1 00:00:09,720 --> 00:00:12,880 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keen with 2 00:00:13,560 --> 00:00:16,560 Speaker 1: David Gura. Daily we bring you insight from the best 3 00:00:16,560 --> 00:00:22,279 Speaker 1: of economics, finance, investment, and international relations. Find Bloomberg Surveillance 4 00:00:22,320 --> 00:00:27,000 Speaker 1: on Apple Podcasts, SoundCloud, Bloomberg dot com, and of course, 5 00:00:27,320 --> 00:00:34,239 Speaker 1: on the Bloomberg. Let's go first to Edward Alden, who 6 00:00:34,280 --> 00:00:36,239 Speaker 1: joins us now from our Bloomberg nine nine one studios 7 00:00:36,240 --> 00:00:38,080 Speaker 1: in Washington, d C. He's a Senior Fellow at the 8 00:00:38,080 --> 00:00:41,639 Speaker 1: Council on Formulations, author of Failure to Adjust, How Americans 9 00:00:41,680 --> 00:00:44,320 Speaker 1: got left behind in the global economy, and expert on 10 00:00:44,400 --> 00:00:48,200 Speaker 1: trade policies. We approached the beginning of renegotiation talks on NAFTA, 11 00:00:48,280 --> 00:00:50,680 Speaker 1: and Ted, let me ask you first of all about 12 00:00:50,720 --> 00:00:53,120 Speaker 1: the use of trade as a weapon and offensive or 13 00:00:53,120 --> 00:00:56,639 Speaker 1: a defensive weapon. Bloomberg News reporting yesterday that the the 14 00:00:56,640 --> 00:01:00,279 Speaker 1: the administration is elected to wait awhile here on an 15 00:01:00,280 --> 00:01:03,319 Speaker 1: investigation into intellectual property violations that may right occurred with 16 00:01:03,320 --> 00:01:06,000 Speaker 1: with China because of China's willingness to vote with the 17 00:01:06,120 --> 00:01:08,280 Speaker 1: U S and the U N Security Council. Over the 18 00:01:08,280 --> 00:01:10,880 Speaker 1: weekend fIF zero was the vote there on new sanctions 19 00:01:10,880 --> 00:01:14,039 Speaker 1: on North Korea. Have we seen this before, that being 20 00:01:14,040 --> 00:01:17,880 Speaker 1: trade policy used as as advice of foreign policy, Oh, yeah, 21 00:01:17,959 --> 00:01:20,320 Speaker 1: very much, David. And and in fact, it was one 22 00:01:20,360 --> 00:01:24,119 Speaker 1: of the things that President Trump criticized as a candidate, 23 00:01:24,240 --> 00:01:27,200 Speaker 1: which which is that the United States does have a 24 00:01:27,280 --> 00:01:31,040 Speaker 1: long record of sometimes putting its trade in economic concerns 25 00:01:31,080 --> 00:01:35,560 Speaker 1: on the back burner because it has bigger diplomatic fish 26 00:01:35,600 --> 00:01:38,040 Speaker 1: to fry. If you look at our trade relations with 27 00:01:38,120 --> 00:01:41,520 Speaker 1: Japan over many years, there's no question that that that 28 00:01:41,640 --> 00:01:45,200 Speaker 1: Japan got advantages from the United States because it was 29 00:01:45,200 --> 00:01:47,680 Speaker 1: such an important ally in Asia. So so this kind 30 00:01:47,680 --> 00:01:49,760 Speaker 1: of thing happens all the time. What's a bit different 31 00:01:50,360 --> 00:01:53,000 Speaker 1: is the President being quite so explicit about it, having 32 00:01:53,040 --> 00:01:55,160 Speaker 1: said to China, look, if you help us out on 33 00:01:55,200 --> 00:01:57,960 Speaker 1: North Korea, we might go easier with you on trade. 34 00:01:58,560 --> 00:02:03,440 Speaker 1: You rarely hear presidents be be quite that forthright about 35 00:02:03,480 --> 00:02:06,160 Speaker 1: what it is they're doing. Tetle and help us understand 36 00:02:06,200 --> 00:02:10,320 Speaker 1: the importance of the trade relationship between China and North Korea. 37 00:02:10,360 --> 00:02:14,239 Speaker 1: These sanctions amounted about a billion dollars in total. Uh, 38 00:02:14,280 --> 00:02:17,680 Speaker 1: this is not a that's very sizeable for North Korea. 39 00:02:17,720 --> 00:02:21,720 Speaker 1: Here explain the importance of that particular trade relationship and 40 00:02:21,720 --> 00:02:24,040 Speaker 1: and the role that China is playing here. Well, I 41 00:02:24,040 --> 00:02:26,840 Speaker 1: mean China and to a lesser extent, Russia. Those are 42 00:02:26,880 --> 00:02:32,760 Speaker 1: North Korea's primary markets for UH, for the country's exports. UM. 43 00:02:32,800 --> 00:02:35,960 Speaker 1: What was significant about the U N sanctions is that 44 00:02:36,200 --> 00:02:39,720 Speaker 1: is that they're going to bite on major raw materials 45 00:02:39,800 --> 00:02:42,799 Speaker 1: exports coming out of North Korea, and if fully implemented, 46 00:02:43,320 --> 00:02:46,400 Speaker 1: will squeeze the North Korean economy to a degree we 47 00:02:46,440 --> 00:02:49,000 Speaker 1: have not seen in the past. That said, there's a 48 00:02:49,040 --> 00:02:54,639 Speaker 1: long history of China looking the other way and allowing 49 00:02:54,639 --> 00:02:59,320 Speaker 1: a lot of this trade to continue despite formal sanctions 50 00:02:59,360 --> 00:03:01,839 Speaker 1: being in play. So I think the real question here 51 00:03:01,840 --> 00:03:05,160 Speaker 1: will be whether China is worried enough about the current 52 00:03:05,200 --> 00:03:11,480 Speaker 1: situation and believes that sanctions might actually UH put North 53 00:03:11,560 --> 00:03:14,679 Speaker 1: Korea on a on a slightly less volatile path. And 54 00:03:14,720 --> 00:03:16,560 Speaker 1: we're just gonna have to to watch how that plays out. 55 00:03:16,680 --> 00:03:18,640 Speaker 1: Tad Alton with the Council on formulations here with us 56 00:03:18,639 --> 00:03:20,679 Speaker 1: on Bloomberg surveillance. Tad, I know you're looking ahead to 57 00:03:20,720 --> 00:03:23,799 Speaker 1: August the sixteenth, that's when negotiations over and AFTA are 58 00:03:23,800 --> 00:03:25,720 Speaker 1: set to begin. What do we know about what's on 59 00:03:25,760 --> 00:03:28,320 Speaker 1: the table? We got this I think eighteen page report 60 00:03:28,360 --> 00:03:31,320 Speaker 1: from the U S. Trade Representative outlining what the the 61 00:03:31,320 --> 00:03:34,120 Speaker 1: the the the the ideal agenda items would be, what's 62 00:03:34,120 --> 00:03:35,920 Speaker 1: the what's the administration said about what they hope to 63 00:03:35,920 --> 00:03:38,360 Speaker 1: accomplish during these talks. Yeah, well, we know quite a 64 00:03:38,400 --> 00:03:40,600 Speaker 1: lot now actually from all three countries. So I would 65 00:03:40,600 --> 00:03:43,840 Speaker 1: put the U S asks into kind of three buckets. Um. 66 00:03:43,920 --> 00:03:46,720 Speaker 1: One is things that we're already done in the Transpacific Partnership, 67 00:03:46,760 --> 00:03:49,160 Speaker 1: which is the deal with Asia that President Trump walked 68 00:03:49,200 --> 00:03:51,680 Speaker 1: away from. Uh Digital trade is a good example, new 69 00:03:51,760 --> 00:03:54,880 Speaker 1: rules for digital trade which are very important, restricting state 70 00:03:54,880 --> 00:03:58,680 Speaker 1: owned enterprises, looking at the issue of currency manipulation, labor, 71 00:03:58,760 --> 00:04:01,560 Speaker 1: environmental standards. A lot of that was on the table 72 00:04:01,600 --> 00:04:04,960 Speaker 1: at tpp UM. There's a kind of second bucket, which 73 00:04:05,040 --> 00:04:06,960 Speaker 1: is hard issues within NAFT. A lot of those have 74 00:04:07,040 --> 00:04:11,120 Speaker 1: to do with dispute settlement. The Trump administration believes that 75 00:04:11,160 --> 00:04:14,080 Speaker 1: American sovereignty has been compromised in various ways by these 76 00:04:14,160 --> 00:04:19,279 Speaker 1: arrangements government procurement. Trump administration wants to expand by America. 77 00:04:19,600 --> 00:04:21,400 Speaker 1: And then there's a third basket, which I think nobody's 78 00:04:21,480 --> 00:04:24,000 Speaker 1: kind of paying attention to, which is all the industries 79 00:04:24,080 --> 00:04:26,039 Speaker 1: that didn't get as good a deal as they wanted 80 00:04:26,040 --> 00:04:27,560 Speaker 1: out of NAFTA are now going to come out of 81 00:04:27,600 --> 00:04:29,600 Speaker 1: the woodwork and say this is our opportunity to make 82 00:04:29,640 --> 00:04:32,840 Speaker 1: it better. You mentioned the t p P. How much 83 00:04:32,839 --> 00:04:35,200 Speaker 1: of that is is a framework for this administration's trade 84 00:04:35,200 --> 00:04:38,440 Speaker 1: policy and going forward they electing not to to sign 85 00:04:38,480 --> 00:04:40,680 Speaker 1: on to that deal. Um, but is it's still the 86 00:04:40,720 --> 00:04:43,080 Speaker 1: framework for for word things you're heading? Yeah, if you, 87 00:04:43,200 --> 00:04:45,280 Speaker 1: I mean, if you look at that the proposal from 88 00:04:45,360 --> 00:04:48,279 Speaker 1: USTR and the negotiating objectives an awful lot of the 89 00:04:48,360 --> 00:04:51,320 Speaker 1: languages straight out of TPP and and and does make 90 00:04:51,880 --> 00:04:54,960 Speaker 1: the president's action on TPP look much more questionable. I mean, 91 00:04:54,960 --> 00:04:57,039 Speaker 1: we were talking about China earlier as well. TPP would 92 00:04:57,040 --> 00:04:59,719 Speaker 1: have been a great way to pressure China on on 93 00:05:00,040 --> 00:05:02,760 Speaker 1: eight issues. So I think the reality is that there 94 00:05:02,760 --> 00:05:06,000 Speaker 1: are things that the United States wants for its own 95 00:05:06,000 --> 00:05:10,080 Speaker 1: economic interests, particularly helping our advanced industries of one sort 96 00:05:10,160 --> 00:05:12,720 Speaker 1: or another in the technology and digital space, and a 97 00:05:12,720 --> 00:05:14,440 Speaker 1: lot of that was done in TPP, and now the 98 00:05:14,440 --> 00:05:16,760 Speaker 1: administration is going to have to redo it on a 99 00:05:16,800 --> 00:05:20,400 Speaker 1: smaller scale and then after renegotiations. Good morning everyone, Bloomberg 100 00:05:20,440 --> 00:05:23,400 Speaker 1: surveillance David Gurha and Tom Kane with Brooklyn Meyer of 101 00:05:23,760 --> 00:05:27,680 Speaker 1: BNP Perry futures deteriorate negative eight down futures a negative 102 00:05:27,720 --> 00:05:31,320 Speaker 1: twenty five, and the vicks, which oh was nine out 103 00:05:31,320 --> 00:05:35,039 Speaker 1: to a ten, jumped up to eleven point five. Eleven 104 00:05:35,080 --> 00:05:38,240 Speaker 1: point six is now out to twelve point one. Seven 105 00:05:38,279 --> 00:05:41,120 Speaker 1: That vis moved through the morning is a big one 106 00:05:41,279 --> 00:05:46,320 Speaker 1: point to one vix points. That's a big move given 107 00:05:46,320 --> 00:05:49,640 Speaker 1: what we've seen through August and July and the quiet 108 00:05:49,760 --> 00:05:51,960 Speaker 1: of the markets. I guess what else I'm looking at? 109 00:05:52,000 --> 00:05:57,119 Speaker 1: David on on yen strong yen uh this morning? Point 110 00:05:57,160 --> 00:06:02,159 Speaker 1: four seven figures on yen as well, Brooklyn. How open 111 00:06:02,279 --> 00:06:05,560 Speaker 1: is the US economy? How much is our export and 112 00:06:05,640 --> 00:06:10,359 Speaker 1: our import economy getting ahead of ourselves? You're ted Aldon first? 113 00:06:11,080 --> 00:06:17,720 Speaker 1: His next next, That's what happens when I walk in 114 00:06:17,880 --> 00:06:22,800 Speaker 1: lake David, continue, Please, I just let's let's let's before 115 00:06:22,800 --> 00:06:24,240 Speaker 1: we before we get into that question, let me let 116 00:06:24,240 --> 00:06:25,680 Speaker 1: me ask you just about the digital e commy. You've 117 00:06:25,680 --> 00:06:29,120 Speaker 1: mentioned that here talking about NAFTA renegotiations, and it's something 118 00:06:29,160 --> 00:06:32,279 Speaker 1: that I talked about with your now colleague, Ambassador Michael Frohman, 119 00:06:32,320 --> 00:06:35,200 Speaker 1: at the Council on Foreign Relations. A lot has changed 120 00:06:35,240 --> 00:06:37,400 Speaker 1: here in the twenty three years that have intervened here 121 00:06:37,400 --> 00:06:40,320 Speaker 1: between when when NAFTA was ratified and where we are today. 122 00:06:40,400 --> 00:06:42,600 Speaker 1: How how desperate is is the need to change trade 123 00:06:42,640 --> 00:06:46,320 Speaker 1: policy because of innovations in the information space? Oh, I mean, 124 00:06:46,360 --> 00:06:49,680 Speaker 1: I think it's pretty desperate, right, I mean NAFTA was 125 00:06:49,680 --> 00:06:52,599 Speaker 1: was ratified, and you know, back in the mid nineteen nineties, 126 00:06:52,640 --> 00:06:56,160 Speaker 1: that was before the Internet, you know, long before smartphones 127 00:06:56,200 --> 00:06:58,040 Speaker 1: and all the other things we take for granted. If 128 00:06:58,080 --> 00:07:01,880 Speaker 1: you look at at at the most successful dynamic companies 129 00:07:01,920 --> 00:07:04,200 Speaker 1: in the United States, you know, the Google's, the Facebook's, 130 00:07:04,279 --> 00:07:08,360 Speaker 1: the Amazon's, you know, these companies didn't exist when when 131 00:07:08,440 --> 00:07:11,440 Speaker 1: NAFTA was negotiated. So I think even if it weren't 132 00:07:11,520 --> 00:07:15,440 Speaker 1: in this this political context of Trump having won the 133 00:07:15,480 --> 00:07:18,600 Speaker 1: election in part on promising to renegotiate NAFTA, I think 134 00:07:18,600 --> 00:07:22,280 Speaker 1: there clearly is a need to update the NAFTA. Mexico 135 00:07:22,320 --> 00:07:25,000 Speaker 1: and Canada are, you know, our our first and third 136 00:07:25,080 --> 00:07:27,640 Speaker 1: largest trading partners. So there's a lot of work that 137 00:07:27,640 --> 00:07:30,000 Speaker 1: that should have been done under any circumstances, to make 138 00:07:30,000 --> 00:07:32,560 Speaker 1: this a better and more modern deal. Help us understand 139 00:07:32,560 --> 00:07:34,200 Speaker 1: who the principles are here, who's going to be at 140 00:07:34,240 --> 00:07:36,600 Speaker 1: the negotiating table. I read that the the chief negotiator 141 00:07:36,600 --> 00:07:39,680 Speaker 1: here on NAFTA is somebody who's been with the US 142 00:07:39,720 --> 00:07:42,520 Speaker 1: Trade Representative Office for for well over a decade. He's 143 00:07:42,520 --> 00:07:46,960 Speaker 1: a he's a career member the US Trade Representative Office. Uh, 144 00:07:47,080 --> 00:07:49,760 Speaker 1: what difference does that make and and what do you expect? 145 00:07:49,760 --> 00:07:52,240 Speaker 1: How politically do you expect these negotiations to be ten Well, 146 00:07:52,320 --> 00:07:54,360 Speaker 1: I think they will probably, at least at the outset, 147 00:07:54,480 --> 00:07:57,520 Speaker 1: be less political than people think because these negotiations are 148 00:07:57,520 --> 00:08:01,320 Speaker 1: extraordinarily complicated. You know, Canada, the United States, and Mexico 149 00:08:01,480 --> 00:08:06,280 Speaker 1: have all appointed experienced expert negotiators who understand the ins 150 00:08:06,280 --> 00:08:08,400 Speaker 1: and outs of everything from you know, digital trade to 151 00:08:08,480 --> 00:08:11,840 Speaker 1: textiles to autos to agriculture. Um, a lot of these 152 00:08:11,880 --> 00:08:15,520 Speaker 1: are are hard grinding sort of issues. That's that's why 153 00:08:15,560 --> 00:08:16,920 Speaker 1: I think this notion that we're going to do a 154 00:08:16,960 --> 00:08:19,400 Speaker 1: quicker negotiation is just a fantasy. This is going to 155 00:08:19,440 --> 00:08:22,560 Speaker 1: be an extremely complex and difficult negotiation and I think 156 00:08:22,560 --> 00:08:25,960 Speaker 1: it's gonna take a lot longer than than people think. 157 00:08:26,000 --> 00:08:28,680 Speaker 1: And the fact that you've got professionals and in each 158 00:08:28,680 --> 00:08:32,360 Speaker 1: of the three countries running it. Uh is evidence of 159 00:08:32,360 --> 00:08:35,679 Speaker 1: of of how serious all three countries are taking it. Ted, 160 00:08:35,840 --> 00:08:39,280 Speaker 1: thank you for stopping by today. Good to be with 161 00:08:39,400 --> 00:08:42,800 Speaker 1: chill them. It's very importantly folks. His book Failure to 162 00:08:42,920 --> 00:08:46,040 Speaker 1: Justice fabulous on the United States trade and with a 163 00:08:46,080 --> 00:08:49,280 Speaker 1: paperback coming out here in a bit with an update. 164 00:08:49,320 --> 00:08:53,679 Speaker 1: I'm President of the United States. His name is Ted Alden. 165 00:08:54,080 --> 00:08:56,440 Speaker 1: David Gura got there right, I did not. That's what 166 00:08:56,600 --> 00:09:00,040 Speaker 1: happens when you stay up late last night watch in 167 00:09:00,160 --> 00:09:04,520 Speaker 1: Yankee baseball torture that I had to goes from anyway, 168 00:09:04,600 --> 00:09:21,440 Speaker 1: Ted Alden with the Council and Foreign Relations. MafA Nathanson 169 00:09:21,679 --> 00:09:24,600 Speaker 1: is a phrase and media of great respect. Michael Nathanson 170 00:09:24,679 --> 00:09:28,400 Speaker 1: out of brandeis legendary at Sanford Bernstein. In a week 171 00:09:28,440 --> 00:09:31,400 Speaker 1: moment decided to join Craig MafA or MafA joined naked 172 00:09:31,520 --> 00:09:34,280 Speaker 1: and no one knows. But anyways, we are honored in 173 00:09:34,400 --> 00:09:38,400 Speaker 1: our studios today. Michael Nathanson. I think we covered today 174 00:09:38,440 --> 00:09:42,320 Speaker 1: a lot, Michael, the news on Disney and Netflix. I 175 00:09:42,320 --> 00:09:45,040 Speaker 1: want to bring up the name Jeffrey Immelt, you Bill 176 00:09:45,160 --> 00:09:48,520 Speaker 1: Ge and things happen and all of a sudden they're 177 00:09:48,559 --> 00:09:51,839 Speaker 1: going Jeff, maybe we need a new pair of eyes. 178 00:09:52,559 --> 00:09:56,880 Speaker 1: Is Iger getting out in front of margin reduction? Is 179 00:09:57,000 --> 00:10:00,920 Speaker 1: Mr Iger getting out in front of a board that's 180 00:10:00,920 --> 00:10:03,640 Speaker 1: gonna go Wait a minute, what's going on here? Yeah, 181 00:10:03,679 --> 00:10:05,440 Speaker 1: that's a good question. I think he's getting out in 182 00:10:05,480 --> 00:10:07,959 Speaker 1: front of the changes that you and I are observing 183 00:10:08,000 --> 00:10:10,760 Speaker 1: in the marketplace, which you're gonna lead to more investment 184 00:10:10,800 --> 00:10:13,880 Speaker 1: spending in the near term. So taking that question is yeah, 185 00:10:13,920 --> 00:10:16,680 Speaker 1: Bob is saying we cannot stay in the path we're 186 00:10:16,760 --> 00:10:19,920 Speaker 1: on now. It's gonna it's not going to the optimal solution, 187 00:10:20,000 --> 00:10:22,199 Speaker 1: so we have to spend. He did this when he 188 00:10:22,240 --> 00:10:24,520 Speaker 1: got there. He bought Picks Are his first his almost 189 00:10:24,559 --> 00:10:26,800 Speaker 1: first month on the job. That was an admission that 190 00:10:26,880 --> 00:10:29,800 Speaker 1: Disney needed to change the entire culture. So Bob has 191 00:10:29,840 --> 00:10:31,440 Speaker 1: done this before, and I think this is the right 192 00:10:31,480 --> 00:10:33,880 Speaker 1: path for Disney. It may not be pretty the near 193 00:10:33,960 --> 00:10:35,880 Speaker 1: term verse what we expected, but it's the right thing 194 00:10:35,880 --> 00:10:38,000 Speaker 1: to do for the long term healthful. They have the 195 00:10:38,080 --> 00:10:41,720 Speaker 1: luxury of a timeline to eighteen nineteen when I see 196 00:10:41,760 --> 00:10:45,440 Speaker 1: margin erosion and two of three businesses is the truth here. 197 00:10:45,480 --> 00:10:49,400 Speaker 1: They really got to get this done faster. It's it's 198 00:10:49,400 --> 00:10:51,800 Speaker 1: really It's funny you asked that. In eighteen and nineteen, 199 00:10:51,880 --> 00:10:54,760 Speaker 1: Disney actually sets up well because of their content slate. 200 00:10:55,679 --> 00:10:58,720 Speaker 1: In twenty you know, last one, there's a new NFL 201 00:10:58,800 --> 00:11:01,480 Speaker 1: deal that comes in for the this new negotiation, and 202 00:11:01,520 --> 00:11:03,880 Speaker 1: the question is what's going to happen to that NFL deal. 203 00:11:03,920 --> 00:11:05,920 Speaker 1: So it's really about twenty one and beyond the next 204 00:11:05,960 --> 00:11:10,040 Speaker 1: couple of years of Disney have has enough engine kicking 205 00:11:10,080 --> 00:11:12,559 Speaker 1: at the parks and and the movie you know movies. 206 00:11:12,720 --> 00:11:15,520 Speaker 1: I know the movies are the David Kurtt help us here, 207 00:11:15,520 --> 00:11:19,000 Speaker 1: because you're the only one watching Disney movies exactly. I mean, 208 00:11:19,080 --> 00:11:21,760 Speaker 1: I get the idea of the movies are predictable. I'm 209 00:11:21,800 --> 00:11:25,000 Speaker 1: looking at margin erosion that at any other company in 210 00:11:25,000 --> 00:11:28,040 Speaker 1: America would stop traffic. But Tom, this was a bad 211 00:11:28,120 --> 00:11:29,800 Speaker 1: This was a bad year. Here's why this was a 212 00:11:29,840 --> 00:11:32,080 Speaker 1: bad year. There was a new NBA contract. It cost 213 00:11:32,080 --> 00:11:34,400 Speaker 1: six hundred million dollars more this year than last year. 214 00:11:34,920 --> 00:11:38,080 Speaker 1: That's a one time hit to this year's numbers. Acting 215 00:11:38,160 --> 00:11:43,120 Speaker 1: that hit. Disney's ESPN growth is modestly zero plus minus one. 216 00:11:43,880 --> 00:11:46,240 Speaker 1: You know, it's so that's the outlook the next one 217 00:11:46,320 --> 00:11:48,360 Speaker 1: or two years. The problem is when the step ups 218 00:11:48,400 --> 00:11:52,320 Speaker 1: come again on the NFL. What is your base of revenues? Right? 219 00:11:52,320 --> 00:11:54,200 Speaker 1: What are you gonna do to your base? And if 220 00:11:54,240 --> 00:11:56,160 Speaker 1: he stays on the panthes on now, he's gonna have 221 00:11:56,160 --> 00:11:59,319 Speaker 1: a much smaller base of revenues to bid for the contract. Right, 222 00:11:59,360 --> 00:12:01,560 Speaker 1: that's his problem. Help us understand the timing here. Visit 223 00:12:01,640 --> 00:12:03,840 Speaker 1: v Mr Igor. He just had his contract with Nude. 224 00:12:03,840 --> 00:12:06,920 Speaker 1: Seems like everybody loves Bob Iger within the Disney world. 225 00:12:06,920 --> 00:12:09,880 Speaker 1: Why do this now? Why why respond, as he said, 226 00:12:09,920 --> 00:12:12,240 Speaker 1: to what's happening in the marketplace? Why didn't this happen earlier? 227 00:12:12,679 --> 00:12:14,760 Speaker 1: Why not wait to see how how another company fair 228 00:12:14,840 --> 00:12:16,120 Speaker 1: is trying to do what he's trying to do, because 229 00:12:16,160 --> 00:12:19,240 Speaker 1: it's the Walt Disney Company, and Bob feels like, you 230 00:12:19,280 --> 00:12:21,679 Speaker 1: know that that company is going to be a survivor, 231 00:12:21,760 --> 00:12:23,199 Speaker 1: and you could do one or two things. You could 232 00:12:23,240 --> 00:12:25,800 Speaker 1: sell the way that scripts are sold, Time Warner sold, 233 00:12:25,840 --> 00:12:28,040 Speaker 1: You could stay in fight. And so Walt Disney Company, 234 00:12:28,080 --> 00:12:29,520 Speaker 1: they look at this is We've got a hundred of 235 00:12:29,559 --> 00:12:32,600 Speaker 1: year history, We've got brands, we have consumer connections. Why 236 00:12:32,600 --> 00:12:34,920 Speaker 1: can't we do this? And Bob has never been a 237 00:12:34,960 --> 00:12:37,920 Speaker 1: short term quarter to quarter guy, and he has to 238 00:12:37,920 --> 00:12:39,880 Speaker 1: do this now. It's the right thing to do for 239 00:12:39,920 --> 00:12:44,040 Speaker 1: the company and probably gonna be tested by it's a 240 00:12:44,040 --> 00:12:46,080 Speaker 1: three or four year question whether or not it's gonna work, 241 00:12:46,440 --> 00:12:48,160 Speaker 1: But it's the right thing to do. What's going to 242 00:12:48,240 --> 00:12:50,960 Speaker 1: happen with with sports rights? I look at the ever 243 00:12:51,120 --> 00:12:54,960 Speaker 1: escalating cost of getting the NBA contract, of the NFL contract, 244 00:12:55,000 --> 00:12:57,360 Speaker 1: you look at what's been happening with the ESPN. There's uh, 245 00:12:57,400 --> 00:12:58,600 Speaker 1: you know, I guess not not a whole lot of 246 00:12:58,600 --> 00:13:01,599 Speaker 1: grounds for optimism. There are the price of all that 247 00:13:01,640 --> 00:13:03,520 Speaker 1: is going to continue to go up, and how is Disney, 248 00:13:03,520 --> 00:13:05,480 Speaker 1: how are the companies going to deal with that? Now, 249 00:13:06,559 --> 00:13:08,520 Speaker 1: that's something that we always talked about the value of 250 00:13:08,559 --> 00:13:10,360 Speaker 1: sports and how the companies and owned sports right now 251 00:13:10,440 --> 00:13:13,040 Speaker 1: or the place you want to invest in the Achilles 252 00:13:13,120 --> 00:13:16,600 Speaker 1: hell that that thesis is well in one beyond, there's 253 00:13:16,800 --> 00:13:19,880 Speaker 1: another cycle that's gonna be a problem. Right, what's gonna 254 00:13:19,880 --> 00:13:24,080 Speaker 1: stop on Amazon, maybe Netflix one day, YouTube from bidding 255 00:13:24,120 --> 00:13:26,120 Speaker 1: on the next set of rights? Right, that is going 256 00:13:26,160 --> 00:13:29,280 Speaker 1: to be a problem. Um, it's really the NFL and 257 00:13:29,320 --> 00:13:31,960 Speaker 1: the NFL. It's interesting that Disney pays a billion nine 258 00:13:32,000 --> 00:13:34,440 Speaker 1: for seventeen Monday night football games that I would say 259 00:13:34,440 --> 00:13:37,960 Speaker 1: to you should not be reextended at that price. Those 260 00:13:38,000 --> 00:13:41,400 Speaker 1: games are lower rated than they ever have been. Well, 261 00:13:41,400 --> 00:13:43,439 Speaker 1: Disney walk away from the NFL, will the move to 262 00:13:43,480 --> 00:13:46,160 Speaker 1: a Sunday and night package, right, so that is going 263 00:13:46,240 --> 00:13:49,640 Speaker 1: to be in two three years. The biggest questions of 264 00:13:49,679 --> 00:13:51,240 Speaker 1: the sector is like, what's going to be the next 265 00:13:51,280 --> 00:13:53,960 Speaker 1: cycle of cost? And it's the glue we have on 266 00:13:53,960 --> 00:13:56,320 Speaker 1: our sector. And I think you're gonna have massive inflation 267 00:13:56,400 --> 00:13:58,800 Speaker 1: the next time you go around, which will lead to 268 00:13:58,840 --> 00:14:01,880 Speaker 1: more margin pressure and more need to find other ways 269 00:14:01,880 --> 00:14:04,120 Speaker 1: to grow revenues. It's just there's there's only around it. 270 00:14:04,200 --> 00:14:07,240 Speaker 1: How does Cable TV respond to this? How does Mr 271 00:14:07,360 --> 00:14:10,360 Speaker 1: Roberts over his morning cup of coffee looking at the 272 00:14:10,440 --> 00:14:14,400 Speaker 1: collapse of the Philadelphia Phillies. How does Mr Roberts at 273 00:14:14,440 --> 00:14:17,480 Speaker 1: depth and adjust to what I grew up? Okay, so 274 00:14:17,520 --> 00:14:19,760 Speaker 1: that's that's Craig's world. But I think he lam an 275 00:14:19,760 --> 00:14:27,000 Speaker 1: answer exactly exactly exactly Okay, So basically I think what 276 00:14:27,160 --> 00:14:29,600 Speaker 1: Brian Roberts and Contact Cable do will say, Look, we 277 00:14:29,640 --> 00:14:32,320 Speaker 1: own the broadband pipe to the home, the best broadband pipe. 278 00:14:32,720 --> 00:14:36,080 Speaker 1: As more content goes over the internet, we've got broadband pricing, 279 00:14:36,120 --> 00:14:39,600 Speaker 1: we have a unique offering on the video front. They 280 00:14:39,640 --> 00:14:42,920 Speaker 1: may start becoming indifferent as to how you and David 281 00:14:42,960 --> 00:14:45,920 Speaker 1: and I get our content right. They may let these 282 00:14:45,920 --> 00:14:48,280 Speaker 1: companies go over the top and get integrated at your 283 00:14:48,400 --> 00:14:51,920 Speaker 1: TV set, so they may trade the property making TV 284 00:14:52,560 --> 00:14:55,240 Speaker 1: for property making broadband and allow the media companies to 285 00:14:55,520 --> 00:14:58,320 Speaker 1: work their way around what's been a set top box, 286 00:14:58,560 --> 00:15:01,640 Speaker 1: closed end system for many years. Do you have confidence 287 00:15:01,720 --> 00:15:04,920 Speaker 1: that cable TVs we know it will exist in ten 288 00:15:05,040 --> 00:15:09,280 Speaker 1: years thirty second adds? Maybe we go to fifteen second adds. 289 00:15:09,400 --> 00:15:12,520 Speaker 1: How will we get the CBS News? How will we 290 00:15:12,600 --> 00:15:15,800 Speaker 1: get PBS and c Span. Well, it's gonna look a 291 00:15:15,800 --> 00:15:17,880 Speaker 1: lot like the paper business, where we have some people 292 00:15:18,200 --> 00:15:20,840 Speaker 1: who prefer the printed copy like you have in your 293 00:15:20,880 --> 00:15:23,160 Speaker 1: desk right now, and the majority of people may not. 294 00:15:23,360 --> 00:15:25,480 Speaker 1: So I think you're gonna have to have two models, right, 295 00:15:25,520 --> 00:15:27,920 Speaker 1: One milet's direct consumer and one that's going to be 296 00:15:27,960 --> 00:15:31,280 Speaker 1: the big bundle deliver the old fashioned way. Where is 297 00:15:31,320 --> 00:15:34,520 Speaker 1: the creativity and content today? You look at what's successful 298 00:15:34,560 --> 00:15:38,320 Speaker 1: for Disney, Uh, it's the Marvel franchise. It's these these 299 00:15:38,360 --> 00:15:42,840 Speaker 1: big sequels and beyond sequels, triquels. What do you know, right, 300 00:15:42,920 --> 00:15:45,360 Speaker 1: right right, where do you see creativity in content today? 301 00:15:45,400 --> 00:15:47,400 Speaker 1: Where's that coming from as a company like Disney equipped 302 00:15:47,440 --> 00:15:50,920 Speaker 1: to do things that are capital creative. Well, let's divide 303 00:15:50,960 --> 00:15:54,640 Speaker 1: that question into television and film. It's clear that television 304 00:15:54,680 --> 00:15:57,360 Speaker 1: has never had a better cycle of content creation, and 305 00:15:57,360 --> 00:16:00,440 Speaker 1: that TV has replaced movies for play for develop helpers 306 00:16:00,480 --> 00:16:03,560 Speaker 1: of great content. On a film side, we are really worried. 307 00:16:03,920 --> 00:16:06,080 Speaker 1: Disney is the exclusion to the rule, but we're very 308 00:16:06,080 --> 00:16:08,400 Speaker 1: worried about the health of the film business because it's 309 00:16:08,440 --> 00:16:11,640 Speaker 1: all been about sequels and global ten poles and just 310 00:16:11,880 --> 00:16:15,520 Speaker 1: redundant copies of of kind the same script. So I 311 00:16:15,520 --> 00:16:18,160 Speaker 1: think on the film side, everyone but Disney has real 312 00:16:18,280 --> 00:16:22,440 Speaker 1: challenges to find unique content. TV has replaced film, right, 313 00:16:22,480 --> 00:16:27,240 Speaker 1: So in HBO, Showtime, Netflix, they've got those developers, but 314 00:16:27,320 --> 00:16:29,960 Speaker 1: films are a big problem. What's TV gonna look like? 315 00:16:30,000 --> 00:16:31,440 Speaker 1: I mean, you must be thinking about this day in 316 00:16:31,440 --> 00:16:32,920 Speaker 1: a day appen light of the news that we got 317 00:16:33,000 --> 00:16:34,840 Speaker 1: yesterday from Disney the way they intend to do this. 318 00:16:34,880 --> 00:16:38,400 Speaker 1: If you get every other h film studio, entertainment company 319 00:16:38,440 --> 00:16:40,880 Speaker 1: pursuing this kind of approach, what is the device? What 320 00:16:41,000 --> 00:16:43,560 Speaker 1: is our engagement with that device. Look like in five 321 00:16:43,600 --> 00:16:47,080 Speaker 1: ten years, Okay, so we see the device being there'll 322 00:16:47,120 --> 00:16:50,640 Speaker 1: be a connected boxing your house for lives live content, 323 00:16:50,680 --> 00:16:53,480 Speaker 1: and we're not gonna trust the internet to deliver ninety 324 00:16:53,520 --> 00:16:56,720 Speaker 1: million homes streaming Eagles games. Right, We're gonna get we 325 00:16:56,720 --> 00:16:59,200 Speaker 1: We're gonna need to pay for live TV, and the 326 00:16:59,240 --> 00:17:01,840 Speaker 1: companies that have live assets will benefit live. But for 327 00:17:01,840 --> 00:17:04,080 Speaker 1: the vast majority of the rest of the networks out there, 328 00:17:04,359 --> 00:17:06,800 Speaker 1: we're living on kind of channel surfing. They're gonna have 329 00:17:06,800 --> 00:17:08,840 Speaker 1: a problem because we're gonna also go to on demand. Right, 330 00:17:08,840 --> 00:17:11,879 Speaker 1: You're gonna basically bifrect into an on demand world, live world, 331 00:17:11,920 --> 00:17:14,840 Speaker 1: and that middle will just drop away, right, And that's 332 00:17:14,880 --> 00:17:18,840 Speaker 1: what's gonna happens. Free cash flow drop away for some 333 00:17:18,880 --> 00:17:20,480 Speaker 1: of these companies out For the people in the middle, 334 00:17:20,520 --> 00:17:23,240 Speaker 1: it's gonna drop away. Well, look, we we have cells 335 00:17:23,240 --> 00:17:25,439 Speaker 1: and AMC networks, we have cells on Discovery and up 336 00:17:25,480 --> 00:17:28,080 Speaker 1: until that deal last week, we have silent scripts. So 337 00:17:28,119 --> 00:17:30,720 Speaker 1: we thought the cable network universe are pure play, the 338 00:17:30,760 --> 00:17:34,679 Speaker 1: CBS world, the BUCAS world, Well, CBS CBS will be 339 00:17:34,680 --> 00:17:36,919 Speaker 1: fine because CBS is going to collect a higher toll 340 00:17:37,560 --> 00:17:39,520 Speaker 1: from the distributors. Right, they're gonna say the value of 341 00:17:39,560 --> 00:17:42,919 Speaker 1: our content is underpriced. Right, But it's time. It's the middle, 342 00:17:43,840 --> 00:17:46,399 Speaker 1: you know, on the dial that basically was was just 343 00:17:46,480 --> 00:17:50,720 Speaker 1: filling time as we channel. This has been wonderful Michael 344 00:17:50,760 --> 00:17:55,000 Speaker 1: Nathans and making a huge effort really off of this 345 00:17:55,200 --> 00:17:59,200 Speaker 1: seismic announcement by Dizzie. Mr Nathanson is with Moffatt Nathanson 346 00:17:59,240 --> 00:18:01,600 Speaker 1: again we protect copyright of all of I guess no, 347 00:18:02,200 --> 00:18:05,119 Speaker 1: I'm not going to send out the Black Book from 348 00:18:05,200 --> 00:18:19,720 Speaker 1: Michael Nathan Sinny how much to talk about this one, David, 349 00:18:19,760 --> 00:18:22,320 Speaker 1: what are your thoughts as we're looking at taking the 350 00:18:22,359 --> 00:18:28,560 Speaker 1: official surveillance nap that we both every afternoon for you 351 00:18:28,600 --> 00:18:30,679 Speaker 1: maybe two Mondays ago, and that was when the Anthony 352 00:18:30,720 --> 00:18:33,000 Speaker 1: Scaramucci news broke. So I had a taste of what 353 00:18:33,040 --> 00:18:35,119 Speaker 1: you must experience every day you're getting up so early 354 00:18:35,160 --> 00:18:37,760 Speaker 1: and trying to sleep as you can. But you know, 355 00:18:37,800 --> 00:18:40,640 Speaker 1: I obviously continuing to watch what's happening in the Asia 356 00:18:40,640 --> 00:18:43,399 Speaker 1: Pacific region light of the tweets we've seen this morning 357 00:18:43,400 --> 00:18:46,040 Speaker 1: and the hot rhetoric conveyed the official statements from the 358 00:18:46,040 --> 00:18:49,200 Speaker 1: president here and from the leader of North Korea as well, 359 00:18:49,240 --> 00:18:52,400 Speaker 1: it's making a diplomatic option returned to the negotiating table. 360 00:18:52,440 --> 00:18:54,960 Speaker 1: Looked like a farther off and farther off thing. David, 361 00:18:55,000 --> 00:18:57,160 Speaker 1: you do the politics here. But I want to say 362 00:18:57,160 --> 00:19:00,280 Speaker 1: that we have made every effort to speak to our mility, Harry, 363 00:19:00,320 --> 00:19:04,280 Speaker 1: including the great services of James Travitis, A Fletcher School 364 00:19:04,320 --> 00:19:07,760 Speaker 1: Tufts for Admiral Navy. Uh, and much can be saved 365 00:19:07,760 --> 00:19:11,080 Speaker 1: with Wesley Clark has been much more visible. But what 366 00:19:11,200 --> 00:19:14,359 Speaker 1: I think is so important in introduction is General Clark, 367 00:19:14,400 --> 00:19:16,760 Speaker 1: you were first in your class at West Point. How 368 00:19:16,800 --> 00:19:19,239 Speaker 1: did you do that? How did you go into the 369 00:19:19,280 --> 00:19:23,080 Speaker 1: Lincoln Building overlooking the Hudson and defeat the rest of 370 00:19:23,119 --> 00:19:26,879 Speaker 1: the troops or was it really defeat? I mean I was. 371 00:19:27,400 --> 00:19:30,399 Speaker 1: I really enjoyed. I love being there. I love the 372 00:19:30,680 --> 00:19:33,720 Speaker 1: officers that mentored me and helped me. And Uh, it 373 00:19:33,880 --> 00:19:39,600 Speaker 1: was privileged to be my class. It was been had 374 00:19:39,600 --> 00:19:43,680 Speaker 1: a great inundication school of arts on its being stare 375 00:19:44,280 --> 00:19:46,679 Speaker 1: General Clark, let me ask you how much this situation 376 00:19:46,760 --> 00:19:49,359 Speaker 1: has changed the situation with regard to to North Korea 377 00:19:50,160 --> 00:19:53,480 Speaker 1: since you were serving General. Of course, we've had to 378 00:19:53,520 --> 00:19:56,479 Speaker 1: test these two tests at these Intercontinental Ballistic missiles UH 379 00:19:56,480 --> 00:19:57,960 Speaker 1: and a new round of sanctions, I think the eighth 380 00:19:58,040 --> 00:20:00,240 Speaker 1: round of sanctions from the U N. Security Council. How 381 00:20:00,280 --> 00:20:02,719 Speaker 1: much has this story changed as you've watched it unfold? 382 00:20:03,680 --> 00:20:07,760 Speaker 1: So In I was in the Joint Staff and I 383 00:20:07,840 --> 00:20:12,440 Speaker 1: was part of the team that helped do the response 384 00:20:12,560 --> 00:20:16,480 Speaker 1: to the North Korean nuclear crisis at that time, and 385 00:20:16,560 --> 00:20:21,040 Speaker 1: we came out of it with negotiated settlement to provide 386 00:20:21,080 --> 00:20:25,159 Speaker 1: two nuclear reactors. At that time, North Korea didn't have 387 00:20:25,280 --> 00:20:28,879 Speaker 1: nuclear weapons, but they did have a very very powerful 388 00:20:28,960 --> 00:20:34,480 Speaker 1: conventional artillery system that at rockets that could have devastated 389 00:20:34,520 --> 00:20:38,080 Speaker 1: South Korea and could have struck Japan. And they did 390 00:20:38,119 --> 00:20:43,000 Speaker 1: have biological and chemical weapons. So we wanted to hint 391 00:20:43,080 --> 00:20:47,120 Speaker 1: off their nuclear challenge. We did it by promising them 392 00:20:47,119 --> 00:20:50,400 Speaker 1: two nuclear reactors for electric power, that's what they said 393 00:20:50,400 --> 00:20:54,679 Speaker 1: they really wanted, and fuel oil to sustain their electricity 394 00:20:54,680 --> 00:20:58,560 Speaker 1: grid until the reactors came online. Um, there was a 395 00:20:58,560 --> 00:21:02,639 Speaker 1: lot of fumbling around. One agree it was shaded. People 396 00:21:02,720 --> 00:21:05,920 Speaker 1: had money at the South LANs Japanese. We had to 397 00:21:05,960 --> 00:21:08,080 Speaker 1: put some money up and had to go through Congress. 398 00:21:08,119 --> 00:21:11,600 Speaker 1: Congress had to appropriate money for the fuel oil. People 399 00:21:11,640 --> 00:21:15,160 Speaker 1: didn't like the North Koreans. They didn't like USA blah blah, 400 00:21:15,680 --> 00:21:17,840 Speaker 1: and they probably didn't trust it, and then we didn't 401 00:21:17,840 --> 00:21:23,200 Speaker 1: trust them and art and we knew about two thousand 402 00:21:23,280 --> 00:21:27,440 Speaker 1: two that North Korea was the highest risk for nuclear proliferation, 403 00:21:28,080 --> 00:21:33,000 Speaker 1: but instead we invaded Iraq on the theory that what 404 00:21:33,200 --> 00:21:36,080 Speaker 1: if we woke up and they had a nuclear weapon, 405 00:21:36,280 --> 00:21:40,040 Speaker 1: but we knew Korea was high risk for developing it. 406 00:21:40,400 --> 00:21:44,920 Speaker 1: So we've lived for decades with the problem that there's 407 00:21:45,000 --> 00:21:48,040 Speaker 1: no good military option for Korea. Even in the early 408 00:21:48,119 --> 00:21:51,199 Speaker 1: nine nineties, if you'd attacked North Korea, they would have 409 00:21:51,640 --> 00:21:54,560 Speaker 1: had ten thousand pieces of artillery. They could have brained 410 00:21:54,680 --> 00:21:58,520 Speaker 1: thousands of rounds of chemical web warheads and other things 411 00:21:58,520 --> 00:22:02,240 Speaker 1: into South Korea. Million man army, a hundred thousand special 412 00:22:02,320 --> 00:22:06,560 Speaker 1: courses troops, insurted by many subs and uh and and 413 00:22:06,560 --> 00:22:14,000 Speaker 1: and small aircraft, guerrilla operations all over the country. And 414 00:22:14,080 --> 00:22:17,840 Speaker 1: it's still the same, all the worse because they have 415 00:22:17,920 --> 00:22:20,760 Speaker 1: nuclear warriage. General Clark, we we've had a couple of 416 00:22:20,800 --> 00:22:23,120 Speaker 1: moments here in recent history. In the present has tweeted 417 00:22:23,160 --> 00:22:26,399 Speaker 1: something that could have potentially huge ramifications. I think just 418 00:22:26,440 --> 00:22:28,840 Speaker 1: a couple of weeks ago when he tweeted about whether 419 00:22:28,920 --> 00:22:31,240 Speaker 1: or not to allow transgender individuals to serve in the 420 00:22:31,240 --> 00:22:33,280 Speaker 1: in the U. S. Military. Uh, there was a lot 421 00:22:33,280 --> 00:22:35,760 Speaker 1: of questioning about the nuance or the lack thereof in 422 00:22:35,760 --> 00:22:38,040 Speaker 1: those tweets. Today there are some more tweets about North 423 00:22:38,119 --> 00:22:41,119 Speaker 1: Korea and our nuclear arsenal. Go back to when you 424 00:22:41,160 --> 00:22:42,960 Speaker 1: were serving, when you were a general, how would you 425 00:22:42,960 --> 00:22:44,840 Speaker 1: have reacted to to the tweets like the ones you've 426 00:22:44,880 --> 00:22:48,920 Speaker 1: seen today. You've got to imagine that Secretary Mattis, that 427 00:22:49,040 --> 00:22:52,760 Speaker 1: John Kelly, others in that upperrational and of the administration 428 00:22:52,800 --> 00:22:55,359 Speaker 1: can't be happy with with what's being communicated via social 429 00:22:55,359 --> 00:22:58,280 Speaker 1: media today. We'll probably not, but you're not going to 430 00:22:58,400 --> 00:23:01,960 Speaker 1: react to tweets. The America public might react on guts 431 00:23:02,040 --> 00:23:05,679 Speaker 1: might react, but the military chain fan bax or orders 432 00:23:05,680 --> 00:23:08,720 Speaker 1: that come down the chain command, so they're coming through 433 00:23:08,880 --> 00:23:14,280 Speaker 1: General or through Secretary demanding, so they're not tying directly 434 00:23:14,400 --> 00:23:17,760 Speaker 1: for the tweets. General, you have been balanced in your 435 00:23:17,800 --> 00:23:21,320 Speaker 1: support of the legacy of and also of Harry Truman. 436 00:23:21,840 --> 00:23:24,679 Speaker 1: You are identified, I would believe my most Americans as 437 00:23:24,720 --> 00:23:29,000 Speaker 1: a Democrat, what is the Wesley cart Clark prescription for 438 00:23:29,040 --> 00:23:34,520 Speaker 1: the Democratic Party forward? Well, you're asking something that's beyond 439 00:23:34,600 --> 00:23:39,320 Speaker 1: North Korea. But we've got to focus on The Democratic 440 00:23:39,359 --> 00:23:42,919 Speaker 1: Party had to focus on economic growth. We've got to 441 00:23:42,960 --> 00:23:48,280 Speaker 1: have infrastructure. We've got to use our oil industry and 442 00:23:48,520 --> 00:23:53,120 Speaker 1: maximize our production of energy now and then transition through 443 00:23:54,040 --> 00:23:56,960 Speaker 1: a some form of incentive. It could be a carbon 444 00:23:57,080 --> 00:24:03,159 Speaker 1: tax and move us into a non hypercarbon economy in 445 00:24:03,240 --> 00:24:08,120 Speaker 1: the thirty year time frame, among like the renewable fuel standard, 446 00:24:08,320 --> 00:24:12,720 Speaker 1: and it would be a tremendous job creating exercise to 447 00:24:12,800 --> 00:24:18,600 Speaker 1: do that. So it's it's pulled us economic strength. That's 448 00:24:18,680 --> 00:24:21,960 Speaker 1: the biggest thing we could do to strength in American 449 00:24:22,040 --> 00:24:24,800 Speaker 1: General Clark thought about our military forces. General Clark right 450 00:24:24,840 --> 00:24:26,080 Speaker 1: to speak to you this morning, to speak to you 451 00:24:26,080 --> 00:24:27,520 Speaker 1: the hope we can talk again soon. That's at General 452 00:24:27,520 --> 00:24:29,920 Speaker 1: Wesley Clark, retire. General Wesley Clark from a NATO Supremalli 453 00:24:30,000 --> 00:24:42,760 Speaker 1: commander joining us on our phone lines. He's from the 454 00:24:42,760 --> 00:24:47,800 Speaker 1: fourth District of Oklahoma. The Congressman for Oklahoma, Tom Cole. 455 00:24:47,920 --> 00:24:50,199 Speaker 1: I think it's fair to say anybody that listens to 456 00:24:50,240 --> 00:24:52,320 Speaker 1: the show knows how what a joy it is to 457 00:24:52,440 --> 00:24:56,439 Speaker 1: have the historian in the academic Congressman Cole on the 458 00:24:56,480 --> 00:24:59,119 Speaker 1: phone Uh, Tom, I'm gonna go to you as a 459 00:24:59,200 --> 00:25:03,919 Speaker 1: card carryman publican of what I see today and the 460 00:25:03,960 --> 00:25:06,239 Speaker 1: cover of the New York Times, the headline is they 461 00:25:06,280 --> 00:25:09,159 Speaker 1: will be met with fire and fury. I paid a 462 00:25:09,200 --> 00:25:12,639 Speaker 1: lot more attention to the follow on statement like the 463 00:25:12,680 --> 00:25:16,720 Speaker 1: world has never seen. How can you in Republican leadership 464 00:25:16,760 --> 00:25:19,640 Speaker 1: give a history lesson to the President of the United States. 465 00:25:20,040 --> 00:25:21,520 Speaker 1: What do we need to do to get scope and 466 00:25:21,560 --> 00:25:24,399 Speaker 1: scales so we don't see a phrase like the world 467 00:25:24,400 --> 00:25:28,480 Speaker 1: has never seen? Well, I think, look, I think the 468 00:25:28,480 --> 00:25:31,000 Speaker 1: President is trying to be very direct in his communication 469 00:25:31,080 --> 00:25:35,040 Speaker 1: to North Korea. Uh it's a you know, impenetrable regime, 470 00:25:35,240 --> 00:25:37,720 Speaker 1: and uh, I think he just wanted to be crystal clear. 471 00:25:37,800 --> 00:25:40,560 Speaker 1: But I don't find the phrase that's disturbing as some 472 00:25:41,480 --> 00:25:44,480 Speaker 1: because I look at the people that are around the president. 473 00:25:44,480 --> 00:25:47,720 Speaker 1: I look at a pievous staff like John Kelly, I 474 00:25:47,760 --> 00:25:50,760 Speaker 1: look at Secretary Maddis, I look at uh, you know, 475 00:25:51,040 --> 00:25:53,520 Speaker 1: Ceptry Tillerson. I look at him and the Master and 476 00:25:53,560 --> 00:25:57,240 Speaker 1: I think he's got probably the best foreign policy uh 477 00:25:57,760 --> 00:26:01,880 Speaker 1: slash defense team of any more president. And so I think, 478 00:26:02,200 --> 00:26:05,240 Speaker 1: I think, you know, he's not going to take precipitous 479 00:26:05,280 --> 00:26:09,280 Speaker 1: or rash action James Travitas in Bloomerview Today. The admiral 480 00:26:09,320 --> 00:26:13,520 Speaker 1: from tough school, Fletcher Fletcher School, a tough university, makes 481 00:26:13,560 --> 00:26:17,159 Speaker 1: it very clear that we need a military presence, but 482 00:26:17,320 --> 00:26:21,159 Speaker 1: bluster won't do it. What will matters? What will Kelly? 483 00:26:21,320 --> 00:26:25,840 Speaker 1: What will McMaster message to the president? I think very 484 00:26:25,920 --> 00:26:29,240 Speaker 1: much the same thing. I mean, frankly, Uh, Admiral Stravais 485 00:26:29,520 --> 00:26:31,720 Speaker 1: I met when he was actually commander in NATO. He's 486 00:26:31,720 --> 00:26:35,160 Speaker 1: a he's a brilliant soldier, but he's also a contemporary 487 00:26:35,200 --> 00:26:38,680 Speaker 1: of Maddis, McMaster and Kelly. So these are people that 488 00:26:38,760 --> 00:26:41,080 Speaker 1: have served together that no one another to think highly 489 00:26:41,160 --> 00:26:44,240 Speaker 1: of one another. And I think, you know, the Admiral's 490 00:26:44,280 --> 00:26:48,200 Speaker 1: expressing and perfectly appropriate points at Uh. Look, we're gonna, 491 00:26:48,400 --> 00:26:51,239 Speaker 1: you know, back up what we say, but we're not 492 00:26:51,280 --> 00:26:54,200 Speaker 1: trying to be provocative. But we do want the North 493 00:26:54,280 --> 00:26:56,720 Speaker 1: Koreans to understand that we're serious, and frankly, we want 494 00:26:56,720 --> 00:26:59,640 Speaker 1: the Chinese to understand we're serious. And I think that's 495 00:26:59,640 --> 00:27:02,840 Speaker 1: something lost in all this. Uh. This may be as 496 00:27:02,920 --> 00:27:06,000 Speaker 1: much about pressuring the Chinese and reminding them to keep 497 00:27:06,040 --> 00:27:08,639 Speaker 1: the commitments that they made when they voted for you 498 00:27:08,720 --> 00:27:11,680 Speaker 1: in sanctions as anything else. We know we need them 499 00:27:12,359 --> 00:27:14,840 Speaker 1: as a pressure point on North Korea. And frankly, they've 500 00:27:14,840 --> 00:27:18,240 Speaker 1: responded to President Trump more than they have to any 501 00:27:18,240 --> 00:27:21,520 Speaker 1: previous American president on this doesn't make a difference to 502 00:27:21,560 --> 00:27:23,600 Speaker 1: you being outside of Washington and all as all this 503 00:27:23,760 --> 00:27:25,760 Speaker 1: is happening, of course, Congress on recess to send it 504 00:27:25,800 --> 00:27:28,360 Speaker 1: on recess as well. It seems like things are are 505 00:27:28,400 --> 00:27:31,240 Speaker 1: heating up here. The Secretary State and disputing that today 506 00:27:31,280 --> 00:27:34,520 Speaker 1: on his plane as he arrived in Guam, Uh, he 507 00:27:34,560 --> 00:27:36,880 Speaker 1: said that Americans just sleep soundly at night. He said, 508 00:27:36,880 --> 00:27:39,280 Speaker 1: things that have have not measurably changed to him. Is 509 00:27:39,280 --> 00:27:41,080 Speaker 1: it harder to keep track of this for you and 510 00:27:41,080 --> 00:27:43,399 Speaker 1: your colleagues when you're not all in Washington? Is there 511 00:27:43,440 --> 00:27:47,280 Speaker 1: a disadvantage to not being there at this point? Well, obviously, 512 00:27:47,320 --> 00:27:50,160 Speaker 1: if you're there, you've got immediate access to briefing from 513 00:27:50,160 --> 00:27:52,320 Speaker 1: the Pentagon, of the State Department, whoever you need to 514 00:27:52,359 --> 00:27:56,160 Speaker 1: talk to. But actually, I said on Defense Appropriation Subcommittee, 515 00:27:56,160 --> 00:27:58,719 Speaker 1: and so this none of this really has come as 516 00:27:58,720 --> 00:28:03,840 Speaker 1: a surprise, uh, including the quote updated intelligence you know, 517 00:28:04,119 --> 00:28:08,359 Speaker 1: estimate of North Korea's nuclear capability. Frankly, We've been being 518 00:28:08,359 --> 00:28:12,000 Speaker 1: told for over a year in Congress that the North 519 00:28:12,080 --> 00:28:16,160 Speaker 1: Koreans would develop this kind of capability within President Trump's 520 00:28:16,200 --> 00:28:20,320 Speaker 1: first term. So I think our Defense Department, State Department 521 00:28:20,359 --> 00:28:22,600 Speaker 1: been thinking about this for quite a long time, and 522 00:28:22,600 --> 00:28:25,359 Speaker 1: to be fair to them, they've kept Congress well informed. 523 00:28:25,400 --> 00:28:29,960 Speaker 1: So I see no particular disadvantage other than you get 524 00:28:30,280 --> 00:28:33,480 Speaker 1: much more immediate information. But throughouty is we've been warned 525 00:28:33,480 --> 00:28:35,240 Speaker 1: this was coming for quite a while. You're on the 526 00:28:35,280 --> 00:28:36,960 Speaker 1: Budget Committee as well. I think a lot of our 527 00:28:37,119 --> 00:28:38,960 Speaker 1: listeners care a great deal about whether or not we 528 00:28:39,000 --> 00:28:41,520 Speaker 1: meet our funding obligations. What's going to happen with the 529 00:28:41,640 --> 00:28:43,920 Speaker 1: with the debt ceiling. What's your sense of how all 530 00:28:43,960 --> 00:28:45,600 Speaker 1: of that is going to perceive when you get back 531 00:28:45,600 --> 00:28:48,440 Speaker 1: to Washington in early September. Do you have a clear 532 00:28:48,440 --> 00:28:51,440 Speaker 1: path forward from the White House? Uh? Do you have 533 00:28:51,440 --> 00:28:53,160 Speaker 1: a sense here that we're gonna we're gonna avoid a 534 00:28:53,160 --> 00:28:55,120 Speaker 1: government shutdown. I think we're going to see that debt 535 00:28:55,160 --> 00:28:59,040 Speaker 1: limit raised. I think we will avoid a government shutdown. 536 00:28:59,080 --> 00:29:02,240 Speaker 1: I think we'll probably past the budget pretty quickly after 537 00:29:02,280 --> 00:29:04,320 Speaker 1: we get back in. It's out of the Budget Committee. 538 00:29:04,320 --> 00:29:07,160 Speaker 1: It came out with the unanimous Republican vote. So that's 539 00:29:07,160 --> 00:29:09,560 Speaker 1: a sign that things won't be too rough on the floor. 540 00:29:10,120 --> 00:29:13,400 Speaker 1: All the appropriations committees are out of our appropriations bills 541 00:29:13,400 --> 00:29:16,280 Speaker 1: are out of the Appropriations committee for um across the floor, 542 00:29:16,600 --> 00:29:19,760 Speaker 1: I expect the other eight, the death sits, will be trickier. 543 00:29:19,920 --> 00:29:24,280 Speaker 1: It always is, uh, simply because every administration, including this one, 544 00:29:24,320 --> 00:29:28,120 Speaker 1: wants a clean debt ceiling. Every Republican Congress it says, right, 545 00:29:28,200 --> 00:29:30,520 Speaker 1: we'll give it you a debt ceiling, but we want 546 00:29:30,600 --> 00:29:33,959 Speaker 1: some sort of uh uh, you know, change on the 547 00:29:34,000 --> 00:29:36,480 Speaker 1: trajectory of the debt. We don't expect you to solve 548 00:29:36,480 --> 00:29:38,800 Speaker 1: it a single pleasure, but we don't want to be 549 00:29:38,880 --> 00:29:42,120 Speaker 1: in a situation where, effectively, you know, it's like having 550 00:29:42,120 --> 00:29:43,760 Speaker 1: a credit card and you hit the limit and you 551 00:29:43,880 --> 00:29:46,400 Speaker 1: just raise the limit, but you keep spending at the 552 00:29:46,440 --> 00:29:49,520 Speaker 1: same rate. So I think that will be a point 553 00:29:49,520 --> 00:29:52,840 Speaker 1: of some negotiation. But you'll have plenty of Democratic votes. Uh, 554 00:29:52,880 --> 00:29:55,600 Speaker 1: they always are for a clean debt ceiling increase. So 555 00:29:56,120 --> 00:29:57,640 Speaker 1: I always say, this is a little bit like the 556 00:29:57,720 --> 00:30:00,560 Speaker 1: Perils of Pauline. You know, always, look, the train has 557 00:30:00,560 --> 00:30:03,480 Speaker 1: gonna run over Pauline. But sooner or later, Pauline somehow 558 00:30:03,640 --> 00:30:06,160 Speaker 1: magic who slips out of it? And I think that's 559 00:30:06,200 --> 00:30:11,360 Speaker 1: what will happen again in September. Does he realize that 560 00:30:12,520 --> 00:30:15,719 Speaker 1: of the audience doesn't know the perils of Pauline is? 561 00:30:16,720 --> 00:30:19,600 Speaker 1: We got the allusion, we got the illusion. Uh, taxi 562 00:30:19,680 --> 00:30:21,280 Speaker 1: form is also going to be on your agenda. We've 563 00:30:21,320 --> 00:30:23,200 Speaker 1: we've heard from the Big Six. I wonder if you 564 00:30:23,240 --> 00:30:26,320 Speaker 1: think the process has been inclusive enough thus far. I'm 565 00:30:26,320 --> 00:30:28,640 Speaker 1: gonna be talking to your colleague, congress Been Brady tomorrow 566 00:30:28,640 --> 00:30:31,080 Speaker 1: on Bloomberg Television about where things stand when it comes 567 00:30:31,120 --> 00:30:33,520 Speaker 1: to taxi form. What's the what's the lesson that you've 568 00:30:33,600 --> 00:30:37,280 Speaker 1: learned on the heels of the conversation about healthcare that 569 00:30:37,320 --> 00:30:40,760 Speaker 1: you can apply to the conversation about tax reform. Well, 570 00:30:40,800 --> 00:30:43,520 Speaker 1: I think the first lesson is that recofciliation is a 571 00:30:43,600 --> 00:30:46,959 Speaker 1: very difficult process, and running the House by Senate rules, 572 00:30:47,520 --> 00:30:49,600 Speaker 1: tribute in the Senate couldn't follow through on his own, 573 00:30:49,640 --> 00:30:52,680 Speaker 1: which it didn't on healthcare as a little tricky. On 574 00:30:52,720 --> 00:30:54,480 Speaker 1: the other hand, I do think this has been a 575 00:30:54,560 --> 00:30:58,720 Speaker 1: much more transparent process. Chairman Brady's kept us all inform 576 00:30:59,120 --> 00:31:02,200 Speaker 1: that we've had a lease of common principles by the administration. 577 00:31:02,200 --> 00:31:05,480 Speaker 1: Of the House and the Senate. So my instinct is, again, 578 00:31:05,520 --> 00:31:08,320 Speaker 1: we've got to see the bill. I mean uh, and 579 00:31:08,360 --> 00:31:09,840 Speaker 1: we don't have some of the pay for us we 580 00:31:09,880 --> 00:31:13,680 Speaker 1: thought we would have in healthcare reform. Obviously the moorderjustment 581 00:31:13,720 --> 00:31:16,440 Speaker 1: tax is no longer an option here. So the real 582 00:31:16,520 --> 00:31:19,240 Speaker 1: question is if they're going to proceed under reconciliation, which 583 00:31:19,240 --> 00:31:21,720 Speaker 1: has to be budget neutral, you know, what are the 584 00:31:21,760 --> 00:31:23,440 Speaker 1: pay for is going to be. I think we were 585 00:31:23,440 --> 00:31:25,760 Speaker 1: pretty much a pretty clear understanding where they're going to 586 00:31:25,840 --> 00:31:30,000 Speaker 1: go in terms of lowering rates and you know, consolidating 587 00:31:30,040 --> 00:31:34,200 Speaker 1: brackets and lower corporate income tax and territory reality. But 588 00:31:34,480 --> 00:31:36,640 Speaker 1: tell me how you're gonna pay for it all. That's 589 00:31:36,680 --> 00:31:38,920 Speaker 1: the piece that we need to know. But again, they're 590 00:31:38,960 --> 00:31:41,440 Speaker 1: working it, they've been transparent, so I think we have 591 00:31:41,520 --> 00:31:43,120 Speaker 1: a good chance of getting there before the end of 592 00:31:43,120 --> 00:31:46,240 Speaker 1: the year. And practically having failed on healthcare, it's absolutely 593 00:31:46,360 --> 00:31:49,160 Speaker 1: essential that we succeed on tax reform, and I think 594 00:31:49,160 --> 00:31:52,200 Speaker 1: that will focus a lot of Republican minds and maybe 595 00:31:52,240 --> 00:31:54,880 Speaker 1: make the conference a little more compliant than it was 596 00:31:54,920 --> 00:31:57,680 Speaker 1: over the healthcare issue. Jackson, thank you so much. Thomas 597 00:31:57,720 --> 00:32:00,160 Speaker 1: Cole is with the fourth District of Oklahoma, and we 598 00:32:00,280 --> 00:32:02,200 Speaker 1: look forward to speaking to them again in our studios 599 00:32:02,240 --> 00:32:14,920 Speaker 1: in Washington. Thanks for listening to the Bloomberg Surveillance podcast. 600 00:32:15,400 --> 00:32:20,600 Speaker 1: Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or 601 00:32:20,720 --> 00:32:25,000 Speaker 1: whichever podcast platform you prefer. I'm on Twitter at Tom Keene, 602 00:32:25,120 --> 00:32:29,480 Speaker 1: David Gura is at David Gura. Before the podcast, you 603 00:32:29,480 --> 00:32:32,800 Speaker 1: could always catch us worldwide. I'm Bloomberg Radio