1 00:00:02,920 --> 00:00:10,600 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,640 --> 00:00:14,560 Speaker 1: Bloomberg Balance of Power podcast. Catch us live weekdays at 3 00:00:14,560 --> 00:00:17,239 Speaker 1: noon Eastern on Amocarplay and then Roun Auto with the 4 00:00:17,239 --> 00:00:21,200 Speaker 1: Bloomberg Business App. Listen on demand wherever you get your podcasts, 5 00:00:21,400 --> 00:00:25,360 Speaker 1: or watch us live on YouTube. 6 00:00:26,360 --> 00:00:29,640 Speaker 2: The clock has started now on a sixty day ceasefire 7 00:00:29,720 --> 00:00:34,680 Speaker 2: agreement between Israel and Hesbela in Lebanon. The deal, of course, 8 00:00:34,760 --> 00:00:38,000 Speaker 2: was reached yesterday, and it required weeks of shuttle diplomacy 9 00:00:38,479 --> 00:00:42,199 Speaker 2: from those in the Biden administration. Obviously, this is a 10 00:00:42,240 --> 00:00:44,959 Speaker 2: big deal and important news for those who have been 11 00:00:44,960 --> 00:00:48,320 Speaker 2: affected by this conflict, as many can now return to 12 00:00:48,400 --> 00:00:51,000 Speaker 2: their homes. But it's a big deal for President Biden 13 00:00:51,040 --> 00:00:54,000 Speaker 2: as well, who has been pushing for this very hard, 14 00:00:54,040 --> 00:00:56,760 Speaker 2: pushing for a ceasefire in Gaza as well, and he 15 00:00:56,840 --> 00:00:59,800 Speaker 2: actually announced this from the Rose Garden at the White 16 00:00:59,840 --> 00:01:03,880 Speaker 2: House yesterday just after the Israeli Prime Minister Bibi net 17 00:01:03,960 --> 00:01:05,600 Speaker 2: and Yahoo spoke in Israel. 18 00:01:06,120 --> 00:01:09,560 Speaker 3: This is designed to be a permanent cessation of hostilities. 19 00:01:11,120 --> 00:01:14,160 Speaker 3: What is left of Hesbalah and another terrorist organization will 20 00:01:14,200 --> 00:01:17,080 Speaker 3: not be allowed, well, our emphasize, will not be allowed 21 00:01:17,120 --> 00:01:21,440 Speaker 3: to threaten the security visual again. Over the next sixty days, 22 00:01:21,600 --> 00:01:25,720 Speaker 3: a Lebanese army and State security force will deploy and 23 00:01:25,760 --> 00:01:28,039 Speaker 3: take control of their own territory once again. 24 00:01:29,000 --> 00:01:32,319 Speaker 4: I am determined to do whatever it takes to prevent 25 00:01:32,360 --> 00:01:35,000 Speaker 4: Iran from attaining nuclear weapons. 26 00:01:35,240 --> 00:01:35,839 Speaker 5: I'm mult people. 27 00:01:36,600 --> 00:01:39,600 Speaker 4: I have said many times that a good agreement is 28 00:01:39,600 --> 00:01:43,319 Speaker 4: an agreement that is enforced, and we will enforce it. 29 00:01:43,720 --> 00:01:46,240 Speaker 2: So for more on this agreement and what it means 30 00:01:46,240 --> 00:01:49,000 Speaker 2: for the region more largely, we turned to Jonathan Panicoff. 31 00:01:49,040 --> 00:01:52,280 Speaker 2: He is Atlantic Council Director of the Scowcroft Middle East 32 00:01:52,400 --> 00:01:56,600 Speaker 2: Security Initiative. Welcome back to balance and power Jonathan to 33 00:01:56,680 --> 00:01:59,680 Speaker 2: seize on the words of President Biden. There, he suggested, 34 00:01:59,680 --> 00:02:04,760 Speaker 2: this is a path to something permanent, but ceasefires often 35 00:02:04,840 --> 00:02:08,120 Speaker 2: are temporary in nature. In this initial period is only 36 00:02:08,240 --> 00:02:11,240 Speaker 2: sixty days. What will it take to make this a 37 00:02:11,320 --> 00:02:13,080 Speaker 2: permanent cessation of hostilities? 38 00:02:13,600 --> 00:02:15,640 Speaker 5: Good afternoon, Thanks so much for having me back. 39 00:02:15,760 --> 00:02:18,880 Speaker 6: Look, I think it is true that it is a 40 00:02:18,919 --> 00:02:22,000 Speaker 6: sixty day cease fire, but it's supposed to be sixty days, 41 00:02:22,440 --> 00:02:25,720 Speaker 6: and if all the parties implement the required steps, then 42 00:02:25,760 --> 00:02:29,560 Speaker 6: it will become permanent. In other words, it's not sixty days, 43 00:02:29,600 --> 00:02:32,360 Speaker 6: and then Israel at the end of that is supposed 44 00:02:32,360 --> 00:02:34,800 Speaker 6: to the Israeli forces is supposed to go back to Israel. 45 00:02:35,120 --> 00:02:39,000 Speaker 6: It's sixty days, and step by step, as the Lebanese 46 00:02:39,080 --> 00:02:43,280 Speaker 6: Armed Forces redeployed to the south of Lebanon, then Israeli 47 00:02:43,320 --> 00:02:45,799 Speaker 6: forces will move out. And the goal is that at 48 00:02:45,800 --> 00:02:49,160 Speaker 6: the end of sixty days, you'll have no more Israeli 49 00:02:49,240 --> 00:02:53,040 Speaker 6: forces in Lebanon. You'll have only the Lebanese Armed Forces 50 00:02:53,280 --> 00:02:56,160 Speaker 6: undertaking the security that frankly, they were supposed to have 51 00:02:56,200 --> 00:03:00,200 Speaker 6: been undertaking back in two thousand and six when you 52 00:03:00,360 --> 00:03:02,880 Speaker 6: and Resolution seventeen oh one was implemented. 53 00:03:03,400 --> 00:03:05,880 Speaker 5: The hope is that this will actually. 54 00:03:05,480 --> 00:03:08,360 Speaker 6: Be different this time because of the parties involved in 55 00:03:08,400 --> 00:03:11,600 Speaker 6: the structure, and that it will lead to obviously a. 56 00:03:11,520 --> 00:03:12,880 Speaker 5: More permanent ceasefire. 57 00:03:13,000 --> 00:03:15,960 Speaker 6: Whether that's true, we'll obviously have to wait and see. 58 00:03:16,160 --> 00:03:19,160 Speaker 6: Both sides are going to be inclined to say there's violations. 59 00:03:19,480 --> 00:03:21,760 Speaker 6: The goal will be for the US and France, who 60 00:03:21,800 --> 00:03:24,520 Speaker 6: are now more involved, to be able to say, look, 61 00:03:24,960 --> 00:03:26,240 Speaker 6: we have to move forward. 62 00:03:26,280 --> 00:03:28,359 Speaker 5: The violations we can be dealt with. 63 00:03:28,760 --> 00:03:32,280 Speaker 6: We need to ensure that we retain the ceasefire that 64 00:03:32,360 --> 00:03:34,560 Speaker 6: we've sought to establish. 65 00:03:34,680 --> 00:03:38,680 Speaker 2: Well, how able what haslet even be at this point 66 00:03:38,720 --> 00:03:43,720 Speaker 2: to violate this in a materially threatening way, Jonathan, considering, 67 00:03:43,760 --> 00:03:46,640 Speaker 2: we understand that the reason this was able to come 68 00:03:46,680 --> 00:03:50,120 Speaker 2: together is in part because Israel has so materially weakened 69 00:03:50,120 --> 00:03:53,080 Speaker 2: hasbi laed by decapitating its most senior leadership, by taking 70 00:03:53,120 --> 00:03:55,279 Speaker 2: out a lot of its military capability. 71 00:03:55,920 --> 00:03:56,920 Speaker 5: That's certainly right. 72 00:03:57,000 --> 00:03:59,760 Speaker 6: Look, I think about probably sixty to seventy percent of 73 00:04:00,120 --> 00:04:04,960 Speaker 6: Isabella's missile inventory, on his rocket inventory, it's drone inventory 74 00:04:05,040 --> 00:04:08,120 Speaker 6: has probably been destroyed by Israel over the last four 75 00:04:08,160 --> 00:04:12,800 Speaker 6: months or so. And obviously Hesbela's command and control is 76 00:04:12,840 --> 00:04:16,400 Speaker 6: incredibly weak right now. Israel has taken out and killed 77 00:04:16,480 --> 00:04:19,719 Speaker 6: not only the most senior leaders of Hezbala, but even 78 00:04:19,760 --> 00:04:23,760 Speaker 6: the second and third level commanders, and that's incredibly weak 79 00:04:23,800 --> 00:04:28,800 Speaker 6: in the organization. But Isbela still does retain a significant 80 00:04:28,800 --> 00:04:32,800 Speaker 6: amount of rockets of shorter range weapons that can reach 81 00:04:32,920 --> 00:04:36,040 Speaker 6: northern Israel. At the end of the day, the fundamental 82 00:04:36,080 --> 00:04:39,000 Speaker 6: goal for Israel. Israel was to be able to ensure 83 00:04:39,360 --> 00:04:41,800 Speaker 6: that the tens of thousands of Israelis who have been 84 00:04:41,800 --> 00:04:44,960 Speaker 6: displaced from their homes for over a year now could 85 00:04:45,040 --> 00:04:49,400 Speaker 6: return to that if Hezbala is able to start refiring 86 00:04:49,440 --> 00:04:53,479 Speaker 6: the rockets that has remaining in inventory, that obviously would 87 00:04:53,600 --> 00:04:55,480 Speaker 6: create a challenge for the ceasefire. 88 00:04:55,839 --> 00:04:58,880 Speaker 5: But clearly they are fully weakened. 89 00:04:58,440 --> 00:05:01,200 Speaker 6: And in a much weaker position than they were even 90 00:05:01,279 --> 00:05:02,160 Speaker 6: four months ago. 91 00:05:02,960 --> 00:05:05,479 Speaker 2: Well, and arguably, Jonathan, the same thing could be said 92 00:05:05,600 --> 00:05:08,039 Speaker 2: of Hamas after more than a year of fighting with 93 00:05:08,160 --> 00:05:12,000 Speaker 2: Israel in Gaza. There was much conversation yesterday about whether 94 00:05:12,080 --> 00:05:15,520 Speaker 2: or not this ceasefire agreement with Hesbola would be a 95 00:05:15,560 --> 00:05:20,040 Speaker 2: step toward reaching another ceasefire agreement with Hamas. Obviously, these 96 00:05:20,040 --> 00:05:22,960 Speaker 2: are fundamentally different conflicts in many ways. There's a massive 97 00:05:23,040 --> 00:05:25,400 Speaker 2: question about what the day after would look like if 98 00:05:25,400 --> 00:05:28,240 Speaker 2: an agreement is come to you between Israel and Hamas. 99 00:05:28,279 --> 00:05:31,240 Speaker 2: So give us a reality check here. How much closer 100 00:05:31,279 --> 00:05:35,080 Speaker 2: are we to a resolution there now that this currency 101 00:05:35,120 --> 00:05:36,520 Speaker 2: is fire and Lebanon is in place. 102 00:05:37,440 --> 00:05:41,000 Speaker 5: I think we're probably a little bit closer, but not much, 103 00:05:41,080 --> 00:05:42,800 Speaker 5: to be honest. Look, the Biden. 104 00:05:42,520 --> 00:05:45,839 Speaker 6: Administration has put a lot of emphasis that if you 105 00:05:45,880 --> 00:05:49,560 Speaker 6: could create a situation in terms of resolving the conflict 106 00:05:49,600 --> 00:05:52,719 Speaker 6: with Hesbela, it would cut the link between Hesbela and 107 00:05:52,760 --> 00:05:57,279 Speaker 6: Hamas and might create an opening for a new negotiation between. 108 00:05:57,040 --> 00:05:59,320 Speaker 5: Hamas and Israel. That is possible. 109 00:05:59,360 --> 00:06:02,760 Speaker 6: There was enough official just today who went to the 110 00:06:02,920 --> 00:06:05,440 Speaker 6: cutteries US and Egypt and said we were ready to 111 00:06:05,440 --> 00:06:07,120 Speaker 6: negotiate under serious terms. 112 00:06:07,520 --> 00:06:10,200 Speaker 5: The difference is the circumstances. 113 00:06:09,440 --> 00:06:13,960 Speaker 6: Haven't significantly changed when it comes to Israel's position or 114 00:06:14,000 --> 00:06:18,960 Speaker 6: Hamas's position. The reality is that is degraded as Hamas is, 115 00:06:19,279 --> 00:06:22,640 Speaker 6: they still hold a significant amount of leverage because they're 116 00:06:22,680 --> 00:06:26,920 Speaker 6: still holding one hundred and one hostages. And even though 117 00:06:26,960 --> 00:06:29,640 Speaker 6: we know most or at least some of those hostages 118 00:06:29,640 --> 00:06:32,520 Speaker 6: are probably no longer alive, that still means that there's 119 00:06:32,600 --> 00:06:36,480 Speaker 6: dozens of them remaining. I think that creates a different 120 00:06:36,560 --> 00:06:40,720 Speaker 6: impediment to getting to a ceasefire deal than you had 121 00:06:40,800 --> 00:06:44,039 Speaker 6: with Hesbaalah. For example, Hamas is going to want a 122 00:06:44,120 --> 00:06:47,479 Speaker 6: much higher cost in Israel without a day after planning, 123 00:06:47,480 --> 00:06:50,120 Speaker 6: as you mentioned, isn't quite ready to give it. 124 00:06:50,160 --> 00:06:53,599 Speaker 2: I wouldn't think well, And I wonder if that's also 125 00:06:53,720 --> 00:06:57,479 Speaker 2: in part because Israel knows a new US president is 126 00:06:57,560 --> 00:07:00,280 Speaker 2: coming fifty four days from now. It will be Ronald 127 00:07:00,279 --> 00:07:02,880 Speaker 2: Trump that is the commander in chief, and is helping 128 00:07:03,000 --> 00:07:07,000 Speaker 2: to dictate or dictating entirely foreign policy. So I do 129 00:07:07,120 --> 00:07:10,160 Speaker 2: wonder your sense of the timing here that yes, maybe 130 00:07:10,200 --> 00:07:12,920 Speaker 2: this ceasefire in Lebanon was able to be accomplished under 131 00:07:13,160 --> 00:07:15,920 Speaker 2: this administration, but all of these parties all throughout the 132 00:07:15,960 --> 00:07:17,960 Speaker 2: Middle East and other allies involved in this, no when 133 00:07:18,000 --> 00:07:19,560 Speaker 2: new administration's coming in. 134 00:07:19,760 --> 00:07:22,600 Speaker 6: I think that certainly play into plays into it from 135 00:07:22,760 --> 00:07:25,880 Speaker 6: Prime Minister Netyak, whose perspective. Look, I don't think it's 136 00:07:25,920 --> 00:07:29,000 Speaker 6: any secret that Prime Minister net Yak, who was strongly 137 00:07:29,520 --> 00:07:33,080 Speaker 6: preferring that President Trump president elect Trump win the election 138 00:07:33,800 --> 00:07:34,800 Speaker 6: earlier this month. 139 00:07:35,280 --> 00:07:37,600 Speaker 5: At the same time, the President. 140 00:07:37,200 --> 00:07:39,200 Speaker 6: Elect has actually been very very clear this may be 141 00:07:39,320 --> 00:07:41,520 Speaker 6: one of the few areas that he and the Bide 142 00:07:41,520 --> 00:07:44,680 Speaker 6: administration are on the same page, that he wants to 143 00:07:44,760 --> 00:07:48,920 Speaker 6: see the conflict ended before, if not very very soon 144 00:07:49,080 --> 00:07:52,240 Speaker 6: after his inauguration. It's hard to believe that you'll see 145 00:07:52,280 --> 00:07:56,000 Speaker 6: has significant change and circumstances on the ground that would 146 00:07:56,080 --> 00:07:59,840 Speaker 6: really change the totality of what the parties are negotiating 147 00:08:00,120 --> 00:08:05,080 Speaker 6: over between now and Trump's inauguration. And so I think, look, 148 00:08:05,160 --> 00:08:07,480 Speaker 6: it is true that I think President Trump will probably 149 00:08:07,480 --> 00:08:10,920 Speaker 6: have a little bit more leverage a new administration and 150 00:08:10,960 --> 00:08:14,000 Speaker 6: an ability to control Net and Yahoo in a way 151 00:08:14,040 --> 00:08:16,720 Speaker 6: that I think President Biden has struggled to do. But 152 00:08:17,120 --> 00:08:20,960 Speaker 6: ultimately it's still going to be a fundamental challenge, and 153 00:08:21,040 --> 00:08:24,320 Speaker 6: without the circumstances on the ground changing, I'm not sure 154 00:08:24,360 --> 00:08:26,880 Speaker 6: that it's going to make a huge difference in the end. 155 00:08:27,840 --> 00:08:31,080 Speaker 2: Well, we know that there are some common denominators in 156 00:08:31,160 --> 00:08:34,079 Speaker 2: terms of what the incoming Trump administration would like to 157 00:08:34,080 --> 00:08:35,959 Speaker 2: see accomplished in the Middle East and what the Biden 158 00:08:35,960 --> 00:08:39,920 Speaker 2: administration has been pushing for, inclusive of a normalization in 159 00:08:39,960 --> 00:08:44,400 Speaker 2: the Saudi Israel relationship. Jonathan and our final moment here, 160 00:08:44,520 --> 00:08:47,760 Speaker 2: what needs to happen is a prerequisite to that normalization. 161 00:08:48,280 --> 00:08:51,040 Speaker 6: It's a great question because over the last year the 162 00:08:51,040 --> 00:08:54,679 Speaker 6: Saudis have moved consistently in terms of their demands. 163 00:08:54,679 --> 00:08:56,400 Speaker 5: When it comes to the Palestinians. 164 00:08:56,800 --> 00:09:00,000 Speaker 6: It started quite quietly that they just wanted to see 165 00:09:00,080 --> 00:09:03,840 Speaker 6: a ceasefire, and then it became a question of a 166 00:09:03,960 --> 00:09:07,800 Speaker 6: clear path through Tuesday solution, and earlier this month you 167 00:09:07,880 --> 00:09:10,840 Speaker 6: saw the Crown Prince of Saudi Arabia, Muhammed Ben Salomon, 168 00:09:10,920 --> 00:09:12,920 Speaker 6: come out and say no, there needs to be an 169 00:09:13,000 --> 00:09:14,480 Speaker 6: actual Palestinian state. 170 00:09:14,960 --> 00:09:17,240 Speaker 5: Look, it's gonna be hard to move back from that. 171 00:09:17,440 --> 00:09:18,800 Speaker 5: In a multi polar world. 172 00:09:18,800 --> 00:09:22,000 Speaker 6: The Saudis see themselves not only as the key pole 173 00:09:22,040 --> 00:09:23,719 Speaker 6: in the Middle East, but they see themselves as the 174 00:09:23,800 --> 00:09:27,040 Speaker 6: voice not just for the Saudi population but the Pan 175 00:09:27,200 --> 00:09:30,720 Speaker 6: Arab population. That doesn't mean that it can't happen, but 176 00:09:30,760 --> 00:09:33,400 Speaker 6: I think in order to get there, you're really going 177 00:09:33,440 --> 00:09:36,200 Speaker 6: to need a heavy push by the Trump administration and 178 00:09:36,280 --> 00:09:39,880 Speaker 6: a broader deal that includes not just the Saudis and 179 00:09:39,880 --> 00:09:42,080 Speaker 6: the Israelis and the Palestinians, but probably more of the 180 00:09:42,120 --> 00:09:42,840 Speaker 6: region as well. 181 00:09:44,080 --> 00:09:47,000 Speaker 2: All Right, Jonathan Panakoff of the Atlantic Council, thank you 182 00:09:47,040 --> 00:09:49,800 Speaker 2: so much as always for joining me here on Balance 183 00:09:49,800 --> 00:09:52,280 Speaker 2: of Power, and we'll have more ahead on the book. 184 00:09:55,040 --> 00:09:58,440 Speaker 1: You're listening to the Bloomberg Balance of Power podcast kens 185 00:09:58,559 --> 00:10:01,440 Speaker 1: just live week days at noon. He's on Applecarplay and 186 00:10:01,480 --> 00:10:03,960 Speaker 1: then Roud Otto with a Bloomberg business ad. You can 187 00:10:04,000 --> 00:10:07,280 Speaker 1: also listen live on Amazon Alexa from our flagship New 188 00:10:07,320 --> 00:10:12,280 Speaker 1: York station Just Say Alexa playing Bloomberg eleven thirty. 189 00:10:13,080 --> 00:10:15,559 Speaker 2: So as we consider motorists, especially as many of them 190 00:10:15,559 --> 00:10:18,600 Speaker 2: take to the roads for this Thanksgiving, they are paying 191 00:10:19,080 --> 00:10:21,480 Speaker 2: some of the lowest prices of the year at the pump. 192 00:10:21,559 --> 00:10:23,840 Speaker 2: Right now, the triple A average for a gallon of 193 00:10:23,840 --> 00:10:27,360 Speaker 2: gas is three dollars and seven cents. But how quickly 194 00:10:27,679 --> 00:10:30,360 Speaker 2: could that ultimately change? That is a question I now 195 00:10:30,400 --> 00:10:33,040 Speaker 2: post to Patrick de'han he is head of a petroleum 196 00:10:33,040 --> 00:10:37,080 Speaker 2: analysis at GUS Buddy joining me here on balance of power. Patrick, 197 00:10:37,160 --> 00:10:39,960 Speaker 2: welcome back to the program. If we could start firstly 198 00:10:40,040 --> 00:10:42,880 Speaker 2: with what the actual translation of a tariff like this 199 00:10:43,040 --> 00:10:46,480 Speaker 2: would be to the cost that consumers see at the 200 00:10:46,520 --> 00:10:49,520 Speaker 2: gas pump, you know, post it on the board at 201 00:10:49,559 --> 00:10:52,080 Speaker 2: the station. If it's a twenty five percent tariff, what 202 00:10:52,160 --> 00:10:54,720 Speaker 2: does that translate to in terms of sense per gallot? 203 00:10:54,960 --> 00:10:57,559 Speaker 7: Well, yeah, well, you know, as Bob had said, I mean, 204 00:10:57,600 --> 00:11:00,400 Speaker 7: this is going to be a significant impact. And a 205 00:11:00,400 --> 00:11:03,640 Speaker 7: lot of these refineries in the Great Lakes, the Midwest, 206 00:11:03,679 --> 00:11:08,360 Speaker 7: the Rockies processed Canadian heavy oil almost exclusively. So right 207 00:11:08,400 --> 00:11:11,880 Speaker 7: now Western Canadian Select, which is one of the benchmarks 208 00:11:12,280 --> 00:11:15,000 Speaker 7: at about sixty dollars a barrow, that twenty five percent 209 00:11:15,080 --> 00:11:18,600 Speaker 7: tariff would amount about fourteen or fifteen dollars, which break 210 00:11:18,640 --> 00:11:22,839 Speaker 7: it down to a gallon of gasoline, and the raw 211 00:11:23,160 --> 00:11:25,959 Speaker 7: input would be about a thirty three to thirty four 212 00:11:26,080 --> 00:11:26,959 Speaker 7: cent a gallon. 213 00:11:26,800 --> 00:11:29,160 Speaker 5: Impact, and so this is not nothing. 214 00:11:29,200 --> 00:11:32,079 Speaker 7: I mean, this is an over ten percent impact, and 215 00:11:32,120 --> 00:11:34,559 Speaker 7: this is the baseline, would be about thirty five cents. 216 00:11:34,640 --> 00:11:38,360 Speaker 7: Keep in mind twenty five percent tariff. If oil prices rally, 217 00:11:38,960 --> 00:11:40,600 Speaker 7: you're going to see that tariff go up and up 218 00:11:40,640 --> 00:11:41,880 Speaker 7: and up, and it's going to be more of a 219 00:11:41,920 --> 00:11:45,239 Speaker 7: squeeze as that happens, especially into the summer months. 220 00:11:45,520 --> 00:11:47,719 Speaker 2: Well, that's a very good point. Of course, this kind 221 00:11:47,720 --> 00:11:51,200 Speaker 2: of policy can't actually be implemented until at least January twentieth, 222 00:11:51,200 --> 00:11:54,320 Speaker 2: when Trump takes office, which is just over a month. 223 00:11:54,360 --> 00:11:57,040 Speaker 2: And I guess two months from now, just a little 224 00:11:57,040 --> 00:11:58,840 Speaker 2: bit less than two months, where are we going to 225 00:11:58,880 --> 00:12:02,960 Speaker 2: be into terms of gas prices by then? Patrick, considering 226 00:12:03,000 --> 00:12:05,920 Speaker 2: the trajectory we are currently on, which has been pretty 227 00:12:05,920 --> 00:12:06,959 Speaker 2: steadily lower. 228 00:12:07,080 --> 00:12:09,360 Speaker 7: Well, I think most consumers are going to feel that 229 00:12:09,480 --> 00:12:13,040 Speaker 7: bite very significantly, because over the next couple of months 230 00:12:13,040 --> 00:12:16,080 Speaker 7: we should see gas prices saying it relatively low levels. 231 00:12:16,120 --> 00:12:18,000 Speaker 5: We still should have half. 232 00:12:17,760 --> 00:12:21,040 Speaker 7: Of the country, if not more, seeing average gas prices 233 00:12:21,080 --> 00:12:24,480 Speaker 7: below three dollars for comparison's sake, gas But he counts 234 00:12:24,480 --> 00:12:27,560 Speaker 7: about thirty states today below three dollars a gallon, and 235 00:12:27,720 --> 00:12:30,800 Speaker 7: though there may be some volatility and prices depending on 236 00:12:31,559 --> 00:12:34,640 Speaker 7: the balance of global supply and demand, depending on Russia 237 00:12:34,679 --> 00:12:36,800 Speaker 7: and Ukraine and the Middle East, there may be some 238 00:12:36,880 --> 00:12:40,760 Speaker 7: minor fluctuations, but the seasonal low should stick around right 239 00:12:40,760 --> 00:12:44,200 Speaker 7: through inauguration debt, and if we see that tariff implemented, 240 00:12:44,520 --> 00:12:46,800 Speaker 7: it's going to be a rather abrupt pinch of the 241 00:12:46,800 --> 00:12:48,800 Speaker 7: pump for those areas that are going to be affected. 242 00:12:50,120 --> 00:12:53,760 Speaker 2: Would that theoretically, and I understand we're playing in hypotheticals here, 243 00:12:53,800 --> 00:12:56,720 Speaker 2: but would that lead to a just as abrupt drop 244 00:12:56,760 --> 00:13:00,040 Speaker 2: off in demand, Well, it probably would. 245 00:13:00,320 --> 00:13:01,440 Speaker 5: To such a drop off. 246 00:13:01,480 --> 00:13:05,959 Speaker 7: I mean, Americans only really have their car to drive, 247 00:13:06,040 --> 00:13:08,720 Speaker 7: whether it's an EV, then they're insulated completely from this. 248 00:13:08,920 --> 00:13:11,600 Speaker 7: But for those that are still driving around an internal 249 00:13:11,600 --> 00:13:14,480 Speaker 7: combustion engine vehicle, there's not a whole lot of alternatives here. 250 00:13:14,559 --> 00:13:17,040 Speaker 7: Nor are there really alternatives for the refineries that have 251 00:13:17,559 --> 00:13:20,679 Speaker 7: for decades been relying on Canadian crude oil. This is 252 00:13:20,760 --> 00:13:25,200 Speaker 7: upsetting the status quo that's been established really for probably 253 00:13:25,240 --> 00:13:27,599 Speaker 7: the better part of one hundred years. These refineries that 254 00:13:27,720 --> 00:13:31,200 Speaker 7: process Canadian oil almost exclusively, and they're going to be 255 00:13:31,200 --> 00:13:33,960 Speaker 7: the ones impacted the most, and they really have no alternatives. 256 00:13:34,000 --> 00:13:39,800 Speaker 7: As Bob has said, these inland areas Illinois, Michigan, Ohio 257 00:13:39,880 --> 00:13:43,440 Speaker 7: refineries in this region just really don't have alternatives. 258 00:13:44,240 --> 00:13:48,040 Speaker 2: Well, so explain that to those who might say, hey, 259 00:13:48,320 --> 00:13:52,079 Speaker 2: Donald Trump has promised to deregulate American energy to make 260 00:13:52,080 --> 00:13:54,960 Speaker 2: it easier for them to build that new infrastructure to 261 00:13:55,080 --> 00:13:59,000 Speaker 2: increase their production capacity. That's going to mean we produce 262 00:13:59,080 --> 00:14:02,360 Speaker 2: more and potentially that means prices go lower. Why is 263 00:14:02,440 --> 00:14:05,240 Speaker 2: that not true when we think about the need to 264 00:14:05,320 --> 00:14:08,720 Speaker 2: potentially directly replace some of these imports. 265 00:14:09,160 --> 00:14:11,600 Speaker 7: Yeah, I mean absolutely. I mean you're talking about a 266 00:14:11,760 --> 00:14:14,520 Speaker 7: huge change in the status quo. I mean a president 267 00:14:14,559 --> 00:14:17,960 Speaker 7: that would potentially on day one levy massive tariffs is 268 00:14:18,000 --> 00:14:20,360 Speaker 7: not something we're used to a president seeing. And so 269 00:14:20,840 --> 00:14:22,560 Speaker 7: you know, I've heard folks say, well, how can the 270 00:14:22,600 --> 00:14:26,320 Speaker 7: president have such a vast impact? Well, because presidents typically 271 00:14:26,400 --> 00:14:28,920 Speaker 7: don't upset the status quo in such a huge way. 272 00:14:29,000 --> 00:14:34,240 Speaker 7: And you know, these refineries have long, for as I mentioned, decades, 273 00:14:34,320 --> 00:14:38,120 Speaker 7: been set up. They've been configured specifically to process more 274 00:14:38,160 --> 00:14:42,520 Speaker 7: of this heavy Canadian oil, to have additionally units coking units, desulfurization. 275 00:14:43,080 --> 00:14:46,280 Speaker 7: I mean, they have decades of experience processing Canadian oil 276 00:14:46,320 --> 00:14:50,240 Speaker 7: and specifically designing their refineries around this type of oil. 277 00:14:50,360 --> 00:14:53,520 Speaker 7: Keep in mind, the largest refinery in the Midwest four 278 00:14:53,560 --> 00:14:57,680 Speaker 7: hundred and thirty five thousand barrels a day down in Whiting, Indiana, 279 00:14:57,760 --> 00:15:00,920 Speaker 7: that's Northwest Indiana in two thousand nates that three and 280 00:15:00,960 --> 00:15:04,680 Speaker 7: a half billion dollars, essentially making itself more reliant on 281 00:15:04,800 --> 00:15:07,840 Speaker 7: processing more Canadian crude oil. So, I mean, that's just 282 00:15:07,880 --> 00:15:10,680 Speaker 7: how reliant these refineries are. There's been a SETI supply 283 00:15:10,720 --> 00:15:14,240 Speaker 7: of Canadian oil and increasing amount for decades and decades. 284 00:15:14,280 --> 00:15:16,920 Speaker 7: We're now receiving four million barrels of Canadian oil a day. 285 00:15:16,960 --> 00:15:19,560 Speaker 7: So this is a drastic and sudden potential chef. 286 00:15:20,360 --> 00:15:23,160 Speaker 2: Well, so when we consider the refiners, obviously we have 287 00:15:23,240 --> 00:15:26,120 Speaker 2: to take into account refining margins here and as we 288 00:15:26,160 --> 00:15:29,840 Speaker 2: consider tariffs especially, we have heard this notion propagated by 289 00:15:30,120 --> 00:15:33,440 Speaker 2: Trump and those who think similarly to him, this idea 290 00:15:33,440 --> 00:15:36,960 Speaker 2: that not all tariffs are necessarily a direct cost that 291 00:15:37,040 --> 00:15:40,000 Speaker 2: the consumer will pay. Companies could eat some of this. 292 00:15:40,080 --> 00:15:43,360 Speaker 2: For example, could we see instead of it being passed 293 00:15:43,400 --> 00:15:45,960 Speaker 2: on to the end consumer at the gas pump just 294 00:15:46,000 --> 00:15:48,800 Speaker 2: a shrinking of refining margins, or are they likely to 295 00:15:48,800 --> 00:15:51,840 Speaker 2: want to pass all of that additional cost on well. 296 00:15:51,920 --> 00:15:54,720 Speaker 7: Refinery margins are already at some of the worst levels 297 00:15:54,760 --> 00:15:57,720 Speaker 7: we've seen in multiple years. I mean, refineries probably in 298 00:15:57,720 --> 00:16:00,000 Speaker 7: this region are only clearing a few dollars a barrel, 299 00:16:00,160 --> 00:16:03,400 Speaker 7: So you know, can they absorb some of it, maybe, 300 00:16:03,800 --> 00:16:06,760 Speaker 7: you know, in iota of it, But for now refining margins, 301 00:16:06,800 --> 00:16:08,840 Speaker 7: I mean, this is the time of year that they 302 00:16:08,880 --> 00:16:11,680 Speaker 7: are very much challenged. And keep in mind the irony 303 00:16:11,720 --> 00:16:14,080 Speaker 7: here is the only way that these refineries have been 304 00:16:14,120 --> 00:16:18,000 Speaker 7: profitable is because Western Canadian crude oil generally comes to 305 00:16:18,040 --> 00:16:20,160 Speaker 7: the US at a pretty big discount because of its 306 00:16:20,240 --> 00:16:23,800 Speaker 7: landlocked status. Now, the interesting dynamic here that few people 307 00:16:23,800 --> 00:16:25,880 Speaker 7: are talking about is at the same time these terrafts 308 00:16:25,880 --> 00:16:30,720 Speaker 7: could be implemented, Trump may again greenlight the Keystone XL pipeline, 309 00:16:30,720 --> 00:16:34,440 Speaker 7: which ironically could give Canada exactly what it wants is 310 00:16:34,480 --> 00:16:37,960 Speaker 7: it wants another market besides the US refiners, and so 311 00:16:38,040 --> 00:16:41,520 Speaker 7: if the Keystone XL is suddenly greenlit, that could essentially 312 00:16:41,560 --> 00:16:44,120 Speaker 7: give a huge win to Canada, allowing a lot more 313 00:16:44,160 --> 00:16:47,080 Speaker 7: of that Canadian heavy crude ol to be exupported, and 314 00:16:47,120 --> 00:16:49,760 Speaker 7: it could further inflict more pain on refineries down in 315 00:16:49,800 --> 00:16:53,040 Speaker 7: the US which are already dealing with razor than margins. 316 00:16:53,760 --> 00:16:57,240 Speaker 2: It's really valuable information as we consider what could come 317 00:16:57,400 --> 00:16:59,720 Speaker 2: in this second Trump administration. Before we get there, though, 318 00:16:59,720 --> 00:17:01,800 Speaker 2: I do want to ask you quickly about what's happening 319 00:17:01,800 --> 00:17:04,960 Speaker 2: this week, which is of course the Thanksgiving holiday tomorrow 320 00:17:04,960 --> 00:17:07,000 Speaker 2: and hence a lot of people taking to the roads. 321 00:17:07,040 --> 00:17:10,280 Speaker 2: For those who are on road trips, where in the 322 00:17:10,320 --> 00:17:12,440 Speaker 2: country can they find the cheapest gas. 323 00:17:12,720 --> 00:17:14,240 Speaker 5: Well, you can see that map behind me. 324 00:17:14,440 --> 00:17:17,400 Speaker 7: Generally the South, the Gulf Coast, the areas with low 325 00:17:17,440 --> 00:17:20,719 Speaker 7: gas leade taxes and with proximity to large refiners are 326 00:17:20,720 --> 00:17:24,119 Speaker 7: those that are benefiting the most. Areas like Oklahoma City, 327 00:17:24,160 --> 00:17:27,119 Speaker 7: some stations down to two ten or two twenty a gallon. 328 00:17:27,160 --> 00:17:31,480 Speaker 7: But you know, Texas, Oklahoma, Arkansas, Louisiana, the Deep South 329 00:17:31,560 --> 00:17:34,600 Speaker 7: generally the place to be when it comes to lower prices, 330 00:17:34,640 --> 00:17:37,359 Speaker 7: whereas the West Coast the place not to be. California 331 00:17:37,400 --> 00:17:39,640 Speaker 7: is still struggling with prices that are well over four 332 00:17:39,680 --> 00:17:42,880 Speaker 7: dollars a gallon, although many of California's neighbors are quite 333 00:17:42,880 --> 00:17:44,800 Speaker 7: a bit lower than that, so we still have quite 334 00:17:44,800 --> 00:17:47,800 Speaker 7: the extremes. You have the lowest price state averaging two 335 00:17:47,880 --> 00:17:50,119 Speaker 7: forty a gallon, and you have the highest price state 336 00:17:50,240 --> 00:17:53,159 Speaker 7: averaging two dollars a gallon more in California, where prices 337 00:17:53,160 --> 00:17:56,280 Speaker 7: are four forty four, so a massive spread for those 338 00:17:56,440 --> 00:18:00,400 Speaker 7: especially traveling for Thanksgiving, crossing those state lines is still 339 00:18:00,400 --> 00:18:03,320 Speaker 7: a danger zone for seeing a big fluctuation in prices. 340 00:18:04,000 --> 00:18:07,680 Speaker 2: All right, Patrick Dehan, head of petroleum analysis at gas Buddy, 341 00:18:07,720 --> 00:18:09,840 Speaker 2: thank you so much for joining me, and a very 342 00:18:09,840 --> 00:18:12,480 Speaker 2: happy Thanksgiving to you and yours. 343 00:18:14,880 --> 00:18:18,400 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 344 00:18:18,480 --> 00:18:21,520 Speaker 1: Just Live weekdays at noon Eastern on Emocarplay and then 345 00:18:21,560 --> 00:18:24,520 Speaker 1: Broun Auto with the Bloomberg Business app. Listen on demand 346 00:18:24,600 --> 00:18:32,680 Speaker 1: wherever you get your podcasts, or watch us live on YouTube. 347 00:18:30,840 --> 00:18:33,480 Speaker 2: Here in Washington. Over the course of the last three 348 00:18:33,520 --> 00:18:36,840 Speaker 2: weeks since the election, we've talked at length about the 349 00:18:36,880 --> 00:18:40,720 Speaker 2: speed of this Trump transition. He has wasted no time 350 00:18:40,760 --> 00:18:44,160 Speaker 2: at all in naming names to his second administration, including 351 00:18:44,160 --> 00:18:47,359 Speaker 2: two new ones last night, Kevin Hassett and Jamison Greer, 352 00:18:47,440 --> 00:18:51,040 Speaker 2: to serve key economic roles. But what has moved a 353 00:18:51,080 --> 00:18:56,600 Speaker 2: lot slower is the paperwork part of this transition, the 354 00:18:56,640 --> 00:19:01,120 Speaker 2: signing of pledges around ethics and transparency that help facilitate 355 00:19:01,600 --> 00:19:06,600 Speaker 2: the existing government agencies and the handover to the incoming administration. 356 00:19:07,240 --> 00:19:10,080 Speaker 2: The delay has actually been unprecedented, but at least for 357 00:19:10,119 --> 00:19:12,640 Speaker 2: part of it, the delay is now over, the incoming 358 00:19:12,720 --> 00:19:15,600 Speaker 2: Chief of Staff for Donald Trump, Susie Wiles, announcing yesterday 359 00:19:15,640 --> 00:19:19,840 Speaker 2: that they have signed memorandums of understanding with the Biden administration, 360 00:19:19,960 --> 00:19:22,199 Speaker 2: so that will clear the way for this flow of 361 00:19:22,240 --> 00:19:25,560 Speaker 2: information between those who have been appointed to lead these 362 00:19:25,600 --> 00:19:29,639 Speaker 2: agencies be involved in them, and the existing people inside 363 00:19:29,640 --> 00:19:33,840 Speaker 2: the agencies to be sharing information. It's an important step 364 00:19:34,000 --> 00:19:35,920 Speaker 2: and when we want to reflect on with our signature 365 00:19:36,200 --> 00:19:40,160 Speaker 2: political panel Rick Davis Stonecourt, Capital Partner and Republican Strategists 366 00:19:40,160 --> 00:19:44,320 Speaker 2: alongside Democratic analyst Ghini Schanzeno, who of course is senior 367 00:19:44,359 --> 00:19:46,199 Speaker 2: Democracy Fellow at the Center for the Study of the 368 00:19:46,240 --> 00:19:50,320 Speaker 2: Presidency and Congress. Rick, first to you, it took a 369 00:19:50,359 --> 00:19:54,400 Speaker 2: while for this to happen, much longer than usual. Now 370 00:19:54,440 --> 00:19:57,240 Speaker 2: that it has, is there enough time for everything that 371 00:19:57,280 --> 00:19:59,040 Speaker 2: needs to happen over the course in the next fifty 372 00:19:59,040 --> 00:20:00,440 Speaker 2: four days happen? 373 00:20:01,600 --> 00:20:02,240 Speaker 5: Yeah, I think so. 374 00:20:02,920 --> 00:20:06,199 Speaker 8: You're right, it did delay itself. These agreements should have 375 00:20:06,240 --> 00:20:10,560 Speaker 8: been executed back in early October, so it took a 376 00:20:10,560 --> 00:20:12,720 Speaker 8: couple of months to get this done. But it's not 377 00:20:12,800 --> 00:20:17,560 Speaker 8: like they haven't been pumping out announcements on cabinet members 378 00:20:17,600 --> 00:20:21,879 Speaker 8: and sub cabinet members of their administration. There were affiliate 379 00:20:21,960 --> 00:20:27,200 Speaker 8: organizations like the Heritage Foundation and America First Policy Institute 380 00:20:27,280 --> 00:20:31,440 Speaker 8: that have been working on transition ideas for a year. 381 00:20:32,440 --> 00:20:35,480 Speaker 8: So it's not like they aren't going to be prepared 382 00:20:35,520 --> 00:20:39,160 Speaker 8: to run the government when they come on board. It's 383 00:20:39,480 --> 00:20:42,639 Speaker 8: the activity now that they will be able to get 384 00:20:43,520 --> 00:20:47,720 Speaker 8: non public information from their counterparts in these agencies directly 385 00:20:48,400 --> 00:20:51,120 Speaker 8: and get a feel for what the current issues are 386 00:20:51,280 --> 00:20:54,240 Speaker 8: that are going to meet them when they come into office. 387 00:20:54,320 --> 00:20:57,800 Speaker 8: So the landing teams now will be given access to 388 00:20:58,960 --> 00:21:01,800 Speaker 8: the agencies and the employees of government and that will 389 00:21:01,960 --> 00:21:05,080 Speaker 8: smooth things and plenty of time to make all that work. 390 00:21:06,640 --> 00:21:06,880 Speaker 9: Well. 391 00:21:06,960 --> 00:21:09,719 Speaker 2: What they still aren't doing, though, is accepting funding an 392 00:21:09,720 --> 00:21:13,080 Speaker 2: office space from the General Services Administration. They're relying instead, 393 00:21:13,160 --> 00:21:17,880 Speaker 2: Genie on private donated dollars. Susie Wilds did say yesterday 394 00:21:17,920 --> 00:21:21,479 Speaker 2: that they will be publicly disclosing those donors. But that 395 00:21:22,000 --> 00:21:23,359 Speaker 2: does that give you concern? 396 00:21:23,440 --> 00:21:25,800 Speaker 10: Still, it does? 397 00:21:25,880 --> 00:21:28,119 Speaker 11: You know, I think it's very important that they signed 398 00:21:28,119 --> 00:21:30,879 Speaker 11: the MoU with the White House, and as Rick was 399 00:21:30,920 --> 00:21:33,520 Speaker 11: talking about, those landing teams got to love the D 400 00:21:33,720 --> 00:21:36,160 Speaker 11: Day reference can now embed. 401 00:21:35,920 --> 00:21:38,080 Speaker 10: With those agencies and begin. 402 00:21:37,920 --> 00:21:40,960 Speaker 11: To shape them to reflect Donald Trump and what he 403 00:21:41,080 --> 00:21:43,960 Speaker 11: hopes to achieve there and the facts that they get 404 00:21:44,359 --> 00:21:46,280 Speaker 11: some of the non public information. 405 00:21:46,800 --> 00:21:49,240 Speaker 10: But it is deeply concerning. 406 00:21:48,760 --> 00:21:52,040 Speaker 11: That they have not ceded to these FBI background checks. 407 00:21:52,960 --> 00:21:56,040 Speaker 11: And it's concerning and should be concerning to all Americans 408 00:21:56,440 --> 00:22:01,920 Speaker 11: because this becomes an issue of national security. Transition times 409 00:22:02,000 --> 00:22:05,520 Speaker 11: are important and they are also a moment of great 410 00:22:05,600 --> 00:22:07,440 Speaker 11: vulnerability for the country. 411 00:22:08,240 --> 00:22:09,159 Speaker 10: That is why. 412 00:22:08,960 --> 00:22:12,240 Speaker 11: Congress has stepped in and taken a role in trying 413 00:22:12,280 --> 00:22:14,280 Speaker 11: to smooth the transition process. 414 00:22:14,760 --> 00:22:17,120 Speaker 10: And so they are not, at least at. 415 00:22:17,000 --> 00:22:19,600 Speaker 11: This point, going to allow the FBI to do those 416 00:22:19,640 --> 00:22:23,800 Speaker 11: background checks. And so any sort of idea in terms 417 00:22:23,840 --> 00:22:27,760 Speaker 11: of who's being appointed that the FBI would be able 418 00:22:27,800 --> 00:22:31,439 Speaker 11: to flag somebody who may be vulnerable can create a 419 00:22:31,560 --> 00:22:34,080 Speaker 11: kind of national security risk for all of us. 420 00:22:34,400 --> 00:22:37,120 Speaker 10: And then of course there's the ethics component of this. 421 00:22:37,720 --> 00:22:42,439 Speaker 11: Who is contributing to this transition and how much. And 422 00:22:42,480 --> 00:22:45,280 Speaker 11: it is concerning to many of us that while they 423 00:22:45,359 --> 00:22:48,360 Speaker 11: say they're going to release this, they haven't. 424 00:22:48,119 --> 00:22:50,720 Speaker 10: Yet and what is the hold up on that? 425 00:22:51,080 --> 00:22:56,160 Speaker 11: So I think action by Congress to require this transparency, 426 00:22:56,200 --> 00:22:59,040 Speaker 11: I think going forward would be important, but as of 427 00:22:59,119 --> 00:23:01,800 Speaker 11: now we have to just wait for them if they 428 00:23:01,920 --> 00:23:02,879 Speaker 11: choose to release it. 429 00:23:04,600 --> 00:23:07,439 Speaker 2: Well, I want to talk about another security risk that 430 00:23:07,520 --> 00:23:11,760 Speaker 2: the FBI is actively looking into now. They're investigating bomb 431 00:23:11,760 --> 00:23:16,440 Speaker 2: threats and swatting incidents that have targeted Trump administration nominees. 432 00:23:16,480 --> 00:23:19,600 Speaker 2: We got a statement earlier today from Caroline Levett, the 433 00:23:19,640 --> 00:23:22,920 Speaker 2: spokesperson for the transition team, that said, in part last 434 00:23:22,960 --> 00:23:25,919 Speaker 2: night in this morning, several of Trump's cabinet nominees and 435 00:23:25,920 --> 00:23:29,680 Speaker 2: administration appointees were targeted in violent, Unamerican threats to their 436 00:23:29,680 --> 00:23:32,520 Speaker 2: lives and those who live with them. These attacks ranged 437 00:23:32,800 --> 00:23:37,960 Speaker 2: from bomb threats to swatting rick figures. High profile political 438 00:23:38,000 --> 00:23:42,800 Speaker 2: figures have unfortunately not become or have become a bit 439 00:23:42,960 --> 00:23:47,960 Speaker 2: used to swatting in this American political era. These threats 440 00:23:48,000 --> 00:23:52,000 Speaker 2: are actually troublingly frequent, and I wonder your reaction here 441 00:23:52,400 --> 00:23:54,960 Speaker 2: and how concerned we should be about the security risks 442 00:23:55,000 --> 00:23:57,480 Speaker 2: to those who are about to take very high level 443 00:23:57,560 --> 00:23:58,880 Speaker 2: roles in this government. 444 00:24:00,359 --> 00:24:00,600 Speaker 12: Yeah. 445 00:24:00,680 --> 00:24:04,680 Speaker 8: Look, I mean this is pretty pernicious behavior by people 446 00:24:04,880 --> 00:24:08,160 Speaker 8: who have an ax to grind. We saw a lot 447 00:24:08,160 --> 00:24:11,440 Speaker 8: of this spike at the end of the twenty twenty 448 00:24:11,480 --> 00:24:15,479 Speaker 8: elections when Republicans were saying that the election was stolen 449 00:24:15,640 --> 00:24:19,040 Speaker 8: and this was happening to election workers and people who 450 00:24:19,119 --> 00:24:22,879 Speaker 8: oversee the certification of the elections. It hasn't gone away 451 00:24:22,920 --> 00:24:25,399 Speaker 8: since then. Look, I mean, I think we got to 452 00:24:25,440 --> 00:24:28,960 Speaker 8: create a standard in our country. And I think it 453 00:24:29,040 --> 00:24:33,240 Speaker 8: starts with the White House, not just the incoming White House, 454 00:24:33,240 --> 00:24:36,480 Speaker 8: but the current White House, to talk about how disruptive 455 00:24:36,560 --> 00:24:41,879 Speaker 8: this behavior is. It puts the law enforcement officials in 456 00:24:41,880 --> 00:24:46,560 Speaker 8: a difficult position, It endangers the lives of people who 457 00:24:46,840 --> 00:24:55,280 Speaker 8: are affected by these kinds of swatting episodes, and minimizes 458 00:24:55,400 --> 00:25:00,280 Speaker 8: the use of the police. 459 00:25:00,080 --> 00:25:03,840 Speaker 12: And fire for people who really need it. 460 00:25:04,160 --> 00:25:07,520 Speaker 8: So I think, I think that this is the kind 461 00:25:07,520 --> 00:25:09,600 Speaker 8: of thing we want our elected officials to set a 462 00:25:09,640 --> 00:25:11,800 Speaker 8: standard on. And I think the more of them come 463 00:25:11,840 --> 00:25:15,679 Speaker 8: out and say, look, this is unacceptable behavior. People who 464 00:25:15,760 --> 00:25:19,439 Speaker 8: do it are gonna be punished for it. And and 465 00:25:19,440 --> 00:25:23,080 Speaker 8: and as a society, you know, we we expect more 466 00:25:23,119 --> 00:25:25,840 Speaker 8: of our people than to play these kind of games 467 00:25:25,840 --> 00:25:27,240 Speaker 8: that could put people in harm's way. 468 00:25:28,880 --> 00:25:31,200 Speaker 2: Well, so, Genie, to that point, I know President Biden 469 00:25:31,280 --> 00:25:35,760 Speaker 2: is currently on Thanksgiving vacation in Nantucket, but do we 470 00:25:35,800 --> 00:25:36,960 Speaker 2: need to hear from him on this? 471 00:25:38,520 --> 00:25:39,760 Speaker 10: You know, I don't think so. 472 00:25:39,920 --> 00:25:44,360 Speaker 11: I think that the FBI and law enforcement officials can 473 00:25:44,400 --> 00:25:47,920 Speaker 11: absolutely handle this, and by all account from Levitt's statement, 474 00:25:48,040 --> 00:25:52,439 Speaker 11: that has happened, and the transition team expressed gratitude to 475 00:25:52,720 --> 00:25:56,520 Speaker 11: the FBI and public officials. In my mind, it brings 476 00:25:56,640 --> 00:26:01,679 Speaker 11: up a frustrating reality of the rhetoric coming out of 477 00:26:01,760 --> 00:26:04,040 Speaker 11: Donald Trump and the Trump transition team. 478 00:26:04,560 --> 00:26:07,800 Speaker 10: You know, I understand his longstanding. 479 00:26:07,119 --> 00:26:10,639 Speaker 11: Distrust of the FBI and officials. 480 00:26:11,640 --> 00:26:12,240 Speaker 10: That is what. 481 00:26:12,359 --> 00:26:16,520 Speaker 11: Fuels this type of behavior in part, and of course 482 00:26:16,880 --> 00:26:20,280 Speaker 11: you have to be very careful about that kind of rhetoric. 483 00:26:20,400 --> 00:26:23,280 Speaker 10: And so we were just talking about the transition. 484 00:26:23,440 --> 00:26:26,800 Speaker 11: We're not going to get proper FBI vetting because of 485 00:26:26,840 --> 00:26:31,199 Speaker 11: that distrust. We are seeing these kinds of unacceptable to 486 00:26:31,320 --> 00:26:37,640 Speaker 11: Rick's point, points of aggression and all this, you know, 487 00:26:37,760 --> 00:26:40,600 Speaker 11: threats to people who are trying to act as public 488 00:26:40,640 --> 00:26:45,080 Speaker 11: officials coming into the new administration, and we rely on 489 00:26:45,280 --> 00:26:50,440 Speaker 11: law enforcement and we have to trust them to do 490 00:26:50,520 --> 00:26:53,280 Speaker 11: their jobs. And you know, this lack of trust in 491 00:26:53,320 --> 00:26:57,000 Speaker 11: these institutions has been in part fueled by Trump and 492 00:26:57,080 --> 00:27:00,280 Speaker 11: this team, and so to me, I think I hope 493 00:27:00,440 --> 00:27:04,080 Speaker 11: that as they get into office themselves, they take a 494 00:27:04,160 --> 00:27:07,080 Speaker 11: second look at that and are grateful to our great 495 00:27:07,119 --> 00:27:10,800 Speaker 11: law enforcement officials for keeping us safe and doing their jobs. 496 00:27:12,800 --> 00:27:16,199 Speaker 2: Of course, a lot of the rhetoric surrounding the election, 497 00:27:16,359 --> 00:27:19,880 Speaker 2: just the general political environment is circulated on social media, 498 00:27:19,920 --> 00:27:23,960 Speaker 2: on platforms like X of course controlled by Elon Musk, 499 00:27:24,000 --> 00:27:26,159 Speaker 2: who is getting set to take this role in the 500 00:27:26,160 --> 00:27:29,560 Speaker 2: Department of Government Efficiency or DOGE. I do want to 501 00:27:29,600 --> 00:27:34,080 Speaker 2: mention something that Musk posted on X about today. He 502 00:27:34,200 --> 00:27:39,360 Speaker 2: suggests that we should quote delete the Consumer Financial Protection 503 00:27:39,520 --> 00:27:42,679 Speaker 2: Bureau because he says there are quote too many deplicative 504 00:27:42,720 --> 00:27:46,080 Speaker 2: regulatory agencies. Maybe this is part of trying to cut 505 00:27:46,160 --> 00:27:49,560 Speaker 2: down the price tag in the government in terms of 506 00:27:49,600 --> 00:27:53,560 Speaker 2: the budget. Rick, we know that the Consumer Financial Protection 507 00:27:53,640 --> 00:27:56,760 Speaker 2: Bureau has not been popular in many ways since its 508 00:27:56,800 --> 00:28:01,000 Speaker 2: inceptions after the financial crisis, certainly with Republicans. Should we 509 00:28:01,040 --> 00:28:03,720 Speaker 2: be surprised by this, Rick, and what are the odds 510 00:28:03,760 --> 00:28:06,800 Speaker 2: that a deleting quote unquote could really happen. 511 00:28:08,840 --> 00:28:09,119 Speaker 12: Yeah. 512 00:28:09,160 --> 00:28:11,320 Speaker 8: Look, I mean this was one of the agencies that 513 00:28:11,400 --> 00:28:13,600 Speaker 8: sprung out, as you said, of the two thousand and 514 00:28:13,640 --> 00:28:19,000 Speaker 8: eight financial crisis, in order to protect people from predatory 515 00:28:19,600 --> 00:28:22,439 Speaker 8: lending habits and other things like that. And look, I 516 00:28:22,440 --> 00:28:26,400 Speaker 8: mean you really have to question whether or not these 517 00:28:26,440 --> 00:28:29,440 Speaker 8: agencies are worth the price that taxpayers pay for them. 518 00:28:30,280 --> 00:28:32,760 Speaker 8: And I have no doubt that that's the kind of 519 00:28:32,760 --> 00:28:38,200 Speaker 8: thing that Elon Musk and vi Vek Ramaswami and the 520 00:28:38,400 --> 00:28:41,840 Speaker 8: DOGE team are going to be going after. Some of 521 00:28:41,840 --> 00:28:45,880 Speaker 8: these things are based in statutory laws. The creation of 522 00:28:46,400 --> 00:28:51,760 Speaker 8: agencies are usually done, you know, with laws passed by Congress, 523 00:28:51,800 --> 00:28:53,600 Speaker 8: and which means the only way you get rid of 524 00:28:53,600 --> 00:28:57,160 Speaker 8: them is by passing another law that says we're going 525 00:28:57,200 --> 00:29:00,280 Speaker 8: to take them out. And really, I mean it's a 526 00:29:00,400 --> 00:29:04,240 Speaker 8: very difficult position to put members of Congress in to say, hey, 527 00:29:04,280 --> 00:29:06,200 Speaker 8: we're going to get rid of an agency that protects 528 00:29:06,240 --> 00:29:09,040 Speaker 8: people from predatory lending. I mean, that's a I don't 529 00:29:09,080 --> 00:29:13,000 Speaker 8: know what politics you might be thinking about, Elon Musk, 530 00:29:13,040 --> 00:29:14,800 Speaker 8: but that's a hard sell to a member of Congress 531 00:29:14,920 --> 00:29:17,480 Speaker 8: has got to get re elected next year. In two years. 532 00:29:17,720 --> 00:29:21,320 Speaker 8: So yeah, it's worth the debate. 533 00:29:21,360 --> 00:29:23,800 Speaker 12: It's worth talking about the efficacy of government. 534 00:29:24,280 --> 00:29:26,040 Speaker 5: Its efficiency should be top. 535 00:29:25,880 --> 00:29:30,640 Speaker 8: Of mind for people right now. The meteoric rise in 536 00:29:31,000 --> 00:29:35,640 Speaker 8: government post financial crisis, post COVID needs to be cut 537 00:29:35,680 --> 00:29:40,520 Speaker 8: back and everything should be under the scrutiny of the 538 00:29:40,600 --> 00:29:42,840 Speaker 8: DOGE team to take a look at where we can 539 00:29:42,880 --> 00:29:43,719 Speaker 8: do that effectively. 540 00:29:45,400 --> 00:29:48,480 Speaker 2: All right, Rick Davis and Jeanie Shanzino our signature of 541 00:29:48,480 --> 00:29:51,400 Speaker 2: political panel here with me on Balance of Power. Thank 542 00:29:51,440 --> 00:29:51,960 Speaker 2: you so much. 543 00:29:53,680 --> 00:29:57,240 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 544 00:29:57,280 --> 00:30:00,880 Speaker 1: Just Live weekdays at noon Eastern onmocarp and then Roudoto 545 00:30:01,000 --> 00:30:04,000 Speaker 1: with the Bloomberg Business app. Listen on demand wherever you 546 00:30:04,080 --> 00:30:09,280 Speaker 1: get your podcasts, or watch us live on YouTube. 547 00:30:09,880 --> 00:30:13,840 Speaker 2: We're just over sixteen hours into what is going to 548 00:30:13,880 --> 00:30:16,719 Speaker 2: be at least a sixty day cease fire as agreed 549 00:30:16,760 --> 00:30:21,120 Speaker 2: between Israel and Hesbela in Lebanon. This, of course, a 550 00:30:21,160 --> 00:30:25,800 Speaker 2: deal that was just reached yesterday or approved yesterday by 551 00:30:25,800 --> 00:30:28,200 Speaker 2: the parties and announced at the White House by President 552 00:30:28,280 --> 00:30:31,000 Speaker 2: Joe Biden, as well as spoken about by the Israeli 553 00:30:31,040 --> 00:30:33,000 Speaker 2: Prime Minister Benjamin Netanyahu. 554 00:30:33,680 --> 00:30:37,120 Speaker 3: This is designed to be a permanent cessation of hostilities. 555 00:30:38,720 --> 00:30:41,720 Speaker 3: What is left of Hesbalah and another terrorist organization will 556 00:30:41,760 --> 00:30:44,680 Speaker 3: not be allowed well, I emphasized, will not be allowed 557 00:30:44,680 --> 00:30:49,000 Speaker 3: to threaten security visual again. Over the next sixty days, 558 00:30:49,160 --> 00:30:53,280 Speaker 3: the Lebanese Army and State Security Force will deploy and 559 00:30:53,360 --> 00:30:55,600 Speaker 3: take control of their own territory once again. 560 00:30:56,560 --> 00:30:59,800 Speaker 4: I am determined to do whatever it takes to prevent 561 00:31:00,120 --> 00:31:04,680 Speaker 4: Ron from attaining nuclear weapons. I multiple I have said 562 00:31:04,720 --> 00:31:08,160 Speaker 4: many times that a good agreement is an agreement that 563 00:31:08,280 --> 00:31:10,880 Speaker 4: is enforced, and we will enforce it. 564 00:31:11,800 --> 00:31:15,280 Speaker 2: So as we consider this agreement and how far into 565 00:31:15,280 --> 00:31:17,920 Speaker 2: the future it will be able to extend, we bring 566 00:31:17,960 --> 00:31:20,120 Speaker 2: in Jane Harmon, chair of the Commission on the National 567 00:31:20,160 --> 00:31:24,600 Speaker 2: Defense Strategy, and President am Emerita of the Woodrow Wilson Center, 568 00:31:24,640 --> 00:31:28,200 Speaker 2: former Democratic Congressman from California, as well here on. 569 00:31:28,160 --> 00:31:28,800 Speaker 12: Balance of Power. 570 00:31:28,880 --> 00:31:31,240 Speaker 2: Jane, welcome back to the program. Thanks for being with 571 00:31:31,320 --> 00:31:35,400 Speaker 2: us here on Bloomberg TV and Radio. Obviously, much needs 572 00:31:35,440 --> 00:31:38,320 Speaker 2: to happen in this sixty day span in order for 573 00:31:38,360 --> 00:31:42,080 Speaker 2: this to lead to a permanent ceasefire. What is your 574 00:31:42,120 --> 00:31:44,000 Speaker 2: degree of optimism that it will. 575 00:31:44,280 --> 00:31:47,280 Speaker 9: Well, it's a very good start and several things are 576 00:31:47,520 --> 00:31:50,600 Speaker 9: going to happen in the sixty days. That give me optimism. 577 00:31:50,760 --> 00:31:54,160 Speaker 9: One is civilians will start coming back into southern Lebanon 578 00:31:54,240 --> 00:31:56,880 Speaker 9: and northern Israel, so the stakes are going to be 579 00:31:56,960 --> 00:32:01,320 Speaker 9: higher as this resumes. Two is that Hezbollah has been 580 00:32:01,480 --> 00:32:05,760 Speaker 9: seriously degraded. They're the ones, I think now who pushed 581 00:32:05,800 --> 00:32:09,000 Speaker 9: for this more than than even than the Israelis did 582 00:32:09,480 --> 00:32:12,280 Speaker 9: UH and that's good news. That's the most potent of 583 00:32:12,320 --> 00:32:16,880 Speaker 9: Iran's UH terror proxy groups. Third is Levanon has a 584 00:32:17,000 --> 00:32:22,680 Speaker 9: chance to form again a really serious solid UH democratic government, 585 00:32:22,720 --> 00:32:25,440 Speaker 9: which it had in the olden days. I mean, they 586 00:32:25,560 --> 00:32:27,600 Speaker 9: root was the Paris of the Middle East, or maybe 587 00:32:27,600 --> 00:32:30,720 Speaker 9: Paris was the bay Root of Europe, but it was 588 00:32:30,760 --> 00:32:34,440 Speaker 9: a beautiful city destroyed now by all of this uh 589 00:32:34,840 --> 00:32:38,040 Speaker 9: UH terror and and and collapse of government. 590 00:32:38,520 --> 00:32:42,240 Speaker 12: And finally Iran is hemmed in more. 591 00:32:42,640 --> 00:32:46,520 Speaker 9: They're threatening to advance their nuclear capacity, but their their 592 00:32:46,520 --> 00:32:49,920 Speaker 9: biggest weapon, which was these terror groups are losing ground, 593 00:32:50,080 --> 00:32:55,200 Speaker 9: including UH fortunately in Gaza, which I hope will be 594 00:32:55,240 --> 00:32:58,560 Speaker 9: next on the list for a ceasefire, return of hostages 595 00:32:58,920 --> 00:33:00,800 Speaker 9: and passed towards state solution. 596 00:33:01,560 --> 00:33:03,920 Speaker 2: Well that's exactly what I wanted to ask you about, 597 00:33:04,320 --> 00:33:07,600 Speaker 2: Jane Obviously, there has been a lot of expression of 598 00:33:07,640 --> 00:33:10,320 Speaker 2: that hope that a ceasefire with Hesbela could pave the 599 00:33:10,360 --> 00:33:13,080 Speaker 2: way for a ceasefire with Hamas. Considering it's becoming more 600 00:33:13,080 --> 00:33:15,480 Speaker 2: and more clear that neither Hesbela or Iron really is 601 00:33:15,480 --> 00:33:17,880 Speaker 2: going to be coming to the aid of Hamas at 602 00:33:17,920 --> 00:33:22,000 Speaker 2: this stage of the conflict. So how much closer has 603 00:33:22,080 --> 00:33:24,280 Speaker 2: this agreement drawn us to that potential? 604 00:33:24,320 --> 00:33:24,520 Speaker 7: One? 605 00:33:24,520 --> 00:33:26,280 Speaker 2: Do you think this is still something that could be 606 00:33:26,320 --> 00:33:28,880 Speaker 2: accomplished while President Biden is in office? 607 00:33:29,960 --> 00:33:30,600 Speaker 12: I don't know. 608 00:33:31,520 --> 00:33:36,920 Speaker 9: Certainly, kudos to his team for four years of working 609 00:33:36,960 --> 00:33:39,480 Speaker 9: on all this and one plus year of working on 610 00:33:39,600 --> 00:33:46,719 Speaker 9: Gaza since the illegal invasion by Hamas. One major factor 611 00:33:46,840 --> 00:33:50,800 Speaker 9: is who would govern Gaza. That is unclear. The palestinating 612 00:33:50,840 --> 00:33:53,600 Speaker 9: authority at the moment is not in charge of Gaza 613 00:33:53,680 --> 00:33:58,000 Speaker 9: and is a weak and a corrupt government. I mean, 614 00:33:58,000 --> 00:34:03,480 Speaker 9: there has to be something stronger there. Secondly, just maybe Biden, 615 00:34:03,760 --> 00:34:09,360 Speaker 9: building on an accomplishment of the Trump one administration, can 616 00:34:09,520 --> 00:34:14,640 Speaker 9: revive this deal among Sunny States and Israel, which must 617 00:34:14,640 --> 00:34:17,680 Speaker 9: include a path to two states, and that could help 618 00:34:18,280 --> 00:34:22,840 Speaker 9: push some competent government into Gaza and generate some interest 619 00:34:22,920 --> 00:34:25,759 Speaker 9: in rebuilding Gaza. I mean, that's the other thing. It's 620 00:34:25,840 --> 00:34:29,880 Speaker 9: essentially destroyed. So I think there are a lot of IFFs. 621 00:34:30,280 --> 00:34:32,359 Speaker 9: I think Biden deserves a lot of credit. And as 622 00:34:32,360 --> 00:34:35,560 Speaker 9: I said, it was Trump who started with the Abraham Accords, 623 00:34:35,800 --> 00:34:38,640 Speaker 9: this notion of a not just a truce, but an 624 00:34:38,680 --> 00:34:43,160 Speaker 9: economic arrangement among Sunny governments and Israel. And if that 625 00:34:43,200 --> 00:34:48,440 Speaker 9: can be developed starting now and continuing now and then 626 00:34:48,520 --> 00:34:50,840 Speaker 9: continuing into the Trump administration, that's good news. 627 00:34:51,239 --> 00:34:53,240 Speaker 2: Well, Gane, as you give Biden a lot of credit 628 00:34:53,280 --> 00:34:56,319 Speaker 2: for this. The question is, as he is preparing to 629 00:34:56,400 --> 00:34:58,399 Speaker 2: leave the White House just a few weeks from now, 630 00:34:58,440 --> 00:35:01,759 Speaker 2: how much credit historians will give him. How important was 631 00:35:01,840 --> 00:35:05,640 Speaker 2: reaching this ceasefire agreement in Lebanon to the shaping of 632 00:35:05,680 --> 00:35:06,640 Speaker 2: his ultimate legacy. 633 00:35:07,680 --> 00:35:08,680 Speaker 12: Well, it's important. 634 00:35:09,280 --> 00:35:12,160 Speaker 9: But the unknown unknown, I guess, is where are we 635 00:35:12,200 --> 00:35:16,560 Speaker 9: going with Ukraine? I would say he is was late 636 00:35:16,640 --> 00:35:21,400 Speaker 9: to permit the transfer of very lethal weapons into Ukraine, 637 00:35:21,719 --> 00:35:25,560 Speaker 9: and sadly very late to give the Ukrainians permission to 638 00:35:25,680 --> 00:35:30,080 Speaker 9: use them on Russian soil against military installations and against 639 00:35:30,640 --> 00:35:35,120 Speaker 9: the influx of North Korean troops. Fortunately this has happened. 640 00:35:35,280 --> 00:35:39,400 Speaker 9: He's also pushing another appropriation of twenty plus billion dollars 641 00:35:39,640 --> 00:35:40,520 Speaker 9: before he leaves. 642 00:35:40,880 --> 00:35:43,239 Speaker 12: But what I worry about is not. 643 00:35:43,280 --> 00:35:46,200 Speaker 9: To change in mission, but the way we left Afghanistan 644 00:35:46,360 --> 00:35:50,520 Speaker 9: on Biden's watch and the way we may leave Ukraine 645 00:35:50,880 --> 00:35:54,839 Speaker 9: will seriously erode US leadership in the future. I don't 646 00:35:54,880 --> 00:35:57,080 Speaker 9: blame it all on Joe Biden. It was Russia that 647 00:35:57,239 --> 00:36:03,840 Speaker 9: invaded Ukraine. And certainly Biden has restored and revived enhanced 648 00:36:05,000 --> 00:36:08,600 Speaker 9: NATO and the NATO Alliance, and he leaves that behind too. 649 00:36:08,760 --> 00:36:11,520 Speaker 12: I hope Trump won't degrade that again. 650 00:36:12,120 --> 00:36:16,279 Speaker 9: But you know, legacies take a while to form, and 651 00:36:16,360 --> 00:36:19,239 Speaker 9: it would be great if this leads to a ceasefire 652 00:36:19,320 --> 00:36:23,240 Speaker 9: in Gaza and it leads to a real serious advance 653 00:36:23,360 --> 00:36:26,840 Speaker 9: by Ukraine against Russian forces before he leaves. 654 00:36:27,239 --> 00:36:29,840 Speaker 2: Well, if we could just continue this discussion on Ukraine. 655 00:36:29,880 --> 00:36:33,040 Speaker 2: We learned about an hour ago Jane that Donald Trump 656 00:36:33,080 --> 00:36:37,200 Speaker 2: has nominated retire General Keith Kellogg to be a special 657 00:36:37,400 --> 00:36:40,400 Speaker 2: Envoy for Russia and Ukraine. Kellogg had written for the 658 00:36:40,400 --> 00:36:43,680 Speaker 2: America First Policy Institute that in order for people to 659 00:36:43,719 --> 00:36:45,919 Speaker 2: come to the peace table, if you will, the US 660 00:36:45,960 --> 00:36:48,400 Speaker 2: should make it clear, as well as other NATO allies, 661 00:36:48,400 --> 00:36:52,240 Speaker 2: that they are willing to put off Ukraine joining the alliance, 662 00:36:52,280 --> 00:36:54,480 Speaker 2: and then that may be a key component for Russia 663 00:36:55,040 --> 00:36:57,080 Speaker 2: to come to any kind of agreement. I wonder what 664 00:36:57,120 --> 00:36:59,480 Speaker 2: your thoughts are on a that idea, but be the 665 00:36:59,560 --> 00:37:02,760 Speaker 2: role is ultimately going to play well. 666 00:37:03,680 --> 00:37:07,600 Speaker 9: Note that he's a special envoy, he's not nominated as ambassador. 667 00:37:07,920 --> 00:37:12,160 Speaker 9: That's again to avoid confirmation by Congress. But note two 668 00:37:12,360 --> 00:37:16,120 Speaker 9: that Marco Rubio and Mitch McConnell, who is the outgoing 669 00:37:16,440 --> 00:37:21,360 Speaker 9: Senate leader, are strong proponents of aid to Ukraine. 670 00:37:21,440 --> 00:37:23,919 Speaker 12: So let's see how this plays out. 671 00:37:24,480 --> 00:37:29,360 Speaker 9: I worry about taking joining NATO off the table because 672 00:37:29,520 --> 00:37:33,640 Speaker 9: what is the insurance policy against Russia agreeing to some 673 00:37:34,040 --> 00:37:37,120 Speaker 9: form of settlement and then advancing in the future. Let's 674 00:37:37,200 --> 00:37:41,240 Speaker 9: understand that in nineteen ninety four Russia agreed that Ukraine 675 00:37:41,360 --> 00:37:44,520 Speaker 9: was a sovereign state before Ukraine gave up its nuclear weapons. 676 00:37:44,760 --> 00:37:47,600 Speaker 9: And let's understand that Russia is a charter member of 677 00:37:47,640 --> 00:37:51,319 Speaker 9: the UN, where every member is supposed to respect the 678 00:37:51,360 --> 00:37:55,719 Speaker 9: sovereignty of every other member, And there were other agreements 679 00:37:55,719 --> 00:37:56,200 Speaker 9: along the. 680 00:37:56,120 --> 00:37:57,719 Speaker 12: Way, all of which Russia violated. 681 00:37:58,080 --> 00:38:02,560 Speaker 9: So I'm still worried that with that NATO without NATO 682 00:38:02,680 --> 00:38:06,600 Speaker 9: membership as an insurance policy, that Russia might feel emboldened 683 00:38:07,040 --> 00:38:10,080 Speaker 9: to move against Ukraine soon and to move into Europe. 684 00:38:10,239 --> 00:38:13,160 Speaker 9: And again to remind the Trump administration, we are a 685 00:38:13,160 --> 00:38:16,640 Speaker 9: member of NATO. Article five guarantees would put us in 686 00:38:16,680 --> 00:38:18,040 Speaker 9: a war if that should happen. 687 00:38:18,600 --> 00:38:22,279 Speaker 2: Jane, as you chair the Commission on the National Defense Strategy, 688 00:38:22,600 --> 00:38:24,919 Speaker 2: I want to turn to something that happened last week 689 00:38:24,960 --> 00:38:26,960 Speaker 2: that I don't think got very much attention. But it 690 00:38:27,000 --> 00:38:29,879 Speaker 2: was a speech that the incoming Senate Majority leader John 691 00:38:29,920 --> 00:38:32,840 Speaker 2: Thune gave on the Senate floor in which he quoted 692 00:38:32,840 --> 00:38:37,360 Speaker 2: directly from the commission's final report, specifically the line that 693 00:38:37,360 --> 00:38:40,480 Speaker 2: says the Commission finds the US military lacks both the 694 00:38:40,520 --> 00:38:44,359 Speaker 2: capabilities and the capacity required to be confident and can 695 00:38:44,440 --> 00:38:47,520 Speaker 2: deter and prevail in combat. He went on to say 696 00:38:47,520 --> 00:38:50,399 Speaker 2: that as a pretty damning statement. He was using this 697 00:38:51,160 --> 00:38:53,640 Speaker 2: as a way to reinforce the idea that the National 698 00:38:53,640 --> 00:38:58,040 Speaker 2: Defense Authorization Act, the NDAA does need to pass. That's 699 00:38:58,040 --> 00:39:00,920 Speaker 2: something on there to do list before the year is out, Jane. 700 00:39:00,920 --> 00:39:02,680 Speaker 2: But as he gets ready to take control of the 701 00:39:02,680 --> 00:39:06,360 Speaker 2: Senate majority, Mike Johnson of course going to have continued 702 00:39:06,360 --> 00:39:09,239 Speaker 2: control we assume over the House. In Donald Trump, the presidency. 703 00:39:09,280 --> 00:39:12,480 Speaker 2: How do they need to be considering the US defense position. 704 00:39:13,600 --> 00:39:16,239 Speaker 9: Well, let's start with the fact that this commission, which 705 00:39:16,280 --> 00:39:19,480 Speaker 9: I was fortunate to chair, composed of four Democrats and 706 00:39:19,520 --> 00:39:24,279 Speaker 9: four Republicans, was unanimous, bipartisan, and unanimous. 707 00:39:23,680 --> 00:39:25,680 Speaker 12: In the conclusions we reach, one of which. 708 00:39:25,520 --> 00:39:28,040 Speaker 9: You just cited, and we think that the world is 709 00:39:28,320 --> 00:39:31,080 Speaker 9: more dangerous and more complex than any time since World 710 00:39:31,080 --> 00:39:34,600 Speaker 9: War Two, and we are under prepared. Yes, soon is 711 00:39:34,680 --> 00:39:38,080 Speaker 9: right to add to make sure that the National Defense 712 00:39:38,120 --> 00:39:44,120 Speaker 9: Authorization Act passes before Congress adjourns. It's already late. It's 713 00:39:44,239 --> 00:39:47,239 Speaker 9: always late. It's been late every year since at least 714 00:39:47,280 --> 00:39:51,400 Speaker 9: twenty eleven. But this is crucial to protect the US 715 00:39:51,440 --> 00:39:54,560 Speaker 9: against threats around the world, not just threats from one 716 00:39:54,600 --> 00:39:55,720 Speaker 9: location like China. 717 00:39:56,160 --> 00:39:57,640 Speaker 12: At any rate, I hope that happens. 718 00:39:57,840 --> 00:40:02,000 Speaker 9: What we've also urged, though, is maybe language that says, 719 00:40:02,040 --> 00:40:05,279 Speaker 9: before the next National Defense strategy is prepared, that the 720 00:40:06,960 --> 00:40:12,040 Speaker 9: National Security Strategy, the overlying document, directs all these smaller 721 00:40:12,040 --> 00:40:15,320 Speaker 9: strategies to focus outward, because we think in order for 722 00:40:15,360 --> 00:40:18,240 Speaker 9: the US to deter threats against US in the future 723 00:40:18,360 --> 00:40:22,080 Speaker 9: and prevent wars, which is what everybody would like, we 724 00:40:22,160 --> 00:40:25,120 Speaker 9: need to use all elements of national power, not just 725 00:40:25,239 --> 00:40:28,840 Speaker 9: DoD DD does need reforms, but I would urge that 726 00:40:28,920 --> 00:40:32,200 Speaker 9: if if it's decapitated and the top level of military 727 00:40:32,680 --> 00:40:36,920 Speaker 9: leaders is taken out, it will really undermine God's authority. 728 00:40:36,960 --> 00:40:40,400 Speaker 9: And if it's misused for purposes that are inconsistent with 729 00:40:40,480 --> 00:40:44,000 Speaker 9: the posse commatatis policy, that's another way that d D 730 00:40:44,120 --> 00:40:47,400 Speaker 9: will not perform better than it has been and as 731 00:40:47,480 --> 00:40:48,440 Speaker 9: well as it needs to be. 732 00:40:49,200 --> 00:40:50,960 Speaker 2: So a final note on this Jane, as we get 733 00:40:51,000 --> 00:40:54,360 Speaker 2: ready for just the NDAA authorization but also the funding 734 00:40:54,400 --> 00:40:56,680 Speaker 2: battle Congress still needs to sort out before they have 735 00:40:56,800 --> 00:40:59,440 Speaker 2: more funding battles in the new year and try to 736 00:40:59,480 --> 00:41:02,520 Speaker 2: reign in spending. What is this ultimately going to mean 737 00:41:02,600 --> 00:41:05,520 Speaker 2: for what the defense budget needs to be, especially as 738 00:41:05,560 --> 00:41:07,839 Speaker 2: you have the likes of Elon Musk and Vivek Ramaswami 739 00:41:07,880 --> 00:41:11,000 Speaker 2: saying they want to cut two trillion dollars in federal 740 00:41:11,040 --> 00:41:13,960 Speaker 2: spending and just by basic math, that would have to 741 00:41:13,960 --> 00:41:15,720 Speaker 2: include at least a portion of defense. 742 00:41:16,920 --> 00:41:20,480 Speaker 9: Well, we say in our report that some legacy systems 743 00:41:20,520 --> 00:41:23,680 Speaker 9: should be canceled and that would free up some funds 744 00:41:24,280 --> 00:41:29,320 Speaker 9: to spend on the right assets. We said that building 745 00:41:29,360 --> 00:41:33,480 Speaker 9: hardware only is not a good strategy given what the 746 00:41:33,480 --> 00:41:36,040 Speaker 9: weapons systems are that are veered against us that can 747 00:41:36,080 --> 00:41:37,240 Speaker 9: take that out. 748 00:41:37,520 --> 00:41:42,440 Speaker 12: And more software based, iterative tech based. 749 00:41:42,480 --> 00:41:46,600 Speaker 9: Weapons are the future. Think Ukraine. Ukraine's making those itself 750 00:41:46,920 --> 00:41:50,160 Speaker 9: and using them effectively on the battles like drones. But 751 00:41:50,239 --> 00:41:52,359 Speaker 9: at any rate, that's that's what we said, those things 752 00:41:52,400 --> 00:41:53,320 Speaker 9: are less expensive. 753 00:41:53,400 --> 00:41:54,600 Speaker 12: On the other hand, we. 754 00:41:54,640 --> 00:41:59,080 Speaker 9: Pointed out that the Defense Department is way below targets 755 00:41:59,080 --> 00:42:02,040 Speaker 9: set years ago, and that we do need to increase 756 00:42:02,080 --> 00:42:04,920 Speaker 9: defense spending on the right things. And it's not a 757 00:42:05,000 --> 00:42:07,440 Speaker 9: zero sum game. We shouldn't increase the Pentagon budget and 758 00:42:07,520 --> 00:42:11,560 Speaker 9: decrease the State Department budget because robust soft power is 759 00:42:11,600 --> 00:42:14,480 Speaker 9: a huge part of all elements and national power. 760 00:42:15,360 --> 00:42:16,680 Speaker 12: So let's see what they do. 761 00:42:16,760 --> 00:42:20,480 Speaker 9: But we call for raising revenues to cover any increases 762 00:42:20,520 --> 00:42:23,640 Speaker 9: in defense and reforming entitlements, which is a place they 763 00:42:23,680 --> 00:42:26,719 Speaker 9: will maybe go. And certainly I've been in favor of 764 00:42:26,760 --> 00:42:28,880 Speaker 9: that all my years in Congress and now, and I 765 00:42:29,239 --> 00:42:32,680 Speaker 9: was there, you know, one hundred years ago in nineteen 766 00:42:32,760 --> 00:42:35,960 Speaker 9: ninety seven, when members of Congress on a bipartisan basis 767 00:42:36,040 --> 00:42:38,720 Speaker 9: voted successfully to balance the federal budget. 768 00:42:39,040 --> 00:42:41,800 Speaker 2: All right, Former Congressman Jane Harmon, now Chair of the 769 00:42:41,800 --> 00:42:45,759 Speaker 2: Commission on the National Defense Strategy, joining us here on 770 00:42:45,840 --> 00:42:48,360 Speaker 2: Balance of Power on this Thanksgiving Eve. Gene, thank you 771 00:42:48,440 --> 00:42:52,080 Speaker 2: so much and a very happy Thanksgiving to you and yours. 772 00:42:55,200 --> 00:42:58,399 Speaker 7: Thanks for listening to the Balance of Power podcast. Make 773 00:42:58,440 --> 00:43:01,920 Speaker 7: sure to subscribe if you haven't all right to get Apple, Spotify. 774 00:43:01,480 --> 00:43:03,520 Speaker 5: Or wherever you get your podcasts, and 775 00:43:03,600 --> 00:43:06,200 Speaker 8: You can find us live every weekday from Washington, DC 776 00:43:06,360 --> 00:43:09,080 Speaker 8: at noontime Eastern at Bloomberg dot com.