1 00:00:02,520 --> 00:00:10,119 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,119 --> 00:00:13,880 Speaker 1: Bloomberg Balance of Power podcast. Catch us live weekdays at 3 00:00:13,920 --> 00:00:17,119 Speaker 1: noon and five pm Eastern on Apple Coarckley and Android 4 00:00:17,160 --> 00:00:20,560 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 5 00:00:20,600 --> 00:00:25,080 Speaker 1: you get your podcasts, or watch us live on YouTube. 6 00:00:25,320 --> 00:00:28,200 Speaker 2: Wall Street again bumping into Washington and a looming decision 7 00:00:28,240 --> 00:00:30,520 Speaker 2: now for President Trump on what to do whether to 8 00:00:30,640 --> 00:00:33,920 Speaker 2: join Israel offensively against Iran. He's back at the White 9 00:00:33,960 --> 00:00:36,239 Speaker 2: House today, as we told you, having left the G 10 00:00:36,400 --> 00:00:39,760 Speaker 2: seven in Canada early to deal with these matters that 11 00:00:39,840 --> 00:00:44,279 Speaker 2: we've seen a flurry of posts on truth social demanding 12 00:00:44,440 --> 00:00:49,680 Speaker 2: unconditional surrender in one case, to Iran, and going even 13 00:00:49,760 --> 00:00:54,200 Speaker 2: further to write about Iran's supreme leader. We know exactly, 14 00:00:54,760 --> 00:00:57,360 Speaker 2: he writes, where the so called supreme leader is hiding. 15 00:00:57,840 --> 00:01:00,640 Speaker 2: He is an easy target, but is safe there. We're 16 00:01:00,640 --> 00:01:04,000 Speaker 2: not going to take him out, he writes, kill in parentheses, 17 00:01:04,319 --> 00:01:06,480 Speaker 2: at least not for now. But we don't want missiles 18 00:01:06,480 --> 00:01:09,880 Speaker 2: shot at civilians or American soldiers, our patients as wearing thin. 19 00:01:10,600 --> 00:01:11,240 Speaker 3: Thank you for. 20 00:01:11,280 --> 00:01:14,959 Speaker 2: Your attention to this matter. The question, of course, whether 21 00:01:15,000 --> 00:01:19,560 Speaker 2: the US should go further than providing logistical support to 22 00:01:19,600 --> 00:01:23,880 Speaker 2: the Israeli military, the Israeli Air Force, the IDF, whether, 23 00:01:23,920 --> 00:01:27,880 Speaker 2: in fact the US should put American air crews in 24 00:01:28,000 --> 00:01:32,040 Speaker 2: D two bombers to deliver bunker busting bombs that are 25 00:01:32,080 --> 00:01:36,120 Speaker 2: needed to get to the deep underground enrichment facilities like 26 00:01:36,200 --> 00:01:40,200 Speaker 2: Fourdeaux that we've talked about inside Iran. I discussed the 27 00:01:40,280 --> 00:01:43,520 Speaker 2: idea of US involvement and whether it was essential right 28 00:01:43,560 --> 00:01:46,080 Speaker 2: at this time. Yesterday in a conversation with Ron Dermer, 29 00:01:46,760 --> 00:01:49,440 Speaker 2: Israel's Minister for Strategic Affairs, Here's what he said. 30 00:01:50,120 --> 00:01:52,520 Speaker 4: The US has been tremendous in the support that it's 31 00:01:52,520 --> 00:01:55,960 Speaker 4: given Israel from the beginning of this war on defense. 32 00:01:56,040 --> 00:02:00,560 Speaker 4: There's an understanding, frankly, Joe in America and not just Israel. Then, 33 00:02:00,560 --> 00:02:04,120 Speaker 4: when we are fighting Iran, we're not just fighting for ourselves. 34 00:02:04,560 --> 00:02:06,880 Speaker 4: We're fighting an enemy of the United States. So when 35 00:02:06,880 --> 00:02:09,880 Speaker 4: we're taking them on, we are fighting your fight, and 36 00:02:10,040 --> 00:02:13,080 Speaker 4: actually our victory will also be an American victory, and 37 00:02:13,120 --> 00:02:15,160 Speaker 4: I think it will help turn the region into a 38 00:02:15,200 --> 00:02:15,960 Speaker 4: different direction. 39 00:02:17,600 --> 00:02:19,720 Speaker 2: Let's see what the thinking is at the White House 40 00:02:19,760 --> 00:02:22,160 Speaker 2: right now. Bloomberg's Tyler Kendall has been there all day 41 00:02:22,160 --> 00:02:24,239 Speaker 2: and joins US Live from the North Lawn Tyler. 42 00:02:25,160 --> 00:02:27,400 Speaker 5: Yeah, hey, Joe, Well, it's our understanding that the US 43 00:02:27,440 --> 00:02:31,200 Speaker 5: has been in close contact with its Israeli counterparts. President 44 00:02:31,200 --> 00:02:33,880 Speaker 5: Trump has been in the situation room getting updates. And 45 00:02:33,880 --> 00:02:35,919 Speaker 5: then about an hour ago, as you mentioned, we saw 46 00:02:35,960 --> 00:02:39,200 Speaker 5: this flurry of posts on truth social that included him 47 00:02:39,240 --> 00:02:43,080 Speaker 5: posting about unconditional surrender and also threatening Iran Supreme leader. 48 00:02:43,120 --> 00:02:46,160 Speaker 5: And then another one worth reiterating. He said, quote, we 49 00:02:46,240 --> 00:02:50,079 Speaker 5: now have complete and total control of the skies over Iran. 50 00:02:50,120 --> 00:02:54,000 Speaker 5: Iran had good skytrackers and other defensive equipment, and plenty 51 00:02:54,040 --> 00:02:57,680 Speaker 5: of it, but it doesn't compare to American made, conceived, 52 00:02:57,720 --> 00:03:01,120 Speaker 5: and manufactured stuff in quotes. This definitely, of course, heightens 53 00:03:01,320 --> 00:03:04,799 Speaker 5: the US's support of these ongoing Israeli airstrikes, as the 54 00:03:04,919 --> 00:03:08,280 Speaker 5: question really does become what will US involvement look like 55 00:03:08,400 --> 00:03:11,799 Speaker 5: going forward? We could soon have an answer, as Axios 56 00:03:11,880 --> 00:03:14,800 Speaker 5: reports that President Trump is going to convene that National 57 00:03:14,840 --> 00:03:17,160 Speaker 5: Security Council at one pm Eastern, and we also heard 58 00:03:17,160 --> 00:03:20,480 Speaker 5: from the German Chancellor speaking to local broadcaster saying that 59 00:03:20,520 --> 00:03:23,480 Speaker 5: the US will make its decision based off of whether 60 00:03:23,600 --> 00:03:26,320 Speaker 5: or not it thinks Iran is willing to negotiate. We 61 00:03:26,320 --> 00:03:28,120 Speaker 5: should say that up to this point, the White House 62 00:03:28,120 --> 00:03:31,480 Speaker 5: has maintained that it has a defensive posture here, though 63 00:03:31,480 --> 00:03:35,520 Speaker 5: it did move military assets into the region, and analysts 64 00:03:35,520 --> 00:03:37,680 Speaker 5: do tell us, just for context, that if the US 65 00:03:37,720 --> 00:03:39,600 Speaker 5: does get involved, it likely want to be boots on 66 00:03:39,640 --> 00:03:41,240 Speaker 5: the ground, troops on the ground, but it would be 67 00:03:41,400 --> 00:03:46,560 Speaker 5: air or sea defense and support moving forward. There also 68 00:03:46,680 --> 00:03:49,440 Speaker 5: important to mention, though, that the speculation about this Joe 69 00:03:49,440 --> 00:03:51,920 Speaker 5: really did heighten after we saw a post from Vice 70 00:03:51,960 --> 00:03:54,640 Speaker 5: President to JD. Vance earlier today. He wrote in a 71 00:03:54,680 --> 00:03:58,120 Speaker 5: post on x that President Trump quote may decide he 72 00:03:58,200 --> 00:04:01,920 Speaker 5: needs to take further action to and Iranian enrichment. Of course, 73 00:04:01,960 --> 00:04:05,360 Speaker 5: the possibility of a diplomatic de escalation could still be 74 00:04:05,400 --> 00:04:07,480 Speaker 5: on the table. It's worth noting that President Trump did 75 00:04:07,480 --> 00:04:10,560 Speaker 5: suggest earlier that he may dispatch either Vance or his 76 00:04:10,640 --> 00:04:13,600 Speaker 5: special en voice Steed Witcoff or talks with Roan. We're 77 00:04:13,640 --> 00:04:15,560 Speaker 5: just waiting for some updates on how that involves. 78 00:04:16,560 --> 00:04:19,080 Speaker 2: All right, Tyler, stay close with us. Bloomberg's Tyler Kendall 79 00:04:19,160 --> 00:04:21,200 Speaker 2: at the White House. As we turn our attention now 80 00:04:21,440 --> 00:04:24,159 Speaker 2: to what is left of the G seven summit in Canada. 81 00:04:24,240 --> 00:04:28,520 Speaker 2: Bloomberg's David Gura is in Banff, where world leaders are 82 00:04:28,560 --> 00:04:34,680 Speaker 2: continuing to move their conversations ahead even without President Trump. David, 83 00:04:34,680 --> 00:04:36,000 Speaker 2: how is all of this playing there? 84 00:04:38,760 --> 00:04:38,920 Speaker 4: Well? 85 00:04:38,920 --> 00:04:40,920 Speaker 6: To borrow a phrase from the President, this matter does 86 00:04:40,960 --> 00:04:43,360 Speaker 6: have the attention of the world leaders who are gathered here. 87 00:04:43,360 --> 00:04:45,800 Speaker 6: We heard from Chancellor Friedrich Mertz of Germany this morning 88 00:04:46,320 --> 00:04:49,880 Speaker 6: talking about that conflict, having some very strong rhetoric about Iran, 89 00:04:49,920 --> 00:04:51,520 Speaker 6: and suggesting that the US is going to make its 90 00:04:51,560 --> 00:04:55,080 Speaker 6: decision on military action today. So everyone here tracking very 91 00:04:55,080 --> 00:04:57,800 Speaker 6: closely what's happening in Washington, indeed what's happening in the 92 00:04:57,800 --> 00:04:59,880 Speaker 6: Middle East as well. But you just rightfully point out 93 00:05:00,800 --> 00:05:04,720 Speaker 6: the agenda proceeds as normal. President Vladimir Zelenski's here in Canada. 94 00:05:04,720 --> 00:05:06,640 Speaker 6: He had a meeting with Prime Minister Mark Karney just 95 00:05:06,640 --> 00:05:09,279 Speaker 6: a few minutes ago, at which Canada announced a big 96 00:05:09,320 --> 00:05:14,040 Speaker 6: investment in defense spending for Ukraine and new sanctions on Russia. 97 00:05:14,560 --> 00:05:16,640 Speaker 6: We're seeing those meetings continue over the course of the day, 98 00:05:16,640 --> 00:05:19,120 Speaker 6: and sitting in President Trump's seat at all of these 99 00:05:19,120 --> 00:05:21,760 Speaker 6: major meetings is now Scott Bessett, the Treasury Secretary who 100 00:05:21,760 --> 00:05:24,960 Speaker 6: traveled here with President Trump, with the expectation going into 101 00:05:25,000 --> 00:05:27,760 Speaker 6: this summit there'd be more conversations on the sidelines about 102 00:05:27,800 --> 00:05:30,360 Speaker 6: trade and tariffs, but he has now been given the 103 00:05:30,640 --> 00:05:32,800 Speaker 6: impromado to sit in that seat over the course of 104 00:05:32,839 --> 00:05:34,839 Speaker 6: these meetings to kind of play the role of the 105 00:05:34,920 --> 00:05:39,080 Speaker 6: US's representative here as conversations center on Ukraine this morning 106 00:05:39,080 --> 00:05:42,840 Speaker 6: and energy this afternoon. Again, the official agenda continues, but 107 00:05:43,080 --> 00:05:45,280 Speaker 6: everyone here very much watching what's unfolding and Washington in 108 00:05:45,279 --> 00:05:45,720 Speaker 6: the Middle East. 109 00:05:45,760 --> 00:05:49,760 Speaker 2: Joe great reporting this week from David Girl live in Banff, Canada. 110 00:05:49,839 --> 00:05:50,920 Speaker 3: Thank you so much, David. 111 00:05:51,200 --> 00:05:54,640 Speaker 2: As we add the voice of experience in retired General 112 00:05:54,680 --> 00:05:58,279 Speaker 2: Frank McKenzie. We told you he would join us. Someone 113 00:05:58,320 --> 00:06:00,680 Speaker 2: with answers to many of the questions that we've been asking. 114 00:06:00,800 --> 00:06:04,000 Speaker 2: Is he was the former commander United States Central Command 115 00:06:04,200 --> 00:06:08,960 Speaker 2: SENTCOM from twenty nineteen to twenty twenty two. Now executive 116 00:06:09,000 --> 00:06:11,800 Speaker 2: director of the University of South Florida's Global and National 117 00:06:11,839 --> 00:06:14,800 Speaker 2: Security Institute. General mackenzie, it's good to have you back 118 00:06:14,839 --> 00:06:15,760 Speaker 2: on Balance of Power. 119 00:06:15,800 --> 00:06:18,839 Speaker 3: Welcome back to Bloomberg TV and Radio. It's good to 120 00:06:18,839 --> 00:06:19,400 Speaker 3: have you with us. 121 00:06:19,440 --> 00:06:22,000 Speaker 2: The President is facing a big choice today as it seems, 122 00:06:22,000 --> 00:06:24,240 Speaker 2: and he's been writing on truth Social about it. If 123 00:06:24,279 --> 00:06:26,960 Speaker 2: you were still in your old job, would you recommend 124 00:06:27,040 --> 00:06:30,279 Speaker 2: to the President that the US join Israel offensively in 125 00:06:30,320 --> 00:06:33,080 Speaker 2: eliminating Iran's nuclear program? 126 00:06:33,520 --> 00:06:34,880 Speaker 7: Well, I think, first of all, it's going to be 127 00:06:34,880 --> 00:06:37,120 Speaker 7: with you, Joe. I think the important thing to remember 128 00:06:37,160 --> 00:06:40,800 Speaker 7: here is, as he approaches this decision, President Trump actually 129 00:06:40,839 --> 00:06:44,760 Speaker 7: has unique credibility with Iran because he gave the order 130 00:06:44,800 --> 00:06:48,560 Speaker 7: to strike Cassim Solmony back in early twenty twenty, So 131 00:06:48,600 --> 00:06:53,599 Speaker 7: he possesses enormous, enormous wata, if you will. As he 132 00:06:53,640 --> 00:06:56,080 Speaker 7: approaches this problem, it's going to be his decision to 133 00:06:56,160 --> 00:06:57,440 Speaker 7: choose how how is he going to use it? Are 134 00:06:57,480 --> 00:06:59,640 Speaker 7: we going to try to negotiate? Now? The problem with 135 00:06:59,720 --> 00:07:03,760 Speaker 7: nagociating with the Iranians is they're not great fighters, but 136 00:07:03,839 --> 00:07:06,840 Speaker 7: they're remarkable negotiators. They will try to bog you down, 137 00:07:06,880 --> 00:07:09,000 Speaker 7: they'll try to spend it out in time, and what 138 00:07:09,040 --> 00:07:11,360 Speaker 7: they will try to do is stay on their task 139 00:07:11,440 --> 00:07:14,200 Speaker 7: of destroying Israel and ejecting US from the region. So 140 00:07:14,240 --> 00:07:17,880 Speaker 7: it's a particularly it's a particularly difficult decision for the 141 00:07:17,880 --> 00:07:20,559 Speaker 7: President to make. If we go in and we strike 142 00:07:20,600 --> 00:07:23,680 Speaker 7: this target, as we're talking about doing. We're probably not 143 00:07:23,760 --> 00:07:27,200 Speaker 7: going to be able to completely eradicate the Iranian nuclear program, 144 00:07:27,240 --> 00:07:29,080 Speaker 7: but we will set the nuclear program back. 145 00:07:30,360 --> 00:07:34,880 Speaker 2: Interesting you mentioned a custom Solomony. I believe you did 146 00:07:34,920 --> 00:07:37,880 Speaker 2: recommend to President Trump at the time that he'd be 147 00:07:37,960 --> 00:07:39,800 Speaker 2: taken out, and a lot of people are looking at 148 00:07:39,840 --> 00:07:43,480 Speaker 2: that as the beginning of a saga that brings us 149 00:07:43,520 --> 00:07:47,040 Speaker 2: here today. That, in fact, closing the deal at four 150 00:07:47,120 --> 00:07:49,880 Speaker 2: DOAU and eliminating by the use of American B two 151 00:07:49,920 --> 00:07:52,440 Speaker 2: bombers and the MOAB eliminating what is left of that 152 00:07:52,560 --> 00:07:55,400 Speaker 2: ENRICHMENTD facility would be the bookend on something that you 153 00:07:55,520 --> 00:07:56,360 Speaker 2: started that day. 154 00:07:56,440 --> 00:07:58,080 Speaker 3: General, Is that correct. 155 00:07:59,000 --> 00:08:02,040 Speaker 7: Well, that would be President Trump's decision to actually execute 156 00:08:02,040 --> 00:08:05,160 Speaker 7: that strike, And I believe you can make a point 157 00:08:05,560 --> 00:08:08,480 Speaker 7: that it began a narrative arc that has taken us 158 00:08:08,520 --> 00:08:11,160 Speaker 7: to where we are today. You know, twenty twenty four 159 00:08:11,400 --> 00:08:14,000 Speaker 7: was the worst year in Iranian history in terms of 160 00:08:14,040 --> 00:08:17,080 Speaker 7: foreign policy and defense policy, but it really did begin 161 00:08:17,320 --> 00:08:21,240 Speaker 7: with the loss of Solomani, who was their inspirational leader, 162 00:08:21,840 --> 00:08:23,480 Speaker 7: the guy that could bring it all together for him 163 00:08:23,480 --> 00:08:26,600 Speaker 7: across the region. After January twenty twenty, he was no 164 00:08:26,680 --> 00:08:29,440 Speaker 7: longer there and they have felt his loss significantly. 165 00:08:31,440 --> 00:08:34,480 Speaker 2: It's really interesting as we try to understand the impact 166 00:08:34,520 --> 00:08:39,040 Speaker 2: that that had when it comes to communications with Iran's proxies, 167 00:08:39,679 --> 00:08:41,800 Speaker 2: when it comes even to a spreed to core if 168 00:08:41,840 --> 00:08:45,400 Speaker 2: I can use that term in keeping some cohesion among 169 00:08:45,520 --> 00:08:49,840 Speaker 2: proxies and even within the Revolutionary Guard. The elimination of 170 00:08:49,920 --> 00:08:54,280 Speaker 2: Cassem Solomani speaks directly to the chaos and the lack 171 00:08:54,320 --> 00:08:57,880 Speaker 2: of response, the chaotic response we're seeing now, does it not. 172 00:08:58,960 --> 00:09:01,440 Speaker 7: It absolutely does. The fact of the matter is the 173 00:09:01,440 --> 00:09:06,640 Speaker 7: Iranian military and particularly the IRGC, the Republican Guard Corps, 174 00:09:07,040 --> 00:09:09,960 Speaker 7: they don't have good succession planning. People come into these 175 00:09:10,040 --> 00:09:13,960 Speaker 7: jobs and they stay for many, many, many years. You know, 176 00:09:14,000 --> 00:09:16,560 Speaker 7: you don't have someone you can turn to if a 177 00:09:16,600 --> 00:09:19,720 Speaker 7: person dies or is killed. And they felt that very keenly. 178 00:09:19,760 --> 00:09:22,280 Speaker 7: They felt it. And the loss of Solomony we see 179 00:09:22,280 --> 00:09:24,599 Speaker 7: it right now in the loss of their equivalent, of 180 00:09:24,640 --> 00:09:28,000 Speaker 7: their chairman and equivalent, and the loss of the IRGC commander. 181 00:09:28,200 --> 00:09:30,920 Speaker 7: It has been is having a profound effect on Iranian 182 00:09:30,960 --> 00:09:34,480 Speaker 7: decision making. It's crippling it. It's making it very hard 183 00:09:34,520 --> 00:09:38,320 Speaker 7: for them to come to coordinated positions on how to 184 00:09:38,360 --> 00:09:42,440 Speaker 7: respond and we see that every day in their ineptitude. 185 00:09:42,920 --> 00:09:43,640 Speaker 3: Gentleal mackenzie. 186 00:09:43,640 --> 00:09:46,480 Speaker 2: We're getting headlines from Iranian state media right now that 187 00:09:46,520 --> 00:09:49,120 Speaker 2: Iran will soon launch soon launch what they're calling a 188 00:09:49,240 --> 00:09:53,400 Speaker 2: putative operation against Israel. I'm reading these with you for 189 00:09:53,440 --> 00:09:56,240 Speaker 2: the first time, citing Iran's Chief of Staff of Armed 190 00:09:56,280 --> 00:10:00,480 Speaker 2: Forces on this operation, urging Israelis to evacuate tell Leviv 191 00:10:01,200 --> 00:10:07,120 Speaker 2: and Haifa. How should Israel respond to headlines like these? 192 00:10:07,160 --> 00:10:10,600 Speaker 2: And is the Iron Dome enough to keep them safe? 193 00:10:12,160 --> 00:10:16,080 Speaker 7: The waves of Iranian attacks have had minimal success. I 194 00:10:16,120 --> 00:10:18,000 Speaker 7: know that's easy for me to say here in the 195 00:10:18,080 --> 00:10:21,960 Speaker 7: United States when buildings have been destroyed in Israel, but 196 00:10:21,960 --> 00:10:25,800 Speaker 7: the Israeli success rate with their various systems far beyond 197 00:10:25,840 --> 00:10:29,760 Speaker 7: Iron Dome has actually been pretty remarkable. The Iranians have 198 00:10:29,840 --> 00:10:33,000 Speaker 7: thrown about all they can throw at Israel. There's not 199 00:10:33,120 --> 00:10:36,360 Speaker 7: some secret deadly weapon out there waiting to be employed. 200 00:10:36,559 --> 00:10:38,640 Speaker 7: They just don't have it. You'll see more of the 201 00:10:38,640 --> 00:10:41,640 Speaker 7: same against Israel. I predict what will happen over time 202 00:10:42,240 --> 00:10:47,280 Speaker 7: is that Israeli defenses will grow increasingly effective as they 203 00:10:47,480 --> 00:10:50,120 Speaker 7: solve the way the Iranians are attacking, and the Iranians 204 00:10:50,160 --> 00:10:51,960 Speaker 7: don't have an endless supply of these weapons. 205 00:10:52,000 --> 00:10:57,240 Speaker 2: As well, we've been surging equipment into the theater, as 206 00:10:57,280 --> 00:11:00,920 Speaker 2: I'm sure you know, more than two dozen tankers, air refuelers. 207 00:11:01,520 --> 00:11:05,720 Speaker 2: We're steering the USS Knimitz Strike Carrier Group into the region. 208 00:11:05,760 --> 00:11:09,200 Speaker 2: What does this collection of material illustrate. 209 00:11:08,679 --> 00:11:10,240 Speaker 3: To you that we may be preparing for. 210 00:11:11,440 --> 00:11:14,240 Speaker 7: First of all, that illustrates the excellence of the Joint Force, 211 00:11:14,960 --> 00:11:18,480 Speaker 7: and our capabilities are global. We can flex anywhere very quickly. 212 00:11:19,000 --> 00:11:21,560 Speaker 7: I think it's prudent planning by the Department of Defense. 213 00:11:21,920 --> 00:11:26,080 Speaker 7: It's all about giving the president options. The decision to 214 00:11:26,120 --> 00:11:28,559 Speaker 7: whether or not we're going to strike Iran is going 215 00:11:28,600 --> 00:11:31,480 Speaker 7: to be a political decision that is not a military decision. 216 00:11:31,720 --> 00:11:33,240 Speaker 7: But what you want to do is ensure that the 217 00:11:33,280 --> 00:11:36,600 Speaker 7: president has all the tools necessary to make that decision 218 00:11:37,000 --> 00:11:39,080 Speaker 7: or to defer that decision if that's what he wants 219 00:11:39,120 --> 00:11:41,840 Speaker 7: to do, and protect our forces in the region. And 220 00:11:41,880 --> 00:11:45,120 Speaker 7: so that's what's going on right now. It's pretty much 221 00:11:45,120 --> 00:11:47,560 Speaker 7: another day at the office for the US military. We're 222 00:11:47,679 --> 00:11:50,560 Speaker 7: very good at this. They're bringing them in so that 223 00:11:50,600 --> 00:11:54,480 Speaker 7: we can prepared for really any contingency. 224 00:11:54,960 --> 00:11:57,560 Speaker 2: Some great reporting today in the New York Times about 225 00:11:57,559 --> 00:12:01,000 Speaker 2: what it would take to strike four Dough, the underground 226 00:12:01,000 --> 00:12:03,640 Speaker 2: and enrichment site that we've already referred to. It's essentially 227 00:12:03,720 --> 00:12:08,000 Speaker 2: underneath a mountain. General, and apparently the US was involved 228 00:12:08,080 --> 00:12:11,160 Speaker 2: here the Pentagon for several years trying to refine a 229 00:12:11,200 --> 00:12:15,560 Speaker 2: strike plan if in fact it was needed. They found 230 00:12:15,640 --> 00:12:19,040 Speaker 2: that it would require B two's, several of them releasing 231 00:12:19,160 --> 00:12:23,000 Speaker 2: one moab after another down the same hole before they 232 00:12:23,040 --> 00:12:25,679 Speaker 2: got there. Were you involved in those experiments? Is that 233 00:12:25,800 --> 00:12:28,920 Speaker 2: actually what it would take, regardless of whether it's decided 234 00:12:28,960 --> 00:12:30,600 Speaker 2: to be used today, is that what it would take 235 00:12:31,000 --> 00:12:31,839 Speaker 2: to blow up a mountain? 236 00:12:32,920 --> 00:12:35,160 Speaker 7: So, really, Joe, all I can tell you is we 237 00:12:35,240 --> 00:12:38,079 Speaker 7: have very good plans, we have very good capabilities. We 238 00:12:38,240 --> 00:12:40,559 Speaker 7: study the problem, we believe we have a solution to 239 00:12:40,600 --> 00:12:42,600 Speaker 7: the problem. But that's really all I can tell you. 240 00:12:43,760 --> 00:12:45,800 Speaker 2: Well, when the General can't answer a question like that, 241 00:12:45,840 --> 00:12:47,760 Speaker 2: I know we're getting warm on something here. Let me 242 00:12:47,800 --> 00:12:51,160 Speaker 2: ask you further. There's also reporting that if we didn't 243 00:12:51,160 --> 00:12:54,800 Speaker 2: in fact make that decision to use these bunker busting bombs, 244 00:12:55,120 --> 00:12:58,480 Speaker 2: that cutting the power might do it. A sabotage mission 245 00:12:58,480 --> 00:13:00,960 Speaker 2: to cut the power to these center feuge which spin 246 00:13:01,120 --> 00:13:05,880 Speaker 2: at supersonic speeds? Should that be in our playbook? 247 00:13:06,000 --> 00:13:09,360 Speaker 7: Every possible approach to this problem is in our playbook, 248 00:13:09,400 --> 00:13:13,040 Speaker 7: and many of them obviously also in Israel's playbook. Everything 249 00:13:13,080 --> 00:13:16,199 Speaker 7: from different forms of cyber attack to power interruption to 250 00:13:16,480 --> 00:13:20,440 Speaker 7: proxy attack direct on the ground. All of those options 251 00:13:20,480 --> 00:13:22,800 Speaker 7: are on the table. All of those options have been 252 00:13:22,840 --> 00:13:25,640 Speaker 7: thoroughly studied, and all of those options would be available 253 00:13:25,640 --> 00:13:28,040 Speaker 7: should we choose to use them. 254 00:13:28,400 --> 00:13:31,360 Speaker 2: As we spend time with retired General Frank Mackenzie trying 255 00:13:31,400 --> 00:13:34,319 Speaker 2: to figure out the way forward here, I wonder the 256 00:13:34,400 --> 00:13:38,400 Speaker 2: questions that you're asking as well about how far Israel 257 00:13:38,720 --> 00:13:40,920 Speaker 2: is planning to go here? General, is there a scenario 258 00:13:40,960 --> 00:13:44,280 Speaker 2: that we should be prepared for that would involve Israeli 259 00:13:44,400 --> 00:13:48,040 Speaker 2: boots on the ground in Iran and a very different 260 00:13:48,120 --> 00:13:50,640 Speaker 2: mission to support Joe. 261 00:13:50,679 --> 00:13:53,160 Speaker 7: I can't see that under any circumstance it ran as 262 00:13:53,200 --> 00:13:55,720 Speaker 7: a large country or the population of over ninety million. 263 00:13:56,440 --> 00:14:01,600 Speaker 7: I can't see any possible way that involve an Israeli 264 00:14:01,720 --> 00:14:05,640 Speaker 7: ground invasion of Iran just not going to happen. I 265 00:14:05,679 --> 00:14:08,920 Speaker 7: see some scenarios perhaps where the Israelis believe they can 266 00:14:09,200 --> 00:14:13,160 Speaker 7: knock out the existing government. Now you're dealing with what 267 00:14:13,320 --> 00:14:16,880 Speaker 7: is essentially a failed state, a dysfunctional, a dysfunctional entity, 268 00:14:16,920 --> 00:14:19,480 Speaker 7: And in some ways that may be better than a 269 00:14:19,640 --> 00:14:23,000 Speaker 7: state that isn't failing, but that has malevolent intent not 270 00:14:23,040 --> 00:14:25,640 Speaker 7: only against Israel but against all of its neighbors. It 271 00:14:25,720 --> 00:14:27,880 Speaker 7: would it would not be a good scenario for the 272 00:14:27,920 --> 00:14:31,080 Speaker 7: people of Iran. Will be denied basic services, for food, 273 00:14:31,160 --> 00:14:33,640 Speaker 7: for medicine, for all the things that make a life 274 00:14:33,640 --> 00:14:36,360 Speaker 7: worth living. But to some degree, the only people to 275 00:14:36,400 --> 00:14:38,280 Speaker 7: blame for that is current Iranian leadership. 276 00:14:39,400 --> 00:14:41,480 Speaker 2: Huh, General, you know what it's like to be in 277 00:14:41,480 --> 00:14:44,200 Speaker 2: the situation room with the National Security Council with the 278 00:14:44,200 --> 00:14:46,280 Speaker 2: President of the United States. It appears that's the kind 279 00:14:46,280 --> 00:14:48,560 Speaker 2: of day they're having today at the White House. We've 280 00:14:48,600 --> 00:14:52,760 Speaker 2: already discussed the decision that President Trump is facing here, 281 00:14:53,040 --> 00:14:55,600 Speaker 2: and I wonder if we could qualify this as the 282 00:14:55,640 --> 00:14:59,040 Speaker 2: most important foreign policy decision facing a president since the 283 00:14:59,080 --> 00:15:00,200 Speaker 2: withdrawal of afghanist in. 284 00:15:01,840 --> 00:15:05,080 Speaker 7: It's certainly a big it's certainly a certainly a big decision. 285 00:15:05,480 --> 00:15:07,480 Speaker 7: And if you're in there as a military person, your 286 00:15:07,600 --> 00:15:10,600 Speaker 7: job is to ensure that the people who make those decisions, 287 00:15:10,680 --> 00:15:13,800 Speaker 7: the civilian leadership of our country, have all the options 288 00:15:13,840 --> 00:15:16,960 Speaker 7: they need in order to execute whatever decision they choose, 289 00:15:17,160 --> 00:15:20,120 Speaker 7: and then the Joint Force will faithfully execute those decisions. 290 00:15:21,200 --> 00:15:24,120 Speaker 2: There seems to be an expectation this decision is made today. General, 291 00:15:24,400 --> 00:15:25,800 Speaker 2: how long is this window open for? 292 00:15:28,160 --> 00:15:30,640 Speaker 7: I think we have some flexibility in how we choose 293 00:15:30,720 --> 00:15:34,080 Speaker 7: to approach it. I think the problem is for the Iranians, 294 00:15:34,120 --> 00:15:36,880 Speaker 7: time works against them. They're weaker every day, They're more 295 00:15:36,920 --> 00:15:40,040 Speaker 7: attried it every day, They're less capable every day. So 296 00:15:40,160 --> 00:15:42,760 Speaker 7: I think the pressure of the clock is working against them. 297 00:15:43,000 --> 00:15:44,760 Speaker 7: It's working for us and for Israel. 298 00:15:46,440 --> 00:15:48,880 Speaker 2: Lastly, the President writing on truth Social Generally you might 299 00:15:48,880 --> 00:15:50,600 Speaker 2: have seen it. We know exactly where the so called 300 00:15:50,640 --> 00:15:53,960 Speaker 2: Supreme Leader is hiding. He writes an easy target. He's 301 00:15:54,000 --> 00:15:55,680 Speaker 2: safe there. We're not going to take him out, at 302 00:15:55,760 --> 00:15:59,800 Speaker 2: least for now. Is the Supreme Leader eventually a target? 303 00:16:01,440 --> 00:16:03,400 Speaker 7: Don't know the answer to that. I do know that 304 00:16:03,880 --> 00:16:07,280 Speaker 7: President Trump has unique credibility when he writes those words, 305 00:16:07,520 --> 00:16:09,320 Speaker 7: and Iran is very much aware of that. 306 00:16:10,520 --> 00:16:12,520 Speaker 3: It's great to have you with us. General. 307 00:16:12,600 --> 00:16:14,560 Speaker 2: We hope that we can continue this conversation with you. 308 00:16:14,640 --> 00:16:18,560 Speaker 2: Retired General Frank Mackenzie, former Sencom commander now at the 309 00:16:18,640 --> 00:16:22,440 Speaker 2: University of South Flora's Global and National Security Institute, a 310 00:16:22,480 --> 00:16:25,200 Speaker 2: fascinating conversation. As we always seek to bring you voices 311 00:16:25,320 --> 00:16:28,520 Speaker 2: of experience practitioners here on Balance of Power. 312 00:16:28,760 --> 00:16:29,960 Speaker 3: We'll assemble our panel next. 313 00:16:30,040 --> 00:16:33,080 Speaker 2: Rick Davis and Jeanie Shanzino are with us live from 314 00:16:33,160 --> 00:16:34,680 Speaker 2: Washington with much more to follow. 315 00:16:34,720 --> 00:16:35,960 Speaker 3: Here. I'm Joe, Matthew and Glad. 316 00:16:35,960 --> 00:16:38,000 Speaker 2: You're Alon on the Tuesday edition of Balance of Power 317 00:16:38,000 --> 00:16:39,440 Speaker 2: on Bloomberg TV and Radio. 318 00:16:41,800 --> 00:16:45,280 Speaker 1: You're listening to the Bloomberg Balance of Power Podcast. Catch 319 00:16:45,360 --> 00:16:48,400 Speaker 1: us live weekdays at noon and five pm Eastern on 320 00:16:48,520 --> 00:16:51,760 Speaker 1: Apple Cockley and Android Auto with the Bloomberg Business App. 321 00:16:51,800 --> 00:16:54,840 Speaker 1: You can also listen live on Amazon Alexa from our 322 00:16:54,840 --> 00:16:59,239 Speaker 1: flagship New York station, Just say Alexa, play Bloomberg eleven. 323 00:16:59,080 --> 00:17:03,800 Speaker 2: Thirty watching the Tuesday Trade Evolve with the news here 324 00:17:04,160 --> 00:17:07,359 Speaker 2: from Washington. Bloomberg News can now confirm the President of 325 00:17:07,400 --> 00:17:10,240 Speaker 2: the United States set to meet with the National Security 326 00:17:10,280 --> 00:17:14,000 Speaker 2: team here to talk about what next in the Middle East. 327 00:17:14,080 --> 00:17:14,680 Speaker 3: We've had a. 328 00:17:14,600 --> 00:17:17,919 Speaker 2: Flurry of truth social posts from President Trump and as 329 00:17:17,920 --> 00:17:21,639 Speaker 2: we were just discussing with retired General Frank McKenzie, a 330 00:17:21,680 --> 00:17:24,320 Speaker 2: big decision here in the offing and it could come 331 00:17:24,359 --> 00:17:26,760 Speaker 2: today based on everything that we are hearing about what 332 00:17:26,800 --> 00:17:30,199 Speaker 2: should be the US policy when it comes to offensive 333 00:17:30,359 --> 00:17:36,119 Speaker 2: military action against Iran, the President calling for unconditional surrender 334 00:17:36,240 --> 00:17:39,920 Speaker 2: in One Truth social post, going even further if you 335 00:17:39,960 --> 00:17:42,280 Speaker 2: were with us on Bloomberg to say, we know exactly 336 00:17:42,320 --> 00:17:47,000 Speaker 2: where the so called Supreme Leader is hiding, adding that 337 00:17:47,000 --> 00:17:48,840 Speaker 2: we're not going to take him out, at least not 338 00:17:49,040 --> 00:17:53,560 Speaker 2: for now. The pressure campaign is ratcheting up here as 339 00:17:53,560 --> 00:17:55,840 Speaker 2: we get closer to a decision that could lead to 340 00:17:55,960 --> 00:18:01,320 Speaker 2: either US military action or some sort of if we're 341 00:18:01,359 --> 00:18:04,560 Speaker 2: still allowing for that. We assembled our political panel now. 342 00:18:04,600 --> 00:18:08,840 Speaker 2: Bloomberg Politics contributors Genie Shanzano and Rick Davis are with us. 343 00:18:08,920 --> 00:18:11,920 Speaker 2: Rick is our Republican strategist partner at Stone Court Capital. 344 00:18:12,440 --> 00:18:15,320 Speaker 2: Genie is senior Democracy Fellow with the Center for the 345 00:18:15,359 --> 00:18:19,120 Speaker 2: Study of the Presidency in Congress, Rick, you spent enough 346 00:18:19,119 --> 00:18:22,000 Speaker 2: time at the White House and in skiffs across Washington 347 00:18:22,040 --> 00:18:23,919 Speaker 2: to have a sense of what this is like inside 348 00:18:23,960 --> 00:18:26,480 Speaker 2: the sit room, inside the West wing. 349 00:18:26,720 --> 00:18:26,920 Speaker 3: Right. 350 00:18:26,960 --> 00:18:29,000 Speaker 2: Now, give us a sense of the conversations that are 351 00:18:29,040 --> 00:18:32,639 Speaker 2: being had, the options the president is hearing and from whom. 352 00:18:33,960 --> 00:18:38,560 Speaker 8: Yeah, well, the joint chiefs job is to advise the 353 00:18:38,600 --> 00:18:44,159 Speaker 8: president and give him military options, obviously orchestrated by his 354 00:18:44,240 --> 00:18:49,040 Speaker 8: Secretary of Defense Pete Hexath. So they are there along 355 00:18:49,040 --> 00:18:51,840 Speaker 8: with the National Security team both inside the White House 356 00:18:51,880 --> 00:18:56,119 Speaker 8: and other members in the cabinet, and that is exactly, Joe, 357 00:18:56,480 --> 00:18:59,680 Speaker 8: what you described they're doing. They're going through various scenarios, 358 00:19:00,800 --> 00:19:03,240 Speaker 8: you know, to tell the president what kind of options 359 00:19:03,240 --> 00:19:06,719 Speaker 8: he has, what kind of choices, ask answering any questions 360 00:19:06,800 --> 00:19:10,560 Speaker 8: that here the team has, and and game planning out 361 00:19:10,600 --> 00:19:14,200 Speaker 8: a little bit about what happens next. We know he's 362 00:19:14,240 --> 00:19:15,960 Speaker 8: not tweeting in there, because you're not allowed to have 363 00:19:16,000 --> 00:19:18,320 Speaker 8: a phone in a skiff. He's certainly not in the 364 00:19:18,359 --> 00:19:21,639 Speaker 8: sit room, and so he must have We can almost 365 00:19:21,720 --> 00:19:24,840 Speaker 8: time how much time he's in the sit room by 366 00:19:25,119 --> 00:19:28,159 Speaker 8: like when those tweets kick off again, he gets his 367 00:19:28,240 --> 00:19:31,639 Speaker 8: phone back. But the bottom line on it is is 368 00:19:31,760 --> 00:19:35,000 Speaker 8: that they'll have all the information they need there at hand, 369 00:19:35,600 --> 00:19:39,480 Speaker 8: a lot of electronic information available to make a decision, 370 00:19:40,400 --> 00:19:42,880 Speaker 8: and that maybe that decision is a non decision for now, 371 00:19:42,920 --> 00:19:46,359 Speaker 8: but at the end of the day, it's the president's choice. 372 00:19:46,359 --> 00:19:49,960 Speaker 8: It is not the decision of a military leader to 373 00:19:50,040 --> 00:19:52,560 Speaker 8: make what we do. They are giving him options. It's 374 00:19:52,640 --> 00:19:55,600 Speaker 8: up to the President to make that commander in chief decision. 375 00:19:57,200 --> 00:19:58,960 Speaker 2: Genie, I don't know how often you're on the same 376 00:19:59,000 --> 00:20:03,480 Speaker 2: page as Tom mass but he is among a group 377 00:20:03,520 --> 00:20:08,120 Speaker 2: of Republicans on Capitol Hill who are demanding that Congress 378 00:20:08,160 --> 00:20:11,480 Speaker 2: be involved in this decision. The President obviously has great 379 00:20:11,480 --> 00:20:13,840 Speaker 2: authority when it comes to dealing with our own national 380 00:20:13,880 --> 00:20:17,399 Speaker 2: security when it comes to the immediacy of whether or 381 00:20:17,440 --> 00:20:19,520 Speaker 2: not to strike. But if we're talking about a longer 382 00:20:19,600 --> 00:20:23,440 Speaker 2: term commitment here, when does Congress get the call? 383 00:20:23,600 --> 00:20:26,960 Speaker 9: Well, so far they have not been very active. You 384 00:20:27,040 --> 00:20:31,359 Speaker 9: mentioned Tom Massey, who is joined to buy strange bedfellows 385 00:20:31,560 --> 00:20:36,200 Speaker 9: like Ilhan Omar and Alexandro Casio Cortes who have indicated 386 00:20:36,240 --> 00:20:38,800 Speaker 9: they would sign on to this resolution. And then, of 387 00:20:38,840 --> 00:20:41,040 Speaker 9: course in the Senate you have Tim Kane, who is 388 00:20:41,080 --> 00:20:44,600 Speaker 9: promising to bring other Democrats along. It'll be curious to 389 00:20:44,640 --> 00:20:47,480 Speaker 9: see if any of the more right wing MAGA folks 390 00:20:47,520 --> 00:20:50,920 Speaker 9: go along with him. So we're going to see strange bedfellows. 391 00:20:51,240 --> 00:20:54,720 Speaker 9: And I think from the President's perspective, and you can 392 00:20:54,840 --> 00:20:58,399 Speaker 9: see this, I think in the truths from today, he 393 00:20:58,920 --> 00:21:04,520 Speaker 9: would think best case scenario is that he compels Iran 394 00:21:05,080 --> 00:21:08,399 Speaker 9: to give up, come to the negotiating table, and he 395 00:21:08,680 --> 00:21:12,560 Speaker 9: doesn't have to make this very tough decision because for 396 00:21:12,680 --> 00:21:17,719 Speaker 9: him politically, this is a very moment. He has told 397 00:21:17,880 --> 00:21:23,080 Speaker 9: people two things that simply do not reconcile together. One, 398 00:21:24,160 --> 00:21:27,480 Speaker 9: I am Israel's best ally. America will continues to support it. 399 00:21:27,880 --> 00:21:30,600 Speaker 9: Number Two, we are out of foreign wars. I am 400 00:21:30,640 --> 00:21:33,040 Speaker 9: heading for a Nobel Peace Prize. We are going to 401 00:21:33,040 --> 00:21:37,679 Speaker 9: be America first. Those two promises are irreconcilable, and he 402 00:21:37,760 --> 00:21:40,760 Speaker 9: is being called to the mat on those by those 403 00:21:40,800 --> 00:21:42,919 Speaker 9: on the MAGA right, which is why you're seeing the 404 00:21:43,000 --> 00:21:46,760 Speaker 9: Vice President, who speaks MAGA, speaking to them on Twitter 405 00:21:46,800 --> 00:21:50,800 Speaker 9: today and saying, give the president some space. He's earned 406 00:21:50,840 --> 00:21:53,119 Speaker 9: your trust. He's only going to do what's in the 407 00:21:53,160 --> 00:21:56,640 Speaker 9: best interest of the American public. But remember, the use 408 00:21:56,680 --> 00:21:59,879 Speaker 9: of troops for that reason is the same defense ever 409 00:22:00,080 --> 00:22:03,160 Speaker 9: free president of the United States gives. And Donald Trump 410 00:22:03,240 --> 00:22:08,280 Speaker 9: made a career of attacking George Bush, Barack Obama, Joe Biden. 411 00:22:08,320 --> 00:22:10,640 Speaker 9: I can go on and on Hillary Clinton for using 412 00:22:10,760 --> 00:22:13,560 Speaker 9: US troops on foreign soil for exactly the same reason. 413 00:22:13,920 --> 00:22:16,840 Speaker 9: So he's in a conundrum. Best case scenario, he doesn't 414 00:22:16,880 --> 00:22:18,960 Speaker 9: have to make a decision. But I think he's not 415 00:22:19,000 --> 00:22:20,879 Speaker 9: going to get that. He's probably going to have to 416 00:22:20,920 --> 00:22:22,159 Speaker 9: make it, and it's going to put him in a 417 00:22:22,160 --> 00:22:23,600 Speaker 9: politically charged position. 418 00:22:24,920 --> 00:22:27,479 Speaker 3: Rick Wherrer, are you on Congress's role in all of this? 419 00:22:27,640 --> 00:22:30,320 Speaker 2: How long does Donald Trump have to act independently before 420 00:22:30,400 --> 00:22:31,640 Speaker 2: lawmakers need to have a say? 421 00:22:33,080 --> 00:22:33,199 Speaker 7: Oh? 422 00:22:33,240 --> 00:22:36,280 Speaker 8: I think that historically presidents have been given a long 423 00:22:36,359 --> 00:22:40,639 Speaker 8: lead time. You know, throughout the ages, presidents have been 424 00:22:40,680 --> 00:22:45,160 Speaker 8: able to act in an offensive fashion. Bill Clinton intervened 425 00:22:45,200 --> 00:22:49,560 Speaker 8: in the Bosnia War without permission from Congress, and you 426 00:22:49,720 --> 00:22:55,280 Speaker 8: go back to presidents like Nixon and others. So there's 427 00:22:55,320 --> 00:22:58,159 Speaker 8: a lot of history to giving the President of the 428 00:22:58,240 --> 00:23:03,840 Speaker 8: United States flexibilit especially in urgent situations such as this. Right, 429 00:23:04,040 --> 00:23:07,760 Speaker 8: this does not correspond with a debate in Congress that 430 00:23:07,800 --> 00:23:11,320 Speaker 8: could last weeks. This is a moment in time US 431 00:23:11,359 --> 00:23:14,119 Speaker 8: needs to act and the president, I think will be 432 00:23:14,160 --> 00:23:17,080 Speaker 8: given plenty of leeway. Remember, too, there are a lot 433 00:23:17,119 --> 00:23:21,080 Speaker 8: of bipartisan support for heming in Iran. 434 00:23:21,560 --> 00:23:22,560 Speaker 3: This is not just. 435 00:23:22,520 --> 00:23:27,879 Speaker 8: A Republican idea. A lot of hawks in the Democratic 436 00:23:27,920 --> 00:23:30,760 Speaker 8: Party see this as an opportunity to finally rid the 437 00:23:30,760 --> 00:23:34,159 Speaker 8: Middle East of the biggest troublemaker that we've had in 438 00:23:34,200 --> 00:23:39,800 Speaker 8: our lifetimes, and so I think you'll find both bipartisan 439 00:23:39,840 --> 00:23:43,679 Speaker 8: opposition to this, but also bipartisan support for anything that 440 00:23:43,720 --> 00:23:46,359 Speaker 8: the President wants to do to end the scourge of 441 00:23:47,000 --> 00:23:48,959 Speaker 8: Iranian troublemaking in the region. 442 00:23:50,160 --> 00:23:50,440 Speaker 3: Geni. 443 00:23:50,480 --> 00:23:53,879 Speaker 2: When you hear the president's comments, particularly from last evening 444 00:23:53,880 --> 00:23:57,080 Speaker 2: on Air Force One, we are looking for better than 445 00:23:57,080 --> 00:24:01,400 Speaker 2: a cease fire, he said, better than a fire, a 446 00:24:01,480 --> 00:24:05,919 Speaker 2: real end, which is why people are wondering if he 447 00:24:06,040 --> 00:24:10,359 Speaker 2: is in fact thinking seriously about committing the US military 448 00:24:10,480 --> 00:24:14,040 Speaker 2: to this to take part in Israeli strikes against Iran. 449 00:24:14,160 --> 00:24:14,879 Speaker 3: When you hear. 450 00:24:14,880 --> 00:24:17,560 Speaker 2: Talk like that, does that tell you that Donald Trump 451 00:24:17,600 --> 00:24:20,080 Speaker 2: will make this decision today in the sit room with 452 00:24:20,200 --> 00:24:24,080 Speaker 2: his military advisors, or that actually Iran will make this 453 00:24:24,200 --> 00:24:25,879 Speaker 2: decision based on how it responds. 454 00:24:27,880 --> 00:24:31,480 Speaker 9: You know, I think the President probably is committed to 455 00:24:31,520 --> 00:24:34,240 Speaker 9: where he wants to take this already. I think that's 456 00:24:34,320 --> 00:24:37,040 Speaker 9: why he came back. I think that's why we're seeing 457 00:24:37,119 --> 00:24:40,440 Speaker 9: the messages we are seeing from the President. The Vice 458 00:24:40,480 --> 00:24:44,680 Speaker 9: President Pete heg Seth on Fox News last night. Sure 459 00:24:44,800 --> 00:24:47,520 Speaker 9: his mind could be changed if he gets some new information, 460 00:24:48,440 --> 00:24:50,680 Speaker 9: but I think he knows where he wants to go, 461 00:24:50,720 --> 00:24:52,679 Speaker 9: and that is where he has been a long time. 462 00:24:53,000 --> 00:24:57,119 Speaker 9: Iran cannot have nuclear weapons. The challenge for him is 463 00:24:57,240 --> 00:25:00,600 Speaker 9: he blew up the deal in twenty eighteen that would 464 00:25:00,600 --> 00:25:03,080 Speaker 9: have left us in a much better position than we 465 00:25:03,200 --> 00:25:05,639 Speaker 9: are right now, and now he's got to make a 466 00:25:05,680 --> 00:25:11,160 Speaker 9: tough decision. Yes, he hopes that Iran completely capitulates, completely surrenders, 467 00:25:11,600 --> 00:25:14,920 Speaker 9: but you talk to Iran experts and they say, how 468 00:25:14,920 --> 00:25:17,400 Speaker 9: can Iran do that at this point in the future. 469 00:25:17,440 --> 00:25:21,000 Speaker 9: They might, but at this point, how can they? Number One, 470 00:25:21,240 --> 00:25:24,200 Speaker 9: they have lost faith in the President of the United 471 00:25:24,280 --> 00:25:28,240 Speaker 9: States Donald Trump because they don't feel like he was 472 00:25:28,320 --> 00:25:31,760 Speaker 9: being completely open and honest with them about the negotiations 473 00:25:31,800 --> 00:25:34,960 Speaker 9: that were occurring. And so that's something he's going to 474 00:25:35,000 --> 00:25:38,240 Speaker 9: have to overcome if he really wants a substantive negotiation 475 00:25:38,359 --> 00:25:41,520 Speaker 9: with them on this. And number two, is he really 476 00:25:41,560 --> 00:25:45,360 Speaker 9: going to backtrack on his no nuclear weapons for Iran? 477 00:25:45,800 --> 00:25:49,120 Speaker 9: I read that truth to say that he really does 478 00:25:49,480 --> 00:25:53,199 Speaker 9: want regime change, which many people do, but he doesn't 479 00:25:53,200 --> 00:25:55,199 Speaker 9: want to make the difficult decision as to how you 480 00:25:55,200 --> 00:25:57,000 Speaker 9: get there, and he may just have to in the 481 00:25:57,000 --> 00:25:57,960 Speaker 9: next couple hours. 482 00:25:59,440 --> 00:26:03,720 Speaker 2: Well, that's pretty interesting, Rick, when you consider the options here. 483 00:26:03,760 --> 00:26:06,640 Speaker 2: Donald Trump could simply let Israel keep hammering away at 484 00:26:06,640 --> 00:26:10,000 Speaker 2: Iran and hope for the people to rise up, or 485 00:26:10,040 --> 00:26:13,520 Speaker 2: maybe an alternate approach to eliminating the centerfugees. But as 486 00:26:14,080 --> 00:26:18,560 Speaker 2: General McKenzie said, the Iranians are better negotiators than they 487 00:26:18,600 --> 00:26:21,040 Speaker 2: are fighters, and I think he said they're bad fighters 488 00:26:21,040 --> 00:26:22,760 Speaker 2: and great negotiators. 489 00:26:22,800 --> 00:26:23,480 Speaker 3: Based on the. 490 00:26:23,520 --> 00:26:26,480 Speaker 2: History of this conversation, why should the US even take 491 00:26:26,520 --> 00:26:30,320 Speaker 2: Iran seriously as a credible actor at a negotiating table. 492 00:26:31,800 --> 00:26:33,919 Speaker 8: Yeah, I think that Donald Trump has always felt that 493 00:26:34,119 --> 00:26:37,400 Speaker 8: threats and coercions the way to go with the Iranians, 494 00:26:37,359 --> 00:26:39,320 Speaker 8: and he's probably more right than wrong. I mean, Frank 495 00:26:39,400 --> 00:26:42,520 Speaker 8: McKenzie has got an enormous amount of experience dealing with 496 00:26:42,560 --> 00:26:48,200 Speaker 8: the Iranians. But remember too, the Iranians have a Deak squad, 497 00:26:49,160 --> 00:26:52,919 Speaker 8: you know, trying to take out Donald Trump for the 498 00:26:53,000 --> 00:26:56,159 Speaker 8: assassination of Solomoni. I mean, these are not like normal 499 00:26:56,240 --> 00:26:59,679 Speaker 8: negotiations among interested parties. I mean, you know, this is 500 00:26:59,720 --> 00:27:02,000 Speaker 8: the the rangest group of people you're ever going to 501 00:27:02,040 --> 00:27:04,840 Speaker 8: meet with. Hey, we'd like to negotiate you with you 502 00:27:05,040 --> 00:27:07,800 Speaker 8: while we're trying to kill you. So if you have 503 00:27:07,880 --> 00:27:10,960 Speaker 8: conditions like that, you have to assume that Donald Trump's 504 00:27:10,960 --> 00:27:14,000 Speaker 8: going to use equal, if not more lethal ways of 505 00:27:14,080 --> 00:27:17,240 Speaker 8: dealing with the Iranians. And so I just want to 506 00:27:17,320 --> 00:27:20,440 Speaker 8: you know, this is not like negotiating a real estate deal. 507 00:27:21,440 --> 00:27:24,200 Speaker 8: You know, You've got a situation here where Iran does 508 00:27:24,240 --> 00:27:28,080 Speaker 8: not played by any rules of modern society, and therefore 509 00:27:28,600 --> 00:27:32,159 Speaker 8: they are now vulnerable to those who have the power 510 00:27:32,200 --> 00:27:34,600 Speaker 8: to prey upon them. And at the end of the day, 511 00:27:36,000 --> 00:27:38,679 Speaker 8: if you want a peaceful Middle East, you're going to 512 00:27:38,760 --> 00:27:41,800 Speaker 8: have to deal with the biggest troublemaker in the region, 513 00:27:41,920 --> 00:27:45,240 Speaker 8: and that's Iran. And Iran has been unwilling to contain 514 00:27:45,280 --> 00:27:46,080 Speaker 8: their ambitions. 515 00:27:47,440 --> 00:27:49,359 Speaker 2: Ginnie, I've got less than a minute here. If the 516 00:27:49,400 --> 00:27:53,560 Speaker 2: President decides to attack and he loses MAGA, can he 517 00:27:53,600 --> 00:27:54,240 Speaker 2: win them back? 518 00:27:55,960 --> 00:27:59,400 Speaker 9: He absolutely could, but there might be a fissure there. 519 00:27:59,480 --> 00:28:02,840 Speaker 9: But let's not forget we just got out of Afghanistan. 520 00:28:02,920 --> 00:28:06,200 Speaker 9: Who controls that country now, the Taliban? It is not 521 00:28:06,400 --> 00:28:09,119 Speaker 9: just we attack, regime change and we live in a 522 00:28:09,240 --> 00:28:13,439 Speaker 9: peaceful Middle East. The President, the United States, all of 523 00:28:13,440 --> 00:28:16,600 Speaker 9: our allies have to answer what is the day after? 524 00:28:16,840 --> 00:28:19,520 Speaker 9: What is next? What is this new regime you're hoping for. 525 00:28:19,960 --> 00:28:22,680 Speaker 9: We need to hear about that from the President of 526 00:28:22,720 --> 00:28:25,439 Speaker 9: the United States. If he decides to attack, what is 527 00:28:25,480 --> 00:28:26,000 Speaker 9: the end of. 528 00:28:25,920 --> 00:28:26,800 Speaker 6: This entire thing? 529 00:28:28,000 --> 00:28:31,760 Speaker 2: Great conversation with our great panel, Rick Davis and Jeanie Shanzano, 530 00:28:31,800 --> 00:28:34,680 Speaker 2: Bloomberg Politics contributors. Thank you both for the insights. 531 00:28:38,000 --> 00:28:41,480 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 532 00:28:41,560 --> 00:28:45,000 Speaker 1: us live weekdays at noon and five pm Eastern on Alpa, 533 00:28:45,040 --> 00:28:48,400 Speaker 1: Cocklay and Android Auto with the Bloomberg Business App. Listen 534 00:28:48,480 --> 00:28:51,600 Speaker 1: on demand wherever you get your podcasts, or watch us 535 00:28:51,640 --> 00:28:53,000 Speaker 1: live on YouTube. 536 00:28:54,000 --> 00:28:56,040 Speaker 2: A lot to look forward to you with regards to 537 00:28:56,080 --> 00:28:59,160 Speaker 2: our special FED coverage as well. That's tomorrow at the 538 00:28:59,160 --> 00:29:02,640 Speaker 2: meeting getting under and that's always our pleasure because Michael 539 00:29:02,720 --> 00:29:04,719 Speaker 2: McKee is in town. When the FED gets together, the 540 00:29:04,760 --> 00:29:07,520 Speaker 2: FOMC means Michael McKee is, whether it's at the desk 541 00:29:07,520 --> 00:29:10,440 Speaker 2: here Bloomberg International Economics and Policy correspond it's great to 542 00:29:10,440 --> 00:29:12,480 Speaker 2: see you. I don't know how bullish you're feeling, or 543 00:29:12,520 --> 00:29:15,480 Speaker 2: how bullish j Powell is feeling. We don't get a 544 00:29:15,560 --> 00:29:18,560 Speaker 2: cut tomorrow or a change in rates, but we might 545 00:29:18,920 --> 00:29:20,680 Speaker 2: start hearing some hints what do you think. 546 00:29:20,680 --> 00:29:23,720 Speaker 10: Well, Wall Street should be looking for hints. The question 547 00:29:23,840 --> 00:29:25,880 Speaker 10: is how much of a hint does the Fed want 548 00:29:25,920 --> 00:29:27,080 Speaker 10: to give them? And I don't think it's going to 549 00:29:27,120 --> 00:29:28,880 Speaker 10: be a whole lot because they don't know anything either. 550 00:29:29,680 --> 00:29:33,320 Speaker 10: We are getting a new Summary of Economic Projections, their 551 00:29:33,400 --> 00:29:37,400 Speaker 10: forecast for GDP, unemployment, and inflation, and then we get 552 00:29:37,400 --> 00:29:40,480 Speaker 10: the new dot plot. Wall Street is kind of betting 553 00:29:40,560 --> 00:29:44,080 Speaker 10: that they're going to raise the unemployment forecast and raise 554 00:29:44,160 --> 00:29:49,120 Speaker 10: the inflation forecast, which would suggest slower growth, but not 555 00:29:49,360 --> 00:29:51,400 Speaker 10: do a whole lot about it in the dot plot, 556 00:29:51,440 --> 00:29:54,000 Speaker 10: maybe cut from two cuts this year to one cut, 557 00:29:54,600 --> 00:29:57,280 Speaker 10: and essentially admit they don't know what's going to happen 558 00:29:57,320 --> 00:29:59,640 Speaker 10: to the economy because we're all waiting on Donald Trump. 559 00:29:59,760 --> 00:30:01,000 Speaker 3: Yeah, about everything. 560 00:30:01,120 --> 00:30:03,520 Speaker 2: So yesterday I probably would have a couple of days 561 00:30:03,560 --> 00:30:06,880 Speaker 2: ago asked you about tariffs. We have a massive geopolitical 562 00:30:07,240 --> 00:30:10,760 Speaker 2: crisis that's unfolding now as well. Donald Trump's in the 563 00:30:10,760 --> 00:30:13,560 Speaker 2: White House as we're talking to you, trying to figure 564 00:30:13,560 --> 00:30:16,880 Speaker 2: out whether the US should join Israel offensively against Iran. 565 00:30:17,480 --> 00:30:21,360 Speaker 2: This is happening just as the FMC gets behind closed doors. 566 00:30:21,520 --> 00:30:23,400 Speaker 2: Does that factor into their decision making? 567 00:30:23,760 --> 00:30:26,240 Speaker 10: It's not going to factor into their decision making because 568 00:30:26,400 --> 00:30:28,920 Speaker 10: there is no way to know what it will actually mean. 569 00:30:28,960 --> 00:30:32,880 Speaker 10: We can speculate about what the US might do, and 570 00:30:32,920 --> 00:30:35,120 Speaker 10: we can speculate about how the Iranians and others in 571 00:30:35,160 --> 00:30:38,040 Speaker 10: the Middle East might respond, but other than oil prices 572 00:30:38,120 --> 00:30:40,600 Speaker 10: going up, which is sort of a given in this situation, 573 00:30:41,240 --> 00:30:43,440 Speaker 10: there's no way to know how this would play out 574 00:30:43,640 --> 00:30:46,680 Speaker 10: for the US economy, which is what the FED cares about. 575 00:30:46,880 --> 00:30:50,480 Speaker 10: Oil prices can go up, they will maybe at some 576 00:30:50,640 --> 00:30:55,480 Speaker 10: point affect people's purchasing decision making, but for right now 577 00:30:56,120 --> 00:30:57,880 Speaker 10: they have to watch too. I mean, maybe they'll have 578 00:30:57,920 --> 00:31:00,640 Speaker 10: a TV set watching you FED meeting. 579 00:31:00,760 --> 00:31:02,600 Speaker 3: We'll see about that. If anyone knows, it would be you. 580 00:31:02,640 --> 00:31:06,800 Speaker 2: But in this case I mentioned tariffs. A weaker than 581 00:31:06,840 --> 00:31:09,480 Speaker 2: expected reading on retail sales today, this is something that 582 00:31:09,520 --> 00:31:11,880 Speaker 2: FED can get its arms around. Is that a result 583 00:31:11,920 --> 00:31:13,640 Speaker 2: of the front loading or the front running that we 584 00:31:13,680 --> 00:31:15,040 Speaker 2: saw ahead of tariffs taking. 585 00:31:14,880 --> 00:31:18,200 Speaker 10: It largely was in the sense that most of the 586 00:31:18,280 --> 00:31:22,360 Speaker 10: damage was done by decline in car sales because everybody 587 00:31:22,360 --> 00:31:27,080 Speaker 10: bought cars earlier. Building materials maybe a little bit terrif related, 588 00:31:27,120 --> 00:31:30,320 Speaker 10: but probably a lot weather related, and it's rained, it 589 00:31:30,480 --> 00:31:35,000 Speaker 10: just keeps raining, and then you had gasoline prices go 590 00:31:35,120 --> 00:31:38,840 Speaker 10: down Ghasoly prices are going back up again now because of. 591 00:31:38,840 --> 00:31:40,280 Speaker 3: What's going on in the Middle East. 592 00:31:40,320 --> 00:31:44,200 Speaker 10: So it isn't clear exactly what the message is from 593 00:31:44,280 --> 00:31:46,880 Speaker 10: all of that, except that the FED has to keep 594 00:31:46,880 --> 00:31:50,760 Speaker 10: an eye on whether Americans want to keep spending. But 595 00:31:50,840 --> 00:31:53,840 Speaker 10: Americans are waiting for details as well. And the interesting 596 00:31:53,880 --> 00:31:56,520 Speaker 10: thing about getting all this information from the Fed tomorrow 597 00:31:56,960 --> 00:32:00,520 Speaker 10: is July ninth. Two weeks after that we hear about 598 00:32:00,520 --> 00:32:03,080 Speaker 10: the reciprocal tariffs, and that might change the whole game again. 599 00:32:03,360 --> 00:32:04,800 Speaker 3: Less, of course, does an extend. 600 00:32:04,520 --> 00:32:06,960 Speaker 10: But expiration data on their new forecast. 601 00:32:07,080 --> 00:32:09,480 Speaker 2: Yeah, well, I guess in two weeks is a pretty 602 00:32:09,520 --> 00:32:12,360 Speaker 2: long time around here. So imagine yourself in the news 603 00:32:12,360 --> 00:32:14,320 Speaker 2: conference tomorrow as you will be, and I know you're 604 00:32:14,360 --> 00:32:17,720 Speaker 2: probably crafting some impossible to answer question as we speak. 605 00:32:18,080 --> 00:32:18,840 Speaker 3: What's the tone? 606 00:32:18,880 --> 00:32:20,800 Speaker 2: What's the posture for j Powell in the midst of 607 00:32:20,840 --> 00:32:23,280 Speaker 2: all this uncertainty? Is it just like the last news conference? 608 00:32:23,440 --> 00:32:25,480 Speaker 10: I think so. I think he wants to avoid making 609 00:32:25,640 --> 00:32:28,719 Speaker 10: news as much as possible. He'll say that we are 610 00:32:28,760 --> 00:32:32,160 Speaker 10: focused on the economy and we will take in all 611 00:32:32,200 --> 00:32:34,720 Speaker 10: of the President's policies in terms of what they mean 612 00:32:35,040 --> 00:32:38,240 Speaker 10: for the economy and for our mandate, and we just 613 00:32:38,280 --> 00:32:42,080 Speaker 10: don't have enough information now to decide. And he'll kind 614 00:32:42,080 --> 00:32:45,080 Speaker 10: of leave it at that because there's no percentage in 615 00:32:45,200 --> 00:32:48,200 Speaker 10: him making the President mad. We already know the President 616 00:32:48,280 --> 00:32:51,240 Speaker 10: is bad at him, and there's no percentage in upsetting 617 00:32:51,240 --> 00:32:53,320 Speaker 10: Wall Street at this point because there's plenty of other 618 00:32:53,400 --> 00:32:54,960 Speaker 10: things that Wall Street has. 619 00:32:54,840 --> 00:32:56,520 Speaker 2: To worry Yeah, well there's a lot of other things 620 00:32:56,600 --> 00:32:58,800 Speaker 2: that Donald Trump has to worry about as well. You 621 00:32:58,840 --> 00:33:01,080 Speaker 2: wonder if we don't get them sives on truth Social 622 00:33:01,120 --> 00:33:04,720 Speaker 2: tomorrow because we actually do have an international crisis underway. 623 00:33:04,840 --> 00:33:05,040 Speaker 3: Yeah. 624 00:33:05,080 --> 00:33:07,560 Speaker 10: I suspect that we might not, but it could be 625 00:33:07,600 --> 00:33:10,520 Speaker 10: overnight that he sends out some note that I don't 626 00:33:10,520 --> 00:33:16,000 Speaker 10: expect too late. Jay to Yes, too late? Pal is 627 00:33:16,200 --> 00:33:20,920 Speaker 10: Scott Besson the next FED chair? Uh my guess, I 628 00:33:20,920 --> 00:33:23,040 Speaker 10: guess would be no. I think where did this come from? 629 00:33:23,040 --> 00:33:23,360 Speaker 8: This week? 630 00:33:23,440 --> 00:33:26,120 Speaker 10: Well, it's the Wall Street game, you know, you you 631 00:33:26,160 --> 00:33:29,520 Speaker 10: float people's names and see what the reaction is. And 632 00:33:29,560 --> 00:33:32,360 Speaker 10: the reaction has not been overwhelmingly Yeah, we got to 633 00:33:32,400 --> 00:33:35,720 Speaker 10: have him. Uh And Besson is kind of busy with 634 00:33:35,800 --> 00:33:38,840 Speaker 10: a whole bunch of things for the president at this point, 635 00:33:39,080 --> 00:33:42,320 Speaker 10: and it is easier for the president to imagine another 636 00:33:42,480 --> 00:33:46,120 Speaker 10: FED chair, someone like Kevin Warsh, who he's already touted 637 00:33:46,160 --> 00:33:48,440 Speaker 10: as a potential FED Chair, then to come up with 638 00:33:48,480 --> 00:33:51,560 Speaker 10: another name for Treasury who would be able to fit 639 00:33:51,680 --> 00:33:55,560 Speaker 10: into the roles that Besson has played. Liai's under Wall 640 00:33:55,600 --> 00:34:00,640 Speaker 10: Street negotiator with Foreign Internation in terms of and things 641 00:34:00,680 --> 00:34:03,560 Speaker 10: like that. They've perfectly qualified people, but they also have 642 00:34:03,640 --> 00:34:07,640 Speaker 10: to satisfy the MAGA side of the party, so it'd 643 00:34:07,680 --> 00:34:09,760 Speaker 10: be harder for him maybe to get a new Treasury 644 00:34:09,800 --> 00:34:11,399 Speaker 10: Secretary than a FED chair. 645 00:34:11,480 --> 00:34:13,400 Speaker 3: That's a lot of needles to thread. You've covered this 646 00:34:13,480 --> 00:34:15,160 Speaker 3: complex for some time. 647 00:34:15,320 --> 00:34:16,840 Speaker 2: What do you make of all these roles that the 648 00:34:16,880 --> 00:34:18,880 Speaker 2: Treasury Secretary is suddenly balancing. 649 00:34:19,320 --> 00:34:21,120 Speaker 3: Did he even know he was going to be doing this? 650 00:34:21,920 --> 00:34:24,480 Speaker 10: Probably not. I mean, it seems to be an ad 651 00:34:24,520 --> 00:34:27,040 Speaker 10: hoc process over at the White House, but this is 652 00:34:27,080 --> 00:34:31,640 Speaker 10: not necessarily new. During the Clinton administration, Bob Rubin and 653 00:34:31,680 --> 00:34:34,720 Speaker 10: the folks a Treasury surpassed the State Department. They became 654 00:34:34,800 --> 00:34:39,560 Speaker 10: the prime policy implementers for the president because we had 655 00:34:40,000 --> 00:34:42,240 Speaker 10: an economic crisis in the world. We had the Asian 656 00:34:42,280 --> 00:34:46,200 Speaker 10: financial crisis, and then we saw Treasury under George W. 657 00:34:46,280 --> 00:34:49,480 Speaker 10: Bush with Hank Paulson also take the leading role on 658 00:34:49,760 --> 00:34:52,239 Speaker 10: we had the financial crisis. And this is a time 659 00:34:52,360 --> 00:34:55,960 Speaker 10: when the crises now Israel Iran may be different, but 660 00:34:56,040 --> 00:34:59,960 Speaker 10: the crises that we have been facing that Trump maybe 661 00:35:00,080 --> 00:35:03,520 Speaker 10: closing are on the financial side. So it puts Treasury 662 00:35:03,560 --> 00:35:06,000 Speaker 10: in the driver's seat in terms of implementing this stuff 663 00:35:06,000 --> 00:35:07,720 Speaker 10: and in terms of talking to everybody else. 664 00:35:07,560 --> 00:35:08,000 Speaker 3: In the world. 665 00:35:08,080 --> 00:35:10,200 Speaker 2: Fascinating. Great to have you with us here. We'll connect 666 00:35:10,239 --> 00:35:13,759 Speaker 2: tomorrow on the FED. Michael mckeed, Bloomberg International Economics and 667 00:35:13,760 --> 00:35:15,960 Speaker 2: Policy correspondent with us here on Balance of Power. 668 00:35:18,920 --> 00:35:21,360 Speaker 3: Thanks for listening to the Balance of Power podcast. 669 00:35:21,960 --> 00:35:24,400 Speaker 2: Make sure to subscribe if you haven't already, at Apple, 670 00:35:24,520 --> 00:35:27,560 Speaker 2: Spotify or wherever you get your podcasts, and you can 671 00:35:27,600 --> 00:35:30,640 Speaker 2: find us live every weekday from Washington, DC at noontime 672 00:35:30,719 --> 00:35:32,800 Speaker 2: Eastern at Bloomberg dot com.