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Speaker 1: Brought you by Bank of America, Mary Lynch. Investing in

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Speaker 1: local communities, economies and a sustainable future. That's the power

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Speaker 1: of global connections, Mary Lynch, Pierce Fenner and Smith Incorporated

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Speaker 1: Member s I p C. Welcome to the Bloomberg Surveillance Podcast.

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Speaker 1: I'm Tom Keene with David Gura. Daily we bring you

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Speaker 1: insight from the best of economics, finance, investment, and international relations.

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Speaker 1: Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, Bloomberg dot Com,

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Speaker 1: and of course, on the Bloomberg Jason Furman, he's Senior

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Speaker 1: Fellow with the Peterson Institute for International Economics, the former

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Speaker 1: chairman of the White House Council of Economic Advisors, and

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Speaker 1: as of last week, he's professor with the Practice of

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Speaker 1: Economic Policy at the Harvard Kennedy School. He's in our

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Speaker 1: nine nine one studios with Tom in Washington, a DC.

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Speaker 1: Great to have you with us, Jason, and congrats on

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Speaker 1: making your home Eric return to to Harvard. Thanks so much.

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Speaker 1: Let me let me start by asking you about what

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Speaker 1: we heard from the Treasury Secretary yesterday. He was speaking

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Speaker 1: in an i F event yesterday was asked quite a

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Speaker 1: bit about the prospects for tax reform, where things stand,

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Speaker 1: where things are are headed and uh, the speech, the

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Speaker 1: comments were suffused with optimism. This is going to happen

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Speaker 1: here in the not too distant future. What's your sense

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Speaker 1: of of what's happening. What are the holdups towards getting uh,

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Speaker 1: some indication of what tax from looks like to this

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Speaker 1: Trump administration. The hold up is the administration hasn't told

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Speaker 1: us what it's in favor of it. First I thought

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Speaker 1: they were going to let Congress write the plan. That

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Speaker 1: wouldn't be such a terrible thing. The House Republican blueprint

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Speaker 1: from last year actually had a lot of good, thoughtful

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Speaker 1: ideas and it had some problems too, but had a

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Speaker 1: lot of thoughtful ideas and a lot of thought went

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Speaker 1: into it. Um, the administration said they don't want to

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Speaker 1: go that route. They want to put out their own plan,

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Speaker 1: but we haven't heard what it is. What we heard

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Speaker 1: yesterday though, was concerning which is that they want a

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Speaker 1: net tax cut rather than a genuine revenue neutral tax reform.

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Speaker 1: And I don't think, um, a tax cut is something

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Speaker 1: that you could get bipartisan support for, and without bipartisan support,

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Speaker 1: I don't think you can really do the types of

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Speaker 1: reforms we need to do UM to make our tax

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Speaker 1: code more efficient and more competitive. You've been in Washington while,

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Speaker 1: so let me get some inside from you into into

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Speaker 1: this process. A lot of people saying it's it's overly

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Speaker 1: ambitious to think you could get tax reform done quickly.

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Speaker 1: These type of things take a very long time. But

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Speaker 1: when you're dealing with something like this, the longer rout

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Speaker 1: plays out, does it become more complicated as you get

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Speaker 1: more people to fighting over what goes in and what

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Speaker 1: comes out? There's an interplay. At some point. You don't

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Speaker 1: want the fish lying on the dock too long because

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Speaker 1: it just starts to starts to smell um. But it

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Speaker 1: takes a while to figure out how to get to

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Speaker 1: that point, and then you strike and try to move

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Speaker 1: as quickly as possible. The last time we did tax reform,

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Speaker 1: the Treasury put out a two volume, really comprehensive study

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Speaker 1: in nine teen eight four. Congress spent the next two years.

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Speaker 1: They made it worse. They added all sorts of transition rules, giveaways,

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Speaker 1: took out some of the good things UM. But what

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Speaker 1: came out of it was still a lot better than UM.

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Speaker 1: The law ex empty and that was a too year process.

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Speaker 1: I mean, part of this is even just technically complicated.

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Speaker 1: People talk about, you know, border adjustment or ending interest deductions.

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Speaker 1: Those are really tricky things to figure out the details.

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Speaker 1: You need proposals out there so people can discuss and

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Speaker 1: work on that, and they're just not right now. You've

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Speaker 1: been in the White House working on policy in concert

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Speaker 1: with with the Congress. What's your sense of what that

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Speaker 1: relationship is like today? In other words, do you get

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Speaker 1: the sense here that when it comes to taxi form,

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Speaker 1: Republicans in Congress are working in concert with the White House?

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Speaker 1: Who are we seeing sort of a parallel track here?

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Speaker 1: You're seeing, um, a bit of a parallel track. Um,

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Speaker 1: in fact, three different tracks. Um. You have the House,

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Speaker 1: which is in favor of border adjustment. You have the

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Speaker 1: White House, which up until recently hadn't decided allough now

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Speaker 1: maybe it seems like they're against it. And then you

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Speaker 1: have the Senate, which is opposed to anything. Um, the

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Speaker 1: houses in favor of and these three tracks I'm talking

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Speaker 1: about right now, all three of them are Republican tracks. So, um,

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Speaker 1: you know, really the hope we have would be to

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Speaker 1: get on the same page, and that page should be

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Speaker 1: revenue neutral. It should be distribution neutral. That still leaves

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Speaker 1: a lot of room for a nine six style tax

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Speaker 1: or form of lower tax rates that would help our economy.

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Speaker 1: Jason Furman with us. He's a former chairman of the

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Speaker 1: President's Council of Economic Advisors. I was bragging about you

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Speaker 1: in TV about the public good for Republicans, Democrats, for

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Speaker 1: the politically disaffected. On the state of the nation's labor force.

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Speaker 1: It's international economics here and we're doing steel tariffs and

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Speaker 1: the rest. What was the key surprise for you and

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Speaker 1: your August team when you did look at labor participation

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Speaker 1: in the this mystery of our unemploy What was the

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Speaker 1: thing that jumped out at you? That the problem dates

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Speaker 1: back a lot further than most people realize. It's not

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Speaker 1: just this recession and recovery. Give me helpe me, Martin

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Speaker 1: van Buren. Um goes back to and the problem has

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Speaker 1: been the problem has been growing since the nineties. It's

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Speaker 1: been growing steadling. When I met you, you were talking

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Speaker 1: about Hans Solo, which is a lovely monograph from the fifties. Frankly,

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Speaker 1: from our Growthiness and our Study of Growthiness of nineteen

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Speaker 1: fifty seven and fifty eight. Can we use those same

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Speaker 1: theories now or do you guys have to come up

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Speaker 1: with a new regime of theory to get people employed

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Speaker 1: in America. I think some of those classic growth models

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Speaker 1: from the nineteen fifties help us understand and diagnose the problem.

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Speaker 1: And one of the problems we have right now is

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Speaker 1: very low productivity growth. Part of that is low total

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Speaker 1: factor product activity, which is a measure of innovation in

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Speaker 1: a way of thinking about it um and trying to

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Speaker 1: understand what we can do better there um. If we don't,

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Speaker 1: we don't have faster productivity growth, We're not going to

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Speaker 1: be able to have faster wage growth. And that's why

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Speaker 1: the business tax reform we're talking about, for example, is

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Speaker 1: one of the important ingredients in getting our productivity growth up.

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Speaker 1: Are we getting any better at measuring productivity? Tom knows.

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Speaker 1: I was talking with Steve Balmer, former CEO of Microsoft

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Speaker 1: earlier this week. He's very into data in his new

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Speaker 1: Waking website looking out data, but but he's also been

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Speaker 1: thinking about how we measure productivity with technology in specific,

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Speaker 1: Are we getting any better at doing it? I don't

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Speaker 1: think we're getting any better at doing it, but I'm

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Speaker 1: not as convinced as a lot of people are that

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Speaker 1: we're getting a whole lot worse at doing it. Either

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Speaker 1: there's a lot we were missing ten years ago, twenty

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Speaker 1: years ago, thirty years ago. UM. I think the productivity

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Speaker 1: slow down is real, and I think it's because the

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Speaker 1: innovation we're seeing is concentrated in a relatively narrow slice

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Speaker 1: of our economy, and average, over the economy as a whole,

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Speaker 1: which includes construction and um you know, education and all

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Speaker 1: sorts of things, on average, you're not seeing the type

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Speaker 1: of productivity growth we'd like to see. The person whos

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Speaker 1: named your successor, Kevin has it's gonna head up the

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Speaker 1: Council of Economic Advisors now in his administration. Give us

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Speaker 1: a sense of of how the council works. Will he

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Speaker 1: set an objective and agenda for the council? Does it

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Speaker 1: tell us about the president's economic agenda? What what's the

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Speaker 1: what's what's the role of that person in this administration

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Speaker 1: going to be um At first of all, I want

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Speaker 1: to say Kevin Hassett is a great pick, and I

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Speaker 1: would love to see him UM confirmed by the Senate

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Speaker 1: for that position because the role of c e A

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Speaker 1: UM it has both an internal role, and there's a

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Speaker 1: large truth to compower. Components of that UM C e

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Speaker 1: A are PhD trained economists. They tend to be much

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Speaker 1: less political. They're much less into defending the talking points

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Speaker 1: UM and more into figuring out, you know what the

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Speaker 1: truth is now. Kevin has a different perspective than me

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Speaker 1: on some issues. I think, UM, he has two large

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Speaker 1: a notion of what a corporate tax cut to do

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Speaker 1: for the economy, for example, UM. But those are honest

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Speaker 1: UM debates between economists, and I think I'll feel a

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Speaker 1: whole lot better if I know there's an economist sitting

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Speaker 1: there making those arguments. When when you look at the

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Speaker 1: numbers that can come out, it all wraps up in

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Speaker 1: fiscal policy. One of the themes of these I MF

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Speaker 1: meetings has been a lot more discussion here of UH

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Speaker 1: fiscal policy is a good solution for growth and society?

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Speaker 1: What kind of republican policy do we need? And that

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Speaker 1: you mentioned Eisenhower earlier, there's a history here of different

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Speaker 1: kinds of republican policy. What is the best practice of

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Speaker 1: republican fiscal economics? The best practice to deal with our

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Speaker 1: medium and long run deficit problem would be something along

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Speaker 1: lines of the type idea of both Simpson Hadden. They

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Speaker 1: had two principles. One is you need to do both

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Speaker 1: revenue and spending. Number two, you couldn't do it at

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Speaker 1: the expense of low income program Why can't we? And

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Speaker 1: you know because you haven't. You have an approach right

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Speaker 1: now that violates both of those. It rather than raising revenue,

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Speaker 1: it cuts revenue, and rather than dealing with entitlements, it

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Speaker 1: just cuts low income programs. So it violates both of

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Speaker 1: the Bull Simpson principles. And that's not a basis for

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Speaker 1: bipartisan agreement. In fact, the history of Republicans reigning in

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Speaker 1: the medium and long term deficit through entitlement savings on

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Speaker 1: their own is nil. There is none of it. The

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Speaker 1: only way to do it is bipartisan. The only way

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Speaker 1: to these things. Bipartisan has put revenue and spending both

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Speaker 1: on the table. Jason Firmer, thanks for time to I appreciate.

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Speaker 1: That's Jason firm and Senior fellow at the Peterson Institute

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Speaker 1: for International Economics, Professor the Practice of Economic Policy at

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Speaker 1: the Harvard Kennedy School up in Cambridge. You start, when

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Speaker 1: does that start this semester? I'll be moving up there.

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Speaker 1: This summer terrific. Look forward to talk to you again.

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Speaker 1: So Jason from anjoin us our Bloomberg ninety nine studios.

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Speaker 1: We're talking international economics. Olivia Blanchard among others will join

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Speaker 1: us at a moment, but right now we touch on that.

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Speaker 1: But digress to this Washington. Her Washington. She is Alice Rivlin,

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Speaker 1: who just flat out invented what we do on modern

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Speaker 1: fiscal policy at the Congressional Budget Office UH provided public

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Speaker 1: service as vice chairman of the Federal Reserve System as well.

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Speaker 1: Dr Rivlin, wonderful to see you. You and I were

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Speaker 1: reminiscing about the value of Ben's Chili Bowl on you

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Speaker 1: Street from a few from a few years ago. You

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Speaker 1: used to go up there, your kids went to school

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Speaker 1: with Ben's kids, etcetera, etcetera. This Washington is so different

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Speaker 1: from when Ben's Chili Bowl was becoming iconic. Does anybody

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Speaker 1: of the elite down here, including the President United States?

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Speaker 1: Did I understand that a society has to get along

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Speaker 1: and find a common ground? Unfortunately, I think not at

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Speaker 1: the moment. There are plenty of people who do understand that,

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Speaker 1: but our political system is so polarized and our parties

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Speaker 1: are so angry at each other that we're just not

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Speaker 1: getting anything done. You and I talked of Tip O'Neill

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Speaker 1: in in uh President Reagan earlier. Let's take it to

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Speaker 1: the legislative branch in itself. Olympia, Snow or Hatch could

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Speaker 1: provide conversation with the respected senator from Massachusetts, whether it

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Speaker 1: was Ed Brooke or Ted Kennedy. How do we get

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Speaker 1: back to them to what you knew? Well, I think

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Speaker 1: it's gonna take both leadership and public pressure. If you

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Speaker 1: read the polls, you know that the public is just

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Speaker 1: put out with the Congress and their lack of getting

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Speaker 1: anything done in the Congress rates very low it always has,

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Speaker 1: but UH much lower now. And there is real public

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Speaker 1: anger about the bridlock and about the polarization, but it's

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Speaker 1: very hard to break through. Dr Rivelin a few months back,

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Speaker 1: we were talking about a return to regular order on

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Speaker 1: Capitol Here, we're gonna have a regular budget process once

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Speaker 1: once again. Was our optimism misplaced? Yes? I think that

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Speaker 1: the best we can hope for right now, UH is

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Speaker 1: not closing down the government. That's a pretty low threshold,

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Speaker 1: but it's important not to do that. I think the

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Speaker 1: Congress will essentially for the moment, ignore the President's very

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Speaker 1: drastic budget proposal that cuts deeply into domestic spending and

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Speaker 1: adds to defense. Uh, they will pass a continuing resolution,

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Speaker 1: or rather an omnibus appropriations bill that pretty much keeps

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Speaker 1: things where they are and adds some to the defense

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Speaker 1: budget in the Special Overseas Account. I hope I'm not

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Speaker 1: telling tales out of school here. The last time I

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Speaker 1: spoke with you down and Watchington during a break, you

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Speaker 1: said to me, we spend too much time focusing on

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Speaker 1: we know about how the FED is approaching regulation, how

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Speaker 1: the how the White House would like to see the

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Speaker 1: FED approach regulation, What shape the the f sock, the

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Speaker 1: Financial Stability Oversight Council is going to take here under

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Speaker 1: President Trump. Well, I don't think we know very much. Actually. Uh.

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Speaker 1: There's been talk about repealing Dodd Frank and things like that,

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Speaker 1: but I don't think that's going to happen. We haven't

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Speaker 1: had many clues as to where the administration is going

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Speaker 1: on financial regulation. I think what they ought to do

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Speaker 1: is keep the reforms of Dodd Frank which have mainly

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Speaker 1: strengthened the financial system and made us less vulnerable. Uh,

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Speaker 1: they could ease up on the regulations on smaller financial

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Speaker 1: institutions which are arguably over the top. Within our budget

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Speaker 1: is our military. I believe this week we lost an

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Speaker 1: aircraft carrier. We thought it was up in the Northern Pacific. Yeah,

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Speaker 1: we didn't know which way it was going. You know

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Speaker 1: which way it was. It was going very quickly here.

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Speaker 1: Uh do we do we have a control of our

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Speaker 1: Pentagon budget? Do we do we know where the marginal billion?

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Speaker 1: In honor of Mr Dirkson? Do we know where the

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Speaker 1: marginal billion or trillion is going? Oh? Yes? I think so.

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Speaker 1: It's the processes, the processes in uh control. And I

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Speaker 1: think we now have a strong leadership in the Defense

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Speaker 1: Department in general. Madison. Okay, Alice Land, thank you so

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Speaker 1: much for joining us today for starting thank you your day.

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Speaker 1: Whether she's a former vice chair of the funder Reserve

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Speaker 1: System and of interest in a calming influence on my

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Speaker 1: worries about the budget. David Gurr in New York, I'm

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Speaker 1: Tom Keene and Washington A studios in Washington on I Street,

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Speaker 1: I think, David, I'm on I Street, New York, and

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Speaker 1: it's confusing at my hotels on H Street and I'm

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Speaker 1: on Ice Street and g H yeah, it's and I

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Speaker 1: What's cool, folks, is from our office you can look

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Speaker 1: down New York Avenue and see the Church of Abraham Lincoln.

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Speaker 1: That is way Bloomberg surveillance this morning in New York.

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Speaker 1: In Washington, joining us now, Um, David Gurr, why don't

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Speaker 1: you bring in Governor Frankel. I think I've I've talked

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Speaker 1: to him this morning. Why don't you bring in the

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Speaker 1: esteem Jacob Frank. Yes, he's the chairman of JP Morgan

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Speaker 1: Chase International, Chairman of the board of trustees the Group

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Speaker 1: of thirty. Of course, former governor of the Bank of Israel.

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Speaker 1: Jacob Frankel joining us on our phone lines. Great to

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Speaker 1: speak with you, and let me start by by asking

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Speaker 1: you about the agenda for the meetings in Washington today

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Speaker 1: tomorrow through through the weekend. Here to what degree is

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Speaker 1: is what's happening in the US overshadowing a larger conversation

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Speaker 1: about global growth in the global economy. Imagine there's a

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Speaker 1: lot of curiosity about what's going on, what's being discussed

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Speaker 1: in the White Building just a few blocks away from

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Speaker 1: my left headquarters. Good morning. Well, of course there is

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Speaker 1: a great interest, but the United States is not just

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Speaker 1: another country. It is the major country, and therefore needless

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Speaker 1: who say there is a great focus on the US,

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Speaker 1: but there is also a great focus on the inter

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Speaker 1: relationships between the US and the rest of the world.

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Speaker 1: And in this context the subject of protection isn't comes up,

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Speaker 1: and a lot of people are concerned and are worried.

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Speaker 1: There is a discussion, of course, what is happening now

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Speaker 1: literally as we speak, both in Terris in terms of

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Speaker 1: the election, what will happen very shortly in the United

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Speaker 1: Kingdom with the elections. So there is a situation here

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Speaker 1: that the pot see structure is still in a form

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Speaker 1: formative stage. We cannot now analyze what is the effects

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Speaker 1: of the policies because the policies themselves are still undefined.

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Speaker 1: In the United States, a lot of curiosity is about

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Speaker 1: the budget and about the deregulations, because the fact of

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Speaker 1: the matter is that in order to carry out some

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Speaker 1: of the agenda that the new administration set for itself,

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Speaker 1: one needs to have the means to finance it. The

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Speaker 1: fact that the health scales the Obamacare revision has not

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Speaker 1: gone through yet from the fundamental issue of the budget

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Speaker 1: means that there is less resources to finance or to

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Speaker 1: cover the cost of the tax reform. And this has

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Speaker 1: been a major major elements that created optimism in the market,

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Speaker 1: both the tax reform deregulations and fiscal expenditures in areas

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Speaker 1: that are growth producers like infrastructure. These are the areas

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Speaker 1: everyone from the US still speaks about these areas, and

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Speaker 1: everyone from the rest of the world is saying, and

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Speaker 1: what about our links to the US, and hence the

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Speaker 1: protectionism and open markets out there. I must say that

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Speaker 1: in the corridors, whereas in the past the subjects were

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Speaker 1: always about about the financial markets and about the economic

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Speaker 1: uncertainty DOSMOS spilled, this time is very different. The i

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Speaker 1: m F has produced the World Economic Outlook document in

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Speaker 1: which the revisions of growth are upwards, not downworlds in

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Speaker 1: which all major regions of the world are growing positively

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Speaker 1: not negatively. So this means that the sources of answer

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Speaker 1: open are now shifted to the geopolitics rather than the

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Speaker 1: chief finance. And of course North Korea is an important

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Speaker 1: subject everywhere that you walk. But what is the focus

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Speaker 1: of these international meetings. In our modern guilded age, it's

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Speaker 1: widely presumed that the gains of our growth, and the

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Speaker 1: gains from our better growth are going to the technology

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Speaker 1: the elites of society. How do we distribute those gains

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Speaker 1: soon to a greater part of the public. You are

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Speaker 1: absolutely right. Indeed, twenty five years ago, when I was

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Speaker 1: in charge of the production of the World Economic Outlook,

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Speaker 1: the discussion was about growth. Later on it shifted to

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Speaker 1: sustainable growth, and subsequently it has shifted towards inclusive growth.

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Speaker 1: People understand that growth, to say, is not good enough,

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Speaker 1: and it's not good enough because it is not sustainable,

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Speaker 1: and it is not sustainable if it is not inclusive. So, therefore,

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Speaker 1: the recognition that it is important that the benefits from growth,

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Speaker 1: and the benefits from trade and the benefits from good

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Speaker 1: measures are spread throughout society is an integral part of

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Speaker 1: the economic discussion and this requires, of course, when you

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Speaker 1: make changes the trade adjustment a systems, it has to

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Speaker 1: be budgeted and it has the fault to be part

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Speaker 1: of the priorities. This means that the education system must

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Speaker 1: be reflecting the fact that in the modern world what

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Speaker 1: one needs to give our young students is not knowledge

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Speaker 1: but the case because knowledge becomes obsolete, but the capability

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Speaker 1: of learning, of learning in changes circumstances. There it's a

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Speaker 1: very different setting where innovation becomes important, but where one

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Speaker 1: needs to recommend that the greatest enemy. Sure, we don't

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Speaker 1: want to have a situation in which technological progress becomes

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Speaker 1: the villain, but it must become the hope. And the

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Speaker 1: way in which it is sustainable hope is that we

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Speaker 1: pay clear attention not only in lip service but in

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Speaker 1: budgets to deal with those who need to go through adjustment.

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Speaker 1: It's out of the society, Dr Frank, I want to

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Speaker 1: return to the corridors of the I m F and

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Speaker 1: the World Bank in Foggy Bottom if I could. And

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Speaker 1: I wonder how much anxiety you're picking up on there

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Speaker 1: about multilateralism in the future of multilateralism, of course. A

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Speaker 1: Secretary of the Treasury, Stephen Manuchon, was on stage yesterday

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Speaker 1: with Mark Weinberger, the chairman and CEO of e Y

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Speaker 1: formerly Ernst and Young. This weekend, the Treasury sector will

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Speaker 1: be on stage with Madame Legarde for a conversation I

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Speaker 1: expect that the contours of that conversation will be different.

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Speaker 1: Is her job there to make a case for anumber

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Speaker 1: the issues that you were just discussing, make the case

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Speaker 1: for the importance of that can see it importance of

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Speaker 1: the I m F and the World Bank. Absolutely. Christina

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Speaker 1: god is the best spoken spoke person for the vilsus

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Speaker 1: of globalization, for the fact that if you have an

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Speaker 1: interconnected world, you must create the institutions that facilitate this interconnectedness,

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Speaker 1: that the globalization is an asset rather than a liability,

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Speaker 1: and that in order to make globalization and a success

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Speaker 1: easy that you make you must pay attention to it. Yes,

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Speaker 1: so the international organizations out there, Remember how did it

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Speaker 1: all start? It all started at the end of the

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Speaker 1: Second World War. Well, countries were dispersed, they were antagonistic,

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Speaker 1: they were separated from each other, and it was understood

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Speaker 1: that in order to promote economic prosperity, you must allow

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Speaker 1: the interaction between the countries, which, in addition to providing

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Speaker 1: better economic basis, it will also provide the fundamental security

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Speaker 1: against hostilities, because everyone will extend to lose if you

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Speaker 1: break a very well functioning system. Hence, the world back

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Speaker 1: and the i MS were created in the Breton Woods Organization.

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Speaker 1: Then people realize that you order to be successful countries

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Speaker 1: that are engaged in production, which to have the capability

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Speaker 1: of selling those products in the world, and the benefits

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Speaker 1: will be shared through trade. Hence the World Trade Organization

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Speaker 1: was created and trade agreements were there. It is all

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Speaker 1: not the products of people looking for organizations and bureaucracy,

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Speaker 1: but whether people looking for mechanisms by which their astivations

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Speaker 1: can be translated into reality. You can you can invent

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Speaker 1: the best cut in the world. If you don't have

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Speaker 1: good rows, the cut will not reflect the greatness. So

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Speaker 1: this is all interconnected. Yes, christ Agout is the perfect

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Speaker 1: in the champion today to bring it about well. Jacob Frankl,

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Speaker 1: thank you so much, as always for your perspective on

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Speaker 1: Bloomberg Television in Bloomberg Radio this morning. He is chairman

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Speaker 1: of JP Morgan International, the former governor of the Bank

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Speaker 1: of Israel, and of course his research decades ago at

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Speaker 1: the University of Chicago still speaks today. Brought to you

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Speaker 1: by Bank of America Mary Lynch, dedicated to bringing our

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Speaker 1: clients insights and solutions to meet the challenges of a

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Speaker 1: transforming world. That's the power of global connections. Mary Lynch, Pierce,

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00:24:38,680 --> 00:24:48,160
Speaker 1: Fenner and Smith Incorporated Member s I p C. There's

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Speaker 1: something new from Bloomberg. It's called Lens. Starting right now,

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Speaker 1: you can use the Bloomberg iOS app off your iPhone

406
00:24:55,320 --> 00:24:59,920
Speaker 1: or iPad or our new Google Chrome extension to read

407
00:25:00,040 --> 00:25:03,920
Speaker 1: any news story on any website, Scan it, and then

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Speaker 1: instantly you see the news stories relevant market data from Bloomberg.

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00:25:08,440 --> 00:25:11,520
Speaker 1: In addition, see all the bios of the key people

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00:25:12,000 --> 00:25:15,199
Speaker 1: mentioned in the story. It's called Lens, and it is

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00:25:15,240 --> 00:25:18,359
Speaker 1: just that, a lens into the people and the data

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00:25:18,440 --> 00:25:22,680
Speaker 1: of any story you may be reading. Again, Lens brings

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00:25:22,720 --> 00:25:25,960
Speaker 1: you the power of Bloomberg's news and data. Download or

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00:25:26,000 --> 00:25:29,359
Speaker 1: io s app or search for the Bloomberg extension at

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Speaker 1: the Chrome store to try Lens out. Learn more at

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Speaker 1: bloomberg dot com slash lens. We were talking earlier in

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Speaker 1: the program with a former vice chair of the federalsor

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Speaker 1: that being one Alice Rivlin of the Brookings Institution, and uh,

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Speaker 1: you know we we focused more on, uh the budget,

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Speaker 1: what's going on and watched and of course she was

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Speaker 1: the two time director of the Office Management and Budget,

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Speaker 1: founding director of the Congressional Budget Office. Now we're gonna

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Speaker 1: talk to another former vice chair of the Federals or

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Speaker 1: if that's Alan Blinder, Gordon Renchler prefer Sir Memorial Professor

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Speaker 1: Economics and Public Affairs at Princeton University. Professor Blind are

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Speaker 1: great to speak with you, as always help us with

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Speaker 1: this ongoing debate. Are Michael McKee was talking to the

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Speaker 1: president of Kansas City FED, the president of the Dallas FED.

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Speaker 1: The conversation here seems to center on what's going to

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Speaker 1: happen to the FEDS balance sheet. We've introduced a new

431
00:26:17,280 --> 00:26:19,959
Speaker 1: parlor game into our day to day conversation about how

432
00:26:20,000 --> 00:26:22,360
Speaker 1: this is going to happen and when it's going to happen, indeed,

433
00:26:22,520 --> 00:26:24,840
Speaker 1: how much notice we're gonna get about it happening. How

434
00:26:24,840 --> 00:26:28,239
Speaker 1: do you see all of this playing out? Um? I

435
00:26:28,280 --> 00:26:31,080
Speaker 1: think we can see the dim outlines, al though there's

436
00:26:31,160 --> 00:26:35,440
Speaker 1: lots of details yet to be uh determined, even in

437
00:26:35,480 --> 00:26:40,600
Speaker 1: the FED much less announced. Uh they've decided for whatever reasons,

438
00:26:40,640 --> 00:26:42,840
Speaker 1: I think they're probably more good than bad that four

439
00:26:42,880 --> 00:26:45,840
Speaker 1: and a half trillion is too much, and while they

440
00:26:45,880 --> 00:26:49,440
Speaker 1: haven't given a number, they're probably gonna head for something

441
00:26:49,480 --> 00:26:52,479
Speaker 1: in the ballpark of half that give her, you know,

442
00:26:52,720 --> 00:26:58,240
Speaker 1: give her takes five billions, large numbers. Uh here, Uh,

443
00:26:58,280 --> 00:27:04,560
Speaker 1: they're gonna reduce both the treasuries and the NBS, they say. Still,

444
00:27:04,720 --> 00:27:08,000
Speaker 1: although I have never believed this, really, that they're gonna

445
00:27:08,040 --> 00:27:11,120
Speaker 1: do all that without actually any sales, just with runoff.

446
00:27:11,920 --> 00:27:14,919
Speaker 1: I don't think. My guess is that won't happen in

447
00:27:14,960 --> 00:27:19,120
Speaker 1: the end, although it's certainly going to start with runoff,

448
00:27:20,200 --> 00:27:24,359
Speaker 1: and they're probably going to begin this process. You know,

449
00:27:24,600 --> 00:27:26,439
Speaker 1: I would say, if you're going to make a point estimate,

450
00:27:26,480 --> 00:27:30,320
Speaker 1: you would say January pastor minus three months, something like that.

451
00:27:31,080 --> 00:27:33,240
Speaker 1: And on your last the last question you pose is

452
00:27:33,280 --> 00:27:37,200
Speaker 1: the one I'm sure of. Lots of notice. They don't

453
00:27:37,240 --> 00:27:40,399
Speaker 1: want to surprise anybody about this, and now, folks, we

454
00:27:40,480 --> 00:27:44,960
Speaker 1: go for clarity. Speaking of point estimates, David, it's twenty

455
00:27:45,040 --> 00:27:48,240
Speaker 1: nine years young Blinder wrote a book that if you

456
00:27:48,320 --> 00:27:51,800
Speaker 1: were cool on campus, you walked around with and it

457
00:27:51,880 --> 00:27:55,240
Speaker 1: was a recursor to this idiocy over hard data and

458
00:27:55,359 --> 00:28:03,400
Speaker 1: soft data, hard hardheads, soft hearts, tough minded economists and Ellen,

459
00:28:03,440 --> 00:28:06,160
Speaker 1: you were a little bit ahead of the debate. Chapter four,

460
00:28:07,280 --> 00:28:11,080
Speaker 1: Chapter four, Who will protect us from protectionism? I mean

461
00:28:11,119 --> 00:28:14,280
Speaker 1: you were writing twenty nine years ago about the definitive

462
00:28:14,359 --> 00:28:18,359
Speaker 1: question right now. I know you you know one of

463
00:28:18,359 --> 00:28:23,040
Speaker 1: my pet teams about economics, Uh is that for in

464
00:28:23,200 --> 00:28:25,800
Speaker 1: two hundred years? So you mentioned my book twenty nine

465
00:28:25,880 --> 00:28:29,320
Speaker 1: years ago. David Ricardo wrote the principle of comparative advantage

466
00:28:29,400 --> 00:28:33,439
Speaker 1: two hundred years ago. We've not persuaded that many people

467
00:28:34,720 --> 00:28:38,160
Speaker 1: of the importance of comparative advantage, even though of course

468
00:28:38,200 --> 00:28:41,840
Speaker 1: they lived their lives that way. Nobody lives as an

469
00:28:41,880 --> 00:28:46,240
Speaker 1: island doing everything for the fells. But we don't have

470
00:28:46,360 --> 00:28:49,360
Speaker 1: the politics that you were. We done and with your

471
00:28:49,360 --> 00:28:54,000
Speaker 1: Democrat Party support for Senator carry among others. Can you

472
00:28:54,160 --> 00:28:59,200
Speaker 1: do hard heads and soft hearts tough minded economics? Can

473
00:28:59,240 --> 00:29:04,000
Speaker 1: you do that this Washington? I believe it's extremely difficult.

474
00:29:04,160 --> 00:29:07,040
Speaker 1: I mean, in this Washington while we're getting is sort

475
00:29:07,160 --> 00:29:13,920
Speaker 1: the opposite, hardhearted and soft headed mostly pronouncements. Actually, you know,

476
00:29:13,960 --> 00:29:17,520
Speaker 1: one of the minor frustrations of the Trump administration for

477
00:29:17,560 --> 00:29:21,720
Speaker 1: an economist is that in terms of economic policy, other

478
00:29:21,800 --> 00:29:26,000
Speaker 1: than the abortive healthcare bill, there's been more or less nothing.

479
00:29:26,080 --> 00:29:29,000
Speaker 1: There's been a lot of talk we're gonna get tax reform,

480
00:29:29,040 --> 00:29:30,800
Speaker 1: We're going to get this or that. On trade, we're

481
00:29:30,840 --> 00:29:34,640
Speaker 1: gonna redoon nafta, uh, and there's going to be a

482
00:29:34,640 --> 00:29:38,360
Speaker 1: budget sometime, but we haven't seen any of this. I

483
00:29:38,360 --> 00:29:40,440
Speaker 1: put a question to Gideon Rose yesterday, the editor of

484
00:29:40,440 --> 00:29:43,280
Speaker 1: Foreign Affairs Peterson Share at the Council on Foreign Relations,

485
00:29:43,280 --> 00:29:46,040
Speaker 1: I said, when you look at the foreign policy that's

486
00:29:46,080 --> 00:29:47,440
Speaker 1: coming out of this white out, he said that they're

487
00:29:47,440 --> 00:29:50,600
Speaker 1: still finding their way, learning their their their way just

488
00:29:50,880 --> 00:29:52,840
Speaker 1: a few dozen days onto the to the job. Are

489
00:29:52,880 --> 00:29:55,080
Speaker 1: we seeing the same thing when it comes to economics

490
00:29:55,160 --> 00:29:56,360
Speaker 1: or do you do you think that there are people

491
00:29:56,400 --> 00:29:58,560
Speaker 1: in the White House with a grand vision for what

492
00:29:58,560 --> 00:30:00,360
Speaker 1: Trump and omics is is going to be or is

493
00:30:00,400 --> 00:30:02,280
Speaker 1: this something they're still learning, still trying to figure out

494
00:30:02,320 --> 00:30:04,480
Speaker 1: that's still in co it in the Trump white House.

495
00:30:05,040 --> 00:30:09,880
Speaker 1: I doubt that there's any grand vision because, um, there's

496
00:30:09,920 --> 00:30:13,480
Speaker 1: the President United States. So you know, Gary Cone could

497
00:30:13,480 --> 00:30:16,240
Speaker 1: sit in his office and conjure up a grand vision,

498
00:30:17,080 --> 00:30:19,880
Speaker 1: but um, he's not President United States. He can't make

499
00:30:19,920 --> 00:30:23,600
Speaker 1: any of this happen. And his boss is you know,

500
00:30:23,760 --> 00:30:27,280
Speaker 1: this guy's the opposite of grand visions. He's scattershot. It's,

501
00:30:27,320 --> 00:30:29,880
Speaker 1: you know, whatever he sees on Fox News the night

502
00:30:29,920 --> 00:30:33,800
Speaker 1: before or some idea comes into his head and he

503
00:30:33,840 --> 00:30:37,760
Speaker 1: tweets it out this end. The same with the foreign policy.

504
00:30:37,800 --> 00:30:40,640
Speaker 1: By the way, they just doesn't seem to be any

505
00:30:40,800 --> 00:30:43,200
Speaker 1: there there. Let me try to find a silver lining

506
00:30:43,240 --> 00:30:45,520
Speaker 1: on that cloud. Then, for someone like you, for someone

507
00:30:45,560 --> 00:30:48,160
Speaker 1: like Madame Legard, who's presiding over the meetings that are

508
00:30:48,200 --> 00:30:52,200
Speaker 1: taking place across town in foggy bottom, does that give

509
00:30:52,200 --> 00:30:55,280
Speaker 1: her give you grounds for for optimism, that that he's

510
00:30:55,360 --> 00:30:58,880
Speaker 1: somebody who can be swayed, that cooler minds can prevail here.

511
00:30:58,920 --> 00:31:01,960
Speaker 1: He's interested, he has he's he's changeable in his positions

512
00:31:02,920 --> 00:31:05,720
Speaker 1: a little bit. Yeah. I mean a lot of these

513
00:31:05,720 --> 00:31:10,400
Speaker 1: flip flops that have been discussed UH from Trump have

514
00:31:10,520 --> 00:31:14,920
Speaker 1: been in a better direction, right, like less hostile towards trade.

515
00:31:15,560 --> 00:31:20,000
Speaker 1: For example, UM, no longer is the Export Import Bank

516
00:31:20,080 --> 00:31:22,080
Speaker 1: by the way, you could argue this either way, but anyway,

517
00:31:22,280 --> 00:31:25,840
Speaker 1: no longer is it a benoir, big horrible thing that

518
00:31:25,920 --> 00:31:32,280
Speaker 1: needs to be UH gotten rid of. UM the budget

519
00:31:32,280 --> 00:31:35,600
Speaker 1: and taxes will have to see. One of my themes

520
00:31:35,800 --> 00:31:39,720
Speaker 1: UH Vice Chairman Blinder for these meetings has been the

521
00:31:39,720 --> 00:31:42,920
Speaker 1: continued great distortion of nominal and real rates. David mentioned

522
00:31:42,960 --> 00:31:46,680
Speaker 1: central bank policy up top. Is there even any hope

523
00:31:46,720 --> 00:31:49,960
Speaker 1: of clearing markets, of getting back to the incentives that

524
00:31:50,120 --> 00:31:56,840
Speaker 1: drive investment until we get back out of this financial repression? Um? Yes,

525
00:31:57,000 --> 00:32:01,200
Speaker 1: I think so. You know. Part of tom is is

526
00:32:01,320 --> 00:32:06,240
Speaker 1: ah what economists sometimes call money illusion. If you live

527
00:32:06,360 --> 00:32:10,760
Speaker 1: in a much less inflationary world, and we do, that's

528
00:32:10,800 --> 00:32:14,480
Speaker 1: just the way things are everywhere compared to what was

529
00:32:14,520 --> 00:32:18,959
Speaker 1: true when we were young. Um, interest rates are going

530
00:32:19,000 --> 00:32:22,200
Speaker 1: to be lawer. So we need to focus on real

531
00:32:22,240 --> 00:32:27,000
Speaker 1: interest rates. And I think there's every reason to believe

532
00:32:27,200 --> 00:32:30,360
Speaker 1: that real interest rates will go back to something looking

533
00:32:30,880 --> 00:32:33,240
Speaker 1: more normal. It looks like a bit less than we're

534
00:32:33,240 --> 00:32:37,160
Speaker 1: accustomed to. Although the real rates we'll see about that,

535
00:32:37,920 --> 00:32:40,680
Speaker 1: but but we're not going back to the kinds of

536
00:32:40,800 --> 00:32:44,640
Speaker 1: nominal interest rates that we became accustomed to. Okay, let's

537
00:32:44,720 --> 00:32:47,440
Speaker 1: let's uh do this. Ellen Blinders, thank you so much

538
00:32:47,520 --> 00:33:01,480
Speaker 1: for instance university. Well, he is the chief economist at

539
00:33:01,480 --> 00:33:04,520
Speaker 1: the International Monetary Fund and migrated over to Massachusetts, avenueto

540
00:33:04,560 --> 00:33:07,400
Speaker 1: that beautiful modern building that houses the Peterson Institute for

541
00:33:07,480 --> 00:33:10,640
Speaker 1: International Economics. Olivia Blanchard joins us now on our phone lines.

542
00:33:10,680 --> 00:33:13,880
Speaker 1: Olivia Blanchard, senior fellow at the Peterson Institute. Great to

543
00:33:13,920 --> 00:33:16,520
Speaker 1: have you with us here on Bloomberg Surveillance. Let me

544
00:33:16,520 --> 00:33:18,400
Speaker 1: start just by asking you about your sense of the

545
00:33:18,680 --> 00:33:22,160
Speaker 1: theme for this this weekend's meetings. Tom Keene, going into them, says,

546
00:33:22,160 --> 00:33:25,400
Speaker 1: the theme is often scrapped early on that global events

547
00:33:25,400 --> 00:33:28,520
Speaker 1: will supplant whatever was was predicted. What do you see

548
00:33:28,560 --> 00:33:30,920
Speaker 1: shaping up as as the theme here at the IMF

549
00:33:31,000 --> 00:33:33,680
Speaker 1: and World Bank Spring meetings? So I think actually Christine

550
00:33:33,760 --> 00:33:36,040
Speaker 1: the God captured it well. She said spring is in

551
00:33:36,080 --> 00:33:38,560
Speaker 1: the air, and I have a sense that that's the

552
00:33:38,640 --> 00:33:41,760
Speaker 1: dominant theme, which is for you know, I waited, I

553
00:33:41,880 --> 00:33:44,080
Speaker 1: was for hrs at the phone, and I always waited

554
00:33:44,120 --> 00:33:46,600
Speaker 1: for the time when I could revise my forecast up.

555
00:33:47,360 --> 00:33:50,840
Speaker 1: Unfortunately left before I could do that. By my successor

556
00:33:51,400 --> 00:33:53,360
Speaker 1: has has the luck to be able to do it.

557
00:33:53,440 --> 00:33:56,000
Speaker 1: So I think there's a sense that the recovery of

558
00:33:56,000 --> 00:34:01,560
Speaker 1: advanced to columnies is for real, that it book continue, uh,

559
00:34:01,600 --> 00:34:05,120
Speaker 1: and that emerging markets are doing okay and some of

560
00:34:05,160 --> 00:34:09,319
Speaker 1: them are actually kind of covering from bad blues. So

561
00:34:09,440 --> 00:34:12,239
Speaker 1: I suspect that that's going to be the theme. And

562
00:34:12,280 --> 00:34:14,600
Speaker 1: then as a result, the set of issues which comes

563
00:34:14,680 --> 00:34:17,399
Speaker 1: up is very different, which is you shift from how

564
00:34:17,440 --> 00:34:19,960
Speaker 1: can we get the machine to go faster to how

565
00:34:20,000 --> 00:34:23,840
Speaker 1: do we make sure that increases in interest rates or

566
00:34:24,080 --> 00:34:29,120
Speaker 1: overheating in some places doesn't become the dominant worry. So

567
00:34:29,560 --> 00:34:32,040
Speaker 1: it's a bit early, but I guess that's where it is.

568
00:34:32,040 --> 00:34:35,359
Speaker 1: And then in the background the discussion about populism and

569
00:34:35,400 --> 00:34:39,160
Speaker 1: what we can do to to make go caditatively different

570
00:34:39,960 --> 00:34:42,600
Speaker 1: but in terms of a short one first theme, in

571
00:34:42,680 --> 00:34:45,160
Speaker 1: terms of a medium run second theme that's in the

572
00:34:45,200 --> 00:34:47,640
Speaker 1: background at these meetings. That was certainly in the background

573
00:34:47,640 --> 00:34:50,279
Speaker 1: of Morisov's Felt's report as well. He talked about the

574
00:34:50,360 --> 00:34:54,080
Speaker 1: risks of of protectionism. Let's draw that. Let's draw a

575
00:34:54,080 --> 00:34:57,319
Speaker 1: line from that to current events, to the election that

576
00:34:57,360 --> 00:34:58,879
Speaker 1: we had in the US just a few months back,

577
00:34:58,920 --> 00:35:02,160
Speaker 1: to the election that's taking place this weekend in France.

578
00:35:02,200 --> 00:35:04,319
Speaker 1: How how real risk, how large a risk is that

579
00:35:04,360 --> 00:35:08,040
Speaker 1: to global growth going forward? I don't think it is

580
00:35:08,080 --> 00:35:10,680
Speaker 1: a major risk in the in the short run the

581
00:35:10,719 --> 00:35:14,600
Speaker 1: next two or three years, because of our populism is underwise.

582
00:35:14,680 --> 00:35:18,520
Speaker 1: If I look at each country, none in no place,

583
00:35:19,560 --> 00:35:23,200
Speaker 1: no relevant, big place, does a populists look like it's

584
00:35:23,200 --> 00:35:25,800
Speaker 1: going to be in a position to actually really change

585
00:35:26,560 --> 00:35:30,839
Speaker 1: macroeconomic policy dramatically or trade postsy dramatically. So I don't

586
00:35:30,840 --> 00:35:32,760
Speaker 1: see it. We can come back to the French elections

587
00:35:32,880 --> 00:35:35,200
Speaker 1: if you want, but even in France, I don't think

588
00:35:35,239 --> 00:35:37,480
Speaker 1: that that the risk is very high. So I don't

589
00:35:37,480 --> 00:35:39,359
Speaker 1: think that's going to play a major war in terms

590
00:35:39,400 --> 00:35:42,680
Speaker 1: of affecting Wolf in the next few years. But to

591
00:35:42,719 --> 00:35:45,920
Speaker 1: the extended, the underlying reasons for populism are going to

592
00:35:46,000 --> 00:35:49,360
Speaker 1: be there or even become stronger than It is. Clearly

593
00:35:49,400 --> 00:35:53,240
Speaker 1: an issue for the next five or ten. The issue

594
00:35:53,239 --> 00:35:57,439
Speaker 1: will not go away, Professor Blanchard, Good morning from our

595
00:35:57,480 --> 00:36:00,440
Speaker 1: studios in Washington. There is a paper that everyone has

596
00:36:00,520 --> 00:36:05,520
Speaker 1: required David to read from. I believe it was Olivia

597
00:36:05,600 --> 00:36:11,640
Speaker 1: Blanchard and Laurence Summers hystoriesis and the European unemployment problem. Professor,

598
00:36:11,680 --> 00:36:15,040
Speaker 1: it has become a world problem. The panel I did

599
00:36:15,120 --> 00:36:19,239
Speaker 1: yesterday was shocking in the immediacy urgency of nations to

600
00:36:19,360 --> 00:36:25,160
Speaker 1: find investment. What is your formula to find investment to

601
00:36:25,400 --> 00:36:30,200
Speaker 1: jump start jobs to eliminate this chronic unemployment? And your

602
00:36:30,239 --> 00:36:34,719
Speaker 1: acclaimed word historiesis But I think they're two issues. I mean,

603
00:36:34,719 --> 00:36:37,040
Speaker 1: the still in some countries like the US, you know

604
00:36:37,080 --> 00:36:39,320
Speaker 1: we're more or less it potential. So the issue is

605
00:36:39,360 --> 00:36:41,799
Speaker 1: how can we increase potential golf? How can we make

606
00:36:41,840 --> 00:36:46,479
Speaker 1: the underlying grate rate of golf higher? In Europe they're

607
00:36:46,480 --> 00:36:49,080
Speaker 1: not still there in some some other Germany is, but

608
00:36:49,160 --> 00:36:51,160
Speaker 1: the others are not. Verre. You basically needs to still

609
00:36:51,200 --> 00:36:54,319
Speaker 1: increase the men. The biotea must be to increase the men.

610
00:36:54,400 --> 00:36:57,880
Speaker 1: But eventually, when you get back to normal unemployment or

611
00:36:57,960 --> 00:37:01,360
Speaker 1: the unemployment, you want fast golf. And the answer to

612
00:37:01,840 --> 00:37:04,400
Speaker 1: how you do that, even in the USA, in Eupe

613
00:37:05,000 --> 00:37:07,680
Speaker 1: we actually don't know. And what we know is public

614
00:37:07,719 --> 00:37:10,719
Speaker 1: investment is too low and so more public investment in

615
00:37:10,760 --> 00:37:13,719
Speaker 1: many places would be good. And after this we really

616
00:37:13,719 --> 00:37:18,120
Speaker 1: don't understand why productivity golf has slowed down. We just

617
00:37:18,160 --> 00:37:21,040
Speaker 1: have to hope that given to the high rate of innovation,

618
00:37:21,680 --> 00:37:23,719
Speaker 1: firms are going to find ways of using it and

619
00:37:23,840 --> 00:37:28,000
Speaker 1: increase productivity and golf. It has come in the past.

620
00:37:28,680 --> 00:37:30,719
Speaker 1: For the moment it seems to be weak, it will

621
00:37:30,760 --> 00:37:33,680
Speaker 1: probably come back. There are some structural a measures that

622
00:37:34,120 --> 00:37:37,160
Speaker 1: one can take hoping they'll work, but one should not

623
00:37:37,239 --> 00:37:39,920
Speaker 1: be too optimistic. Typically that they don't work if they

624
00:37:39,960 --> 00:37:42,440
Speaker 1: take very long. I think we just have to accept

625
00:37:42,480 --> 00:37:46,080
Speaker 1: that these cycles of productivity golf come and go, So

626
00:37:46,200 --> 00:37:49,200
Speaker 1: potential goal of the moment is a bit mediocre, but

627
00:37:49,320 --> 00:37:52,640
Speaker 1: maybe it will get better. The only I think policy

628
00:37:52,680 --> 00:37:55,520
Speaker 1: advice is look at public investment. There are places where

629
00:37:55,560 --> 00:37:59,080
Speaker 1: public investment actually has been too low, public capital is

630
00:37:59,120 --> 00:38:02,200
Speaker 1: too low, and that setwork can work on folks. This

631
00:38:02,320 --> 00:38:06,040
Speaker 1: is the single question of this meeting of international economics.

632
00:38:06,239 --> 00:38:11,960
Speaker 1: Can we jump start investment given financial repression? The fact is,

633
00:38:12,040 --> 00:38:15,680
Speaker 1: worldwide we have this odd interest rate environment. Some would

634
00:38:15,680 --> 00:38:19,160
Speaker 1: say central bank and douce. Nobody's gonna blame Olivia Blanchard,

635
00:38:19,400 --> 00:38:21,839
Speaker 1: but there's a lot of people lined up. Can we

636
00:38:21,960 --> 00:38:25,600
Speaker 1: do does our new investment, does our new animal spirit?

637
00:38:25,920 --> 00:38:31,839
Speaker 1: Does it wait for an end to this financial repression? Well,

638
00:38:32,880 --> 00:38:36,239
Speaker 1: we may disagree because I don't see financial repression. I

639
00:38:36,360 --> 00:38:41,719
Speaker 1: basically see in most countries. I see low interest rates

640
00:38:41,760 --> 00:38:45,760
Speaker 1: at which many films can borrow uh, And I still

641
00:38:45,840 --> 00:38:50,000
Speaker 1: don't see high investment, high private investment. So it doesn't

642
00:38:50,000 --> 00:38:53,960
Speaker 1: seem to me that the poem with law investment private

643
00:38:53,960 --> 00:38:57,120
Speaker 1: investment is financial repression. I'm quite sure it was in

644
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Speaker 1: two thousands, ten eleven, twelve and so one. But today

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Speaker 1: I just don't think it is. I think it's just

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Speaker 1: that firms don't see anything very exciting on the horizon,

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00:39:05,120 --> 00:39:08,640
Speaker 1: and they don't see the fast sales goalf and they

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00:39:08,640 --> 00:39:11,960
Speaker 1: don't invest so much. If the man picks up, which

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00:39:12,040 --> 00:39:14,360
Speaker 1: I think we're seeing, I think we'll see more investment.

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00:39:14,880 --> 00:39:20,360
Speaker 1: But again, the big movements forward of investment tend to

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Speaker 1: come from the ability to use innovations and they then

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Speaker 1: work in your firm, And at this stage it doesn't

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00:39:27,200 --> 00:39:29,560
Speaker 1: seem to be happening on the same scale, So I

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Speaker 1: would know I would disagree with financial repression is being

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00:39:32,360 --> 00:39:35,319
Speaker 1: as being one of the main reasons. Just lastly here

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00:39:35,360 --> 00:39:37,880
Speaker 1: and quickly, as we look ahead the election in France

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Speaker 1: this weekend, how do you how do you grade the

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00:39:40,080 --> 00:39:43,960
Speaker 1: dialogue about economics in politics right now? Is there a

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00:39:44,640 --> 00:39:47,960
Speaker 1: thoughtful conversation about economics happening in France? Is that happening

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00:39:47,960 --> 00:39:49,680
Speaker 1: in the UKs we head to the to the next

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00:39:49,680 --> 00:39:54,080
Speaker 1: snap election there? No, I mean it is, you know,

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00:39:54,120 --> 00:39:57,840
Speaker 1: I think it's a gigantic issue of the lack of

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00:39:57,920 --> 00:40:03,080
Speaker 1: an informed economics debate. Bait on blanksit earlier, or bat

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Speaker 1: on on immigration, on trade in the US, or being

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00:40:07,960 --> 00:40:13,040
Speaker 1: on on the euro What is clear is people look

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00:40:13,080 --> 00:40:16,880
Speaker 1: at the past, shiver past as having largely the politicians

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00:40:16,880 --> 00:40:19,839
Speaker 1: of the past as having largely failed, and they are

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00:40:19,840 --> 00:40:23,400
Speaker 1: willing to basically try change for change. And then you

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00:40:23,440 --> 00:40:25,239
Speaker 1: tell them when you know a change for change is

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00:40:25,280 --> 00:40:28,759
Speaker 1: incredibly Andrew's the experts say, look at what happened to

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00:40:28,920 --> 00:40:32,560
Speaker 1: Argentina earlier, what happens in Venezuela. And they said, no, no,

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00:40:32,560 --> 00:40:35,920
Speaker 1: not just these are the experts, let's forget them. I

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00:40:35,920 --> 00:40:40,200
Speaker 1: mean the degree in which expert opinion is not respected

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Speaker 1: it is quite amazing. Now you know it must be

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00:40:43,440 --> 00:40:47,040
Speaker 1: it must be our fault. Leave it there, Professor Blanchard,

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Speaker 1: thank you so much. Thanks for listening to the Bloomberg

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00:40:59,040 --> 00:41:05,359
Speaker 1: Surveillance podcast US. Subscribe and listen to interviews on Apple Podcasts, SoundCloud,

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00:41:05,719 --> 00:41:09,560
Speaker 1: or whichever podcast platform you prefer. I'm on Twitter at

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00:41:09,600 --> 00:41:14,279
Speaker 1: Tom Keene. David Gura is at David Gura. Before the podcast,

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Speaker 1: you can always catch us worldwide. I'm Bloomberg Radio, brought

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00:41:32,640 --> 00:41:36,360
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