1 00:00:00,080 --> 00:00:02,920 Speaker 1: Brought you by Bank of America, Mary Lynch. Investing in 2 00:00:03,000 --> 00:00:07,840 Speaker 1: local communities, economies and a sustainable future. That's the power 3 00:00:08,080 --> 00:00:12,360 Speaker 1: of global connections. Mary Lynch, Pierce Fenner and Smith Incorporated 4 00:00:12,760 --> 00:00:26,400 Speaker 1: Member s I p C. Welcome to the Bloomberg Surveillance Podcast. 5 00:00:26,440 --> 00:00:29,920 Speaker 1: I'm Tom Keene with David Gura. Daily we bring you 6 00:00:29,960 --> 00:00:34,800 Speaker 1: insight from the best of economics, finance, investment, and international relations. 7 00:00:35,240 --> 00:00:40,760 Speaker 1: Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, Bloomberg dot com, 8 00:00:40,800 --> 00:00:48,159 Speaker 1: and of course, on the Bloomberg. Ron Hosko is a 9 00:00:48,200 --> 00:00:51,160 Speaker 1: former assistant director of the FBI. He's not the president 10 00:00:51,159 --> 00:00:53,360 Speaker 1: of the Law Enforcement Legal Defense Fund. He joins us. 11 00:00:53,680 --> 00:00:55,800 Speaker 1: Mr Hosko, great to have you with us, and I 12 00:00:55,800 --> 00:00:57,760 Speaker 1: should mention here no one has seen this memo yet, 13 00:00:57,800 --> 00:00:59,800 Speaker 1: As I said, the New York Times had an associated 14 00:00:59,840 --> 00:01:02,760 Speaker 1: MR Comies read parts of it to them. Other news 15 00:01:02,880 --> 00:01:05,679 Speaker 1: organizations have reported the existence of this memo. Help us 16 00:01:05,760 --> 00:01:09,200 Speaker 1: understand what a director of the FBI would be chronicling 17 00:01:09,319 --> 00:01:13,480 Speaker 1: in memos like these, Well, I think it would be 18 00:01:13,880 --> 00:01:17,959 Speaker 1: largely limited to, you know, very significant meetings where the 19 00:01:18,000 --> 00:01:23,319 Speaker 1: director had, you know, immediate or personal involvement. Um there 20 00:01:23,319 --> 00:01:26,160 Speaker 1: are there were many of us, myself included, that kept 21 00:01:26,200 --> 00:01:29,240 Speaker 1: a ledger book where you would go to significant meetings, 22 00:01:29,280 --> 00:01:33,360 Speaker 1: jot notes to yourself, understand what the taskings were that 23 00:01:33,440 --> 00:01:36,119 Speaker 1: might have been directed towards you or that you were 24 00:01:36,160 --> 00:01:40,119 Speaker 1: giving to others. UH. You know, to organize your day, 25 00:01:40,280 --> 00:01:42,520 Speaker 1: to organize follow up meetings, and certainly to have a 26 00:01:42,600 --> 00:01:48,240 Speaker 1: recall of significant events because people there are very, very busy, 27 00:01:48,360 --> 00:01:51,560 Speaker 1: and and when these meetings start to bump into each other, 28 00:01:51,560 --> 00:01:54,400 Speaker 1: which they do every day, it's easy to lose track. 29 00:01:54,560 --> 00:02:00,000 Speaker 1: But in this case, I think that the interaction UH 30 00:02:00,040 --> 00:02:04,360 Speaker 1: as reported was so momentous that I actually think the 31 00:02:04,360 --> 00:02:07,880 Speaker 1: director would have been failing in his his responsibilities had 32 00:02:07,920 --> 00:02:13,000 Speaker 1: he not committed the the interaction to paper. Um it is. 33 00:02:13,040 --> 00:02:16,839 Speaker 1: It is the standard practice of every FBI agent too 34 00:02:17,560 --> 00:02:21,839 Speaker 1: typically take notes in any longer interview and to very 35 00:02:21,919 --> 00:02:26,280 Speaker 1: quickly convert those notes to a formal written report that's 36 00:02:26,480 --> 00:02:29,880 Speaker 1: UH suitable for use in court. That's commonly known as 37 00:02:29,880 --> 00:02:33,840 Speaker 1: a three O two. Agents across this country every day 38 00:02:33,880 --> 00:02:37,000 Speaker 1: are in court testifying on the basis of their three 39 00:02:37,000 --> 00:02:40,480 Speaker 1: O two's and their recollections. So for Jim Comings to 40 00:02:41,040 --> 00:02:44,000 Speaker 1: perhaps produce a three O two because of what he 41 00:02:44,040 --> 00:02:46,720 Speaker 1: thought was the intent or a memo, a separate memo. 42 00:02:47,680 --> 00:02:50,040 Speaker 1: I don't think that is anything out of the ordinary, 43 00:02:50,120 --> 00:02:53,160 Speaker 1: other than the nature of the contact made it out 44 00:02:53,160 --> 00:02:55,600 Speaker 1: of the ordinary. You keep track of all of this, 45 00:02:55,680 --> 00:02:57,800 Speaker 1: it sounds like for for two reasons. The first is 46 00:02:57,840 --> 00:02:59,959 Speaker 1: that for your for your own benefit, to keep track 47 00:03:00,000 --> 00:03:02,000 Speaker 1: of what's going on, what you've said, what's ben said. 48 00:03:02,680 --> 00:03:04,840 Speaker 1: The other is that that this could be used in 49 00:03:05,080 --> 00:03:08,040 Speaker 1: a court of law. How frequently does that happen? And 50 00:03:08,080 --> 00:03:11,440 Speaker 1: how much credence does the judicial system give these three 51 00:03:11,560 --> 00:03:13,960 Speaker 1: or twos, these memos, these notes from from members of 52 00:03:13,960 --> 00:03:18,160 Speaker 1: the FBI a great deal of credence. It is the 53 00:03:18,360 --> 00:03:22,200 Speaker 1: essential UH tool that is produced to have that and 54 00:03:22,360 --> 00:03:26,720 Speaker 1: agent notes, which can tend to be UH more cryptic, 55 00:03:27,280 --> 00:03:29,480 Speaker 1: have more gaps. You know that there intended to be 56 00:03:29,520 --> 00:03:32,120 Speaker 1: just that their notes, so it may be just a 57 00:03:32,160 --> 00:03:35,680 Speaker 1: collection of words. I kept notes very much that same way. 58 00:03:36,240 --> 00:03:40,160 Speaker 1: My notes because of my background, were very difficult for 59 00:03:40,200 --> 00:03:43,600 Speaker 1: others thread sometimes difficult for me to read. Um we 60 00:03:43,600 --> 00:03:45,800 Speaker 1: were expected to be able to turn those over prior 61 00:03:45,840 --> 00:03:50,520 Speaker 1: to a trial and and but typically you were handed 62 00:03:50,560 --> 00:03:53,360 Speaker 1: at FT three oh two and asked on the stand, 63 00:03:53,960 --> 00:03:58,040 Speaker 1: was this year three oh two, recording your recall of 64 00:03:58,240 --> 00:04:02,040 Speaker 1: events around this interview, the activity, and you were going 65 00:04:02,080 --> 00:04:04,800 Speaker 1: to be cross examined on that three oh two. That 66 00:04:05,160 --> 00:04:08,320 Speaker 1: the reality is part of that cross examination would be 67 00:04:09,480 --> 00:04:13,200 Speaker 1: this isn't what the my client said, this is what 68 00:04:13,280 --> 00:04:17,200 Speaker 1: you said he said. And so you know, credibility is 69 00:04:17,240 --> 00:04:21,160 Speaker 1: still at stake. UM. More frequently than not, there's at 70 00:04:21,200 --> 00:04:24,039 Speaker 1: least two agents on an FB three oh two testifying 71 00:04:24,120 --> 00:04:27,920 Speaker 1: to it. They both reviewed the contents, they both initialed 72 00:04:27,960 --> 00:04:32,200 Speaker 1: the document. It's become part of the official FBI record. UM. 73 00:04:32,240 --> 00:04:34,720 Speaker 1: Here we'll we'll have to wait to learn to see 74 00:04:34,760 --> 00:04:38,960 Speaker 1: how Jim Comby treated this memo. I guess that's that's 75 00:04:39,000 --> 00:04:41,919 Speaker 1: the best description we have today. It could be that 76 00:04:42,040 --> 00:04:45,080 Speaker 1: he held it in a safe in his office and 77 00:04:45,240 --> 00:04:50,000 Speaker 1: told senior people involved with the Flint investigation about it 78 00:04:50,200 --> 00:04:52,600 Speaker 1: and you know, to essentially put a placeholder in an 79 00:04:52,600 --> 00:04:56,000 Speaker 1: electronic case file, but made a decision not to share 80 00:04:56,040 --> 00:04:59,440 Speaker 1: it more broadly with like the example of the agents 81 00:04:59,480 --> 00:05:03,919 Speaker 1: working you that because you know you have these concentric circles, 82 00:05:03,920 --> 00:05:07,159 Speaker 1: they get larger and larger. And if somebody mistakenly tells 83 00:05:07,160 --> 00:05:09,040 Speaker 1: their wife and the wife tells a cousin and all 84 00:05:09,040 --> 00:05:12,320 Speaker 1: of a sudden it's in the wild. So I would 85 00:05:12,320 --> 00:05:14,760 Speaker 1: expect if he would keep this very very close hold. 86 00:05:15,480 --> 00:05:18,560 Speaker 1: Important perspective here from from Ron Hosco, former Assistant director 87 00:05:18,600 --> 00:05:21,120 Speaker 1: of the FBI, joining us here on Bloomberg Surveillance right 88 00:05:21,160 --> 00:05:24,559 Speaker 1: to hear this kind of detailed Tom absolutely, good morning everyone, 89 00:05:24,640 --> 00:05:28,520 Speaker 1: David Gern, Tom Keene with Agent Hosco, Ron I of 90 00:05:28,720 --> 00:05:33,360 Speaker 1: out on Twitter during all this uproar, put out people 91 00:05:33,560 --> 00:05:36,600 Speaker 1: that are on the honorable the Federal Bureau of Investigation, 92 00:05:36,839 --> 00:05:40,120 Speaker 1: ending with Samuel S. Hicks two thousand eight, who gave 93 00:05:40,160 --> 00:05:42,240 Speaker 1: his life in the line of duty. You have one 94 00:05:42,240 --> 00:05:46,640 Speaker 1: of the FBI's Shield of Bravery Awards for your action. 95 00:05:47,200 --> 00:05:50,960 Speaker 1: Enlighten their audience on how the agents feel at this 96 00:05:51,240 --> 00:05:56,400 Speaker 1: moment and what kind of FBI director with the agents want. 97 00:05:56,480 --> 00:06:00,440 Speaker 1: This is, if Mr hoscoes three decades of experience with 98 00:06:00,560 --> 00:06:04,760 Speaker 1: the FBI, what do they want. Well, first they want 99 00:06:05,440 --> 00:06:10,080 Speaker 1: they want somebody who I think has a very robust 100 00:06:10,279 --> 00:06:15,160 Speaker 1: knowledge of both d O J and the FBI. Uh. 101 00:06:15,200 --> 00:06:18,280 Speaker 1: This is you know, the the to get a running 102 00:06:18,279 --> 00:06:21,960 Speaker 1: start for this job. To have that sort of prior experience, 103 00:06:22,760 --> 00:06:27,960 Speaker 1: to have been in federal court practice prosecutions have have 104 00:06:28,160 --> 00:06:30,320 Speaker 1: walked the halls of d O j or Bean a 105 00:06:30,440 --> 00:06:34,960 Speaker 1: U S attorney UH for years. Um, you know that 106 00:06:35,120 --> 00:06:39,479 Speaker 1: is a really a long term public servant, not a politician, 107 00:06:39,720 --> 00:06:41,599 Speaker 1: you know. And I've said this, and I don't mean 108 00:06:41,600 --> 00:06:43,680 Speaker 1: this in any way to disparage some of the names 109 00:06:43,680 --> 00:06:45,920 Speaker 1: we've heard. But if you have a D or an 110 00:06:46,040 --> 00:06:48,440 Speaker 1: R behind your name, I think you know to to 111 00:06:48,600 --> 00:06:50,200 Speaker 1: me and I think to a lot of the agents there, 112 00:06:50,600 --> 00:06:53,320 Speaker 1: you'd want to cross that person off the list. They 113 00:06:53,320 --> 00:06:56,520 Speaker 1: want somebody who will gain a very strong contents like 114 00:06:56,640 --> 00:06:59,600 Speaker 1: Jim Comey did when he came in. That is it 115 00:06:59,680 --> 00:07:02,560 Speaker 1: bray by the public as the person to sort it 116 00:07:02,600 --> 00:07:07,200 Speaker 1: out to lead this agency. Um, you know, we're talking 117 00:07:07,240 --> 00:07:09,800 Speaker 1: about an agency of over thirty thousand people with a 118 00:07:10,120 --> 00:07:13,679 Speaker 1: with a daunting task. If you just look no further 119 00:07:13,760 --> 00:07:17,920 Speaker 1: than the cyber attacks, isis terror and all the white 120 00:07:17,920 --> 00:07:21,760 Speaker 1: collar crime and counter intelligence work. You need somebody smart, 121 00:07:21,920 --> 00:07:26,400 Speaker 1: motivated who wants the job in this environment. That alone, 122 00:07:26,400 --> 00:07:31,360 Speaker 1: maybe an illpale client. The phrases the FBI always gets 123 00:07:31,400 --> 00:07:33,400 Speaker 1: its man, And I'm old enough folks to remember, they 124 00:07:33,440 --> 00:07:37,680 Speaker 1: absolutely collapse after j Edgar Over. What does the American 125 00:07:37,760 --> 00:07:41,400 Speaker 1: public most get wrong about the line agents of the 126 00:07:41,440 --> 00:07:46,400 Speaker 1: Federal Bureau of Investigation. Well, I think there's there is 127 00:07:46,440 --> 00:07:50,320 Speaker 1: still even though Director Combe and others have have taken 128 00:07:50,360 --> 00:07:53,280 Speaker 1: these steps to put things into public domain, whether it's 129 00:07:53,280 --> 00:07:56,720 Speaker 1: on the FBI's website where perhaps you looked. You know, 130 00:07:56,800 --> 00:07:59,440 Speaker 1: there's a lot of data about the FBI, it's history. 131 00:08:00,080 --> 00:08:01,880 Speaker 1: You can find a lot online now. But I think 132 00:08:01,880 --> 00:08:04,800 Speaker 1: there is still this mystery about who these men and 133 00:08:04,840 --> 00:08:08,160 Speaker 1: women are that are wearing those badges. And you know 134 00:08:08,240 --> 00:08:12,400 Speaker 1: that the reality is they're the soccer mom or dad 135 00:08:12,640 --> 00:08:16,120 Speaker 1: at night. Uh, you know, they're coaching a team, you know, 136 00:08:16,560 --> 00:08:19,520 Speaker 1: out with the Boy Scouts. Uh, they are. There are 137 00:08:19,600 --> 00:08:22,040 Speaker 1: neighbors and our friends, and they're in our churches and 138 00:08:22,120 --> 00:08:25,720 Speaker 1: our houses of worship. Um. You know, if you cut them, 139 00:08:25,720 --> 00:08:28,560 Speaker 1: they will bleed to But you know, they do have 140 00:08:28,840 --> 00:08:31,680 Speaker 1: a a level of training that I think many of us, 141 00:08:31,720 --> 00:08:35,959 Speaker 1: myself included, think make them a cut above they They 142 00:08:36,000 --> 00:08:40,960 Speaker 1: do believe in their motto fidelity, bravery, integrity. Um, they 143 00:08:41,000 --> 00:08:43,440 Speaker 1: hold that very dear. And they're not part of a 144 00:08:43,480 --> 00:08:47,120 Speaker 1: thin blue line in the pejorative sense that protects its 145 00:08:47,120 --> 00:08:51,880 Speaker 1: own despite corruption. The FBI doesn't I think it's very 146 00:08:51,880 --> 00:08:55,800 Speaker 1: effective job at policing their own and and they believe 147 00:08:55,880 --> 00:08:58,960 Speaker 1: in the rule of law and our institutions of government. 148 00:08:59,000 --> 00:09:03,160 Speaker 1: They swear allegiance to our constitution. Ron, we're out of time. 149 00:09:03,360 --> 00:09:05,360 Speaker 1: We need to get you back. Thank you so much 150 00:09:05,400 --> 00:09:08,079 Speaker 1: for being with us, Mr Hosco, with L L. D 151 00:09:08,160 --> 00:09:10,640 Speaker 1: F and of course a former agent of the Federal 152 00:09:10,640 --> 00:09:27,840 Speaker 1: Bureau of Investigation, we have now force a gentle two 153 00:09:27,840 --> 00:09:32,080 Speaker 1: blocks with Henry Kaufman. His new book is must read 154 00:09:32,280 --> 00:09:35,680 Speaker 1: for global law street. It is beautifully brief, but people 155 00:09:35,840 --> 00:09:38,520 Speaker 1: by people. I'm having so much fun putting out a 156 00:09:39,400 --> 00:09:42,559 Speaker 1: Twitter feed. Dr Kaufman on your book of photos from 157 00:09:42,559 --> 00:09:45,920 Speaker 1: another time in place, including you and possibly young at 158 00:09:45,920 --> 00:09:50,320 Speaker 1: Salomon Brothers is Well, when you were at Salomon Brothers, 159 00:09:50,360 --> 00:09:53,760 Speaker 1: how did you judge risk versus how we judged risk 160 00:09:53,840 --> 00:09:57,400 Speaker 1: in June of two thousand and seven, Well, when I 161 00:09:57,520 --> 00:10:02,040 Speaker 1: was at Solomon Brothers, we judge risking from an analytical viewpoint. 162 00:10:02,520 --> 00:10:06,120 Speaker 1: One of our great publications was the Supply and Demand 163 00:10:06,160 --> 00:10:09,959 Speaker 1: for Credit in the Financial Markets, and where we lined 164 00:10:10,000 --> 00:10:13,080 Speaker 1: up two key demanders of credit and lined up all 165 00:10:13,120 --> 00:10:16,120 Speaker 1: the suppliers at including the role of the Federal Reserve 166 00:10:16,840 --> 00:10:20,120 Speaker 1: and that gave you not only a good anatomy of 167 00:10:20,120 --> 00:10:23,120 Speaker 1: what was going on in the financial markets, but it 168 00:10:23,280 --> 00:10:26,400 Speaker 1: also gave you some hints as to what the direction 169 00:10:26,480 --> 00:10:29,320 Speaker 1: of interest rates would be, and where the pressures would 170 00:10:29,360 --> 00:10:32,880 Speaker 1: be on, what kind of markets would would they initially 171 00:10:32,920 --> 00:10:35,600 Speaker 1: come on the mortgage side, where what would be the 172 00:10:35,679 --> 00:10:39,240 Speaker 1: risks in the government area, and so on. It was 173 00:10:39,280 --> 00:10:42,920 Speaker 1: a different environment and in a different setting, and less 174 00:10:43,040 --> 00:10:46,880 Speaker 1: leveraged as well. How do you respond to ten years 175 00:10:46,920 --> 00:10:50,160 Speaker 1: of work to deleverage the game? Have we done that? 176 00:10:50,240 --> 00:10:55,120 Speaker 1: If we succeeded? Have we now? We have not fully 177 00:10:55,160 --> 00:10:59,880 Speaker 1: succeeded in into leveraging. If you go back a couple 178 00:11:00,000 --> 00:11:04,080 Speaker 1: of decades, not just ten years, uh, you find that 179 00:11:04,320 --> 00:11:10,240 Speaker 1: the position of business corporations is far weaker today in 180 00:11:10,320 --> 00:11:14,360 Speaker 1: terms of credit structure than business corporations were ten twenty 181 00:11:14,440 --> 00:11:17,640 Speaker 1: years ago. You also find, as compared pretend to twenty 182 00:11:17,720 --> 00:11:21,280 Speaker 1: years ago, that the household sector, while it has improved 183 00:11:21,320 --> 00:11:25,280 Speaker 1: its financial situation, is still quite a bit leverage, at 184 00:11:25,360 --> 00:11:28,720 Speaker 1: least from a cyclical perspective. So, in a sense, what 185 00:11:28,760 --> 00:11:32,200 Speaker 1: I'm saying to you, Tom, is that the firing power 186 00:11:32,320 --> 00:11:36,720 Speaker 1: of the private sector to continue to create credit in 187 00:11:36,760 --> 00:11:39,560 Speaker 1: the years ahead is not the same as it was 188 00:11:40,080 --> 00:11:42,960 Speaker 1: in the periods gone by. You dedicate this book to 189 00:11:43,000 --> 00:11:44,960 Speaker 1: a Sydney home or the bard of the bond market. 190 00:11:45,000 --> 00:11:47,840 Speaker 1: The former head of bond research at Salmon Brothers hired you. 191 00:11:48,040 --> 00:11:51,720 Speaker 1: What did you learn from him? Well, I'll give you 192 00:11:51,800 --> 00:11:55,400 Speaker 1: an addecdote. When I came in to the firm about 193 00:11:55,679 --> 00:11:59,200 Speaker 1: three weeks in Sydney, Homer came into my office and 194 00:11:59,679 --> 00:12:01,920 Speaker 1: sit He said, I have here the galleys of the 195 00:12:01,960 --> 00:12:05,600 Speaker 1: book that I have written, called A History of Interest Rates. 196 00:12:06,120 --> 00:12:07,440 Speaker 1: And I said, what do you want me to do 197 00:12:07,520 --> 00:12:09,800 Speaker 1: with these galleys? And he said, I want you to 198 00:12:09,840 --> 00:12:13,560 Speaker 1: give one to your secretary and one for you. And 199 00:12:13,600 --> 00:12:17,120 Speaker 1: I'd like you to read out loud the entire text 200 00:12:17,360 --> 00:12:20,600 Speaker 1: and everything to your secretary. And I said, why do 201 00:12:20,640 --> 00:12:22,960 Speaker 1: you want me to do that? He said, well, you 202 00:12:23,040 --> 00:12:26,040 Speaker 1: will soon find out how many errors I've made and 203 00:12:26,600 --> 00:12:30,079 Speaker 1: what the sentence structure feels like. So I read out 204 00:12:30,160 --> 00:12:33,599 Speaker 1: loud to my secretary in the early days, five d 205 00:12:33,800 --> 00:12:37,320 Speaker 1: seventy five pages of a History of Interest Rates, and 206 00:12:37,480 --> 00:12:42,200 Speaker 1: about it must be a hundred tables of statistical information 207 00:12:42,400 --> 00:12:46,480 Speaker 1: and interest rates from two thousand PC at that time 208 00:12:46,559 --> 00:12:52,079 Speaker 1: the present time that in avasing, sir, we'll come back. 209 00:12:52,080 --> 00:12:54,360 Speaker 1: But let me ask you about just the relationship between 210 00:12:54,640 --> 00:12:57,000 Speaker 1: a US president and a FED chair You can you 211 00:12:57,000 --> 00:12:59,000 Speaker 1: can talk about these two in particular, but just generally, 212 00:12:59,040 --> 00:13:02,520 Speaker 1: what's that relationships spposed to be? Liked it to your view, Well, 213 00:13:03,760 --> 00:13:07,000 Speaker 1: that at one time was a little bit more confrontational 214 00:13:07,080 --> 00:13:10,280 Speaker 1: in the public sense than it is today. It's a 215 00:13:10,280 --> 00:13:13,120 Speaker 1: little bit more behind the scene, although I'm not sure 216 00:13:13,200 --> 00:13:17,319 Speaker 1: yet what it will be with President Trump. Just to 217 00:13:17,320 --> 00:13:20,880 Speaker 1: to illustrate, in the early days of the nineteen fifties, 218 00:13:20,920 --> 00:13:25,080 Speaker 1: when Bill Martin was chairman UH and the US government 219 00:13:25,480 --> 00:13:30,720 Speaker 1: moved to financing in the public sector uninhibited, well, the 220 00:13:30,760 --> 00:13:33,640 Speaker 1: President didn't like that at the time because if the 221 00:13:33,679 --> 00:13:36,840 Speaker 1: president was still used to the fixed financing that was 222 00:13:36,920 --> 00:13:40,840 Speaker 1: going on during World War Two. So at one time 223 00:13:41,480 --> 00:13:45,880 Speaker 1: Bill Martin ran into the President Truman in the in 224 00:13:45,920 --> 00:13:48,720 Speaker 1: the in the Waldorf, and the President went up to 225 00:13:48,760 --> 00:13:54,120 Speaker 1: Bill Martin and said, you are a trader. Okay, Well 226 00:13:54,160 --> 00:13:57,080 Speaker 1: we'll come back, Henry Copeman, I'm not in President Sydney 227 00:13:57,080 --> 00:14:00,040 Speaker 1: Omer made him read out loud his classic book on 228 00:14:00,120 --> 00:14:02,880 Speaker 1: bonds because as we all know, here Taylor Riggs of 229 00:14:02,920 --> 00:14:06,600 Speaker 1: Team surveillance is reading out loud. The entire cf A 230 00:14:06,720 --> 00:14:11,000 Speaker 1: curricula coming up as we speak. We continue with Dr Kaufman. 231 00:14:11,120 --> 00:14:14,200 Speaker 1: This is Bloomberg. Can't say enough about this new effort. 232 00:14:14,240 --> 00:14:19,000 Speaker 1: It is airplane ready, It is summer weekend ready. Henry Kaufman. 233 00:14:19,480 --> 00:14:23,560 Speaker 1: Tectonic shifts in financial markets from age twenty two to 234 00:14:23,720 --> 00:14:27,000 Speaker 1: ninety two. It is about people will look back and 235 00:14:27,000 --> 00:14:30,720 Speaker 1: I look forward in our financial history. Dr Kaufman, how 236 00:14:30,760 --> 00:14:34,280 Speaker 1: are we doing? I mean, Jamie Diamond, Jamie Diamond, Jamie Diamond, 237 00:14:34,480 --> 00:14:40,240 Speaker 1: Jamie Diamond. How's American banking doing away from Fortress Diamond. Well, 238 00:14:40,560 --> 00:14:46,080 Speaker 1: American banking has recovered, as you know, since two thousand nine. 239 00:14:46,320 --> 00:14:52,320 Speaker 1: The structure of the capital position has improved somewhat, but 240 00:14:52,520 --> 00:14:55,560 Speaker 1: at the same time that the limb is the structure 241 00:14:55,720 --> 00:15:00,320 Speaker 1: of the activities have not changed much, and we still 242 00:15:00,360 --> 00:15:03,560 Speaker 1: have institutions that are to pick to fail, and the 243 00:15:03,640 --> 00:15:07,480 Speaker 1: government doesn't fully know how to handle that situation. This 244 00:15:07,560 --> 00:15:11,360 Speaker 1: is going to be an ongoing problem, and so therefore 245 00:15:12,040 --> 00:15:15,520 Speaker 1: the Federal Reserve, the government and an ongoing basis, will 246 00:15:15,560 --> 00:15:18,760 Speaker 1: be involved much more so in the management of our 247 00:15:18,800 --> 00:15:21,880 Speaker 1: financial system than in earlier periods. How do you Look, 248 00:15:22,200 --> 00:15:26,120 Speaker 1: what's the Kaufman prison of prison rather of European banking. 249 00:15:26,200 --> 00:15:29,040 Speaker 1: I mean there was Ackerman and Janet, Deutsche Bank and 250 00:15:29,080 --> 00:15:31,920 Speaker 1: the others. We remember the BNP Paribas and blow up 251 00:15:32,400 --> 00:15:35,960 Speaker 1: a little bit after August of over seven. Can Europe 252 00:15:36,080 --> 00:15:39,160 Speaker 1: compete with our banks or do we have the commanding 253 00:15:39,240 --> 00:15:43,640 Speaker 1: heights now of the financial apparatus? Well, for the time being, 254 00:15:43,680 --> 00:15:49,520 Speaker 1: Europe cannot compete with our banks. They still are undercapitalized, 255 00:15:49,960 --> 00:15:54,880 Speaker 1: they still haven't demonstrated a management strength sufficient to oversee 256 00:15:55,000 --> 00:16:01,920 Speaker 1: its various activities. And the European banks too large extent convalescing. Uh. 257 00:16:02,480 --> 00:16:05,360 Speaker 1: I think our banks are out of that stage at 258 00:16:05,360 --> 00:16:10,040 Speaker 1: the present time. That makes a big difference. But the 259 00:16:10,120 --> 00:16:14,640 Speaker 1: overall structure of banking is still emerging and is still 260 00:16:14,720 --> 00:16:18,680 Speaker 1: under the tight surveillance of central banks and governments, and 261 00:16:18,720 --> 00:16:21,480 Speaker 1: for the time being that's going to continue. There was 262 00:16:21,480 --> 00:16:24,400 Speaker 1: a moment in an interview that Bloomberg did with President 263 00:16:24,400 --> 00:16:26,320 Speaker 1: Trump about a week and a half ago. Two of 264 00:16:26,320 --> 00:16:28,000 Speaker 1: our colleagues sat down with him and asked him if 265 00:16:28,000 --> 00:16:31,040 Speaker 1: he'd think about revisiting breaking up the big banks, and 266 00:16:31,080 --> 00:16:32,400 Speaker 1: he said it's something that he in fact, he is 267 00:16:32,440 --> 00:16:36,320 Speaker 1: thinking about. He's talked about a twenty first century glass Stiegel. 268 00:16:36,440 --> 00:16:38,520 Speaker 1: Is that something that you would would welcome and return 269 00:16:38,600 --> 00:16:42,160 Speaker 1: to that standard. I certainly would, and I've argued for 270 00:16:42,600 --> 00:16:45,920 Speaker 1: the retention of glass Stiegel thirty years ago, and it 271 00:16:45,960 --> 00:16:49,960 Speaker 1: didn't occur at the time. Uh. It's interesting to note 272 00:16:50,000 --> 00:16:53,040 Speaker 1: that when glass Steagle was removed, it was agreed upon 273 00:16:53,400 --> 00:16:57,640 Speaker 1: by both Democratic parties and the Republican parties, and the 274 00:16:57,720 --> 00:17:01,240 Speaker 1: key members of it that drove this. To say, the 275 00:17:01,280 --> 00:17:04,960 Speaker 1: head of the Federal Reserve, Alan Greenspan, was a Republican, 276 00:17:05,359 --> 00:17:07,800 Speaker 1: and of course Mrs Rubin was Secretary of the Treasury. 277 00:17:08,080 --> 00:17:10,119 Speaker 1: It was it was a Democrat, So it was a 278 00:17:10,200 --> 00:17:14,840 Speaker 1: joint decision without fully understanding what the consequences would be 279 00:17:15,280 --> 00:17:20,080 Speaker 1: of this tremendous concentration in financial assets which would occur 280 00:17:20,520 --> 00:17:23,159 Speaker 1: as a result of the breakup of the glass steagel, 281 00:17:23,640 --> 00:17:27,159 Speaker 1: and it empowered the Central Bank to a higher level 282 00:17:27,960 --> 00:17:31,720 Speaker 1: than it had been prior to that event. We've spent 283 00:17:31,840 --> 00:17:36,520 Speaker 1: years now following rule writing in Washington, thousands of pages 284 00:17:36,560 --> 00:17:39,360 Speaker 1: of legislation, more thousands of pages that rules, A lot 285 00:17:39,359 --> 00:17:41,800 Speaker 1: of ink spilled. We have a president talking about scaling 286 00:17:41,800 --> 00:17:44,440 Speaker 1: back those regulations. When you look at the regulatory landscape 287 00:17:44,480 --> 00:17:47,040 Speaker 1: in Washington, d C. All of this stuff now is 288 00:17:47,080 --> 00:17:50,879 Speaker 1: so ingrained into these bureaus and agencies. How difficult is 289 00:17:50,920 --> 00:17:53,240 Speaker 1: it to to move beyond the kind of regulation we 290 00:17:53,280 --> 00:17:56,600 Speaker 1: have in place now. I think in order to move 291 00:17:56,640 --> 00:18:02,639 Speaker 1: beyond this overlay of regulations of regulation is to is 292 00:18:02,680 --> 00:18:09,399 Speaker 1: to simplify the underlying institutions. UH. If we had financial 293 00:18:09,440 --> 00:18:15,679 Speaker 1: institutions not focused on insurance, others on managing money, others 294 00:18:15,720 --> 00:18:21,000 Speaker 1: on consumer lending, the overall regulatory process would be that's 295 00:18:21,040 --> 00:18:24,080 Speaker 1: an important statement, Dr Kaufman. We would get a better 296 00:18:24,119 --> 00:18:26,640 Speaker 1: regulatory process. I think we can all agree on that. 297 00:18:27,119 --> 00:18:31,560 Speaker 1: But within efficiency, do we get better profit, better return 298 00:18:31,640 --> 00:18:36,040 Speaker 1: on equity if we can't take advantage of synergies. I 299 00:18:36,119 --> 00:18:39,400 Speaker 1: hate that word, but that's how you guys invented this, right, 300 00:18:39,720 --> 00:18:48,879 Speaker 1: But it's your fault. I really believe that when you 301 00:18:49,080 --> 00:18:54,960 Speaker 1: have these these overlays of conglomerates that difficult to manage 302 00:18:55,520 --> 00:18:59,680 Speaker 1: because each platform has their own character of risk. That's 303 00:18:59,680 --> 00:19:03,679 Speaker 1: from assurance is radically different then Mr goodfriend running a 304 00:19:03,680 --> 00:19:06,600 Speaker 1: bond desk. That that that is correct. But nevertheless, you're 305 00:19:06,640 --> 00:19:10,480 Speaker 1: in this conglomerate organization and the CEO is supposed to 306 00:19:10,560 --> 00:19:14,280 Speaker 1: be able to make judgments over this diversity of risk taking, 307 00:19:14,520 --> 00:19:17,399 Speaker 1: which becomes very complex. How would Mr Diamond respond to 308 00:19:17,440 --> 00:19:20,480 Speaker 1: that he's living it today. Well, he would say, we've 309 00:19:20,520 --> 00:19:25,919 Speaker 1: done it successfully, but he has been a survivor. He 310 00:19:25,960 --> 00:19:28,440 Speaker 1: would not have been a survivor if that had been 311 00:19:28,440 --> 00:19:30,560 Speaker 1: more failure. Is he a different banker because he had 312 00:19:30,560 --> 00:19:32,879 Speaker 1: a tour duty in the Midwest. He doesn't have the 313 00:19:33,000 --> 00:19:35,640 Speaker 1: arrogance of the East Coast because he was sent out there. 314 00:19:35,680 --> 00:19:38,879 Speaker 1: And you know, excuse me, Chicago, You're gonna kill me 315 00:19:38,920 --> 00:19:45,439 Speaker 1: for this, but banking Siberia the land, John Tucker, my 316 00:19:45,520 --> 00:19:50,919 Speaker 1: days are numbered right. Well, then, good morning Chicago. It 317 00:19:50,960 --> 00:19:56,119 Speaker 1: is Jamie Diamond different. Well you mentioned Chicago named me 318 00:19:56,160 --> 00:19:59,080 Speaker 1: an independent bank that's left in Chicago. Yeah, I mean 319 00:19:59,280 --> 00:20:01,960 Speaker 1: he's Paint Northern Trust, of course, but that's not a 320 00:20:02,000 --> 00:20:07,320 Speaker 1: fully a commercial banking operation. What was what was Continental Illinois? Like? 321 00:20:07,359 --> 00:20:09,800 Speaker 1: What was the morning like? Folks? For those of you younger, 322 00:20:09,880 --> 00:20:13,320 Speaker 1: like John Tucker, Continent Illinois was a different crisis. We 323 00:20:13,480 --> 00:20:17,320 Speaker 1: cleared it quickly. Why can't we clear Continental Illinois? But 324 00:20:17,440 --> 00:20:20,760 Speaker 1: we couldn't clear all this other modern stuff? Well, because 325 00:20:20,920 --> 00:20:26,720 Speaker 1: after Continental Illinois, the market became much more complex. Uh. 326 00:20:26,760 --> 00:20:31,040 Speaker 1: We invented more financial instruments, more tradable obligations of all sorts, 327 00:20:31,640 --> 00:20:35,960 Speaker 1: and as a consequence, the activities were so diverse that 328 00:20:36,040 --> 00:20:42,000 Speaker 1: the management requirement was so high, and we had somebody 329 00:20:42,040 --> 00:20:46,480 Speaker 1: from City corpsus A. As long as the music plays, 330 00:20:46,840 --> 00:20:48,640 Speaker 1: we're going to have to be on the dance floor. 331 00:20:49,119 --> 00:20:52,679 Speaker 1: And that was Chuck Prince which changed the management style 332 00:20:52,840 --> 00:20:57,080 Speaker 1: and said we are not going to balance our entrepreneurial 333 00:20:57,200 --> 00:21:01,040 Speaker 1: drive with if I do share responsibility, which really meant 334 00:21:01,320 --> 00:21:05,560 Speaker 1: the entrepreneurial drive was overriding. You've mentioned central banks a 335 00:21:05,560 --> 00:21:07,479 Speaker 1: couple of times here. Before we let you go, let 336 00:21:07,480 --> 00:21:09,480 Speaker 1: me ask you about the direction you think this FED 337 00:21:09,600 --> 00:21:11,320 Speaker 1: is going in. We hear so much about a new 338 00:21:11,800 --> 00:21:15,880 Speaker 1: rules based approach. Certainly members of the advisory team giving 339 00:21:15,880 --> 00:21:18,879 Speaker 1: the president guidance have hoped for that. There is an 340 00:21:18,880 --> 00:21:21,240 Speaker 1: opportunity here to change a lot of personnel within the FED, 341 00:21:21,720 --> 00:21:24,399 Speaker 1: perhaps scale back some of its regulatory responsibility. What does 342 00:21:24,440 --> 00:21:26,800 Speaker 1: the FED look like to you a year out, four 343 00:21:26,840 --> 00:21:29,680 Speaker 1: years out by the end of the president's term. Well, 344 00:21:30,480 --> 00:21:33,840 Speaker 1: President Trump has the opportunity, as you know, to change 345 00:21:33,880 --> 00:21:39,040 Speaker 1: the composition of the Federal Reserve dramatically without any legal 346 00:21:39,119 --> 00:21:41,800 Speaker 1: changes by the new people that are coming on the 347 00:21:41,840 --> 00:21:45,359 Speaker 1: board and the chairperson that's coming on the board. That 348 00:21:45,600 --> 00:21:49,000 Speaker 1: is the big debate. Now. I don't know what the 349 00:21:49,040 --> 00:21:54,000 Speaker 1: president Will Will will decide, but recognizing that he certainly 350 00:21:54,080 --> 00:21:58,800 Speaker 1: favors the continuation of somewhat low interest rates because he 351 00:21:58,880 --> 00:22:03,119 Speaker 1: was a borrower himself. Uh and and so so, the 352 00:22:03,200 --> 00:22:07,520 Speaker 1: key question is will he go with another economist as 353 00:22:07,520 --> 00:22:12,000 Speaker 1: a chair because the economists have dominated the chairmanship of 354 00:22:12,080 --> 00:22:15,680 Speaker 1: the Fed with the exception of of of two governors, 355 00:22:16,240 --> 00:22:20,280 Speaker 1: so so to speak, will he go to a somebody 356 00:22:20,280 --> 00:22:23,880 Speaker 1: who ran a bank, Uh, to somebody from the business 357 00:22:23,880 --> 00:22:27,840 Speaker 1: community as such? Uh. My suspicion is he may try 358 00:22:27,880 --> 00:22:31,480 Speaker 1: to find a banker. Henry Coffin, thank you so much. 359 00:22:31,480 --> 00:22:35,879 Speaker 1: What are you doing October two thousand seventeen. Well, you 360 00:22:35,920 --> 00:22:39,679 Speaker 1: gonna have lunch with on October twentieth, two thousand seventeen. 361 00:22:39,840 --> 00:22:43,000 Speaker 1: I hope to have lunch with my wife and maybe 362 00:22:43,119 --> 00:22:46,920 Speaker 1: Paul Boca, who will have celebrated his ninetieth birthday the 363 00:22:47,480 --> 00:22:50,800 Speaker 1: way the month before. I'm gonna have to taize here. 364 00:22:50,840 --> 00:22:52,840 Speaker 1: And all I can say is I just hope President 365 00:22:52,920 --> 00:22:55,320 Speaker 1: Trump has you into the Oval Office because he did 366 00:22:55,320 --> 00:22:59,840 Speaker 1: with that old guy, Dr Kissinger, Henry. Look for the tapes. Yeah, 367 00:23:00,160 --> 00:23:02,800 Speaker 1: those those. I just got an email from Chicago which 368 00:23:02,840 --> 00:23:05,560 Speaker 1: I believe we can file John Tucker under hate mail. 369 00:23:05,880 --> 00:23:09,160 Speaker 1: David Harrow, I'm sorry, I didn't mean to say that. 370 00:23:09,440 --> 00:23:11,439 Speaker 1: For all of you on Serious Sex SEP Channel one, 371 00:23:11,520 --> 00:23:15,320 Speaker 1: nineteen Chicago, I love you, I love the Blackhawks, I 372 00:23:15,359 --> 00:23:18,199 Speaker 1: love I love Tays And they're shaking their heads like 373 00:23:18,240 --> 00:23:20,399 Speaker 1: I am right now. I'm They're gonna drown me in 374 00:23:20,440 --> 00:23:25,040 Speaker 1: the Chicago River. Tectonic shifts in financial markets. Must read 375 00:23:25,080 --> 00:23:29,640 Speaker 1: for Global Wall Street from Dr Kaufman. Stay with us worldwide. 376 00:23:29,640 --> 00:23:41,600 Speaker 1: This is Bloomberg, brought you by Bank of America, Mary Lynch, 377 00:23:41,720 --> 00:23:45,960 Speaker 1: dedicated to bringing our clients insights and solutions to meet 378 00:23:46,000 --> 00:23:49,480 Speaker 1: the challenges of a transforming world. That's the power of 379 00:23:49,520 --> 00:23:54,639 Speaker 1: global connections. Mary Lynch, Pierce Feeder and Smith Incorporated Member 380 00:23:55,240 --> 00:24:03,080 Speaker 1: s I p C. There's something new from Bloomberg. It's 381 00:24:03,119 --> 00:24:06,480 Speaker 1: called Lens. Starting right now, you can use the Bloomberg 382 00:24:06,760 --> 00:24:10,600 Speaker 1: Io s app off your iPhone or iPad, or our 383 00:24:10,680 --> 00:24:14,520 Speaker 1: new Google Chrome extension to read any news story on 384 00:24:14,640 --> 00:24:18,680 Speaker 1: any website, scan it, and then instantly see the news 385 00:24:18,680 --> 00:24:23,240 Speaker 1: stories relevant market data from Bloomberg. In addition, see all 386 00:24:23,280 --> 00:24:26,399 Speaker 1: the bios of the key people mentioned in the story. 387 00:24:26,920 --> 00:24:29,840 Speaker 1: It's called lens, and it is just that, a lens 388 00:24:29,960 --> 00:24:33,359 Speaker 1: into the people and the data of any story you 389 00:24:33,440 --> 00:24:37,080 Speaker 1: may be reading. Again, Lens brings you the power of 390 00:24:37,080 --> 00:24:40,320 Speaker 1: Bloomberg's news and data. Download or io s app or 391 00:24:40,400 --> 00:24:44,119 Speaker 1: search for the Bloomberg extension at the Chrome Store to 392 00:24:44,240 --> 00:24:47,880 Speaker 1: try lens out. Learn more at Bloomberg dot com slash 393 00:24:47,960 --> 00:24:56,639 Speaker 1: Lens now joining us for an extended conversation. We'll go 394 00:24:56,680 --> 00:24:59,199 Speaker 1: a bit here and then longer in a moment. Stephen 395 00:24:59,280 --> 00:25:03,600 Speaker 1: Ratner with advisors. We should disclose that he runs an 396 00:25:03,640 --> 00:25:07,800 Speaker 1: investment arm as it's called for. Uh, Michael Bloomberg, the 397 00:25:07,840 --> 00:25:12,320 Speaker 1: principal owner of Bloomberg Television and Radio as well. Steve, 398 00:25:12,440 --> 00:25:15,720 Speaker 1: I've seen you all over the media recently. What is 399 00:25:15,760 --> 00:25:20,000 Speaker 1: the media getting wrong in the uproar over what's going 400 00:25:20,080 --> 00:25:23,399 Speaker 1: on in Washington? Is you go interview to interview and 401 00:25:23,480 --> 00:25:27,240 Speaker 1: you see the pundocracy to I can't find the right 402 00:25:27,280 --> 00:25:31,439 Speaker 1: word like that it's out there? What what what do 403 00:25:31,520 --> 00:25:34,639 Speaker 1: you see where you go as a grizzled real folks. 404 00:25:34,680 --> 00:25:37,399 Speaker 1: Let me make this clear Mr Ratner's a real journalist 405 00:25:37,680 --> 00:25:40,600 Speaker 1: from another time and place. What are we getting wrong 406 00:25:40,640 --> 00:25:44,439 Speaker 1: in the seven cable uproar? I think one thing that 407 00:25:44,560 --> 00:25:47,040 Speaker 1: struck me actually this morning when I was watching one 408 00:25:47,080 --> 00:25:49,440 Speaker 1: of the one of the cable shows, and there was 409 00:25:49,480 --> 00:25:52,720 Speaker 1: a very smart lawyer, Jonathan Turley, who's very experienced in 410 00:25:52,840 --> 00:25:56,760 Speaker 1: terms of the the legalities around the presidency. I think 411 00:25:56,760 --> 00:25:58,919 Speaker 1: we may be a little bit over reacting on the 412 00:25:59,000 --> 00:26:01,080 Speaker 1: legal side. And I'm not here to defend Donald Trump 413 00:26:01,119 --> 00:26:02,840 Speaker 1: in any way, shape or form. I think much of 414 00:26:02,880 --> 00:26:07,600 Speaker 1: what he's done is appalling. Were but but well, this 415 00:26:07,680 --> 00:26:09,520 Speaker 1: is a little a nugget of news. I do I 416 00:26:09,560 --> 00:26:13,000 Speaker 1: do think we are short of the notion of impeachment. 417 00:26:13,040 --> 00:26:15,960 Speaker 1: I think all the talk about about impeachment is probably 418 00:26:16,119 --> 00:26:19,200 Speaker 1: unwarranted relative relative to what at least we know at 419 00:26:19,200 --> 00:26:21,960 Speaker 1: this moment that he did or seems to have done. 420 00:26:22,280 --> 00:26:24,960 Speaker 1: And so we really have as a presidency in crisis, 421 00:26:25,080 --> 00:26:28,640 Speaker 1: rather than necessarily an impeachment tribunal about to be convened. 422 00:26:28,840 --> 00:26:30,360 Speaker 1: How caught up in all of that? Are you? Tom? 423 00:26:30,400 --> 00:26:32,919 Speaker 1: And I exhausted by the news story hitting every day 424 00:26:32,920 --> 00:26:35,600 Speaker 1: at five pm? As a person, as an investor, how 425 00:26:35,640 --> 00:26:37,239 Speaker 1: do you? How do you process all that's happening out 426 00:26:37,240 --> 00:26:38,879 Speaker 1: of watching how do you process that? Christ Well, it's 427 00:26:38,880 --> 00:26:41,600 Speaker 1: funny you mentioned it, because I'm I were all obsessed 428 00:26:41,600 --> 00:26:43,720 Speaker 1: with this, and I happened to turn on one another 429 00:26:43,720 --> 00:26:48,480 Speaker 1: cable show yesterday at five o'clock. But I don't I 430 00:26:48,480 --> 00:26:50,399 Speaker 1: don't devoid and then play it for my friends. But 431 00:26:50,480 --> 00:26:52,639 Speaker 1: in any event, I turned one on at five o'clock 432 00:26:52,680 --> 00:26:54,760 Speaker 1: yesterday and literally in the middle of it of talking 433 00:26:54,760 --> 00:26:56,959 Speaker 1: to the guests about the last issue, suddenly the new 434 00:26:57,000 --> 00:26:59,600 Speaker 1: issue erupted and he had and and the host had 435 00:26:59,640 --> 00:27:02,240 Speaker 1: a complete changed directions. So it is captivating. You know, 436 00:27:02,280 --> 00:27:05,000 Speaker 1: I was. I am old enough as as Tom is. 437 00:27:05,240 --> 00:27:08,960 Speaker 1: You're not, David uh to to remember the whole Watergate 438 00:27:09,000 --> 00:27:11,080 Speaker 1: thing when we didn't have TiVo and cable news, but 439 00:27:11,160 --> 00:27:13,840 Speaker 1: we had around the clock live news and we were 440 00:27:13,880 --> 00:27:16,600 Speaker 1: all glued to our television sets. You couldn't avoid it. It 441 00:27:16,480 --> 00:27:19,280 Speaker 1: It was it was It was an incredible drama in 442 00:27:19,320 --> 00:27:21,480 Speaker 1: the future of the country. I do want to say, David, 443 00:27:21,520 --> 00:27:26,760 Speaker 1: we are acutely aware of doing economics, finance, investment in 444 00:27:26,800 --> 00:27:30,400 Speaker 1: the markets. Around all that's going on in Washington. We're 445 00:27:30,440 --> 00:27:33,800 Speaker 1: already thinking about jobs day early June, where David, we're 446 00:27:33,840 --> 00:27:37,359 Speaker 1: going to give it a real retail perspective as well. Good. 447 00:27:37,520 --> 00:27:40,000 Speaker 1: So let's go back to politican, you know, Steve A. 448 00:27:40,000 --> 00:27:42,320 Speaker 1: Rentor with us here. He'll be heading to Washington tomorrow 449 00:27:42,400 --> 00:27:45,480 Speaker 1: the long Worth House Office Building, testifying before the House 450 00:27:45,480 --> 00:27:47,600 Speaker 1: Ways and Means Committee. The title of the hearing hearing 451 00:27:47,600 --> 00:27:51,399 Speaker 1: on how tax reform will grow our economy and create jobs. 452 00:27:51,400 --> 00:27:53,720 Speaker 1: What are you gonna say to uh, to Chairman Brady 453 00:27:53,720 --> 00:27:56,160 Speaker 1: in the lot tomorrow down in d C. I'm gonna 454 00:27:56,200 --> 00:27:58,439 Speaker 1: say that as we think about tax reform or a 455 00:27:58,480 --> 00:28:01,040 Speaker 1: tax bill, we should think about a number of important principles. 456 00:28:01,080 --> 00:28:04,000 Speaker 1: One is certainly fairness to all Americans. One is thinking 457 00:28:04,040 --> 00:28:06,640 Speaker 1: about the deficit and the impact on the debt. One 458 00:28:06,760 --> 00:28:09,919 Speaker 1: is thinking about our competitive position internationally and what we 459 00:28:09,960 --> 00:28:12,520 Speaker 1: need to do there. And then, of course, most importantly, 460 00:28:12,560 --> 00:28:14,800 Speaker 1: how we're going to grow our economy. I imagine you're 461 00:28:14,840 --> 00:28:17,560 Speaker 1: gonna do some some explaining about this whole growth issue. 462 00:28:17,600 --> 00:28:19,680 Speaker 1: We saw the statement of principles from the White House 463 00:28:20,240 --> 00:28:22,560 Speaker 1: indicating the cycle that taxes when we get growth going, 464 00:28:22,640 --> 00:28:26,000 Speaker 1: that would pay for the cause of the tax cuts, etcetera, etcetera. Uh, 465 00:28:26,280 --> 00:28:27,880 Speaker 1: do you think that the Republicans in the House are 466 00:28:28,080 --> 00:28:30,280 Speaker 1: sympatical with that that they're wedded to the idea they're 467 00:28:30,280 --> 00:28:33,320 Speaker 1: advanced by the White House. I think, I think you've 468 00:28:33,320 --> 00:28:36,000 Speaker 1: seen a number of prominent Republicans talk about the importance 469 00:28:36,080 --> 00:28:38,680 Speaker 1: of the tax bill being deficit neutral. Mitch McConnell, I 470 00:28:38,680 --> 00:28:41,200 Speaker 1: think most recently, what we don't know is what they 471 00:28:41,200 --> 00:28:43,840 Speaker 1: mean by deficit neutral and how much credit they're gonna 472 00:28:43,880 --> 00:28:46,600 Speaker 1: give for the so called dynamics scoring or the circle 473 00:28:46,640 --> 00:28:48,680 Speaker 1: of the virtual circle that you described wherever you want 474 00:28:48,680 --> 00:28:51,280 Speaker 1: to think about it. Uh, Stephen Manuchin set out at 475 00:28:51,280 --> 00:28:54,560 Speaker 1: the Milk and Conference, where I also was, that one 476 00:28:54,600 --> 00:28:57,280 Speaker 1: percent increase in GDP growth from two to three would 477 00:28:57,320 --> 00:29:00,680 Speaker 1: create about two trillion dollars of revenue over ten years. One, 478 00:29:00,760 --> 00:29:02,760 Speaker 1: of course, I have no idea that we can make 479 00:29:02,800 --> 00:29:05,040 Speaker 1: three percent, but even if we did, this is a 480 00:29:05,040 --> 00:29:07,160 Speaker 1: five and a half trillion dollar tax bill at the 481 00:29:07,160 --> 00:29:09,760 Speaker 1: presidents put forward. So there's no amount of growth that 482 00:29:09,800 --> 00:29:13,320 Speaker 1: any reasonable person can project that will address the deficit 483 00:29:13,480 --> 00:29:16,040 Speaker 1: that's created by this proposal. So I think you're going 484 00:29:16,080 --> 00:29:17,640 Speaker 1: to see a much more modest tax bill in the 485 00:29:17,680 --> 00:29:20,000 Speaker 1: dust settles. You did a little bit of Zarre work 486 00:29:20,000 --> 00:29:22,920 Speaker 1: in Detroit. If we announced this week that your civics 487 00:29:22,960 --> 00:29:26,640 Speaker 1: are or social studies are for all of America, and 488 00:29:26,840 --> 00:29:31,600 Speaker 1: certainly President Trump maybe needs a few civics lessons. Can 489 00:29:31,640 --> 00:29:35,000 Speaker 1: we do our civics and social studies and do legislation 490 00:29:35,080 --> 00:29:38,000 Speaker 1: at the same time. Now, I I think I'll be 491 00:29:38,040 --> 00:29:39,920 Speaker 1: interested to see what I hear and feel when I'm 492 00:29:39,960 --> 00:29:43,160 Speaker 1: down there tomorrow, but certainly from up here and having 493 00:29:43,160 --> 00:29:45,760 Speaker 1: conversations and watching what's going on there. Uh, you know, 494 00:29:45,840 --> 00:29:47,560 Speaker 1: Congress is a little bit like I don't know, five 495 00:29:47,640 --> 00:29:49,320 Speaker 1: year old. They can only do one thing at a time, 496 00:29:49,440 --> 00:29:52,520 Speaker 1: well and right now, right and right, so they are 497 00:29:52,520 --> 00:29:55,760 Speaker 1: completely preoccupied with the crisis in the White House. I mean, 498 00:29:55,800 --> 00:29:58,200 Speaker 1: I go back to Charles Wrangle houseways it means, but 499 00:29:58,240 --> 00:30:02,000 Speaker 1: you could go back to Bill Archer, Wilbur Mills ages ago. 500 00:30:02,440 --> 00:30:05,440 Speaker 1: How is Kevin Brady a different house ways of means 501 00:30:05,560 --> 00:30:08,040 Speaker 1: chief than the names you and I grew up with. 502 00:30:08,800 --> 00:30:11,040 Speaker 1: I don't I don't really know the answer to that. 503 00:30:11,080 --> 00:30:13,240 Speaker 1: We'll find out as this tax bill it winds its 504 00:30:13,240 --> 00:30:15,520 Speaker 1: way through. We haven't had a significant tax bill in 505 00:30:15,520 --> 00:30:17,520 Speaker 1: a good while. He hasn't been chairman for very long, 506 00:30:17,840 --> 00:30:19,840 Speaker 1: so we'll see. But I would say that a good 507 00:30:19,920 --> 00:30:25,840 Speaker 1: while forty years is well. We've had other tax bills, 508 00:30:25,840 --> 00:30:28,240 Speaker 1: but not a major overhaul. But I think what you 509 00:30:28,360 --> 00:30:31,480 Speaker 1: probably can say is that the power of the Chairman 510 00:30:31,520 --> 00:30:33,640 Speaker 1: of Ways and Means is much diminished from the people 511 00:30:33,680 --> 00:30:37,320 Speaker 1: that you mentioned that Congressmen no longer follow their leadership 512 00:30:37,440 --> 00:30:40,360 Speaker 1: wherever they may go. There's much more independent thinking, and 513 00:30:40,400 --> 00:30:42,480 Speaker 1: there's a lot a lot more corraling you need to 514 00:30:42,520 --> 00:30:45,800 Speaker 1: do of the horses to get the troop underway. Let's 515 00:30:45,920 --> 00:30:47,800 Speaker 1: let's dig into semantics a little bit here. We had 516 00:30:47,800 --> 00:30:51,280 Speaker 1: a we had a conversation about comprehensive tax reform. Now 517 00:30:51,280 --> 00:30:53,840 Speaker 1: it seems more people are talking about tax cuts. Help 518 00:30:53,880 --> 00:30:56,120 Speaker 1: us with the distinction. There, are you seeing some erosion 519 00:30:56,120 --> 00:31:01,080 Speaker 1: in the optimism for comprehensiveness in Washington. I think the size, 520 00:31:01,120 --> 00:31:03,680 Speaker 1: as I said, for reasons of the deficit of nothing else. 521 00:31:03,720 --> 00:31:05,240 Speaker 1: I think the size of this is going to be 522 00:31:05,320 --> 00:31:08,280 Speaker 1: dramatically smaller than anything the President is talking about. I 523 00:31:08,320 --> 00:31:10,760 Speaker 1: think I think to Tom's point, we have not had 524 00:31:10,840 --> 00:31:14,360 Speaker 1: major tax reform in thirty years. We've had some tax increases, 525 00:31:14,400 --> 00:31:17,360 Speaker 1: we've had some tax and that's an infinite time horizon reform, 526 00:31:17,360 --> 00:31:19,520 Speaker 1: meaning not just to cut the with last ten years, 527 00:31:19,520 --> 00:31:21,560 Speaker 1: but but long as still well that's a different question 528 00:31:21,640 --> 00:31:23,720 Speaker 1: whether you have a permanent but yes, ideally permanent. But 529 00:31:23,720 --> 00:31:25,200 Speaker 1: what I'm really talking about more is that in the 530 00:31:25,240 --> 00:31:29,320 Speaker 1: last thirty years, many, for both individuals and companies, ways 531 00:31:29,560 --> 00:31:33,440 Speaker 1: of avoiding taxes, not avating, but avoiding taxes have crept 532 00:31:33,480 --> 00:31:35,440 Speaker 1: into the tax code. And it's it's like a garden, 533 00:31:35,640 --> 00:31:36,960 Speaker 1: you know, if you don't weed it, if you don't 534 00:31:36,960 --> 00:31:39,320 Speaker 1: put seeds down, if you don't water it, it becomes 535 00:31:39,320 --> 00:31:41,200 Speaker 1: a mess. And that's really what the tax code is. 536 00:31:41,240 --> 00:31:43,400 Speaker 1: And so the hope would be that you get and 537 00:31:43,480 --> 00:31:45,280 Speaker 1: I think the President is actually on the right track 538 00:31:45,280 --> 00:31:47,800 Speaker 1: and some elements of his proposal. You clean up the 539 00:31:47,840 --> 00:31:50,280 Speaker 1: deductions for individuals, you get them down to a couple 540 00:31:50,360 --> 00:31:54,080 Speaker 1: that you need to have, whether it's charitable or mortgage 541 00:31:54,120 --> 00:31:56,320 Speaker 1: interest or whatever, and then you use that money to 542 00:31:56,360 --> 00:31:58,440 Speaker 1: lower rate. So that's a principle I think that everybody 543 00:31:58,480 --> 00:32:01,320 Speaker 1: can agree on thirties. Can I ask the one investment 544 00:32:01,400 --> 00:32:07,440 Speaker 1: question of the week, what's the enthusiasm to acquire equity shares? Here? 545 00:32:07,720 --> 00:32:11,520 Speaker 1: You know? It's it is? It is? I get asked 546 00:32:11,560 --> 00:32:14,160 Speaker 1: that question many times a day. Why is the market 547 00:32:14,200 --> 00:32:16,120 Speaker 1: doing so well. No, I said, do you want to 548 00:32:16,160 --> 00:32:18,480 Speaker 1: buy now? Do I want to buy now? No? I 549 00:32:18,480 --> 00:32:22,440 Speaker 1: mean we think we own equities were long term investors, 550 00:32:22,440 --> 00:32:24,560 Speaker 1: were not good at market timing. We think it's a 551 00:32:24,680 --> 00:32:28,239 Speaker 1: very hard game. But but by every measure, equities are 552 00:32:28,280 --> 00:32:30,520 Speaker 1: very very fully priced. Before you even consider what's going 553 00:32:30,520 --> 00:32:32,360 Speaker 1: on in the White House. Steve Rattner look forward to 554 00:32:32,360 --> 00:32:40,320 Speaker 1: seeing at the Trump Hotel Barnable exactly. He'll be testifying 555 00:32:40,360 --> 00:32:55,520 Speaker 1: across the house. Ways it means, David, I want you 556 00:32:55,560 --> 00:32:57,160 Speaker 1: to bring in our next guest, because I introduced you 557 00:32:57,240 --> 00:32:59,120 Speaker 1: a week ago in London. We can seem way too 558 00:32:59,160 --> 00:33:03,120 Speaker 1: much of because it's always a pleasure. Hell The Kennedy 559 00:33:03,240 --> 00:33:04,680 Speaker 1: joins us now a bar as Kennedy of the show 560 00:33:04,680 --> 00:33:07,080 Speaker 1: as principle at Mansfield, a College in Oxford. We've been 561 00:33:07,160 --> 00:33:09,040 Speaker 1: checking in with her here over the last year so 562 00:33:09,040 --> 00:33:10,800 Speaker 1: several times. It's great to see you once again here 563 00:33:11,320 --> 00:33:12,920 Speaker 1: in New York. Get us up to speed on on 564 00:33:12,960 --> 00:33:15,440 Speaker 1: Brexit from your perspective. I know you care a lot 565 00:33:15,480 --> 00:33:19,080 Speaker 1: about jurisprudence and what all of this means for the 566 00:33:19,080 --> 00:33:22,520 Speaker 1: European courts, jurisdiction in the UK. What's the latest as 567 00:33:22,760 --> 00:33:24,360 Speaker 1: you see it. Well. I mean the thing is that 568 00:33:24,440 --> 00:33:26,760 Speaker 1: I of course in the House of Lords and I 569 00:33:26,800 --> 00:33:29,200 Speaker 1: am on the European Union Select Committee, and I cheered 570 00:33:29,200 --> 00:33:32,080 Speaker 1: the bit on justice. So we've been taking evidence and 571 00:33:32,080 --> 00:33:35,120 Speaker 1: doing reports for for the general public and for parliamentarians 572 00:33:35,560 --> 00:33:38,760 Speaker 1: about the impact of Brexit on law. And of course 573 00:33:38,800 --> 00:33:40,560 Speaker 1: one of the great promises was that this would take 574 00:33:40,600 --> 00:33:43,840 Speaker 1: us away from that awful European Court of Justice and 575 00:33:44,200 --> 00:33:47,240 Speaker 1: we claim all our law back into Britain. But actually 576 00:33:47,240 --> 00:33:49,280 Speaker 1: it's suddenly becoming clear to people that an awful lot 577 00:33:49,280 --> 00:33:52,240 Speaker 1: of this law is reciprocal, and actually it does quite 578 00:33:52,280 --> 00:33:55,440 Speaker 1: good stuff for us in that, you know, particularly untreading, 579 00:33:55,480 --> 00:33:59,480 Speaker 1: that you can get a very quick enforcement of judgments 580 00:33:59,480 --> 00:34:01,680 Speaker 1: against people who your money in other parts of Europe 581 00:34:01,680 --> 00:34:04,240 Speaker 1: because they haven't paid their bills when you've done trading 582 00:34:04,280 --> 00:34:06,680 Speaker 1: with them, or if a company goes bust, that you 583 00:34:06,680 --> 00:34:08,400 Speaker 1: can make sure that you get your bit of the 584 00:34:08,560 --> 00:34:11,200 Speaker 1: of of of the deal and all of that sort 585 00:34:11,239 --> 00:34:13,839 Speaker 1: of thing, so that the law has actually been very 586 00:34:13,880 --> 00:34:17,359 Speaker 1: beneficial to many people. You know, we know that big 587 00:34:17,400 --> 00:34:19,960 Speaker 1: corporates can always get their lawyer and sorted for them 588 00:34:19,960 --> 00:34:23,080 Speaker 1: with very experiensive lawyers, but small businesses are impacted by 589 00:34:23,080 --> 00:34:25,200 Speaker 1: this stuff, and also people who are married to people 590 00:34:25,200 --> 00:34:27,440 Speaker 1: from other bits of Europe, you know, over access to 591 00:34:27,520 --> 00:34:31,919 Speaker 1: children and over maintenance for children and all sorts of stuff, um, 592 00:34:32,280 --> 00:34:35,080 Speaker 1: standards of goods, you know, um, you know, lots of 593 00:34:35,080 --> 00:34:39,239 Speaker 1: things around um. Um. You know, consumer rights and environmental 594 00:34:39,320 --> 00:34:41,680 Speaker 1: rights have come out of Europe and a collaboration. And 595 00:34:41,880 --> 00:34:44,399 Speaker 1: also British lawyers have played a big part in that 596 00:34:44,640 --> 00:34:47,680 Speaker 1: because on the whole British lawyers are pretty pretty good 597 00:34:47,680 --> 00:34:49,399 Speaker 1: at law, at least like they like to think they are. 598 00:34:49,520 --> 00:34:52,279 Speaker 1: And and so it's not all come at us. We've 599 00:34:52,280 --> 00:34:54,560 Speaker 1: actually played a very large part in creating this law. 600 00:34:54,880 --> 00:34:56,800 Speaker 1: So um, it's going to be a big deal. I 601 00:34:56,920 --> 00:34:59,040 Speaker 1: tell you it's going to take us probably a decade 602 00:34:59,080 --> 00:35:00,799 Speaker 1: to get this all sort of out. What do you 603 00:35:00,880 --> 00:35:02,719 Speaker 1: what do you fall on this issue of transparency about 604 00:35:02,719 --> 00:35:06,279 Speaker 1: the negotiations. The Prime Minister would like to have many 605 00:35:06,320 --> 00:35:08,440 Speaker 1: of these negotiations behind closed stories that you says it 606 00:35:08,480 --> 00:35:11,520 Speaker 1: wants to do them with with greater transparency. Are there 607 00:35:11,520 --> 00:35:14,480 Speaker 1: benefits to doing it in the other way in not 608 00:35:14,560 --> 00:35:17,840 Speaker 1: having all of the dirty laundry area it's very British. 609 00:35:17,840 --> 00:35:21,279 Speaker 1: We're we're We're not big on dirty laundry, and we 610 00:35:21,360 --> 00:35:23,400 Speaker 1: like we like, we like things behind closed doors. It's 611 00:35:23,400 --> 00:35:26,400 Speaker 1: always been a much with the British feeling is to 612 00:35:26,440 --> 00:35:29,360 Speaker 1: be very secret um. But the reality is that this 613 00:35:29,360 --> 00:35:32,200 Speaker 1: stuff gets leaked nowadays anyway, and we're not going to 614 00:35:32,239 --> 00:35:35,359 Speaker 1: be able to keep this all closed down um. And 615 00:35:35,520 --> 00:35:37,719 Speaker 1: the idea that we would keep our hand close to 616 00:35:37,760 --> 00:35:41,200 Speaker 1: our chests, um, and that's how you negotiate isn't working 617 00:35:41,200 --> 00:35:43,600 Speaker 1: out because we've seen because people keep leaking from the 618 00:35:43,600 --> 00:35:46,600 Speaker 1: other side, from other bits of Europe, in America, whatever 619 00:35:46,880 --> 00:35:49,480 Speaker 1: anybody's politics. Right now, we're having lots of civics and 620 00:35:49,480 --> 00:35:53,120 Speaker 1: what we call social studies lessons. Give us a civics 621 00:35:53,200 --> 00:35:58,399 Speaker 1: lesson what does lord's place? Good? Question? This debate where 622 00:35:58,400 --> 00:35:59,960 Speaker 1: do you fit? Do you wear that you don't wear 623 00:36:00,040 --> 00:36:03,560 Speaker 1: the white hair? Right? Well, I court, I'm a barrister, 624 00:36:03,640 --> 00:36:07,359 Speaker 1: so I wear I wear a horse hair waging court. 625 00:36:07,560 --> 00:36:09,640 Speaker 1: But in the House of Lords, we actually don't actually 626 00:36:09,840 --> 00:36:12,960 Speaker 1: dress up for anything other than ceremonial stuff. But the 627 00:36:13,120 --> 00:36:15,839 Speaker 1: House of Lords actually plays a very kind of good 628 00:36:15,840 --> 00:36:17,640 Speaker 1: break on the system. The idea is that the House 629 00:36:17,640 --> 00:36:20,160 Speaker 1: of Lords is supposed to take the long view rather 630 00:36:20,200 --> 00:36:23,400 Speaker 1: than the having the pressure of being an elected politician, 631 00:36:23,800 --> 00:36:25,960 Speaker 1: and so it's supposed to be that it guards our 632 00:36:26,200 --> 00:36:30,000 Speaker 1: unwritten constitution, that it kind of deals with values and 633 00:36:30,040 --> 00:36:34,120 Speaker 1: principles rather than the exigencies of the moment, and has 634 00:36:34,160 --> 00:36:36,279 Speaker 1: at times put breaks on some of the things that 635 00:36:36,320 --> 00:36:40,160 Speaker 1: governments have wanted to do of whatever political complexion. So UM, 636 00:36:40,200 --> 00:36:42,360 Speaker 1: you know, for example, when there were attempts to erode 637 00:36:42,560 --> 00:36:46,360 Speaker 1: trial by jury or um, the civil liberties principles that 638 00:36:46,400 --> 00:36:48,160 Speaker 1: have been at the basis of our rule of law, 639 00:36:48,880 --> 00:36:50,360 Speaker 1: when governments have tried to do that, the House of 640 00:36:50,400 --> 00:36:52,359 Speaker 1: Lords said, hold on a minute. You know that you're 641 00:36:52,360 --> 00:36:54,799 Speaker 1: actually tearing up the page of something rather important to 642 00:36:54,840 --> 00:36:58,200 Speaker 1: what makes our system work. And that's a good thing. Um. 643 00:36:58,239 --> 00:37:01,799 Speaker 1: And I think, um, um, you know that that that's 644 00:37:01,840 --> 00:37:04,520 Speaker 1: been the rule of the House of Lords. Um. Obviously 645 00:37:05,080 --> 00:37:07,279 Speaker 1: there's always been the complaint that it's not they're not 646 00:37:07,480 --> 00:37:12,200 Speaker 1: democratically elected, and I wasn't elected either, But you do 647 00:37:12,280 --> 00:37:16,160 Speaker 1: get a really widespread of expertise as a result. So 648 00:37:16,200 --> 00:37:19,160 Speaker 1: there are pros and consum. But but there's no doubt 649 00:37:19,160 --> 00:37:22,720 Speaker 1: that if in this election, um, the Conservative Party gets 650 00:37:23,000 --> 00:37:27,000 Speaker 1: the predicted a huge majority, Um, that they're they're they're 651 00:37:27,000 --> 00:37:29,920 Speaker 1: hoping for that. That does mean that what will be 652 00:37:29,960 --> 00:37:31,920 Speaker 1: said to us in the House of Lords is you 653 00:37:32,000 --> 00:37:34,880 Speaker 1: have no right to try to put a break on 654 00:37:34,920 --> 00:37:38,960 Speaker 1: anything because you are not democratically elected. You can advise, 655 00:37:39,040 --> 00:37:41,040 Speaker 1: you can, you know, you can do all of that stuff, 656 00:37:41,239 --> 00:37:43,200 Speaker 1: but you cannot put a break on it. You see. 657 00:37:43,280 --> 00:37:45,360 Speaker 1: All we can do is put a break on something 658 00:37:45,360 --> 00:37:48,719 Speaker 1: for a year um and that's in extreme circumstances. But 659 00:37:48,840 --> 00:37:51,240 Speaker 1: we can't block legislation in the way that your Senate 660 00:37:51,360 --> 00:37:54,640 Speaker 1: Senate can. And and I think that we will be 661 00:37:54,840 --> 00:37:58,839 Speaker 1: constantly told mind your piece and queues, remember who you are. 662 00:37:59,040 --> 00:38:01,319 Speaker 1: You're not elected and we are, and we've got a 663 00:38:01,400 --> 00:38:03,799 Speaker 1: huge mandate and whatever feast to do what we like. 664 00:38:04,120 --> 00:38:06,480 Speaker 1: That's not not good for democracy. But there we are, 665 00:38:06,640 --> 00:38:10,680 Speaker 1: David gerin time, king together reunited. In our New York studios, 666 00:38:11,239 --> 00:38:13,640 Speaker 1: we have the honor of Helenic Kennedy with us. Baroness 667 00:38:13,719 --> 00:38:16,760 Speaker 1: Kennedy is in the House of Lords and provides a 668 00:38:16,800 --> 00:38:20,840 Speaker 1: perspective for the United Kingdom on legal and also on literature. 669 00:38:20,960 --> 00:38:25,960 Speaker 1: She is the force behind the most controversial cocktail conversation 670 00:38:26,560 --> 00:38:30,280 Speaker 1: in the United Kingdom, which is books. Baroness I learned 671 00:38:30,280 --> 00:38:33,960 Speaker 1: this on my modest book tour, which I was fortunate, 672 00:38:33,960 --> 00:38:37,959 Speaker 1: thank you Bloomberg. It was global. But there's there's New York, 673 00:38:38,040 --> 00:38:42,200 Speaker 1: and there's Asia, and then London is totally different. Boy. 674 00:38:42,239 --> 00:38:45,800 Speaker 1: You people take your book seriously. I just flabber guest 675 00:38:45,880 --> 00:38:48,479 Speaker 1: and it's is it a throwback where you never got 676 00:38:48,520 --> 00:38:51,880 Speaker 1: to two thousand? Or is it something new about the 677 00:38:51,960 --> 00:38:56,080 Speaker 1: United Kingdom books? Yes, well, we do love books. I mean, 678 00:38:56,160 --> 00:38:58,440 Speaker 1: and we have more book festivals than any other country. 679 00:38:58,440 --> 00:39:01,879 Speaker 1: But you know, but capita, um, we really do. Um. Yes, 680 00:39:01,960 --> 00:39:03,840 Speaker 1: we still love our books. And I suppose we we 681 00:39:03,920 --> 00:39:06,440 Speaker 1: love the fact that we you know, of our language 682 00:39:06,440 --> 00:39:08,840 Speaker 1: and the English language and the great writers that have 683 00:39:08,880 --> 00:39:11,719 Speaker 1: been produced in the language. And I have the great 684 00:39:12,400 --> 00:39:14,719 Speaker 1: privilege of being the chair of the board of the 685 00:39:14,760 --> 00:39:18,160 Speaker 1: Man Booker Prize, and and people often say to me, 686 00:39:18,200 --> 00:39:20,480 Speaker 1: I mean, you know, why does it matter? Why do 687 00:39:20,600 --> 00:39:23,880 Speaker 1: prizes like this matter? And it's really about the celebration 688 00:39:23,920 --> 00:39:27,279 Speaker 1: of literature. And and while we sit in studios like 689 00:39:27,320 --> 00:39:29,320 Speaker 1: this and we talk about the state of our economies, 690 00:39:29,320 --> 00:39:31,640 Speaker 1: and we talk about politics, and we talk about you know, 691 00:39:31,760 --> 00:39:34,000 Speaker 1: the conflicts around the world. One of the ways in 692 00:39:34,040 --> 00:39:37,720 Speaker 1: which we understand the human condition based is through books 693 00:39:37,719 --> 00:39:41,239 Speaker 1: and through literature and books such as you write to Tom. 694 00:39:41,280 --> 00:39:45,239 Speaker 1: You know, books are books are Books are still a 695 00:39:45,360 --> 00:39:49,560 Speaker 1: vital part of our of our knowing and understanding the world. 696 00:39:49,800 --> 00:39:52,399 Speaker 1: We have the National Book Award here, the Pulitzer Prize, 697 00:39:52,440 --> 00:39:54,680 Speaker 1: your big big prizes. But what I like about the 698 00:39:54,960 --> 00:39:57,520 Speaker 1: Man Booker Prizes is you have the long list in 699 00:39:57,560 --> 00:40:00,200 Speaker 1: the short list. It becomes something that people participatedly up 700 00:40:00,239 --> 00:40:04,600 Speaker 1: to the Lineal Barber's note a little bit with the 701 00:40:04,680 --> 00:40:07,239 Speaker 1: f T as well, but that offers something different and 702 00:40:07,239 --> 00:40:09,680 Speaker 1: people get involved. I mean, it becomes a pursuit that 703 00:40:09,680 --> 00:40:11,439 Speaker 1: a lot of people can be a part of. People. Yes, 704 00:40:11,520 --> 00:40:13,279 Speaker 1: And one of the things about it is that it 705 00:40:13,360 --> 00:40:18,000 Speaker 1: started off that it was a prize for basically the Commonwealth, 706 00:40:18,320 --> 00:40:22,640 Speaker 1: you know, the UK, the Commonwealth and Ireland, and and 707 00:40:22,640 --> 00:40:24,759 Speaker 1: then of course it's now become a sort of worldwide. 708 00:40:25,160 --> 00:40:28,799 Speaker 1: Americans are eligible. Now Americans I've got in. I recognizing 709 00:40:28,840 --> 00:40:31,520 Speaker 1: the fact that it's basically about the English language and 710 00:40:31,640 --> 00:40:34,239 Speaker 1: those who write in the English language from wherever in 711 00:40:34,280 --> 00:40:36,480 Speaker 1: the world. And it also does a prize which is 712 00:40:36,640 --> 00:40:40,080 Speaker 1: really a translation prize to introduce us to the writings 713 00:40:40,080 --> 00:40:43,880 Speaker 1: of people in in other languages. But the best of translation. 714 00:40:43,920 --> 00:40:46,200 Speaker 1: So the prize is shared between both. So we have 715 00:40:46,239 --> 00:40:48,680 Speaker 1: two prizes, and I think that they are now really 716 00:40:49,360 --> 00:40:52,960 Speaker 1: very important in our world about about basically understanding each other. 717 00:40:53,040 --> 00:40:55,719 Speaker 1: But also it's just the joy of good writing. I mean, 718 00:40:55,800 --> 00:40:58,560 Speaker 1: just just some of the history and controversy. Did you 719 00:40:58,600 --> 00:41:02,279 Speaker 1: get to hate? Now? Do you get death? Can? I 720 00:41:02,320 --> 00:41:04,759 Speaker 1: tell you? I don't, But I do know that some 721 00:41:04,840 --> 00:41:07,560 Speaker 1: of our judges happily I don't do that. You don't. 722 00:41:08,239 --> 00:41:10,439 Speaker 1: I don't do the hundred and sixty books, And we choose, 723 00:41:10,440 --> 00:41:13,279 Speaker 1: We choose great judges. And we also have the great 724 00:41:13,280 --> 00:41:16,439 Speaker 1: privilege of having man Company's familiar to all of you, 725 00:41:16,840 --> 00:41:19,399 Speaker 1: um as our as our partner in this who helped 726 00:41:19,400 --> 00:41:22,520 Speaker 1: with supporting it financially. And one of the things about 727 00:41:22,560 --> 00:41:25,399 Speaker 1: it is that, um you know, it is controversial. People 728 00:41:25,440 --> 00:41:27,600 Speaker 1: get very cross about books and the things that they 729 00:41:27,640 --> 00:41:30,120 Speaker 1: love and feel passionate about, and when they feel that 730 00:41:30,160 --> 00:41:32,560 Speaker 1: in some ways a book that they've loved has not 731 00:41:32,680 --> 00:41:35,440 Speaker 1: been included, people get pretty enraged. And so the judges 732 00:41:35,480 --> 00:41:40,759 Speaker 1: do get some pretty shirty emails, not friendly by it. 733 00:41:40,800 --> 00:41:43,080 Speaker 1: With possession that was a no brainer. But I love 734 00:41:43,160 --> 00:41:46,759 Speaker 1: nineteen eighty Anthony Burgess and William Golding, and they had 735 00:41:46,760 --> 00:41:49,640 Speaker 1: tantrums about who would show up for that. It can 736 00:41:49,680 --> 00:41:53,520 Speaker 1: be excruciating, Yes, and it is true that while we 737 00:41:53,600 --> 00:41:57,920 Speaker 1: think of actors and and opera singers as being the divas, 738 00:41:58,160 --> 00:42:01,120 Speaker 1: writers can be pretty pretty too. You know, they don't 739 00:42:01,120 --> 00:42:04,200 Speaker 1: always they want to have an appropriate deference to their 740 00:42:04,320 --> 00:42:07,160 Speaker 1: to their to their status. Um, not all of them. 741 00:42:07,160 --> 00:42:10,400 Speaker 1: Of course, what is the prize mean to authors themselves? 742 00:42:10,400 --> 00:42:12,480 Speaker 1: I think of Zadie Smith, who's now living here in 743 00:42:12,520 --> 00:42:14,279 Speaker 1: New York, WI short listed, of course, I mean this 744 00:42:14,280 --> 00:42:16,480 Speaker 1: this is a It is something that can really accelerate 745 00:42:16,560 --> 00:42:18,480 Speaker 1: or elevate worst career. But there's no doubt it's a 746 00:42:18,480 --> 00:42:22,320 Speaker 1: game changer for many writers. Winning the Book of prize 747 00:42:22,760 --> 00:42:28,680 Speaker 1: UM really really get getting this this, you know, um 748 00:42:28,920 --> 00:42:32,319 Speaker 1: changes the reach of the of your readership. And so 749 00:42:32,480 --> 00:42:35,239 Speaker 1: you move from reaching I mean sometimes just a few 750 00:42:35,280 --> 00:42:40,400 Speaker 1: thousand readers to actually at times, you know, topping a million. 751 00:42:40,440 --> 00:42:42,720 Speaker 1: I mean you can really really reach a much wider audience, 752 00:42:42,760 --> 00:42:44,719 Speaker 1: and so it can make a writer. So the man 753 00:42:44,760 --> 00:42:47,040 Speaker 1: book a prize really does is a is a game changer. 754 00:42:47,400 --> 00:42:51,160 Speaker 1: Where do you stand on our new short attentions? Henry 755 00:42:51,239 --> 00:42:54,360 Speaker 1: Kaufman came in eighty nine years old. Today with a 756 00:42:54,440 --> 00:42:58,640 Speaker 1: lovely hundred and sixty one page effort, I'm reading nostalgically 757 00:42:58,680 --> 00:43:00,440 Speaker 1: a book from thirty years ago to no matter what 758 00:43:00,480 --> 00:43:04,239 Speaker 1: it is right now it's six pages long. Is there 759 00:43:04,280 --> 00:43:07,960 Speaker 1: a force in the literature industry to keep books shorter 760 00:43:08,480 --> 00:43:12,279 Speaker 1: because we've just lost our ability to read a long book? Well, 761 00:43:12,280 --> 00:43:15,640 Speaker 1: that's well, that's very interesting because I mean, increasingly we've 762 00:43:15,680 --> 00:43:18,920 Speaker 1: seen smaller books, shorter books. Winning Ian McEwen is writing 763 00:43:18,920 --> 00:43:22,840 Speaker 1: these sort of very concise novels. Um. But part of 764 00:43:22,840 --> 00:43:25,840 Speaker 1: the business of the huge fat book is that, of 765 00:43:25,880 --> 00:43:27,640 Speaker 1: course put put people in front of the computer and 766 00:43:27,640 --> 00:43:30,600 Speaker 1: they run away with themselves. And we also tend to 767 00:43:30,640 --> 00:43:34,840 Speaker 1: see fewer, fewer editors um doing the job of getting 768 00:43:34,840 --> 00:43:38,000 Speaker 1: things down to a reasonable size and guiding authors and 769 00:43:38,080 --> 00:43:40,000 Speaker 1: so and sometimes the authors become so grand that they 770 00:43:40,040 --> 00:43:43,719 Speaker 1: won't be told. So that that bit too that but 771 00:43:43,760 --> 00:43:46,560 Speaker 1: by and large I think that there's a sense in which, yes, 772 00:43:46,719 --> 00:43:49,080 Speaker 1: people are losing their attention span and people see a 773 00:43:49,080 --> 00:43:50,759 Speaker 1: fat book and they don't want to buy it. In 774 00:43:50,800 --> 00:43:52,960 Speaker 1: the time we got left with you, we saw Prince 775 00:43:52,960 --> 00:43:58,439 Speaker 1: Philip step aside from active services here a few weeks ago. 776 00:43:58,520 --> 00:44:02,440 Speaker 1: How prepared is the family, the windsor family for the 777 00:44:02,520 --> 00:44:06,440 Speaker 1: next stage of their royalty. What's the pulse of I 778 00:44:06,480 --> 00:44:08,960 Speaker 1: don't care what I think or David things. What's the 779 00:44:09,000 --> 00:44:12,560 Speaker 1: pause of the nation for this generational ship that I 780 00:44:12,560 --> 00:44:15,160 Speaker 1: think there's no doubt that the tradition will win out 781 00:44:15,960 --> 00:44:23,239 Speaker 1: if and when when the Queen um uh I think 782 00:44:23,360 --> 00:44:25,719 Speaker 1: it happens to all of us. And when Queen dies um, 783 00:44:25,760 --> 00:44:27,680 Speaker 1: I have absolutely no doubt that the Prince of Wales 784 00:44:27,719 --> 00:44:31,279 Speaker 1: will will become the king and then will be the 785 00:44:31,360 --> 00:44:33,640 Speaker 1: king for for his the rest of his life span, 786 00:44:33,680 --> 00:44:36,200 Speaker 1: which is going to be much limited by comparison to hers, 787 00:44:36,560 --> 00:44:39,279 Speaker 1: and then you will have William. I think that the 788 00:44:40,040 --> 00:44:44,200 Speaker 1: weddedness to monarchy is so embedded in British tradition that 789 00:44:44,440 --> 00:44:47,320 Speaker 1: it's here to stay, and it does. Actually I'm afraid 790 00:44:47,360 --> 00:44:50,840 Speaker 1: that and this is there's nothing meant detrimental in this. 791 00:44:51,200 --> 00:44:54,160 Speaker 1: I think that people do think there's something the continuity 792 00:44:54,200 --> 00:44:56,600 Speaker 1: of that that they're not really political, that they hold 793 00:44:56,640 --> 00:45:00,239 Speaker 1: themselves at a distance from from politics, and do the 794 00:45:00,280 --> 00:45:03,319 Speaker 1: ceremonial on the grand occasions and the ambassadorial rule and 795 00:45:03,360 --> 00:45:05,839 Speaker 1: all of that. I think people kind of like that 796 00:45:05,880 --> 00:45:07,760 Speaker 1: as they look around the world and they thank God, 797 00:45:08,480 --> 00:45:11,000 Speaker 1: who would we have as a president? And um, and 798 00:45:11,040 --> 00:45:13,560 Speaker 1: I'm afraid that in Britain we would. You know, when 799 00:45:13,640 --> 00:45:15,360 Speaker 1: names are put forward as to who one might have 800 00:45:15,400 --> 00:45:18,319 Speaker 1: as a president, it's not always all inspiring. So I 801 00:45:18,320 --> 00:45:20,600 Speaker 1: think that we better just stick just with the windsor 802 00:45:20,840 --> 00:45:22,680 Speaker 1: you know, it could be any family, but let's stick 803 00:45:22,719 --> 00:45:26,600 Speaker 1: with the There's a classic scene in the Johnny Adams 804 00:45:26,600 --> 00:45:29,120 Speaker 1: movie where Mr Adams backs out of the room with 805 00:45:29,280 --> 00:45:32,480 Speaker 1: the king and it's a little bit of a divide 806 00:45:32,600 --> 00:45:35,480 Speaker 1: and that note will leave it with Lenny Kennedy, barritess 807 00:45:36,160 --> 00:45:38,839 Speaker 1: uh this morning. Thank you so much for being with us. 808 00:45:47,880 --> 00:45:52,040 Speaker 1: Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and 809 00:45:52,080 --> 00:45:57,400 Speaker 1: listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast 810 00:45:57,560 --> 00:46:01,080 Speaker 1: platform you prefer. I'm on Twitter at Tom Keene. David 811 00:46:01,120 --> 00:46:05,279 Speaker 1: Gura is at David Gura. Before the podcast, you can 812 00:46:05,320 --> 00:46:19,839 Speaker 1: always catch us worldwide. I'm Bloomberg Radio, brought you by 813 00:46:20,040 --> 00:46:23,800 Speaker 1: Bank of America Mary Lynch, dedicated to bringing our clients 814 00:46:23,880 --> 00:46:28,040 Speaker 1: insights and solutions to meet the challenges of a transforming world. 815 00:46:28,520 --> 00:46:32,240 Speaker 1: That's the power of global connections. Mary Lynch Pierce, Fenner 816 00:46:32,320 --> 00:46:35,800 Speaker 1: and Smith, Incorporated, Member s i p C,