05:33,279 Speaker 1: Too many people want to buy too few things, and 94 00:05:33,320 --> 00:05:37,120 Speaker 1: that's pushing prices up. Now, what they said is, Okay, 95 00:05:37,279 --> 00:05:40,680 Speaker 1: we realize we need to do a little bit less, 96 00:05:41,080 --> 00:05:43,680 Speaker 1: and that's what speed up the papers all about. It 97 00:05:43,680 --> 00:05:46,320 Speaker 1: means that they're going to you know, they're going to 98 00:05:46,440 --> 00:05:51,200 Speaker 1: be trying to to get out of this accommodative monetary 99 00:05:51,279 --> 00:05:56,240 Speaker 1: policy faster, but you're still looking at really expansionary monetary 100 00:05:56,279 --> 00:06:00,320 Speaker 1: policy for the full next year. But Betsy, there's reality 101 00:06:00,440 --> 00:06:03,200 Speaker 1: and perception here in politics, right, and you've got lawmakers 102 00:06:03,240 --> 00:06:06,640 Speaker 1: like Joe Mansion or the broader Republican narrative here that's 103 00:06:06,640 --> 00:06:08,960 Speaker 1: been looking for anything to kind of hang the hat 104 00:06:09,000 --> 00:06:11,720 Speaker 1: on here to underscore the argument that inflation is a 105 00:06:11,760 --> 00:06:14,599 Speaker 1: problem and more spending will make it worse. Are we 106 00:06:14,680 --> 00:06:17,880 Speaker 1: not going to hear more of that argument now? Oh, well, 107 00:06:17,920 --> 00:06:21,000 Speaker 1: of course we are, because it's the it's the inflation 108 00:06:21,080 --> 00:06:24,359 Speaker 1: data that came out on Friday, And you know, the 109 00:06:24,400 --> 00:06:28,480 Speaker 1: reality is economists also understand that that inflation data is 110 00:06:28,520 --> 00:06:30,960 Speaker 1: going to continue to look bad for some time. If 111 00:06:30,960 --> 00:06:32,880 Speaker 1: you look at what we saw in November, we saw 112 00:06:32,920 --> 00:06:37,400 Speaker 1: a slight slowdown in the rate of inflation compared to October. 113 00:06:37,760 --> 00:06:40,960 Speaker 1: We're gonna need to see slow down even more for 114 00:06:41,040 --> 00:06:43,919 Speaker 1: quite some time. But overall, that's still going to be 115 00:06:44,000 --> 00:06:46,960 Speaker 1: leading us to seeing that higher annual rate of inflation. 116 00:06:47,240 --> 00:06:49,719 Speaker 1: And we know that there's certain things built in that 117 00:06:49,839 --> 00:06:52,279 Speaker 1: mean that price rises are gonna keep going up. For 118 00:06:52,279 --> 00:06:55,920 Speaker 1: a while, the housing market has been white hot, meaning 119 00:06:56,080 --> 00:06:59,920 Speaker 1: that prices are going up for houses, and that gets 120 00:07:00,360 --> 00:07:04,560 Speaker 1: built into the CPI, that measure of inflation slowly as 121 00:07:04,600 --> 00:07:09,080 Speaker 1: you start to adjust to the fact that owners of 122 00:07:09,080 --> 00:07:13,120 Speaker 1: of more expensive houses are now effectively paying more in 123 00:07:13,240 --> 00:07:17,880 Speaker 1: rent and as new renters signed new leases where their 124 00:07:17,880 --> 00:07:22,800 Speaker 1: rents actually go up. So we're gonna see higher inflation rates. 125 00:07:23,000 --> 00:07:24,560 Speaker 1: You know, We're not going to jump back down to 126 00:07:24,640 --> 00:07:28,240 Speaker 1: two in December or in January February. And I think 127 00:07:28,240 --> 00:07:31,760 Speaker 1: all economists, including the FED know that. I think the 128 00:07:31,800 --> 00:07:35,400 Speaker 1: FED wants to be communicating quite clearly that price stability 129 00:07:35,560 --> 00:07:38,280 Speaker 1: is on their mind and that they're being nimble and 130 00:07:38,320 --> 00:07:42,200 Speaker 1: taking action as necessary. And that's what they signaled by 131 00:07:42,280 --> 00:07:45,480 Speaker 1: speeding up the taper. But they communicated that well enough 132 00:07:45,520 --> 00:07:48,720 Speaker 1: that there were no surprises in today's announcement. But as 133 00:07:48,760 --> 00:07:50,680 Speaker 1: we continue to look at this through the prism of 134 00:07:50,880 --> 00:07:53,560 Speaker 1: politics in the capital, it's it's a big I told 135 00:07:53,560 --> 00:07:56,160 Speaker 1: you so for Republicans, right, And I'd like to just 136 00:07:56,200 --> 00:07:58,800 Speaker 1: spin this around, Betsy. What does this say about the 137 00:07:58,880 --> 00:08:01,680 Speaker 1: argument we're hearing from down mcrats and specifically from the 138 00:08:01,720 --> 00:08:05,000 Speaker 1: white House that this reconciliation, build the Build Back Better, 139 00:08:05,120 --> 00:08:07,000 Speaker 1: whatever you want to call it, the social spending plan 140 00:08:07,080 --> 00:08:10,120 Speaker 1: will in fact lower prices that it will help to 141 00:08:10,200 --> 00:08:15,880 Speaker 1: cure inflation. Is that true or false? Well, it's certainly 142 00:08:16,160 --> 00:08:18,400 Speaker 1: the case that it's not going to do very much 143 00:08:18,480 --> 00:08:22,360 Speaker 1: to increase inflation. To Um, you know, let's get into 144 00:08:22,360 --> 00:08:25,840 Speaker 1: the nitty gritty of of what's causing inflation. Inflation happens 145 00:08:25,960 --> 00:08:30,200 Speaker 1: when demand is outstripping supply. One of the problems we 146 00:08:30,240 --> 00:08:34,640 Speaker 1: have is workers not returning to work fast enough. And 147 00:08:34,800 --> 00:08:37,200 Speaker 1: so there's some measures in that Build Back Better plan 148 00:08:37,800 --> 00:08:40,559 Speaker 1: that are going to put extra money in people's pockets 149 00:08:40,600 --> 00:08:42,880 Speaker 1: that could be inflationary. But if they're gonna do it 150 00:08:42,920 --> 00:08:45,720 Speaker 1: by encouraging them to go back to work, for example, 151 00:08:46,200 --> 00:08:50,000 Speaker 1: increasing the earn income tax credit that encourages people to 152 00:08:50,040 --> 00:08:52,920 Speaker 1: go to work, So that could expand labor supply. But 153 00:08:53,160 --> 00:08:55,880 Speaker 1: at the same time, it's going to be paying people 154 00:08:55,880 --> 00:08:58,360 Speaker 1: at that higher rates their wages go up, what are 155 00:08:58,400 --> 00:09:02,600 Speaker 1: they gonna do. They're going to spend money, that's the problem. Um. 156 00:09:02,640 --> 00:09:05,280 Speaker 1: But most of what's in Build Back Better is paid for. 157 00:09:05,640 --> 00:09:08,600 Speaker 1: So what that means is, as they spend money, some 158 00:09:08,800 --> 00:09:12,079 Speaker 1: extra money is being pulled back from somewhere else. So 159 00:09:12,280 --> 00:09:15,480 Speaker 1: that's one reason why it's not very inflationary. It's also 160 00:09:15,960 --> 00:09:18,679 Speaker 1: something that's going to be spent out over time over 161 00:09:18,720 --> 00:09:22,000 Speaker 1: those ten years. So I think the thing Mansions most 162 00:09:22,080 --> 00:09:26,360 Speaker 1: worried about is something like the child tax Credit putting 163 00:09:26,400 --> 00:09:30,200 Speaker 1: money into the houses of households of low income kits, 164 00:09:30,440 --> 00:09:33,640 Speaker 1: low income households with kids, and worried that those people 165 00:09:33,679 --> 00:09:38,000 Speaker 1: can afford food, is putting upward pressure on food prices, 166 00:09:38,760 --> 00:09:41,640 Speaker 1: and you know, I just don't think personally that's how 167 00:09:41,640 --> 00:09:44,320 Speaker 1: we want to fight inflation. Is making it so that, 168 00:09:44,720 --> 00:09:47,040 Speaker 1: you know, kids in low income households don't get enough 169 00:09:47,080 --> 00:09:50,880 Speaker 1: to eat. And I want to ask you about that specifically, 170 00:09:50,920 --> 00:09:53,240 Speaker 1: that that policy, Betsy, we spent a good chunk of 171 00:09:53,240 --> 00:09:57,200 Speaker 1: the program on it yesterday. Uh, this is theft December 172 00:09:57,240 --> 00:09:59,440 Speaker 1: here we are. This is the day that the checks 173 00:09:59,480 --> 00:10:00,880 Speaker 1: go out, and they could be the last for a 174 00:10:00,880 --> 00:10:03,319 Speaker 1: while or permanently, depending on what happens. Listen to Nancy 175 00:10:03,360 --> 00:10:08,959 Speaker 1: Pelosi today, Today, December would be the last my child 176 00:10:09,000 --> 00:10:13,000 Speaker 1: tax Credit check that would go out. We're hoping that 177 00:10:13,040 --> 00:10:17,240 Speaker 1: we can have this settled before Christmas, because on December 178 00:10:17,320 --> 00:10:25,000 Speaker 1: thirty one, this expires, and so it's essential what we 179 00:10:25,120 --> 00:10:28,520 Speaker 1: see in terms of the tax creditism has been used 180 00:10:29,360 --> 00:10:34,840 Speaker 1: more recently for preparing children for school. It's been used 181 00:10:34,880 --> 00:10:39,520 Speaker 1: for food, for rent, essential essentials in the In the 182 00:10:39,600 --> 00:10:43,240 Speaker 1: words of the Speaker of the House, Betsy, I'll ask 183 00:10:43,280 --> 00:10:46,040 Speaker 1: you the same question we've been asking a number of folks. 184 00:10:46,080 --> 00:10:49,120 Speaker 1: What happens if there's a lapse in that child tax 185 00:10:49,160 --> 00:10:51,920 Speaker 1: credit or it goes away altogether. What would be the 186 00:10:51,960 --> 00:10:56,360 Speaker 1: broader economic impact as we hear politicians argue about it, Well, 187 00:10:56,400 --> 00:10:59,240 Speaker 1: it's going to plunge millions of kids back into poverty. 188 00:10:59,600 --> 00:11:01,559 Speaker 1: So it's going to mean that there's not quite enough 189 00:11:01,559 --> 00:11:05,480 Speaker 1: food for them that maybe they end up homeless, or 190 00:11:05,520 --> 00:11:09,000 Speaker 1: they end up, for a lot of low income families 191 00:11:09,400 --> 00:11:12,560 Speaker 1: end up, you know, living in sort of more temporary accommodation, 192 00:11:12,720 --> 00:11:16,959 Speaker 1: staying with a family, another family member or friends of 193 00:11:17,040 --> 00:11:20,880 Speaker 1: the family. So we've got housing instability, we've got pud 194 00:11:20,920 --> 00:11:26,920 Speaker 1: instability and insecurity and come back. Yeah, Betsy Stevenson, I'm 195 00:11:26,920 --> 00:11:29,079 Speaker 1: really glad you gave us some time today. I appreciate 196 00:11:29,120 --> 00:11:33,000 Speaker 1: your answering my questions. Formerly of the Council of Economic Advisors, 197 00:11:33,000 --> 00:11:36,400 Speaker 1: now Professor of Economics, Public Policy University of Michigan. That 198 00:11:36,480 --> 00:11:39,760 Speaker 1: sets the table. We assemble the panel next. Rick and 199 00:11:39,840 --> 00:11:42,320 Speaker 1: Janie are with us for the hour, our signature panel 200 00:11:42,400 --> 00:11:45,400 Speaker 1: on sound On as we try to follow the bouncing 201 00:11:45,400 --> 00:11:48,600 Speaker 1: ball and the rules keep changing in Washington, I'm Joe Matthew. 202 00:11:48,720 --> 00:11:53,920 Speaker 1: This is Bloomberg. You're listening to Bloomberg You sound on 203 00:11:54,440 --> 00:12:00,600 Speaker 1: with Joe Matthew on Bloomberg Radio. Where'd us throwing the 204 00:12:00,600 --> 00:12:02,480 Speaker 1: scripts up in the air here, because that's what they're 205 00:12:02,480 --> 00:12:05,120 Speaker 1: doing on Capitol Hill apparently and at the White House. 206 00:12:05,160 --> 00:12:06,760 Speaker 1: If you were with us at the start of the hour, 207 00:12:08,000 --> 00:12:11,600 Speaker 1: we began with breaking news. The President of the United 208 00:12:11,640 --> 00:12:14,439 Speaker 1: States says he's willing to delay build back Better the 209 00:12:14,600 --> 00:12:19,280 Speaker 1: social spending plan, delay it sit on until next year 210 00:12:19,880 --> 00:12:24,160 Speaker 1: if Democrats can get a voting rights package done. He 211 00:12:24,240 --> 00:12:26,920 Speaker 1: said this to reporters while surveying storm damage in Kentucky. 212 00:12:26,920 --> 00:12:29,560 Speaker 1: And we assemble the panel now with well, I don't 213 00:12:29,559 --> 00:12:31,280 Speaker 1: know exactly where it's going to go. That's why we're 214 00:12:31,360 --> 00:12:33,880 Speaker 1: delighted to have Rick and Genie with us. Bloomberg Politics 215 00:12:33,920 --> 00:12:37,480 Speaker 1: contributors Jeannie Chanzano, Rick Davis, I mean, you just you 216 00:12:37,520 --> 00:12:39,960 Speaker 1: can't make this stuff up. Genie did, did we just 217 00:12:40,080 --> 00:12:45,160 Speaker 1: push this officially into next year, and did this combine 218 00:12:45,200 --> 00:12:47,959 Speaker 1: with the FED meeting, the delay of the bill suggested 219 00:12:48,000 --> 00:12:51,600 Speaker 1: by the President, and the words on the increased taper 220 00:12:51,800 --> 00:12:54,200 Speaker 1: and now interest rate cuts three next year by FED 221 00:12:54,240 --> 00:12:57,280 Speaker 1: share J Powell? Did this just make build back better 222 00:12:57,360 --> 00:13:01,920 Speaker 1: less likely? It's a headspace change for the Democrats, I mean, 223 00:13:01,960 --> 00:13:06,040 Speaker 1: a really amazing reversal, and I think admission that they 224 00:13:06,240 --> 00:13:09,760 Speaker 1: have realized what we have talked about for some time, 225 00:13:10,120 --> 00:13:14,120 Speaker 1: that Joe Mansion was not gonna come along, and without him, 226 00:13:14,160 --> 00:13:17,280 Speaker 1: it wasn't going to pass before Christmas. They simply could 227 00:13:17,400 --> 00:13:21,280 Speaker 1: not agree on the timing, let alone the bill. And 228 00:13:21,400 --> 00:13:24,440 Speaker 1: so I think this is a remarkable admission. You know, 229 00:13:24,520 --> 00:13:27,040 Speaker 1: it was interesting to me to hear the presidents say 230 00:13:27,120 --> 00:13:30,839 Speaker 1: he's willing if they get this Voting Rights Act past. 231 00:13:31,000 --> 00:13:33,000 Speaker 1: Of course that's going to be hard enough to pass. 232 00:13:33,080 --> 00:13:36,000 Speaker 1: But the reality is he's not willing to do this. 233 00:13:36,120 --> 00:13:38,760 Speaker 1: He really has no choice at this point. And and 234 00:13:38,800 --> 00:13:42,840 Speaker 1: that's the the reality of the situation. As the talks 235 00:13:42,880 --> 00:13:45,680 Speaker 1: between him and Joe Mansion have reportedly, you know, sort 236 00:13:45,679 --> 00:13:47,920 Speaker 1: of ground to a halt. They just can't agree on 237 00:13:47,960 --> 00:13:50,040 Speaker 1: the timing and what should be included in this bill, 238 00:13:50,320 --> 00:13:53,280 Speaker 1: and certainly not before Christmas. I just wonder who he's 239 00:13:53,280 --> 00:13:56,400 Speaker 1: talking to, Rick did this just come out in Kentucky? 240 00:13:56,480 --> 00:13:58,440 Speaker 1: Because it seemed like the right thing to say. Nancy 241 00:13:58,480 --> 00:14:02,079 Speaker 1: Pelosi was is clapping back at reporters today, who were, 242 00:14:02,120 --> 00:14:04,360 Speaker 1: you know, in her words, trying to write the post 243 00:14:04,400 --> 00:14:08,920 Speaker 1: mortem here on on build back better? I wonder how 244 00:14:08,920 --> 00:14:11,200 Speaker 1: well this has been communicated throughout the ranks. And do 245 00:14:11,240 --> 00:14:15,600 Speaker 1: you see it slowing this or in fact killing this bill? Well, 246 00:14:15,640 --> 00:14:19,320 Speaker 1: I think the bill was slowed when everybody had to 247 00:14:19,320 --> 00:14:24,560 Speaker 1: recognize that, and that slowed it up because I don't 248 00:14:24,560 --> 00:14:28,560 Speaker 1: think anybody would uh necessarily say what Betsy Stevens has 249 00:14:28,560 --> 00:14:30,960 Speaker 1: said just a while ago, which is this bill pumping 250 00:14:31,080 --> 00:14:33,240 Speaker 1: you know, one point seven five trillion dollars in the 251 00:14:33,240 --> 00:14:36,240 Speaker 1: economy has got no impact on inflation? Who wants to 252 00:14:36,240 --> 00:14:39,800 Speaker 1: take that risk? Even if it's true if you're a politician, 253 00:14:42,720 --> 00:14:45,520 Speaker 1: the late if not killed this bill to begin with, 254 00:14:45,640 --> 00:14:47,240 Speaker 1: and now that the Fed is on top of it 255 00:14:47,280 --> 00:14:48,920 Speaker 1: and saying, yeah, this is our number one thing we're 256 00:14:48,960 --> 00:14:51,680 Speaker 1: gonna we're gonna work to to beat it back and 257 00:14:51,720 --> 00:14:55,080 Speaker 1: contain it. Um. I think I think that that's the 258 00:14:55,080 --> 00:14:57,880 Speaker 1: death knew that that you're looking for into the build 259 00:14:57,880 --> 00:15:02,120 Speaker 1: Back Better plan. I would say Schumer's I have a 260 00:15:02,160 --> 00:15:04,760 Speaker 1: little trouble with the staying connected to Rick here. I 261 00:15:04,840 --> 00:15:08,680 Speaker 1: apologize Rick. Maybe we can shore up the line Virginia. 262 00:15:08,800 --> 00:15:11,160 Speaker 1: You know. I want to bring it back to Nancy 263 00:15:11,160 --> 00:15:13,560 Speaker 1: Pelosi here and I did talk about this as well 264 00:15:13,560 --> 00:15:15,600 Speaker 1: with Betsy just a couple of moments ago, and that 265 00:15:15,640 --> 00:15:18,600 Speaker 1: brings us back to our conversation from yesterday with regard 266 00:15:18,680 --> 00:15:22,680 Speaker 1: to the Child Tax Credit. Very interesting to hear Nancy 267 00:15:22,720 --> 00:15:25,520 Speaker 1: Pelosi kind of get to the same talking points that 268 00:15:25,560 --> 00:15:28,240 Speaker 1: we heard from Jen Psaki. They're just not going there 269 00:15:28,280 --> 00:15:31,840 Speaker 1: when asked about a standalone solution. If they can't get 270 00:15:31,880 --> 00:15:34,720 Speaker 1: the build back Better done, the checks one out today. 271 00:15:34,760 --> 00:15:36,440 Speaker 1: We don't know when the next round will be. Here's 272 00:15:36,520 --> 00:15:38,720 Speaker 1: Nancy Pelosi. But I don't want to let anybody off 273 00:15:38,760 --> 00:15:41,200 Speaker 1: the hook on the BBB to say, well, we covered 274 00:15:41,240 --> 00:15:44,520 Speaker 1: that one thing, so now the pressure is off. I 275 00:15:44,560 --> 00:15:47,800 Speaker 1: think that that is really important leverage in the discussion 276 00:15:48,280 --> 00:15:52,280 Speaker 1: on BBB, that the children and their families will suffer 277 00:15:52,440 --> 00:15:56,560 Speaker 1: without that payment. Not everybody gets it on a monthly basis, 278 00:15:56,800 --> 00:16:00,160 Speaker 1: but those who needed the most do uh, And so 279 00:16:01,880 --> 00:16:08,960 Speaker 1: we're just still optimistic about BBB passing. And perhaps even 280 00:16:09,000 --> 00:16:10,600 Speaker 1: if it were after the first of the year, which 281 00:16:10,640 --> 00:16:13,200 Speaker 1: I hope it is not, that it could be retroactive 282 00:16:13,240 --> 00:16:15,840 Speaker 1: if it's early enough in the first Okay, So there 283 00:16:15,840 --> 00:16:17,200 Speaker 1: was a little treat at the end their genie, it 284 00:16:17,240 --> 00:16:21,640 Speaker 1: could be retroactive. So the ideas they come back in January, 285 00:16:21,800 --> 00:16:24,200 Speaker 1: they either pass build back better, or they get something 286 00:16:24,240 --> 00:16:28,160 Speaker 1: else in there, a standalone child tax credit bill. But 287 00:16:28,200 --> 00:16:30,200 Speaker 1: I keep hearing, Genie, there aren't the votes for it. 288 00:16:30,800 --> 00:16:33,040 Speaker 1: There don't seem to be the votes for it. And 289 00:16:33,040 --> 00:16:35,600 Speaker 1: and you know, this is one of the things that 290 00:16:35,600 --> 00:16:39,880 Speaker 1: that Joe Manchin has really been quite concerned about. He 291 00:16:39,960 --> 00:16:44,120 Speaker 1: has been, you know, something of skeptical about some of this. 292 00:16:44,560 --> 00:16:49,920 Speaker 1: And the reality is Nancy Pelosi remained optimistic as she 293 00:16:50,000 --> 00:16:52,880 Speaker 1: said that this could pass. But it looks like you're 294 00:16:52,920 --> 00:16:54,720 Speaker 1: going to be looking at the new year, and I 295 00:16:54,760 --> 00:16:58,760 Speaker 1: would say, even there you have major questions. Because to 296 00:16:58,880 --> 00:17:01,160 Speaker 1: the news today, one of the big questions in the 297 00:17:01,200 --> 00:17:04,080 Speaker 1: new year is going to be does Joe Mansion feel 298 00:17:04,119 --> 00:17:06,879 Speaker 1: that this is any less likely to add to the 299 00:17:06,880 --> 00:17:09,840 Speaker 1: deficit at a time of high inflation. All of those 300 00:17:09,880 --> 00:17:13,640 Speaker 1: became real big questions. And so until we get answers 301 00:17:13,680 --> 00:17:16,520 Speaker 1: to those, you know, unless the bill is you know, 302 00:17:16,760 --> 00:17:20,160 Speaker 1: drawn down a large extent or the pay force are 303 00:17:20,320 --> 00:17:23,919 Speaker 1: very very clear and he's satisfied with those, that's going 304 00:17:23,960 --> 00:17:26,400 Speaker 1: to remain a big open question. And if they don't 305 00:17:26,400 --> 00:17:28,679 Speaker 1: have the votes to do this as a standalone, it 306 00:17:28,800 --> 00:17:32,159 Speaker 1: probably doesn't get done. And to your conversation with Betsy, 307 00:17:32,200 --> 00:17:36,120 Speaker 1: which was fascinating, the impact on child poverty in this 308 00:17:36,240 --> 00:17:40,040 Speaker 1: country is going to be dramatic and housing, food and 309 00:17:40,080 --> 00:17:43,119 Speaker 1: the like. So the impacts are very very real to 310 00:17:43,160 --> 00:17:46,159 Speaker 1: a vulnerable population. We don't have too much time here, Rick, 311 00:17:46,200 --> 00:17:48,080 Speaker 1: but I'd love to hear you finish your thought and 312 00:17:48,680 --> 00:17:51,400 Speaker 1: whether this build back better has ground to a halt. 313 00:17:51,880 --> 00:17:55,840 Speaker 1: What makes us think that voting rights can pass well. 314 00:17:55,880 --> 00:17:59,399 Speaker 1: I certainly hope they've talked to Joe Manchin about voting 315 00:17:59,480 --> 00:18:01,480 Speaker 1: rights because he was a hang up on that modiform. 316 00:18:01,520 --> 00:18:04,000 Speaker 1: It would be an incredible embarrassment to move to that 317 00:18:04,160 --> 00:18:07,639 Speaker 1: and still have a problem with Joe Manchin, Rick and 318 00:18:07,720 --> 00:18:09,520 Speaker 1: Junior with us for the hour. We're not done with 319 00:18:09,600 --> 00:18:12,560 Speaker 1: this yet. But if you saw the CEOs testify today, 320 00:18:12,600 --> 00:18:15,480 Speaker 1: the airline CEOs, it was a love fest, but only 321 00:18:15,520 --> 00:18:19,000 Speaker 1: to a point. We'll talk about the future of the 322 00:18:19,000 --> 00:18:22,080 Speaker 1: airline business and the emergency money they got for COVID 323 00:18:22,119 --> 00:18:26,840 Speaker 1: next time, Joe Matthew. This is Bloomberg broadcasting live from 324 00:18:26,840 --> 00:18:31,960 Speaker 1: our nation's capital, Bloomberg to New York, Bloomberg eleven, Frio 325 00:18:32,320 --> 00:18:35,840 Speaker 1: to Boston, Bloomberg one oh six one to San Francisco, 326 00:18:35,960 --> 00:18:40,000 Speaker 1: Bloomberg nine sixty to the country Serious x M General 327 00:18:40,040 --> 00:18:43,400 Speaker 1: one nine and around the globe the Bloomberg Business app 328 00:18:43,440 --> 00:18:47,760 Speaker 1: and Bloomberg Radio dot Com. This is Bloomberg Sound On 329 00:18:48,320 --> 00:18:54,879 Speaker 1: with Joe Matthew. Transportation briefing on the terminal airline CEO's 330 00:18:54,920 --> 00:18:57,600 Speaker 1: head to Capitol Hill today. They sure did, executives from 331 00:18:57,600 --> 00:19:02,640 Speaker 1: Delta American Southwest United It testifying before the Senate Commerce 332 00:19:02,640 --> 00:19:06,879 Speaker 1: Committee on how they used the money. The emergency COVID 333 00:19:06,920 --> 00:19:11,320 Speaker 1: month supposed to be for payrolls for labor. So why 334 00:19:11,600 --> 00:19:15,040 Speaker 1: the shortages and the cancelations. We'll talk about it ahead 335 00:19:15,080 --> 00:19:18,280 Speaker 1: with Dan Kat's former senior advisor at the U. S. Treasury, 336 00:19:18,400 --> 00:19:22,000 Speaker 1: who questioned this very program here in a Bloomberg opinion 337 00:19:22,000 --> 00:19:26,840 Speaker 1: piece last April, we heard from the airline ceo s today, 338 00:19:27,440 --> 00:19:30,720 Speaker 1: Doug Parker, CEO of American Airlines, was the first to 339 00:19:30,760 --> 00:19:34,800 Speaker 1: answer the tough question here. This is Senate Commerce, Science, Transportation. 340 00:19:35,359 --> 00:19:37,919 Speaker 1: They want to know what happened to the money and 341 00:19:37,960 --> 00:19:40,480 Speaker 1: why we had the flight disruptions last year. Were you 342 00:19:40,520 --> 00:19:45,960 Speaker 1: a victim of the cascading cancelations that happened that were 343 00:19:46,040 --> 00:19:50,200 Speaker 1: frequently blamed on, Whether did you get a refund when 344 00:19:50,200 --> 00:19:52,679 Speaker 1: you went to cancel or change your reservation. This is 345 00:19:52,720 --> 00:19:55,080 Speaker 1: all real life stuff that a lot of people listening 346 00:19:55,080 --> 00:19:59,640 Speaker 1: have been dealing with. Doug Parker, an American Airline, says, 347 00:19:59,680 --> 00:20:01,920 Speaker 1: we don't have a labor problem. We have more pilots 348 00:20:01,920 --> 00:20:04,920 Speaker 1: per pile black hour flight black hour that we've we've 349 00:20:04,920 --> 00:20:08,480 Speaker 1: had in the past. Well in this environment, unfortunately though, 350 00:20:08,640 --> 00:20:11,080 Speaker 1: it's difficult to get people to pick up extra extra 351 00:20:11,119 --> 00:20:13,920 Speaker 1: time is what we're finding. So we've which is what 352 00:20:13,960 --> 00:20:16,280 Speaker 1: we need in that time, and that was the case there. 353 00:20:16,280 --> 00:20:19,960 Speaker 1: It's largely related to what ms Nelson said about some 354 00:20:20,040 --> 00:20:22,520 Speaker 1: of what's going on the aircraft. It's really to COVID, 355 00:20:22,920 --> 00:20:25,119 Speaker 1: but we just didn't have the we don't have the 356 00:20:25,119 --> 00:20:27,679 Speaker 1: ability to recovery is quickly Miss Nelson. He's referring to 357 00:20:27,720 --> 00:20:32,600 Speaker 1: Sarah Nelson head of the Flight Attendants Association, also testifying 358 00:20:32,600 --> 00:20:36,560 Speaker 1: in the hearing today, referring to the madness, the air rage, 359 00:20:36,720 --> 00:20:39,720 Speaker 1: in the fighting overmasking and everything else on board the plane. 360 00:20:39,760 --> 00:20:42,320 Speaker 1: Will no wonder why not everyone wanted to show up. 361 00:20:43,640 --> 00:20:46,320 Speaker 1: I couldn't get them to commit to extra hours. It 362 00:20:46,359 --> 00:20:48,040 Speaker 1: actually starts to make a little bit of sense when 363 00:20:48,080 --> 00:20:50,359 Speaker 1: you think about this. Half the country doesn't even want 364 00:20:50,359 --> 00:20:54,000 Speaker 1: to go back to work yet. But as we spin 365 00:20:54,119 --> 00:20:58,919 Speaker 1: back to the twelfth of April on the terminal, we 366 00:20:58,960 --> 00:21:01,359 Speaker 1: find the Bloomberg opinion headline airlines don't need to be 367 00:21:01,440 --> 00:21:04,720 Speaker 1: saved by taxpayers again. Dan Katz wrote this column. The 368 00:21:04,760 --> 00:21:08,480 Speaker 1: first fifty billion dollar government lifeline, he wrote then, was 369 00:21:08,520 --> 00:21:10,440 Speaker 1: critical to steering the economy through the worst of the 370 00:21:10,480 --> 00:21:16,119 Speaker 1: pandemic and beyond. The next twenty nine billion is more complicated. Dan, welcome. 371 00:21:16,160 --> 00:21:17,760 Speaker 1: I don't know if you were victims of any of 372 00:21:17,760 --> 00:21:21,239 Speaker 1: the cascading cancelations that we heard about today, But what 373 00:21:21,280 --> 00:21:23,400 Speaker 1: do you make of the argument you give us money? 374 00:21:23,440 --> 00:21:26,119 Speaker 1: They said it saved seven thirty five thousand jobs, but 375 00:21:26,160 --> 00:21:28,840 Speaker 1: they couldn't get as much out of those workers individually 376 00:21:29,240 --> 00:21:33,080 Speaker 1: as they could before the pandemic. Was it money? Well, 377 00:21:33,119 --> 00:21:39,080 Speaker 1: spent UH. Well, first off, thanks very much Joe for 378 00:21:39,160 --> 00:21:42,280 Speaker 1: having having me on. Really pleasure to be here with 379 00:21:42,359 --> 00:21:46,439 Speaker 1: you to talk about this this critical issue, you know, 380 00:21:46,520 --> 00:21:50,240 Speaker 1: in terms of the role of the of the pandemic 381 00:21:50,320 --> 00:21:54,000 Speaker 1: support that was provided to the aviation industry and the 382 00:21:54,040 --> 00:21:58,360 Speaker 1: interplay with the disruptions that we heard the CEOs UH 383 00:21:58,640 --> 00:22:02,760 Speaker 1: talk about to day on Capitol Hill. Um. I think 384 00:22:02,760 --> 00:22:07,119 Speaker 1: it's really important to differentiate between what was done in 385 00:22:08,119 --> 00:22:12,200 Speaker 1: to really save the industry and actions that the airlines 386 00:22:12,200 --> 00:22:15,919 Speaker 1: have had to take since then. The supply disruptions we 387 00:22:16,000 --> 00:22:19,439 Speaker 1: see today in the aviation industry are really not that 388 00:22:19,600 --> 00:22:22,960 Speaker 1: different from what we've seen across many other industries, and 389 00:22:23,119 --> 00:22:27,919 Speaker 1: they have to do with companies planning for the expected 390 00:22:27,960 --> 00:22:31,560 Speaker 1: demand that they that they you know, we're planned on 391 00:22:31,600 --> 00:22:35,040 Speaker 1: seeing in the marketplace, and just their roots are schedules 392 00:22:35,040 --> 00:22:40,560 Speaker 1: fast enough. Is that fair? Yes, it is fair much 393 00:22:40,680 --> 00:22:44,960 Speaker 1: the same that you're seeing disruptions in shipping and disruptions 394 00:22:44,960 --> 00:22:48,320 Speaker 1: and retailers as the expected demand that they've seen from 395 00:22:48,359 --> 00:22:51,400 Speaker 1: customers is different than what they planned for because they 396 00:22:52,080 --> 00:22:56,359 Speaker 1: meeting demand requires lead time. What I'll say about the 397 00:22:56,480 --> 00:23:00,359 Speaker 1: role that the pandemic assistance played is that you know, 398 00:23:00,440 --> 00:23:04,320 Speaker 1: pandemic assistance in from the aviation industry really saved the 399 00:23:04,359 --> 00:23:09,320 Speaker 1: industry and prevented cascading bankruptcies and layoffs of essential the 400 00:23:09,440 --> 00:23:15,600 Speaker 1: entire aviation workforce. Um. Even though we were able to 401 00:23:15,600 --> 00:23:19,119 Speaker 1: to keep the industry intact and keep all of the 402 00:23:19,119 --> 00:23:22,639 Speaker 1: employees that wanted to be on on payroll for that period, 403 00:23:23,359 --> 00:23:28,080 Speaker 1: many employees took voluntary buyouts because they concluded, you know, 404 00:23:28,119 --> 00:23:31,119 Speaker 1: not irrationally, if you were making this decision in June, 405 00:23:32,480 --> 00:23:34,800 Speaker 1: that the airline industry was in it for a tough 406 00:23:34,840 --> 00:23:37,679 Speaker 1: few years. Uh, and so it made more sense to 407 00:23:37,680 --> 00:23:39,760 Speaker 1: take the buy out. But what that did is that 408 00:23:39,880 --> 00:23:44,760 Speaker 1: reduced staffing levels across the industry. And uh, that's that's 409 00:23:45,160 --> 00:23:48,040 Speaker 1: playing into the staffing shortages that we've seen in the 410 00:23:48,040 --> 00:23:50,840 Speaker 1: airline industry and across other sectors in the economy because 411 00:23:50,840 --> 00:23:53,320 Speaker 1: demand came back more quickly that But we heard Doug 412 00:23:53,359 --> 00:23:55,720 Speaker 1: Parker say that they've got they've got a good balance, 413 00:23:55,720 --> 00:23:57,800 Speaker 1: they have enough people. This is the proper number of 414 00:23:57,840 --> 00:24:00,000 Speaker 1: people to run an airline. They're just not as productive 415 00:24:00,000 --> 00:24:02,240 Speaker 1: of as they were before the pandemic. Because should we 416 00:24:02,240 --> 00:24:06,439 Speaker 1: not believe him, I have no reason to to not 417 00:24:06,560 --> 00:24:08,840 Speaker 1: believe him. You know, I think this is part of 418 00:24:08,840 --> 00:24:12,160 Speaker 1: the story that you're seeing more broadly across the economy, 419 00:24:12,160 --> 00:24:16,840 Speaker 1: which is the shifting balance of power between employees and employers. 420 00:24:17,160 --> 00:24:21,240 Speaker 1: Um and uh, you know that that is a good thing. Broadly, 421 00:24:21,280 --> 00:24:25,400 Speaker 1: the employees have more leverage to uh to make sure 422 00:24:25,440 --> 00:24:28,480 Speaker 1: they're being compensated fairly. And in the case of the 423 00:24:28,480 --> 00:24:31,360 Speaker 1: airline industry, I think you heard that the work has 424 00:24:31,400 --> 00:24:35,320 Speaker 1: become more challenging in many respects, and so it is 425 00:24:35,440 --> 00:24:39,840 Speaker 1: it is not surprising that you see employees seeking to 426 00:24:39,840 --> 00:24:42,760 Speaker 1: to to get more compensation for for the same amount 427 00:24:42,760 --> 00:24:45,720 Speaker 1: of work. Uh. You know they would have done previously. 428 00:24:45,920 --> 00:24:49,400 Speaker 1: Fascinating to hear the airlines quantify how much this has 429 00:24:49,440 --> 00:24:54,879 Speaker 1: cost them. By the way, with regard to cancelations refunds 430 00:24:54,920 --> 00:25:00,400 Speaker 1: on cancelations. Doug Parker again at American Airlines issue three 431 00:25:00,440 --> 00:25:05,040 Speaker 1: point two billion dollars of refunds in three cords, and 432 00:25:05,119 --> 00:25:07,920 Speaker 1: our revenues over the last three cos was seven point 433 00:25:07,960 --> 00:25:11,040 Speaker 1: five million dollars. It's like half their revenue here. It's 434 00:25:11,080 --> 00:25:14,840 Speaker 1: pretty remarkable, Dan, I guess I would ask you straight out, 435 00:25:15,000 --> 00:25:19,720 Speaker 1: are these airlines well run or well run enough to 436 00:25:19,920 --> 00:25:25,399 Speaker 1: manage a pandemic Uh So, it's a great question. And 437 00:25:25,720 --> 00:25:30,240 Speaker 1: as you note, the refund numbers are are really extraordinary 438 00:25:30,359 --> 00:25:34,359 Speaker 1: and should be put in context of of what the 439 00:25:34,440 --> 00:25:37,960 Speaker 1: overall shocked that the industry faced in You know, the 440 00:25:37,960 --> 00:25:43,080 Speaker 1: airline industry coming into the pandemic was performing in record levels. 441 00:25:43,800 --> 00:25:48,560 Speaker 1: The companies were well capitalized, they were reporting record profits, 442 00:25:48,600 --> 00:25:51,680 Speaker 1: record revenue, and in the space of essentially a month, 443 00:25:52,080 --> 00:25:55,880 Speaker 1: they went from record revenue to not just zero revenue, 444 00:25:55,960 --> 00:25:58,879 Speaker 1: but negative revenue because all of the refunds that were 445 00:25:58,880 --> 00:26:02,399 Speaker 1: associated with it. There are no businesses that are built 446 00:26:02,520 --> 00:26:06,400 Speaker 1: to run on your revenue going to zero. Yeah, lose 447 00:26:06,440 --> 00:26:09,120 Speaker 1: all your customers in one day. Dan, We're out of time. 448 00:26:09,160 --> 00:26:13,320 Speaker 1: Here was the money well spent or not? The money 449 00:26:13,440 --> 00:26:22,560 Speaker 1: that US administration in Congress uh sent in Margine tiny 450 00:26:22,600 --> 00:26:27,199 Speaker 1: under the cares actually absolutely well spent. I think all right, 451 00:26:27,480 --> 00:26:33,920 Speaker 1: we'll be back. This is Bloomberg. You're listening to Bloomberg. 452 00:26:33,960 --> 00:26:39,920 Speaker 1: You Sound on with Joe Matthew on Bloomberg Radio. It's 453 00:26:39,960 --> 00:26:44,840 Speaker 1: a madhouse. To quote Mr. Heston, the news that has 454 00:26:44,920 --> 00:26:47,440 Speaker 1: emerged this hour. This is why we have the fastest 455 00:26:47,480 --> 00:26:51,760 Speaker 1: hour in politics. Sound on. I'm Joe Matthew Live from Washington. 456 00:26:51,800 --> 00:26:53,680 Speaker 1: And we do have the signature panel here, Rick and 457 00:26:53,720 --> 00:26:55,679 Speaker 1: Jeanie to help us make sense of all of it. 458 00:26:55,720 --> 00:26:57,760 Speaker 1: If you are just joining us though, as a screamer 459 00:26:57,800 --> 00:27:01,040 Speaker 1: at the top, President Biden on the road in Kentucky. 460 00:27:01,080 --> 00:27:04,000 Speaker 1: He's been there, of course, surveying the devastation left by 461 00:27:04,000 --> 00:27:08,439 Speaker 1: the string of tornadoes and spoke to reporters as he 462 00:27:08,480 --> 00:27:10,600 Speaker 1: was walking around looking at this as he's willing to 463 00:27:10,680 --> 00:27:15,760 Speaker 1: delay his social spending agenda to allow for a vote 464 00:27:15,840 --> 00:27:19,440 Speaker 1: on a voting rights bill. That's if Democrats think they 465 00:27:19,440 --> 00:27:21,920 Speaker 1: can do it. So a lot has changed in the 466 00:27:22,000 --> 00:27:24,720 Speaker 1: last twelve hours and the last hour for that matter. 467 00:27:25,280 --> 00:27:28,840 Speaker 1: As we rejoined with the panel Bloomberg Politics contributors Jeanie 468 00:27:28,880 --> 00:27:32,920 Speaker 1: Chanzano and Rick Davis, interesting conversation about the airline hearing today. 469 00:27:32,920 --> 00:27:34,520 Speaker 1: I know both of you guys fly a lot. You 470 00:27:34,520 --> 00:27:36,040 Speaker 1: actually have a good sense of the way this has 471 00:27:36,080 --> 00:27:38,840 Speaker 1: gone over the past year. We heard not only from 472 00:27:38,880 --> 00:27:40,600 Speaker 1: the c e O S and I'd like to get 473 00:27:40,600 --> 00:27:43,520 Speaker 1: your your sense of this, but also from the aforementioned 474 00:27:43,560 --> 00:27:47,480 Speaker 1: Sarah Nelson, who heads the flight Attendance Union, and they're 475 00:27:47,520 --> 00:27:50,000 Speaker 1: all begging for some cooperation here. This has been a 476 00:27:50,000 --> 00:27:53,840 Speaker 1: tough tough ride for this industry, Rick Davis, when you 477 00:27:54,119 --> 00:27:56,600 Speaker 1: when you hear about this fifty billion dollars going out 478 00:27:56,640 --> 00:28:00,720 Speaker 1: in in what was this payroll program here to essentially 479 00:28:00,800 --> 00:28:04,119 Speaker 1: keep the industry afloat, All of these CEOs, American, Delta, 480 00:28:04,200 --> 00:28:08,440 Speaker 1: Southwest United all agreed that it saved the airline industry 481 00:28:08,560 --> 00:28:11,639 Speaker 1: from ruin. Is this an example of government doing the 482 00:28:11,760 --> 00:28:16,080 Speaker 1: right thing to help private industry? Yeah, it may well 483 00:28:16,160 --> 00:28:20,520 Speaker 1: be a very important moment because unlike others that were 484 00:28:20,520 --> 00:28:24,920 Speaker 1: hard hit by COVID, the restaurant business, the hotel business, um, 485 00:28:25,440 --> 00:28:29,439 Speaker 1: the airline business is a strategic and important asset to 486 00:28:29,560 --> 00:28:33,720 Speaker 1: keep flying in America, without which I think our economy 487 00:28:33,760 --> 00:28:37,399 Speaker 1: would would unlikely recover as quickly. So uh and and 488 00:28:37,440 --> 00:28:40,840 Speaker 1: there are many other uses of the airline industry, you know, 489 00:28:40,880 --> 00:28:45,160 Speaker 1: to get supplies back and forth, and the idea of 490 00:28:45,240 --> 00:28:48,080 Speaker 1: letting them, you know, sort of cut them loose, I 491 00:28:48,120 --> 00:28:51,680 Speaker 1: think would have been a really detrimental impact, probably a 492 00:28:51,680 --> 00:28:55,440 Speaker 1: good use of of of taxpayer dollars. Would you agree 493 00:28:55,480 --> 00:28:57,040 Speaker 1: with that, Genie? I know you're no stranger to the 494 00:28:57,080 --> 00:28:59,640 Speaker 1: airline business, but a lot of these lawmakers were wondering, 495 00:28:59,640 --> 00:29:02,920 Speaker 1: why did we still get cancelations. You heard Dan cats, 496 00:29:02,960 --> 00:29:06,440 Speaker 1: They're asking why weren't staffing levels at the at the 497 00:29:06,520 --> 00:29:09,320 Speaker 1: at the levels they should have been. Yeah, and I 498 00:29:09,360 --> 00:29:11,200 Speaker 1: have to say, you know, it's like so many people 499 00:29:11,240 --> 00:29:13,360 Speaker 1: I was personally impacted by that. I know a lot 500 00:29:13,400 --> 00:29:16,280 Speaker 1: of people were. It's been a really difficult over the 501 00:29:16,400 --> 00:29:18,720 Speaker 1: last year for people who have had to fly or 502 00:29:18,720 --> 00:29:21,600 Speaker 1: have chosen to fly. Um And I think that, you know, 503 00:29:21,840 --> 00:29:23,600 Speaker 1: part of what we're seeing when we look at the 504 00:29:23,600 --> 00:29:27,160 Speaker 1: airline industry is really sort of reflective of what we're 505 00:29:27,160 --> 00:29:30,040 Speaker 1: seeing a lot of industries. UM And you were talking 506 00:29:30,080 --> 00:29:31,840 Speaker 1: to Dan about this. You know, they had a lot 507 00:29:31,880 --> 00:29:34,760 Speaker 1: of people who work for the industry decide things weren't 508 00:29:34,800 --> 00:29:36,920 Speaker 1: going to get better in the next year two three, 509 00:29:37,200 --> 00:29:39,760 Speaker 1: So why not take that early buy out? That leads 510 00:29:39,800 --> 00:29:43,120 Speaker 1: to a shortage of employees, and that makes it very 511 00:29:43,200 --> 00:29:46,840 Speaker 1: very difficult for the airline, like other industries, to pivot 512 00:29:46,960 --> 00:29:52,200 Speaker 1: when demand increases, as it did, you know, following the vaccinations, 513 00:29:52,280 --> 00:29:54,959 Speaker 1: and so in that way, I think it's uh, you know, 514 00:29:55,080 --> 00:29:58,560 Speaker 1: something that once in a century pandemic, a lot of 515 00:29:58,680 --> 00:30:02,680 Speaker 1: industries really our challenged to try to respond to an address. 516 00:30:03,000 --> 00:30:06,600 Speaker 1: I agree the spending is critically important. You can't let 517 00:30:06,600 --> 00:30:10,080 Speaker 1: the airline industry in the United States, you know, go under, certainly, 518 00:30:10,560 --> 00:30:13,120 Speaker 1: but also I think there have to be tough questions 519 00:30:13,160 --> 00:30:16,000 Speaker 1: asked and lessons learned about what could have been done 520 00:30:16,120 --> 00:30:19,840 Speaker 1: better in the industry, and a government quite frankly, to 521 00:30:19,920 --> 00:30:22,320 Speaker 1: adjust to some of these challenges. And there's the matter 522 00:30:22,360 --> 00:30:25,240 Speaker 1: of what can still be done better. And as we 523 00:30:25,360 --> 00:30:29,120 Speaker 1: heard from the head of the Flight Attendants Union Sarah Nelson, Uh, 524 00:30:29,160 --> 00:30:32,640 Speaker 1: the issue is air rage. So you've got a situation 525 00:30:32,640 --> 00:30:34,800 Speaker 1: where flight attendants don't always want to come back to 526 00:30:34,840 --> 00:30:37,680 Speaker 1: work or certainly volunteer for extra hours because in many 527 00:30:37,720 --> 00:30:40,200 Speaker 1: cases they're not safe, they're not secure in the air 528 00:30:40,280 --> 00:30:44,760 Speaker 1: that the number of incidents, Uh, it's staggering when when 529 00:30:44,800 --> 00:30:47,000 Speaker 1: you consider this. Sarah Nelson, who is the head of 530 00:30:47,000 --> 00:30:49,560 Speaker 1: the union, talked about it today in the hearings that 531 00:30:49,640 --> 00:30:52,480 Speaker 1: it's not just what's happening on the planes. She's begging 532 00:30:52,480 --> 00:30:55,920 Speaker 1: the t s A to secure the gates, to secure 533 00:30:55,960 --> 00:30:58,880 Speaker 1: the airports. We do need more enforcement in the airports 534 00:30:58,920 --> 00:31:00,960 Speaker 1: because we are not seeing that happen and it is 535 00:31:01,080 --> 00:31:04,440 Speaker 1: unclear um who is responsible for that at t s 536 00:31:04,520 --> 00:31:08,520 Speaker 1: A and how uh consistently that is happening. We need 537 00:31:08,560 --> 00:31:11,200 Speaker 1: to ban to go alcohol. This is a major issue, 538 00:31:11,640 --> 00:31:16,760 Speaker 1: and alcohol is being pushed on passengers now today, more 539 00:31:16,880 --> 00:31:20,400 Speaker 1: so as we are in the pandemic than before. This 540 00:31:20,560 --> 00:31:24,160 Speaker 1: started with to go alcohol because of pandemic serving procedures, 541 00:31:24,360 --> 00:31:26,680 Speaker 1: and they determined that this was a money maker, and 542 00:31:26,720 --> 00:31:29,200 Speaker 1: they're pushing it now in the airports and that is 543 00:31:29,320 --> 00:31:31,960 Speaker 1: unacceptable because it is at the expense of our safety. 544 00:31:32,080 --> 00:31:33,880 Speaker 1: All of this has to do with COVID to go 545 00:31:34,000 --> 00:31:36,520 Speaker 1: alcohol thing. My god, Rick, you see this happen your 546 00:31:36,520 --> 00:31:40,160 Speaker 1: border plane, and a lot of travelers, likely not business travelers, 547 00:31:40,440 --> 00:31:42,760 Speaker 1: are drunk before they get on there, and then then 548 00:31:42,800 --> 00:31:44,920 Speaker 1: the fighting with the masks and all this stuff is 549 00:31:45,320 --> 00:31:48,800 Speaker 1: what follows. Is this simply a matter of government enforcing 550 00:31:49,160 --> 00:31:51,080 Speaker 1: rules already on the books, or do we need new ones? 551 00:31:52,320 --> 00:31:54,920 Speaker 1: You know, I think I don't know enough about what 552 00:31:55,240 --> 00:31:58,840 Speaker 1: the rules are governing this new to go alcohol, which 553 00:31:58,920 --> 00:32:01,960 Speaker 1: really does just like smack of a bad idea, and 554 00:32:02,200 --> 00:32:04,880 Speaker 1: we're now seeing the effects of it, um And I 555 00:32:04,880 --> 00:32:07,280 Speaker 1: guess a lot of it is just enforcement. You know. 556 00:32:07,640 --> 00:32:09,959 Speaker 1: After nine eleven, I thought every single plane had an 557 00:32:09,960 --> 00:32:12,560 Speaker 1: air marshal on it. My my little you know, goal 558 00:32:12,720 --> 00:32:14,760 Speaker 1: was to actually I d the air marshal on every 559 00:32:14,760 --> 00:32:17,040 Speaker 1: flight I was on, you know, because we were gonna 560 00:32:17,120 --> 00:32:19,480 Speaker 1: you know, we're gonna tackle terrorists in the aisles. I mean, 561 00:32:19,640 --> 00:32:22,440 Speaker 1: you know, the terrorists are now us. I mean where 562 00:32:22,480 --> 00:32:24,920 Speaker 1: the are the air marshals still on these planes? I 563 00:32:24,920 --> 00:32:27,320 Speaker 1: mean where did they go? Um? You know, so I 564 00:32:27,680 --> 00:32:30,400 Speaker 1: think the airline and the t s A and and 565 00:32:30,560 --> 00:32:33,200 Speaker 1: the broader community within Homeland security needs to take a 566 00:32:33,200 --> 00:32:36,400 Speaker 1: look at this kind of you know, airline rage and 567 00:32:36,400 --> 00:32:39,640 Speaker 1: and what's fueling it. And obviously, you know, making alcohol 568 00:32:39,720 --> 00:32:42,400 Speaker 1: more accessible at a time when everyone's learned to drink 569 00:32:42,440 --> 00:32:45,000 Speaker 1: more during COVID because there was nothing else to do. 570 00:32:45,640 --> 00:32:48,120 Speaker 1: U is probably one of those things that they ought 571 00:32:48,160 --> 00:32:52,160 Speaker 1: to listen to the pilots in the in the stewage unions, 572 00:32:52,200 --> 00:32:54,080 Speaker 1: because they it makes a lot of sense what the 573 00:32:54,160 --> 00:32:56,560 Speaker 1: arguments are that they're making. I don't know about to 574 00:32:56,560 --> 00:32:58,880 Speaker 1: go alcohol here, Genie, if that's to stay, But we 575 00:32:58,960 --> 00:33:00,960 Speaker 1: have to figure out this problem as far as air 576 00:33:01,040 --> 00:33:03,600 Speaker 1: Marshal's great question here, because yeah, all you have to 577 00:33:03,600 --> 00:33:06,360 Speaker 1: do is go on Twitter, go on TikTok and pick 578 00:33:06,440 --> 00:33:09,320 Speaker 1: your fight. This is like prize fighting at thirty thousand 579 00:33:09,400 --> 00:33:12,480 Speaker 1: feet genie it is and you know, listening to the 580 00:33:12,680 --> 00:33:16,480 Speaker 1: to the the head of the union and talk about 581 00:33:16,520 --> 00:33:19,000 Speaker 1: what they're dealing with, it's like we're asking these people 582 00:33:19,440 --> 00:33:23,760 Speaker 1: to play so many roles, including policing people who are 583 00:33:23,880 --> 00:33:26,040 Speaker 1: under the influence. And I have to tell you this 584 00:33:26,120 --> 00:33:29,520 Speaker 1: to go alcohol is new to me, so I am 585 00:33:29,640 --> 00:33:33,840 Speaker 1: learning a lot. I fly, I had no idea it 586 00:33:33,880 --> 00:33:36,320 Speaker 1: was so much more accessible. I guess I haven't been 587 00:33:36,360 --> 00:33:39,200 Speaker 1: indulging in it before flights. But you know, you hear 588 00:33:39,240 --> 00:33:42,640 Speaker 1: about this and you know it's it's a very difficult 589 00:33:42,640 --> 00:33:45,040 Speaker 1: time and you know, again, how do you attract people 590 00:33:45,080 --> 00:33:48,400 Speaker 1: to this important profession if this is what they're being 591 00:33:48,480 --> 00:33:51,239 Speaker 1: asked to handle? And how do you retain employees who 592 00:33:51,320 --> 00:33:53,800 Speaker 1: are being asked to serve in all of these roles 593 00:33:53,840 --> 00:33:56,960 Speaker 1: and potentially put themselves in danger? That surely our producer 594 00:33:57,000 --> 00:33:59,000 Speaker 1: asking would it be safer for the airlines if they 595 00:33:59,040 --> 00:34:02,440 Speaker 1: brought back smoke ing? Uh that obviously that's a joke. 596 00:34:02,480 --> 00:34:05,360 Speaker 1: And well there it recalls the the All Smokers airline 597 00:34:05,400 --> 00:34:08,040 Speaker 1: they tried to start overseas even that didn't work. But 598 00:34:08,120 --> 00:34:10,160 Speaker 1: now I'm not sure that that's the problem here. But 599 00:34:10,239 --> 00:34:12,400 Speaker 1: when you know there's a lot of news about COVID today. 600 00:34:12,840 --> 00:34:14,880 Speaker 1: Uh that I I also would be remiss if I 601 00:34:14,920 --> 00:34:18,920 Speaker 1: didn't mention Apple to think about an indefinite time spent 602 00:34:19,000 --> 00:34:23,200 Speaker 1: working from home. Uh. This all comes back together in 603 00:34:23,239 --> 00:34:25,759 Speaker 1: the same story when we're talking about the flight attendants, 604 00:34:26,840 --> 00:34:30,279 Speaker 1: a major corporation and near three trillion dollar corporation, Rick 605 00:34:30,360 --> 00:34:33,920 Speaker 1: Davis like that deciding to keep everyone home indefinitely or 606 00:34:33,960 --> 00:34:40,120 Speaker 1: those who choose to What does that mean for worker productivity? Well, 607 00:34:40,160 --> 00:34:44,799 Speaker 1: I mean, obviously with the roaring economy, worker productivity has 608 00:34:44,840 --> 00:34:47,319 Speaker 1: contributed to some of that. And so I think there's 609 00:34:47,360 --> 00:34:52,080 Speaker 1: a confidence level that that that that these big companies 610 00:34:52,120 --> 00:34:54,880 Speaker 1: with tens of thousands of employees hundreds of thousands in 611 00:34:54,920 --> 00:34:58,520 Speaker 1: some cases can manage through. But um, there's not a 612 00:34:58,520 --> 00:35:01,719 Speaker 1: single CEO I know who actually doesn't think they want 613 00:35:01,800 --> 00:35:03,640 Speaker 1: people back in the center. They can do it, the 614 00:35:03,680 --> 00:35:07,160 Speaker 1: better their companies will be. So, you know, the emergence 615 00:35:07,200 --> 00:35:09,680 Speaker 1: of a macron and and and what it's doing to 616 00:35:09,680 --> 00:35:12,799 Speaker 1: everybody's health care systems makes everybody do a check in 617 00:35:12,800 --> 00:35:15,719 Speaker 1: the system and say, maybe it's too early. Let's you know, 618 00:35:15,800 --> 00:35:17,640 Speaker 1: kick the can. But it just seems like we were 619 00:35:17,719 --> 00:35:21,000 Speaker 1: just here a year ago, having exactly the same conversation. Well, 620 00:35:21,000 --> 00:35:23,080 Speaker 1: so let's talk about that. I mean, we only have 621 00:35:23,120 --> 00:35:25,439 Speaker 1: a couple of minutes left this President Biden has said, 622 00:35:25,440 --> 00:35:28,879 Speaker 1: no shutdowns. We're gonna deal with a macron or whether 623 00:35:28,920 --> 00:35:31,479 Speaker 1: it's delta, whatever is prevailing over the course of the winter. 624 00:35:31,560 --> 00:35:36,480 Speaker 1: And we're seeing surging cases, surging hospitalizations. He said, there 625 00:35:36,520 --> 00:35:39,719 Speaker 1: won't be shutdowns, there won't be mandates to close businesses 626 00:35:39,719 --> 00:35:41,640 Speaker 1: and so forth. But Jeannie, we're already seeing it on 627 00:35:41,719 --> 00:35:43,400 Speaker 1: the local level in a lot of places. Is that 628 00:35:43,560 --> 00:35:45,120 Speaker 1: Is that going to be the story of the new year. 629 00:35:45,680 --> 00:35:47,880 Speaker 1: I think it is. I'm in New York State. The 630 00:35:47,920 --> 00:35:50,640 Speaker 1: governor has declared an indoor net mask ban. Date I 631 00:35:50,719 --> 00:35:52,840 Speaker 1: was around this state over the weekend. I have to 632 00:35:52,920 --> 00:35:56,359 Speaker 1: tell you many people very very confused. Many didn't even 633 00:35:56,360 --> 00:35:58,640 Speaker 1: have any idea whether they were supposed to be wearing 634 00:35:58,680 --> 00:36:01,120 Speaker 1: them or not. You look at the latest polling out 635 00:36:01,160 --> 00:36:04,880 Speaker 1: from Monmouth and others showing a real frustration on Americans 636 00:36:04,880 --> 00:36:09,280 Speaker 1: who are exacerbated by the way political leaders have handled 637 00:36:09,280 --> 00:36:12,000 Speaker 1: the pandemic at the local, state, and federal level. They 638 00:36:12,000 --> 00:36:15,040 Speaker 1: are tired. And when I'm hearing this news about Apple, 639 00:36:15,239 --> 00:36:18,239 Speaker 1: you know, understandably it makes sense, but I just think 640 00:36:18,239 --> 00:36:20,560 Speaker 1: it reinforces this idea that you and Rick were just 641 00:36:20,600 --> 00:36:24,440 Speaker 1: talking about, that this thing is far from over. And 642 00:36:24,520 --> 00:36:26,799 Speaker 1: whereas Joe Biden said he was going to be able 643 00:36:26,840 --> 00:36:29,120 Speaker 1: to wrap this up and move us forward into a 644 00:36:29,160 --> 00:36:32,399 Speaker 1: better new world, that's why his poll numbers remained sort 645 00:36:32,440 --> 00:36:34,600 Speaker 1: of trapped in the mid forties at this point, and 646 00:36:34,600 --> 00:36:37,440 Speaker 1: that's a bad sign for Democrats going into the mid term. 647 00:36:37,600 --> 00:36:39,719 Speaker 1: Pretty remarkable moment we're having right here, I want to 648 00:36:39,760 --> 00:36:42,040 Speaker 1: point everyone to, certainly, if you're not with me here 649 00:36:42,080 --> 00:36:47,759 Speaker 1: in the nation's capital, the National Cathedral well toll the 650 00:36:48,080 --> 00:36:51,400 Speaker 1: boarding bell as it's called, and is totally now eight 651 00:36:51,520 --> 00:36:56,120 Speaker 1: hundred times today. That's happening this hour, once for every 652 00:36:56,200 --> 00:37:03,680 Speaker 1: thousand American COVID deaths, Yes, eight hun thousand. Pretty remarkable 653 00:37:03,719 --> 00:37:06,239 Speaker 1: moment here as we listen to this. This is coming 654 00:37:06,280 --> 00:37:12,520 Speaker 1: from up the street in northwest Washington. The cathedral is 655 00:37:12,520 --> 00:37:15,799 Speaker 1: saying while visiting our grounds, please remember that masks and 656 00:37:16,000 --> 00:37:20,000 Speaker 1: social distancing are required. There will be no access, it says, 657 00:37:20,080 --> 00:37:23,359 Speaker 1: inside of the cathedral. But people are lined up there 658 00:37:23,400 --> 00:37:29,200 Speaker 1: along Wisconsin Avenue listening to eight hundred bells tolled at 659 00:37:29,200 --> 00:37:34,000 Speaker 1: our National Cathedral on this of December for Rick and Jeannie. 660 00:37:34,040 --> 00:37:36,560 Speaker 1: I'm Joe Matthew. I thank you for spending time with 661 00:37:36,600 --> 00:37:39,719 Speaker 1: us on the fastest hour in politics. Back tomorrow. This 662 00:37:39,880 --> 00:37:40,520 Speaker 1: is Bloomberg