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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: You're listening to the Bloomberg Balance of Power podcast. Catch

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Speaker 2: us live weekdays at noon Eastern on Applecarplay.

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Speaker 3: And then Rouno with the Bloomberg Business App.

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Speaker 2: Listen on demand wherever you get your podcasts, or watch

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Speaker 2: us live on YouTube.

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Speaker 4: The Big Jobs Day, Yes, as Charlie refers, we started

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Speaker 4: our day out on the patio at the Labor Department

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Speaker 4: with the acting secretary and it was just a short

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Speaker 4: time after the data were released, painting two different pictures

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Speaker 4: exactly like Anna Wong told us what was going to happen.

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Speaker 4: And the team at Bloomberg Economics, which survey do you

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Speaker 4: care about here? As we see a jump much hotter

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Speaker 4: than expected in payrolls, but also an increase in the

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Speaker 4: unemployment rate, and everyone's talking about what's really under the hood.

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Speaker 4: That's why we turned to Molly Smith, Bloomberg Economics editor,

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Speaker 4: is with us live from New York, and Mally, I'd

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Speaker 4: love your take because Molly's the person who gets the

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Speaker 4: data the second that comes in and has to regurgitate

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Speaker 4: this into a story that makes sense to everyone who's

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Speaker 4: about to trade on Wall Street or whatever they're going

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Speaker 4: to do with the news and Molly, you get two

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Speaker 4: different stories here today, don't you which one is more important?

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Speaker 5: That's right, And you know, we were struggling with that

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Speaker 5: at a thirty as to what direction we're going to

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Speaker 5: go in with this story, because as you said, you know,

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Speaker 5: this really does give a bit of a mixed picture

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Speaker 5: depending on which survey you're taking the better cue from.

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Speaker 5: But if you're looking at payrolls, which certainly the market

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Speaker 5: reaction was indicative of, you're just looking at a blowout

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Speaker 5: jobs report and that payroll's number of two hundred and

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Speaker 5: seventy two thousand coming in above all estimates, and that's

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Speaker 5: about one hundred thousand more than the pace that was

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Speaker 5: last month. So that's just really it's so tough to

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Speaker 5: square these and the signals that you're getting from each

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Speaker 5: of the two surveys. I think, you know, parsing through

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Speaker 5: these different economist reactions, it seems like most people are

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Speaker 5: thinking that the true signal of the labor market is

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Speaker 5: we're in between them, that payrolls growth is still strong

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Speaker 5: but moderating, and that the job market overall is gradually,

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Speaker 5: very gradually softening.

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Speaker 4: So when Bloomberg Economics says, we believe the household survey,

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Speaker 4: pointing to the unemployment rate here currently offers a closer

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Speaker 4: approximation of reality than non farm payrolls. What part of

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Speaker 4: the survey does it bring us that's different?

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Speaker 6: Right?

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Speaker 5: So the household survey is it's a bit different from

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Speaker 5: the business survey. So this one is much smaller, and

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Speaker 5: this survey's actual household So if you, for example, get

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Speaker 5: a letter in the mail or a call from the

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Speaker 5: labor department and they will ask you where are you

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Speaker 5: working last month or during this particular week last month

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Speaker 5: versus the bigger survey that captures the headline non farm

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Speaker 5: payrolls number that comes from a survey of hundreds of

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Speaker 5: thousands of businesses. So very different.

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Speaker 4: Wel, it includes agriculture, right, which kind of paints a

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Speaker 4: different view of the labor force all the way around.

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Speaker 4: Is it more active?

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Speaker 6: Exactly?

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Speaker 5: Yeah, So the agriculture piece comes in on the house

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Speaker 5: hold survey side. That's why the establishment survey is called

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Speaker 5: non farm payrolls. So yeah, it's very different. And the

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Speaker 5: household surveys what we look to for the unemployment data,

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Speaker 5: and that's what was obviously the most concerning part of it.

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Speaker 5: Where you saw a big drop in employment this month,

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Speaker 5: the fewer people working, and you also saw a newer

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Speaker 5: people participating in the labor force, and that also contributed

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Speaker 5: to a rise in the unemployment rate.

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Speaker 4: Yeah, what do you make of that? I asked the

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Speaker 4: Labor Secretary about that this morning. I think it was

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Speaker 4: four hundred thousand had dropped out of the workforce. Correct,

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Speaker 4: we're currently not back to the participation rate pre COVID,

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Speaker 4: And how do you square that?

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Speaker 3: Right?

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Speaker 5: You know, it's it's it's really challenging. I mean, I'm

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Speaker 5: still what the report came out like three hours ago.

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Speaker 5: I'm still wondering what it means. But I think you know.

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Speaker 4: The big here to interrogate you about it much.

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Speaker 3: I know you are.

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Speaker 5: You always put me on the spot show. It's what

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Speaker 5: makes this show so great. So no, I mean that

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Speaker 5: really is the challenge of because you want to see

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Speaker 5: greater labor force participation and it has generally been coming

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Speaker 5: back from the drop off in COVID, but still very slowly.

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Speaker 5: But you know, something that was a positive that I'm

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Speaker 5: sure that Biden administration would like to see is that

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Speaker 5: we call it when we look at the prime age

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Speaker 5: participation rate So this is looking at people ages twenty

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Speaker 5: five to fifty four. So when the so called prime

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Speaker 5: working years, that actually increased to the highest in two decades,

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Speaker 5: So that is positive, but when you factor in other

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Speaker 5: age groups, it was slightly lower.

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Speaker 4: Can I ask you about this immigration effect. I don't

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Speaker 4: know if you have time for this in your research

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Speaker 4: or homework at this point, but there was a note

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Speaker 4: out this week I think it was from Standard Charter

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Speaker 4: that said the undocumented immigrants made up of something like

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Speaker 4: half payroll growth since October and that we could be

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Speaker 4: talking about one hundred and tow one hundred and nine

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Speaker 4: thousand jobs a month as Joe Biden puts this executive

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Speaker 4: order in place that would lower the th threshold for

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Speaker 4: the number of undocumented migrants coming across the border. Are

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Speaker 4: we going to see a change in jobs data?

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Speaker 5: Yeah, it's This has been a really big debate in

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Speaker 5: economic circles too, not just debating which survey is the

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Speaker 5: better signal of the labor market, but also which survey

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Speaker 5: better captures the impact of immigration. That there's a big

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Speaker 5: debate circling around about that, and a lot of people

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Speaker 5: seem to think that the Establishment survey does a better

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Speaker 5: job of that, hence why you've seen that number be

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Speaker 5: so robust like the two hundred and seventy two thousand today.

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Speaker 5: Others think the household survey is maybe more indicative of

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Speaker 5: where immigration is going to be captured. You know, it's

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Speaker 5: really tough to say it's you know, I think either

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Speaker 5: way you can conclude economically that immigration is positive for

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Speaker 5: the economy without waiting into politically which side you lean on.

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Speaker 4: Fascinating conversation as always as you're clearly still I love

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Speaker 4: that the gears are still turning. At noontime, Wall Street Time,

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Speaker 4: Molly Smith. Great to have you always, Bloomberg Economics editor.

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Speaker 4: She doesn't only report on tennis, she covers them. Hope

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Speaker 4: you have a great weekend. You know, that's right, that's

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Speaker 4: her full time job, which is what we try to

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Speaker 4: keep her talking about here on Balance of Power. I'm

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Speaker 4: Joe Matthew in Washington and glad you came along on

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Speaker 4: the radio, on the satellite and on YouTube, where you

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Speaker 4: can search Bloomberg Global News and find our live stream

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Speaker 4: anytime we're on the air here from Washington. This is

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Speaker 4: like one of the best deals going. We'll save a

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Speaker 4: seat for you in the studio, see all of our guests,

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Speaker 4: see the images that we're talking about on the interwebs.

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Speaker 4: As we turn to speaking of which another important day

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Speaker 4: for Joe Biden in Normandy. Still the point to Hawk's

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Speaker 4: speech as he delivered his message on protecting democracy standing

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Speaker 4: up to authoritarianism, with the sea behind him, standing on

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Speaker 4: the very cliffs that the Rangers climbed at point to

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Speaker 4: Hawk on D Day, here's the President of the United States.

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Speaker 7: Walk away from you.

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Speaker 8: I apologize for the weeks of not knowing what's going

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Speaker 8: to VAMA in terms of funding, because we had trouble

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Speaker 8: getting a bill that we had to pass, had the

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Speaker 8: money in it from some of our very conservative members

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Speaker 8: holding it up.

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Speaker 9: All right.

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Speaker 4: Clearly not from the speech from his meeting with President

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Speaker 4: Zelenski earlier today, which coincided with his address and his

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Speaker 4: visit to Normandy to mark the eightieth anniversary of the

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Speaker 4: D Day invasion, the President announcing a new two hundred

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Speaker 4: and twenty five million dollar aid package for Ukraine during

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Speaker 4: that conversation, as he spent time and even apologized to Zelenski,

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Speaker 4: the word from the President, I'm not going to walk

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Speaker 4: away from you, and it brings us to our conversation

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Speaker 4: that I've been looking forward to. Here today a special

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Speaker 4: one from Ukraine. Ilia Pana Moreenko, the co founder of

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Speaker 4: the Kiev Independent and the author of an important book

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Speaker 4: called I Will Show You How It was the story

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Speaker 4: of wartime Kiev. Ilia has been in the field in

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Speaker 4: and around Kiev and in the fight since this started,

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Speaker 4: since Russia's invasion of Ukraine, and brings a unique on

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Speaker 4: the ground perspective here literally with what's going on. Ilia,

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Speaker 4: thank you for taking the time to talk with us.

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Speaker 4: It's great to have you here on Bloomberg. I wonder

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Speaker 4: your thoughts today when Joe Biden not only made that

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Speaker 4: address but sat down with President Selenski. Do you believe

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Speaker 4: Joe Biden's resolve when it comes to supporting this war.

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Speaker 6: I do believe him in terms of trusting in Ukraine,

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Speaker 6: in terms of having a positive feeling about Ukraine. Joe Biden,

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Speaker 6: since many years ago, has got the reputation of a

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Speaker 6: vice president and then a President of the United States

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Speaker 6: who truly Ukraine. He loves this country in many ways.

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Speaker 6: This is why we were lucky to have him as

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Speaker 6: the decision top decision maker Washington, d C. However, with

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Speaker 6: his good intentions. At the same time, we often see

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Speaker 6: this in the picture that his into rush is overcautious

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Speaker 6: about the steps, you know, this notorious concept of escalation management.

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Speaker 6: He is definitely between the hammer and the anvil of

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Speaker 6: domestic politics, with a lot of American fatigue about foreign

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Speaker 6: wars and American interventions overseas. He's definitely under severe pressure

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Speaker 6: not to meddle America into something else overseas that that

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Speaker 6: Americans are tired off. So I would say that, yeah,

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Speaker 6: we truly believe him. We truly believe that he means

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Speaker 6: that he really wants Scramee to be free, independent, But

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Speaker 6: the same time his hands are tied in many ways

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Speaker 6: by his own device.

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Speaker 4: Well, you know, there's a lot of debate here about

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Speaker 4: whether the delay and approving funding for Ukraine the better

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Speaker 4: part of six months set back the Ukrainian military or

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Speaker 4: even turned the tide in Russia's favor. Can you tell

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Speaker 4: us firsthand what that delay meant for Ukrainian forces in

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Speaker 4: this stage of the war.

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Speaker 6: Well, I'm not sure that we have all one percent

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Speaker 6: of the material to make complete conclusions about these months

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Speaker 6: without US eight and the effect, but I think we

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Speaker 6: can safely say that it has not traumatically turned the

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Speaker 6: tide for the war, but at the same time it

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Speaker 6: played really strongly into the hands of Russian military. It

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Speaker 6: gave them very wide and very dangerous window of opportunity,

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Speaker 6: especially when it comes to attacking Ukrainian civilian infrastructure, which

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Speaker 6: is in many ways our air defense was so weakened,

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Speaker 6: and which is why in many ways our energy infrastructure

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Speaker 6: and eragey supply is such a severe crisis right now.

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Speaker 6: At the same time, it was an extremely dark time

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Speaker 6: on the front line. Lots of things lost, not only

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Speaker 6: because of the lack of munitions, lack of weapons, but

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Speaker 6: also because of a lot of mistakes from the Ukrainian side. Unfortunately, admittedly,

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Speaker 6: but I'm gonna say that given the dire shortage that

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Speaker 6: was precipitated by this delay, we are extremely lucky to

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Speaker 6: not have lost even more. In many ways, these that

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Speaker 6: dark period was mitigated by the heroism and extreme inventions

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Speaker 6: of the people on the ground, of soldiers of the

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Speaker 6: Ukrainian military, so they used a lot of waste to

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Speaker 6: bypass and mitigate this dire shortage. Without this, without this

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Speaker 6: dedication extremely litigation, in so many cases, a situation could

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Speaker 6: have been way way worse and we are lucky to

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Speaker 6: have it.

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Speaker 4: As we spend time with Iliapanomarenko's the co founder of

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Speaker 4: the Kiev Independent, we talk a lot about morale, or

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Speaker 4: we hear reports about the state of morale among Ukrainian forces. Ilia,

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Speaker 4: how about Ukrainian people. When you're in Kiev, people are

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Speaker 4: trying to live their lives even as missile attacks are

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Speaker 4: being aimed at apartment complexes. The lights are on and off,

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Speaker 4: the power, the heat is on and off. What are

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Speaker 4: the people of Ukraine think of the war at this stage?

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Speaker 4: What appetite do they have to keep fighting?

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Speaker 6: You know, Ukraine and Ukrainian society, it has pretty much

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Speaker 6: everything of what could be expected from a society after

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Speaker 6: more than two years of extremely bloody war. It's about

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Speaker 6: the entire spectrum, the whole spectrum of so many emotions

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Speaker 6: that could be found in a complex society in such

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Speaker 6: a dark time. It's about despair. Some people are losing hope.

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Speaker 6: Some people are still extremely motivated, military and civilians. Some

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Speaker 6: people are more or less impassionate about this. Many try

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Speaker 6: to live their lives. Many are sort of a panicking

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Speaker 6: on the internet, and which is why in many ways,

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Speaker 6: it's not a very good idea to judge on the

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Speaker 6: social discourse from social media. At the same time, that

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Speaker 6: a lot of people who maintain the normal life maintain

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Speaker 6: the motivation to go on to work, to donate to

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Speaker 6: the military, to help to get mobilized, even though of

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Speaker 6: course the stream of volunteers have dropped over these two years.

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Speaker 6: So it has everything that could happen to a nation

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Speaker 6: that has lost such a lot and has suffered such

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Speaker 6: a lot. But yes, you're absolutely right to say that

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Speaker 6: no matter what happens, Essentially what happens is that people

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Speaker 6: get adapt I just got back home from driving through

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Speaker 6: the streets of Kiev and most of the city was

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Speaker 6: in a blackout. Power cuts to control they severely dwindled

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Speaker 6: energy capacity. And yeah, most of the restaurants they keep working.

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Speaker 6: Everybody uses power generators, diesel generators. How small power stations too.

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Speaker 6: It's a very normal thing right now that even the

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Speaker 6: large most in Kiev, outside Kiev, they also use really

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Speaker 6: powerful electric station to absolutely go on working. And I

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Speaker 6: must say that these things, this continuation of normalcy, it

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Speaker 6: really works well for the public morale.

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Speaker 4: Really, I'm really glad that you could spend some time

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Speaker 4: with us. You describe the war in Ukraine as quote,

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Speaker 4: an idiotic war for the sake of just one delusional

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Speaker 4: old man's monstrous act of megalomania. The book I will

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Speaker 4: show you how it was the story of wartime Kiev

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Speaker 4: Ilia Panomorenko joining us live from Kiev on Bloomberg. We

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Speaker 4: do thank you for your time. Come back and talk

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Speaker 4: to us again. I'm Joe Matthew in Washington as we

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Speaker 4: carry on the conversation coming up with the help of

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Speaker 4: Bloomberg Economics Jenny Welch, our geoeconomics analyst on this latest

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Speaker 4: batch of aid for Ukraine and the message from the

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Speaker 4: President Today in Normandy, this is Bloomberg.

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Speaker 2: You're listening to the Bloomberg Balance of Power podcast. Can

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Speaker 2: just live weekdays at noon Eastern on Applecarplay.

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Speaker 3: And Enroid Oto with the Bloomberg Business ad.

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Speaker 2: You can also listen live on Amazon Alexa from our

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Speaker 2: flagship New York station, Just Say Alexa play Bloomberg eleven thirty.

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Speaker 4: With the reaction on Wall Street fascinating since eight thirty

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Speaker 4: this morning. To listen to the analysis and the different

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Speaker 4: takes on the same numbers here growth surging in May.

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Speaker 4: You've been hearing about that if you've been with it

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Speaker 4: since eight thirty this morning. Wages accelerating two hundred and

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Speaker 4: seventy two thousand the number last month, blowing the doors

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Speaker 4: off expectations once again. The unemployment rate though also up,

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Speaker 4: hitting four percent from three point nine, just to tick

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Speaker 4: but not expected. And it brings us to the question

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Speaker 4: of which survey we should be looking at. Bloomberg Economics

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Speaker 4: points you to the household survey that includes agriculture, that

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Speaker 4: which generates the unemployment rate. Payrolls stay hot, though, and

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Speaker 4: that's the number of the White House is going to

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Speaker 4: seize on here. So we made our way down to

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Speaker 4: the Labor Department to get the take of the Acting Secretary,

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Speaker 4: Julie Sue and I started by asking her, as we

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Speaker 4: got together on the patio of the Labor Department, overlooking

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Speaker 4: the US capital, which survey better reflects reality.

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Speaker 10: Here's what she said, This is another very strong jobs report.

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Speaker 10: I'm not going to get tired of coming here and

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Speaker 10: telling you that we are continuing to experience very strong,

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Speaker 10: stable and steady growth. So it's two hundred and seventy

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Speaker 10: two thousand jobs created this month. The unemployment rate has

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Speaker 10: remained at or below four percent for thirty months straight.

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Speaker 10: That's still the longest since the nineteen sixties. And at

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Speaker 10: the same time, real wages, you know, over the year

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Speaker 10: are up four point one percent. So workers are doing

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Speaker 10: better in an economy in which the President has said,

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Speaker 10: when we focus on workers and worker well being, we're

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Speaker 10: going to do what's right for the economy and for

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Speaker 10: the country.

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Speaker 4: When you look under the hood, you find that four

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Speaker 4: hundred thousand, even more than four hundred thousand people left

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Speaker 4: the labor force in May. The participation rate is not

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Speaker 4: back where it was before COVID right now, how do

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Speaker 4: you explain that?

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Speaker 10: Well, so let's say, you know, the prime age labor

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Speaker 10: force participation rate remains very, very strong. And it's worth

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Speaker 10: noting that again women's labor force participation rate hit another

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Speaker 10: historic high. So last month we said it was the

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Speaker 10: highest since nineteen forty eight when this data was begun

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Speaker 10: to be collected. It's now a little bit higher than that.

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Speaker 10: Even so women continue to power are economic recovery. At

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Speaker 10: the same time, you know, we are seeing again strong participation.

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Speaker 10: People are in the job market, People have come off

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Speaker 10: the sidelines. People are looking for jobs and they're finding them.

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Speaker 10: Where there has been a little bit of a you know,

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Speaker 10: of a very small uptick in the unemployment rate again

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Speaker 10: still at or below four percent for the longest stretch

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Speaker 10: in decades, but has to do with young people ages

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Speaker 10: twenty to twenty four, who are in a bit of transition. Really,

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Speaker 10: if we think about May, right, May is a period

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Speaker 10: of transition for all of us parents with kids who

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Speaker 10: graduate and maybe move and you know, are looking for

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Speaker 10: different jobs during that time.

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Speaker 4: You can tell a great story and put a great

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Speaker 4: headline number on that unemployment story as you are right now.

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Speaker 4: But when you look under the hood, you do see

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Speaker 4: some elements of weakness compared to the payroll survey. And

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Speaker 4: I wonder, while your happy word is now, if you

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Speaker 4: worry about where we're going to be six months from now,

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Speaker 4: if this is a slowing job market, well.

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Speaker 10: The payroll survey really is the gold standard when it

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Speaker 10: comes to the unemployment rate. Right, this is the you know,

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Speaker 10: it's the largest by far of any data set, including

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Speaker 10: the household survey that is used. And so again, I

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Speaker 10: don't think there's any way to paint this as other

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Speaker 10: than continued, strong, stable and steady growth under President Biden's leadership.

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Speaker 10: And proof of his theory that if we invest in America,

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Speaker 10: we can create good jobs in communities and crowd in

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Speaker 10: private investment in order to do that. And you know,

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Speaker 10: as I travel the country, I'm seeing the benefits of that.

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Speaker 4: We've talked a lot about the impacts that immigration has

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Speaker 4: on our job market can be for better or worse,

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Speaker 4: depending on the trend that you're looking at. And there's

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Speaker 4: an analysis from Steve England Standard Chartered Bank that we

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Speaker 4: looked at this week that estimates about half of the

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Speaker 4: job growth since October can be attributed to undocumented migrants.

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Speaker 4: That it's somewhere in the area of one hundred and

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Speaker 4: nine thousand a month. If the president's executive order put

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Speaker 4: in place just days ago lowers the threshold, lowers the

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Speaker 4: numbers of undocumented immigrants entering the country, what does that

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Speaker 4: mean for the job market. Do you see numbers like

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Speaker 4: that in your modeling.

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Speaker 10: I mean, I haven't seen that study. I would actually

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Speaker 10: question those numbers based on what we see. This is

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Speaker 10: a situation where one we're not talking about dividing a

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Speaker 10: small pie into smaller pieces. We're talking about a much

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Speaker 10: bigger pie overall, So more jobs, more people in the

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Speaker 10: labor market, more opportunity for all. Since the President came

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Speaker 10: into office, again, we've talked about this, you know, fifteen

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Speaker 10: million jobs created. That is a fifteen million families, fifteen

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Speaker 10: million individuals who are having the benefits of a good

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Speaker 10: job that might not have had that before. I would

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Speaker 10: also say that it is true that there has been

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Speaker 10: you know, immigration based growth also, and that has been

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Speaker 10: true with throughout our nation's history, right that immigrants have

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Speaker 10: helped to do jobs and help field the economy. But

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Speaker 10: the majority of this job growth that we're talking about

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Speaker 10: has gone to native born workers.

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Speaker 4: Well, talk to me about the other side of the story,

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Speaker 4: and that's immigration reform one B H two B. We

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Speaker 4: spend all day talking about border security in Washington. What

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Speaker 4: does our job market need in terms of attracting talent

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Speaker 4: from other countries legally?

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Speaker 10: I mean, it's such an important question, right. This is

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Speaker 10: why since day one, President Biden has called for the

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Speaker 10: kinds of comprehensive immigration reform that would address you know,

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Speaker 10: some of the challenges that our system has created.

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Speaker 9: What job market look like with that help?

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Speaker 10: What what our job market look like.

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Speaker 4: With you got that reform?

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Speaker 2: Right?

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Speaker 10: Well, so we do administer you know, we have in

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Speaker 10: this administration increase the number of H two B workers

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Speaker 10: that have come in. We recently did a rule around

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Speaker 10: H two A workers, making sure that when migrant workers

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Speaker 10: come to this country through legal means, that they're also protected.

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Speaker 10: Right that that that that they are protected for their

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Speaker 10: own good but also so that they're being here doesn't

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Speaker 10: take away from you know, the good wages in those industries. So,

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Speaker 10: you know, the but the bigger picture is that there

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Speaker 10: does need to be comprehensive reform. The press and has

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Speaker 10: called for that, and frankly Congress needs to do its job.

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Speaker 4: There's something that I don't want to get too deep

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Speaker 4: in the weeds called the birth death model that our

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Speaker 4: analysts set Bloomberg Economics are looking at that would suggest

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Speaker 4: some of the companies that we've seen closing might not

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Speaker 4: be reflected yet in the numbers that we saw in

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Speaker 4: this monthly survey based on layoff announcements corporate closures. Where

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Speaker 4: do we look in the middle of summer when these

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Speaker 4: numbers start to emerge from.

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Speaker 10: Well, you know, we will come out every month to

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Speaker 10: report the data that we have, but everything that we

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Speaker 10: have seen this past month, this past year as well

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Speaker 10: as you know, the last year since President Biden came

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Speaker 10: to office is historic job growth, more jobs created during

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Speaker 10: the same time period than any president in our history,

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Speaker 10: and continued low levels of unemployment again historic lows, and

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Speaker 10: more opportunity to come right. The investments in the President's

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Speaker 10: Investing in America agenda, many of them are still coming out.

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Speaker 10: And that's why this summer I'm going across the country

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Speaker 10: talking about Job Summer and focusing on the importance of

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Speaker 10: what a good job.

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Speaker 4: Does, good job principles. Summer Tour. You're like Beyonce, You're

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Speaker 4: launching a national tour and it's not a mistake. I

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Speaker 4: see some of the states are going through, like Pennsylvania

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Speaker 4: and Michigan. What is your message to voters in those states.

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Speaker 10: Well, my message to working people is that we see you,

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Speaker 10: we have your back. We know that you have talent

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Speaker 10: and desire, and we want to create the kinds of

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Speaker 10: opportunities that will allow working people to have a good

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Speaker 10: job where they can be paid a living wage and

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Speaker 10: live a secure life. And our message generally is that

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Speaker 10: when you build a workforce that is ready, that is trained,

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Speaker 10: that is skilled, that pulls the full talent of the

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Speaker 10: American people. It's good for employers, it's good for economy,

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Speaker 10: and we see that time and time again in these

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Speaker 10: jobs numbers.

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Speaker 4: Getting back to the household survey, which is important to

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Speaker 4: us and our viewers and listeners. The fact that it

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Speaker 4: reflects agriculture, the fact that it reflects what's happening in

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Speaker 4: people's households. Does that not raise the level of importance

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Speaker 4: of the household survey at this point? When we look

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Speaker 4: at that against payrolls, they get a sense of not

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Speaker 4: as even as much where we are now, but where

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Speaker 4: we're going.

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Speaker 10: I mean, I think the bigger you know, the answer

439
00:24:10,160 --> 00:24:14,160
Speaker 10: is the payroll survey is the survey that tells us

440
00:24:14,280 --> 00:24:16,960
Speaker 10: how many jobs have been created, what industries they've been

441
00:24:17,000 --> 00:24:19,080
Speaker 10: created in. And again, this the growth we're talking about

442
00:24:19,160 --> 00:24:21,760
Speaker 10: is not just single industry, right, it has been for

443
00:24:21,840 --> 00:24:25,040
Speaker 10: the entire time, but certainly this last month is no different,

444
00:24:25,480 --> 00:24:29,119
Speaker 10: very very broad based. We saw growth in leisure and hospitality,

445
00:24:29,480 --> 00:24:32,639
Speaker 10: we saw it in construction, we saw it in professional services,

446
00:24:33,200 --> 00:24:36,280
Speaker 10: we saw it in healthcare, and so you know, there's

447
00:24:36,320 --> 00:24:40,439
Speaker 10: really the numbers don't lie. It's really you know, broad based,

448
00:24:40,680 --> 00:24:44,159
Speaker 10: solid continued growth, and I think that coveted soft landing

449
00:24:44,160 --> 00:24:46,320
Speaker 10: that so many people bet against.

450
00:24:47,560 --> 00:24:50,600
Speaker 4: My conversation with Julie Sue, the Acting Secretary of Labor,

451
00:24:50,600 --> 00:24:53,520
Speaker 4: a short time ago, was her first conversation coming off

452
00:24:53,560 --> 00:24:55,480
Speaker 4: the data, actually really interesting to hear the way she

453
00:24:55,520 --> 00:24:59,960
Speaker 4: framed some of the messaging coming out of the administration.

454
00:25:00,160 --> 00:25:01,919
Speaker 4: Here we're going to get a different side of this

455
00:25:02,000 --> 00:25:04,280
Speaker 4: now with Catherine Edwards. I've been looking forward to this

456
00:25:04,320 --> 00:25:08,440
Speaker 4: conversation with us today at the Table, economic policy consultant

457
00:25:08,480 --> 00:25:12,359
Speaker 4: adjunct economists at the Rand Corporation, also writes for Bloomberg Opinion.

458
00:25:12,400 --> 00:25:14,160
Speaker 4: So that means, Catherine, you get to say whatever you want.

459
00:25:14,200 --> 00:25:15,720
Speaker 4: I can only imagine what it's like to be you.

460
00:25:16,840 --> 00:25:20,240
Speaker 4: Soft landing is with the Acting Labor Secretary said, and

461
00:25:20,280 --> 00:25:22,520
Speaker 4: we've been asking her that is this it? She seems

462
00:25:22,560 --> 00:25:24,199
Speaker 4: to be saying it out loud. Now you know what

463
00:25:24,359 --> 00:25:28,200
Speaker 4: this is it? What comes after a soft landing? Or

464
00:25:29,040 --> 00:25:31,200
Speaker 4: in your view, are we going into a recession?

465
00:25:32,840 --> 00:25:35,240
Speaker 11: I looked at the jobs report this morning and couldn't

466
00:25:35,240 --> 00:25:38,600
Speaker 11: help but think that we are on borrowed time. I

467
00:25:38,600 --> 00:25:41,040
Speaker 11: don't know how much longer the labor market can stay

468
00:25:41,080 --> 00:25:44,240
Speaker 11: strong with interest rates at the level that they're at now,

469
00:25:44,359 --> 00:25:47,000
Speaker 11: and just the amount of pressure that most families are

470
00:25:47,080 --> 00:25:49,680
Speaker 11: under to make ends meet prices.

471
00:25:49,720 --> 00:25:52,000
Speaker 4: Have you concerned what part of the economy, because we

472
00:25:52,240 --> 00:25:56,439
Speaker 4: see some areas of worry in the household survey versus

473
00:25:56,440 --> 00:25:58,639
Speaker 4: the establishment survey, which is where I started with her.

474
00:25:58,680 --> 00:26:01,000
Speaker 4: They want to talk about a big hay Rolls number,

475
00:26:01,000 --> 00:26:03,399
Speaker 4: but you see a lot of other evidence.

476
00:26:03,080 --> 00:26:03,600
Speaker 9: Under the hood.

477
00:26:04,320 --> 00:26:06,000
Speaker 11: I mean, I think what I'm worried about most is

478
00:26:06,119 --> 00:26:09,720
Speaker 11: just the on some level, the dissatisfaction that Americans are

479
00:26:09,960 --> 00:26:13,640
Speaker 11: expressing with their current economic situation, the amount of price

480
00:26:13,720 --> 00:26:16,159
Speaker 11: increases that they've had to bear over the past two

481
00:26:16,200 --> 00:26:18,119
Speaker 11: and a half years. But at the same time, the

482
00:26:18,240 --> 00:26:21,800
Speaker 11: lack of relief for any of those price increases. You know,

483
00:26:22,119 --> 00:26:24,960
Speaker 11: policy geared towards making it easier for families to get by.

484
00:26:25,040 --> 00:26:27,440
Speaker 11: I mean, that's none of that's allowed right now, because

485
00:26:27,480 --> 00:26:29,199
Speaker 11: we have to wait for prices to come down on

486
00:26:29,240 --> 00:26:31,600
Speaker 11: their own through falling consumer demand. So that means we

487
00:26:31,600 --> 00:26:34,000
Speaker 11: don't really get to help consumers at all. I don't

488
00:26:34,000 --> 00:26:35,720
Speaker 11: know how much longer that can last.

489
00:26:35,880 --> 00:26:37,439
Speaker 4: Well, then you wake up on a morning like this

490
00:26:37,560 --> 00:26:40,760
Speaker 4: and you hear that expectations of an interest rate cut

491
00:26:40,760 --> 00:26:44,240
Speaker 4: have been pushed back, and maybe nothing at all this year,

492
00:26:44,359 --> 00:26:46,800
Speaker 4: even as President Biden predicts one. What do you make

493
00:26:46,840 --> 00:26:48,040
Speaker 4: of that? Do you think it's true?

494
00:26:49,480 --> 00:26:51,960
Speaker 11: I mean, you have better people to forecast what the

495
00:26:52,000 --> 00:26:54,399
Speaker 11: federal dude and me, I prefer to look at the

496
00:26:54,440 --> 00:26:57,919
Speaker 11: labor market than the people down the street. But you know,

497
00:26:58,200 --> 00:27:01,960
Speaker 11: I do wonder we know what needs to happen for

498
00:27:02,040 --> 00:27:05,280
Speaker 11: the FED to cut rates because they think inflation has

499
00:27:05,359 --> 00:27:07,639
Speaker 11: cooled sufficiently. Right, we have all the little ducks that

500
00:27:07,680 --> 00:27:09,840
Speaker 11: have to come into a row and price. We get

501
00:27:09,880 --> 00:27:12,520
Speaker 11: one kind of price report or one kind of jobs report.

502
00:27:12,760 --> 00:27:14,280
Speaker 11: You know, it either gets too bad in the labor

503
00:27:14,320 --> 00:27:16,159
Speaker 11: market or we get good news from prices, and then

504
00:27:16,160 --> 00:27:18,200
Speaker 11: they're going to drop rates. And we are all waiting

505
00:27:18,200 --> 00:27:20,320
Speaker 11: for that to happen and have been for some time.

506
00:27:20,840 --> 00:27:23,560
Speaker 11: I think what is not clear to me is when

507
00:27:23,640 --> 00:27:26,720
Speaker 11: does the FED admit that maybe this policy isn't going

508
00:27:26,800 --> 00:27:29,240
Speaker 11: to do anything else, that we are at the limit

509
00:27:29,280 --> 00:27:32,720
Speaker 11: of what it can accomplish. You know, even Dallas President

510
00:27:32,760 --> 00:27:35,639
Speaker 11: Logan said it's not clear it's going to do anything else. Now,

511
00:27:35,720 --> 00:27:37,760
Speaker 11: she was very careful to say that that doesn't mean

512
00:27:37,800 --> 00:27:40,119
Speaker 11: she thinks that rates should be cut. But you know,

513
00:27:40,200 --> 00:27:42,359
Speaker 11: when you're living in a moment real time. You don't

514
00:27:42,359 --> 00:27:44,719
Speaker 11: have the ability to step back and say, our interest

515
00:27:44,800 --> 00:27:46,600
Speaker 11: rates the best thing that we can do or the

516
00:27:46,640 --> 00:27:49,600
Speaker 11: only thing that we can do to move the economy

517
00:27:49,600 --> 00:27:53,160
Speaker 11: from basically this what we think is a soft landing

518
00:27:53,160 --> 00:27:54,359
Speaker 11: where we've been for six months.

519
00:27:54,400 --> 00:27:57,560
Speaker 4: Well, what do you do coming out of clearly still

520
00:27:57,640 --> 00:27:59,680
Speaker 4: noise from a pandemic. Do you how do you get

521
00:27:59,680 --> 00:28:01,600
Speaker 4: to this apply side? If that's where you're going.

522
00:28:02,920 --> 00:28:05,160
Speaker 11: I think that expansion of the labor market is good

523
00:28:05,240 --> 00:28:08,720
Speaker 11: at keeping certain prices low because we don't have to

524
00:28:08,800 --> 00:28:11,840
Speaker 11: have wayes be bid up too quickly. And increasing labor

525
00:28:11,840 --> 00:28:15,520
Speaker 11: supply is going to be challenging when the largest generation

526
00:28:15,640 --> 00:28:18,199
Speaker 11: is retiring and we're coming off of a period of

527
00:28:18,240 --> 00:28:20,840
Speaker 11: restricted immigration. But at the same time, the US has

528
00:28:20,920 --> 00:28:23,879
Speaker 11: never pursued an active labor supply policy. It's not as

529
00:28:23,880 --> 00:28:26,199
Speaker 11: if Congress has ever sat down and said, how do

530
00:28:26,240 --> 00:28:29,000
Speaker 11: we maximize the number of workers in the United States today?

531
00:28:29,520 --> 00:28:32,399
Speaker 4: Well, there's a big argument about the impact of immigration.

532
00:28:32,840 --> 00:28:35,320
Speaker 4: It's been going on for a long time. It gets

533
00:28:35,400 --> 00:28:39,080
Speaker 4: louder with new research from Standard Charter that you may

534
00:28:39,080 --> 00:28:42,120
Speaker 4: have seen, and the numbers were remarkable. If true that

535
00:28:42,840 --> 00:28:46,440
Speaker 4: undocumented migrants made up for half the job growth in

536
00:28:46,480 --> 00:28:48,920
Speaker 4: this country since October, that we could be looking at

537
00:28:48,960 --> 00:28:51,000
Speaker 4: as many as one hundred to one hundred and nine

538
00:28:51,040 --> 00:28:56,760
Speaker 4: thousand jobs a month, distorting payrolls. Do you see that falling?

539
00:28:56,840 --> 00:28:58,960
Speaker 4: First of all, do you believe that? And if you do,

540
00:28:58,960 --> 00:29:00,480
Speaker 4: do you see that falling in the wake of this

541
00:29:00,520 --> 00:29:01,960
Speaker 4: executive order from the President?

542
00:29:02,680 --> 00:29:05,160
Speaker 11: I hadn't seen it, but it doesn't I guess it

543
00:29:05,160 --> 00:29:08,360
Speaker 11: doesn't necessarily surprise me. Immigration is a very big part

544
00:29:08,400 --> 00:29:11,440
Speaker 11: of our labor market. Around one in five people who

545
00:29:11,480 --> 00:29:13,560
Speaker 11: live in this country were not born here, and we

546
00:29:13,680 --> 00:29:17,080
Speaker 11: tend to treat them as almost a separate segment that

547
00:29:17,240 --> 00:29:20,160
Speaker 11: aren't as good or maybe aren't as important to labor

548
00:29:20,160 --> 00:29:22,760
Speaker 11: market policy as native born workers. But they are here

549
00:29:22,800 --> 00:29:26,120
Speaker 11: and they are working. And to act as if they

550
00:29:26,680 --> 00:29:29,280
Speaker 11: need a separate policy as opposed to our integrated into

551
00:29:29,280 --> 00:29:32,200
Speaker 11: our labor market, you know, is really putting a demographic

552
00:29:32,240 --> 00:29:35,479
Speaker 11: imposition on something the labor market wouldn't make a distinction between.

553
00:29:35,600 --> 00:29:39,080
Speaker 4: Interesting. But if so, if that is qualified here in

554
00:29:39,120 --> 00:29:41,960
Speaker 4: the next couple of months, the Biden administration is acting

555
00:29:41,960 --> 00:29:43,040
Speaker 4: to shrink the labor pool.

556
00:29:43,440 --> 00:29:46,960
Speaker 11: You could say, then yes, you know, no, and yes

557
00:29:47,000 --> 00:29:49,520
Speaker 11: I mean, because directly the basis of the US economies

558
00:29:49,560 --> 00:29:51,840
Speaker 11: that we have more people basically every month than we

559
00:29:51,880 --> 00:29:54,280
Speaker 11: do the month before, and that the population is growing,

560
00:29:54,320 --> 00:29:57,000
Speaker 11: and that you know, the immigration is just a thumb

561
00:29:57,080 --> 00:29:59,600
Speaker 11: on the scale, right to change that growth be higher

562
00:29:59,640 --> 00:30:02,960
Speaker 11: or faster, it is slower or faster. But I, you know, no,

563
00:30:03,080 --> 00:30:05,160
Speaker 11: I don't think it's necessarily good policy. I mean similar

564
00:30:05,200 --> 00:30:06,600
Speaker 11: to how I didn't think it was good policy to

565
00:30:06,680 --> 00:30:09,080
Speaker 11: let childcare subsidies expire when we knew that it was

566
00:30:09,160 --> 00:30:11,360
Speaker 11: risking pushing more women out of the labor force. And

567
00:30:11,360 --> 00:30:13,400
Speaker 11: we haven't seen that happen to the degree that it

568
00:30:13,520 --> 00:30:17,520
Speaker 11: was predicted, but it's certainly not helping the US workforce.

569
00:30:18,000 --> 00:30:21,360
Speaker 11: That childcare cost families, you know, on average a quarter

570
00:30:21,400 --> 00:30:21,960
Speaker 11: of their income.

571
00:30:22,040 --> 00:30:25,320
Speaker 4: Yeah, it's interesting. You remember this exchange between Elizabeth Warren

572
00:30:25,320 --> 00:30:28,200
Speaker 4: and J. Powell and one of their many standoffs in

573
00:30:28,800 --> 00:30:32,480
Speaker 4: congressional hearings. We tune in just for these moments sometimes,

574
00:30:32,840 --> 00:30:35,080
Speaker 4: and she was making the point, you keep hiking interest

575
00:30:35,160 --> 00:30:36,760
Speaker 4: rates to keep them higher for longer, you're going to

576
00:30:36,760 --> 00:30:39,640
Speaker 4: destroy the job market. And he clapped back and said,

577
00:30:39,640 --> 00:30:43,320
Speaker 4: what is better to allow inflation to run out of control?

578
00:30:43,400 --> 00:30:46,280
Speaker 4: So families can afford nothing. What do you make of

579
00:30:46,320 --> 00:30:49,120
Speaker 4: the balance that he's trying to find here?

580
00:30:50,480 --> 00:30:54,280
Speaker 11: All policies have trade offs, that is the reality. There's

581
00:30:54,280 --> 00:30:56,280
Speaker 11: never one winner of all we have to do is

582
00:30:56,320 --> 00:30:58,960
Speaker 11: this and everything is okay and it doesn't have any consequences.

583
00:30:59,400 --> 00:31:03,720
Speaker 11: There's always a trade off to consider. And Powell's job

584
00:31:03,880 --> 00:31:07,680
Speaker 11: is not to consider the trade off for how Americans

585
00:31:07,720 --> 00:31:11,360
Speaker 11: feel about economy and society, whether or not they think

586
00:31:11,480 --> 00:31:14,440
Speaker 11: that their struggles are important to their government. And that

587
00:31:14,600 --> 00:31:18,400
Speaker 11: is Warren's job, and that is elected officials job. I mean, well, it's.

588
00:31:18,280 --> 00:31:21,920
Speaker 4: Also a fed's job. With a dual mandate, you could argue.

589
00:31:22,000 --> 00:31:24,160
Speaker 11: I mean, it's are they equal mandates?

590
00:31:25,240 --> 00:31:25,320
Speaker 7: Me?

591
00:31:26,240 --> 00:31:30,440
Speaker 11: I don't know. We have had unemployment below four percent

592
00:31:30,520 --> 00:31:33,080
Speaker 11: for just over two years ending this month, and that's

593
00:31:33,120 --> 00:31:35,840
Speaker 11: the second time it's happened in almost one hundred years,

594
00:31:35,920 --> 00:31:38,120
Speaker 11: so it feels like maybe it's not quite equal of

595
00:31:38,120 --> 00:31:42,880
Speaker 11: a mandate. I think it's there's a policy question that

596
00:31:43,000 --> 00:31:45,080
Speaker 11: is very much. I write it down on a two

597
00:31:45,080 --> 00:31:47,640
Speaker 11: dimensional graph. Prices are going one way, the labor market

598
00:31:47,680 --> 00:31:49,680
Speaker 11: is going one way, and here's my interest rate policy,

599
00:31:49,720 --> 00:31:51,800
Speaker 11: and I just let it happen. But the world in

600
00:31:51,840 --> 00:31:54,120
Speaker 11: which this takes place is a world in which families

601
00:31:54,160 --> 00:31:57,000
Speaker 11: are struggling, and they hear news every day that corporations

602
00:31:57,040 --> 00:32:00,240
Speaker 11: are not right, that we have record profits happening for companies,

603
00:32:00,280 --> 00:32:02,720
Speaker 11: and that you know, we all have to make sacrifices

604
00:32:02,760 --> 00:32:05,200
Speaker 11: for the economy, if you're a family, if you're a worker,

605
00:32:05,280 --> 00:32:06,920
Speaker 11: if you're trying to buy a gallon of milk. But

606
00:32:07,280 --> 00:32:10,520
Speaker 11: we don't see fortune five hundred companies making those same sacrifices.

607
00:32:10,560 --> 00:32:14,280
Speaker 11: And you know who builds economic recovery and who bears

608
00:32:14,360 --> 00:32:15,240
Speaker 11: economic pain.

609
00:32:15,600 --> 00:32:18,040
Speaker 4: Those are still your few, Catherine, Thank you for joining

610
00:32:18,120 --> 00:32:20,640
Speaker 4: Katherine Edwards from Rand Only on Bloomberg.

611
00:32:24,200 --> 00:32:27,760
Speaker 2: You're listening to the Bloomberg Balance of Power podcast. Catch

612
00:32:27,840 --> 00:32:30,880
Speaker 2: us live weekdays at noon Eastern on Applecarplay and then

613
00:32:30,960 --> 00:32:34,400
Speaker 2: Roudoto with the Bloomberg Business App. Listen on demand wherever

614
00:32:34,440 --> 00:32:39,800
Speaker 2: you get your podcasts, or watch us live on YouTube.

615
00:32:40,120 --> 00:32:43,080
Speaker 4: Welcome to the threshold of the weekend, the Friday edition

616
00:32:43,200 --> 00:32:47,160
Speaker 4: of Balance of Power on Bloomberg TV and Radio. With

617
00:32:47,280 --> 00:32:50,400
Speaker 4: our eyes still on Normandy. A day after we mark

618
00:32:50,480 --> 00:32:54,080
Speaker 4: the eightieth anniversary of the D Day invasion, President Biden

619
00:32:54,240 --> 00:32:58,880
Speaker 4: was back today at Point the Hawk, the same spot

620
00:32:59,200 --> 00:33:03,320
Speaker 4: as I read on the terminal etched in the nation's

621
00:33:03,360 --> 00:33:06,040
Speaker 4: political memory in nineteen eighty four, that's when Ronald Reagan

622
00:33:06,560 --> 00:33:10,560
Speaker 4: stood in that same spot delivering his famous Boys of

623
00:33:10,600 --> 00:33:16,600
Speaker 4: Point to Hawk's speech, drawing common cause between their feet

624
00:33:16,680 --> 00:33:19,400
Speaker 4: in the face of Nazi Germany's tyranny, to then the

625
00:33:19,400 --> 00:33:22,719
Speaker 4: Cold War, and now today Joe Biden connecting the dots

626
00:33:23,320 --> 00:33:28,120
Speaker 4: to aggression from Vladimir Putin, referring as well to Donald

627
00:33:28,120 --> 00:33:31,560
Speaker 4: Trump without mentioning his name. Over the past two days,

628
00:33:31,560 --> 00:33:35,000
Speaker 4: we assemble our panel for their take on this. Genie

629
00:33:35,000 --> 00:33:38,400
Speaker 4: Shanzeno is with us, Bloomberg Politics contributor of course, senior

630
00:33:38,440 --> 00:33:40,880
Speaker 4: Democracy fellow at the Center for the Study of the

631
00:33:40,920 --> 00:33:44,640
Speaker 4: Presidency and Congress. Mac Gorman is here too, Republican strategist

632
00:33:45,040 --> 00:33:47,480
Speaker 4: and executive VP at Targeted Victory. Great to have you

633
00:33:47,520 --> 00:33:49,680
Speaker 4: both here, Matt. What's it like as a Republican to

634
00:33:49,720 --> 00:33:55,480
Speaker 4: hear the Democratic president channel the former Republican president Ronald Reagan,

635
00:33:56,200 --> 00:33:59,040
Speaker 4: who so many Republicans cite in their arguments and their

636
00:33:59,080 --> 00:34:02,840
Speaker 4: justifications for policies. A lot of folks have seen the

637
00:34:02,880 --> 00:34:06,280
Speaker 4: Republican Party move away from that establishment view to one

638
00:34:06,320 --> 00:34:10,280
Speaker 4: closer to isolationism. What did you make of Joe Biden's

639
00:34:10,280 --> 00:34:10,880
Speaker 4: speech today?

640
00:34:11,920 --> 00:34:12,640
Speaker 7: A couple of things.

641
00:34:13,120 --> 00:34:16,440
Speaker 1: I don't think it was a very smart political ploy

642
00:34:17,040 --> 00:34:22,160
Speaker 1: to raise expectations galactically before the speech and say that

643
00:34:22,280 --> 00:34:26,240
Speaker 1: you are Your speech today will evoke comparisons of I believe,

644
00:34:26,600 --> 00:34:29,320
Speaker 1: one of the greatest speeches of one of the greatest

645
00:34:29,320 --> 00:34:31,279
Speaker 1: communicators we've ever had in the presidency.

646
00:34:31,719 --> 00:34:34,360
Speaker 7: I think it did it bien a disservice to raise

647
00:34:34,400 --> 00:34:38,960
Speaker 7: the bar that high. Number one, number two. Look, I

648
00:34:39,000 --> 00:34:40,399
Speaker 7: revere Reagan. I do.

649
00:34:40,440 --> 00:34:42,680
Speaker 1: I think he was one of the greatest presidents, especially

650
00:34:42,719 --> 00:34:45,880
Speaker 1: in the twentieth century. But I think what's tough, and

651
00:34:45,920 --> 00:34:48,160
Speaker 1: we talked about this earlier when you're trying to peel

652
00:34:48,200 --> 00:34:52,960
Speaker 1: younger voters invoking a president who gave a speech that

653
00:34:53,440 --> 00:34:57,399
Speaker 1: is further away from present day than when he gave

654
00:34:57,440 --> 00:35:00,120
Speaker 1: it to It was to D Day. It was a

655
00:35:00,120 --> 00:35:03,960
Speaker 1: long time ago, and so it's tough to resonate when

656
00:35:03,960 --> 00:35:07,280
Speaker 1: you're comparing yourself to a figure that many folks don't

657
00:35:07,280 --> 00:35:08,600
Speaker 1: have that historical touch point.

658
00:35:08,600 --> 00:35:15,880
Speaker 4: For boy, that's incredible, great perspective on the timeline there, Genie.

659
00:35:15,960 --> 00:35:19,439
Speaker 4: We talked about this a bit yesterday. There was more,

660
00:35:19,440 --> 00:35:21,279
Speaker 4: of course than Ronald Reagan. You might have seen this,

661
00:35:21,360 --> 00:35:23,720
Speaker 4: by the way, or heard this as a very different speech.

662
00:35:24,080 --> 00:35:26,520
Speaker 4: Was the right the White House correct to kind of

663
00:35:26,560 --> 00:35:28,560
Speaker 4: frame it that way to begin with? To Matt's point,

664
00:35:28,640 --> 00:35:30,440
Speaker 4: raise expectations.

665
00:35:31,400 --> 00:35:34,560
Speaker 12: No, absolutely not. Listen, Joe, I may want to know,

666
00:35:34,680 --> 00:35:37,920
Speaker 12: repeat Mary lou Wretn's vaults or something, but well, I

667
00:35:37,920 --> 00:35:40,520
Speaker 12: couldn't do it either way. But why would you set

668
00:35:40,560 --> 00:35:46,840
Speaker 12: yourself up for that? You know, Listen, Ronald Reagan's speech

669
00:35:46,960 --> 00:35:49,760
Speaker 12: was given at a particular place in a particular time,

670
00:35:50,320 --> 00:35:53,239
Speaker 12: and it was such a different media environment that a

671
00:35:53,280 --> 00:35:56,640
Speaker 12: speech like that could raise your numbers and help you

672
00:35:56,680 --> 00:36:00,440
Speaker 12: win the presidency again, as it did with Ronald. But

673
00:36:00,480 --> 00:36:03,760
Speaker 12: we're in a very different media environment, and you don't

674
00:36:03,760 --> 00:36:06,760
Speaker 12: want to set yourself up for a repeat, because of course,

675
00:36:06,800 --> 00:36:09,240
Speaker 12: all you can do is fall short in people's eyes.

676
00:36:09,800 --> 00:36:13,400
Speaker 12: Was it a good speech, Absolutely, it was fine. The

677
00:36:13,560 --> 00:36:18,080
Speaker 12: message is right, the time is incredibly different. So for

678
00:36:18,239 --> 00:36:21,200
Speaker 12: that reason, I think, you know, the White House, I'm

679
00:36:21,200 --> 00:36:23,520
Speaker 12: a bit surprised. I think some of the speech writers

680
00:36:23,520 --> 00:36:26,480
Speaker 12: are so keen on getting their important words heard that

681
00:36:26,520 --> 00:36:31,319
Speaker 12: they raise these expectations. But it's problematic. The reality is

682
00:36:31,480 --> 00:36:35,280
Speaker 12: if Joe Biden wants to win this election. He's gonna

683
00:36:35,400 --> 00:36:38,759
Speaker 12: have to return to the issues people care about. He

684
00:36:38,920 --> 00:36:42,440
Speaker 12: is trying. This is an important issue. Democracy around the

685
00:36:42,480 --> 00:36:45,640
Speaker 12: world is under attack. We've known that for two decades.

686
00:36:45,680 --> 00:36:48,120
Speaker 12: He's trying to make that case. But what is it

687
00:36:48,160 --> 00:36:52,520
Speaker 12: at home? It's all about the economy, It's all about inflation,

688
00:36:52,719 --> 00:36:55,760
Speaker 12: the things you just talked to Julie Sue about. That's

689
00:36:55,760 --> 00:36:58,000
Speaker 12: what it's about. And he's gonna have to turn here

690
00:36:58,120 --> 00:37:01,600
Speaker 12: to win the election. So good speech. Absolutely, Is it

691
00:37:01,680 --> 00:37:04,319
Speaker 12: going to change the ballgame? Absolutely?

692
00:37:04,360 --> 00:37:04,440
Speaker 9: Not.

693
00:37:05,640 --> 00:37:07,319
Speaker 4: Well, I don't know, Matt. I think that moment when

694
00:37:07,360 --> 00:37:10,279
Speaker 4: he put the aviators on while he was still at

695
00:37:10,320 --> 00:37:12,960
Speaker 4: the podium before walking away might have done more for

696
00:37:13,040 --> 00:37:16,520
Speaker 4: young people than the words that he delivered in some cases.

697
00:37:16,560 --> 00:37:19,759
Speaker 4: But how about the actions made two hundred and twenty

698
00:37:19,840 --> 00:37:22,279
Speaker 4: five million dollars in eight announced for Ukraine in a

699
00:37:22,280 --> 00:37:26,520
Speaker 4: bilateral meeting with President Zelenski. They appeared together, They got

700
00:37:26,520 --> 00:37:29,000
Speaker 4: the footage of them talking and meeting. Joe Biden even

701
00:37:29,040 --> 00:37:32,920
Speaker 4: apologized to him for the delay in funding. Is that

702
00:37:33,160 --> 00:37:36,479
Speaker 4: closer to what the commander in chief should be doing

703
00:37:36,520 --> 00:37:38,440
Speaker 4: here as he's running for reelection.

704
00:37:39,360 --> 00:37:42,239
Speaker 1: In theory, Yes, I mean Look, he is governing right now.

705
00:37:42,280 --> 00:37:46,640
Speaker 1: And look, there is certainly parts of the Republican base

706
00:37:47,040 --> 00:37:51,080
Speaker 1: that do not want Ukraine funding. The worldview is very different,

707
00:37:52,040 --> 00:37:55,880
Speaker 1: but also it is broadly popular with independence and a

708
00:37:55,960 --> 00:37:59,200
Speaker 1: large segment of Republicans. My old Boston Scott was supportive

709
00:37:59,239 --> 00:38:02,880
Speaker 1: of fund for Ukraine in order to degrade the Russian military.

710
00:38:03,280 --> 00:38:06,600
Speaker 1: And look, I will say in his interview yesterday with

711
00:38:06,680 --> 00:38:09,560
Speaker 1: David Muir of ABC News, Biden didn't make a good point.

712
00:38:09,600 --> 00:38:11,839
Speaker 7: He did point out how much the.

713
00:38:11,800 --> 00:38:15,920
Speaker 1: Russian military has been degraded and the casualties suffered upon

714
00:38:15,920 --> 00:38:16,920
Speaker 1: the Russian military.

715
00:38:17,320 --> 00:38:18,920
Speaker 7: But I will say I.

716
00:38:18,840 --> 00:38:24,120
Speaker 1: Think, to Jenie's point, Ukraine and democracy writ large will

717
00:38:24,160 --> 00:38:26,640
Speaker 1: not be winning issues for Biden on this election. If

718
00:38:26,640 --> 00:38:28,640
Speaker 1: he wins this election, it's going to be because he

719
00:38:28,680 --> 00:38:31,359
Speaker 1: was able to find a message on the economy and

720
00:38:31,400 --> 00:38:35,759
Speaker 1: that abortion was able to at least match the salience

721
00:38:35,800 --> 00:38:39,839
Speaker 1: that immigration does as a single issue, motivating kind of

722
00:38:40,040 --> 00:38:43,799
Speaker 1: point for voters. That's I think it's going to come

723
00:38:43,800 --> 00:38:44,040
Speaker 1: down to.

724
00:38:44,080 --> 00:38:48,080
Speaker 4: At the end of the day, It's interesting that we're

725
00:38:48,080 --> 00:38:49,720
Speaker 4: still talking about money for Ukraine.

726
00:38:49,719 --> 00:38:50,040
Speaker 3: Genie.

727
00:38:50,080 --> 00:38:55,040
Speaker 4: After this massive supplemental request was passed, the President signed

728
00:38:55,040 --> 00:38:57,640
Speaker 4: it into law. This two hundred and twenty five million

729
00:38:57,680 --> 00:39:02,160
Speaker 4: dollar shipment is actually a draw down on US supplies

730
00:39:02,760 --> 00:39:04,920
Speaker 4: as Ukraine waits for help. Here, it's going to take

731
00:39:04,960 --> 00:39:09,000
Speaker 4: a long time to get some of that material to Ukraine.

732
00:39:09,480 --> 00:39:13,000
Speaker 4: The meeting today important in helping that happen. Our European

733
00:39:13,040 --> 00:39:15,600
Speaker 4: allies are also taking part in this now, and we're

734
00:39:15,600 --> 00:39:19,200
Speaker 4: allowing Ukraine to use US made weapons at least in

735
00:39:19,239 --> 00:39:23,160
Speaker 4: some cases near Kharkiv across the border against Russia. How

736
00:39:23,200 --> 00:39:26,800
Speaker 4: long do you give the administration to widen that scope,

737
00:39:27,280 --> 00:39:31,520
Speaker 4: even as they had warned over escalating this conflict with Russia.

738
00:39:32,880 --> 00:39:35,160
Speaker 12: Yeah, it seems to be a pattern with this war

739
00:39:35,239 --> 00:39:37,600
Speaker 12: for the last three years that there is an ask,

740
00:39:37,840 --> 00:39:41,000
Speaker 12: there is a time, and then there is an approval.

741
00:39:42,040 --> 00:39:44,440
Speaker 12: You know. I think the real challenge here for the

742
00:39:44,480 --> 00:39:47,080
Speaker 12: White House and for all of us quite frankly, and

743
00:39:47,160 --> 00:39:51,400
Speaker 12: for Ukraine is it is still very unclear, at least

744
00:39:51,400 --> 00:39:54,480
Speaker 12: in my mind, what is the end game here? What

745
00:39:54,600 --> 00:39:57,480
Speaker 12: is success? How do you define that? And of course

746
00:39:57,600 --> 00:40:00,800
Speaker 12: Zelenski defines it in one way that the White House

747
00:40:00,880 --> 00:40:04,080
Speaker 12: at least heretofore has not approved or agreed with.

748
00:40:04,480 --> 00:40:05,520
Speaker 7: And until we.

749
00:40:05,560 --> 00:40:08,960
Speaker 12: Know what the endgame is, we are down a path

750
00:40:09,000 --> 00:40:11,920
Speaker 12: where this thing is just going to stretch out. So

751
00:40:12,480 --> 00:40:16,759
Speaker 12: Joe Biden may revisit allowing us to arms to be

752
00:40:16,960 --> 00:40:21,440
Speaker 12: used in Russia in a more concerted way, But is

753
00:40:21,480 --> 00:40:23,920
Speaker 12: that going to make a difference. I don't think so,

754
00:40:24,400 --> 00:40:27,120
Speaker 12: And I think as it pertains to this issue at home,

755
00:40:27,560 --> 00:40:31,439
Speaker 12: the Biden team is better left or better off rather

756
00:40:31,600 --> 00:40:36,360
Speaker 12: leaving this to people like McConnell and Sullivan. The Republicans

757
00:40:36,360 --> 00:40:40,040
Speaker 12: in the Senate did approve finally the spending, and we

758
00:40:40,120 --> 00:40:43,920
Speaker 12: saw McConnell's editorial. I think that does more to speak

759
00:40:43,960 --> 00:40:48,959
Speaker 12: to these middle moderate swing Republican voters who don't aren't

760
00:40:49,000 --> 00:40:53,200
Speaker 12: that excited about Donald Trump in general, but specifically foreign

761
00:40:53,239 --> 00:40:56,960
Speaker 12: policy wise, and the isolationism to bring them over. And

762
00:40:57,000 --> 00:41:00,120
Speaker 12: so the Biden team has tried to reach out and

763
00:41:00,160 --> 00:41:03,200
Speaker 12: they continue to do that. But they're far better having

764
00:41:03,280 --> 00:41:07,160
Speaker 12: Republicans reach out to Republicans than trying to have Joe

765
00:41:07,200 --> 00:41:09,440
Speaker 12: Biden over there doing it. And I'm not saying that

766
00:41:09,520 --> 00:41:12,759
Speaker 12: was the intent of the speech, but from a domestic standpoint,

767
00:41:13,040 --> 00:41:16,520
Speaker 12: it's not going to have a lot of impact. You know,

768
00:41:16,560 --> 00:41:18,759
Speaker 12: within twenty four to forty eight hours from where we.

769
00:41:18,719 --> 00:41:22,200
Speaker 4: Are now, Matt The Daily Mail is reporting that of

770
00:41:22,200 --> 00:41:24,640
Speaker 4: all people, Steven Spielberg, who we saw in the crowd

771
00:41:24,719 --> 00:41:29,560
Speaker 4: yesterday at the Normandy Commemoration, helped to prepare Joe Biden

772
00:41:29,880 --> 00:41:32,400
Speaker 4: for his speech today at Point to Hawk. He was

773
00:41:32,400 --> 00:41:35,640
Speaker 4: in the room at the Hotel Intercontinental in Paris on

774
00:41:35,719 --> 00:41:38,200
Speaker 4: Friday morning when the President was doing his final run through,

775
00:41:38,239 --> 00:41:42,439
Speaker 4: doing prep here for the speech on democracy. The White

776
00:41:42,440 --> 00:41:46,279
Speaker 4: House did not apparently respond to inquiries about this. But

777
00:41:46,320 --> 00:41:50,880
Speaker 4: what does that tell you about the optics the President's

778
00:41:50,880 --> 00:41:51,799
Speaker 4: trying to employ here?

779
00:41:53,280 --> 00:41:54,360
Speaker 7: You know, there's.

780
00:41:54,200 --> 00:41:59,920
Speaker 1: Always this fascination, mutual fascination Hollywood with politics, politics with Hollywood.

781
00:42:00,280 --> 00:42:02,080
Speaker 7: You know, Biden has done this before.

782
00:42:02,160 --> 00:42:05,359
Speaker 1: He's brought in John meetscham to kind of ghost right

783
00:42:05,360 --> 00:42:07,279
Speaker 1: if you will, or at least advise a lot of

784
00:42:07,320 --> 00:42:10,480
Speaker 1: his speeches. Look, I love you know what Steven Spielberg

785
00:42:10,480 --> 00:42:13,239
Speaker 1: did with saving Private Ryan, producing Band of Brothers. She

786
00:42:13,280 --> 00:42:17,840
Speaker 1: does bring a unique perspective to this. But I'm also

787
00:42:18,840 --> 00:42:21,400
Speaker 1: he's not much of a writer, so he's a director,

788
00:42:21,400 --> 00:42:23,839
Speaker 1: so he can maybe advising the cinematography, if you.

789
00:42:23,800 --> 00:42:27,200
Speaker 7: Will, the scene that they're going to set, But at the.

790
00:42:27,239 --> 00:42:30,120
Speaker 1: End of the day, it doesn't really out add much

791
00:42:30,239 --> 00:42:32,120
Speaker 1: value to what Biden is doing. He's going to have

792
00:42:32,160 --> 00:42:34,480
Speaker 1: to go up there and perform like he did today.

793
00:42:36,320 --> 00:42:37,719
Speaker 4: It's great to have both of you with us a

794
00:42:37,719 --> 00:42:39,799
Speaker 4: great panel on a Friday. Jeanie Shan say no of course,

795
00:42:39,800 --> 00:42:44,120
Speaker 4: Bloomberg Politics contributor and Republican strategist Matt Gorman from Targeted Victory.

796
00:42:44,600 --> 00:42:46,560
Speaker 4: We thank you both. Have a great weekend. We'll pull

797
00:42:46,640 --> 00:42:48,920
Speaker 4: them back together again on Monday. Here on the fastest

798
00:42:48,960 --> 00:42:50,719
Speaker 4: show in politics.

799
00:42:53,360 --> 00:42:56,799
Speaker 2: You're listening to the Bloomberg Balance of Power podcast. Catch

800
00:42:56,880 --> 00:42:59,440
Speaker 2: Just Live weekdays at noon Eastern on Apple.

801
00:42:59,239 --> 00:43:02,000
Speaker 3: Car Play and then where the Bloomberg Business at.

802
00:43:02,040 --> 00:43:04,880
Speaker 2: You can also listen live on Amazon Alexa from our

803
00:43:04,920 --> 00:43:09,520
Speaker 2: flagship New York station, Just Say Alexa Play Bloomberg eleven thirty.

804
00:43:11,160 --> 00:43:13,480
Speaker 4: And welcome to the Friday edition of Ballance of Power.

805
00:43:13,480 --> 00:43:15,360
Speaker 4: It's good to have you on Bloomberg TV and Radio.

806
00:43:15,360 --> 00:43:19,240
Speaker 4: I'm Joe Matthew in Washington. As we digest the data,

807
00:43:19,520 --> 00:43:22,440
Speaker 4: it's job's day here, of course, as Charlie reminds us,

808
00:43:22,480 --> 00:43:24,839
Speaker 4: the markets reacting to what you can look at as

809
00:43:24,880 --> 00:43:26,840
Speaker 4: a mixed report. We talked to Mollie Smith about it.

810
00:43:26,880 --> 00:43:30,160
Speaker 4: We talked to the Acting Labor Secretary about it. What

811
00:43:30,280 --> 00:43:33,120
Speaker 4: should we be looking at the jump in payrolls hotter

812
00:43:33,160 --> 00:43:37,280
Speaker 4: than expected, or signs of deterioration possibly in the household survey.

813
00:43:37,320 --> 00:43:41,280
Speaker 4: Not that that's a new question. Just ask David Weston,

814
00:43:41,680 --> 00:43:44,560
Speaker 4: the host of Bloomberg Wall Street Week, and our colleague

815
00:43:44,560 --> 00:43:47,480
Speaker 4: in New York is with us right now, the everlasting question.

816
00:43:47,600 --> 00:43:47,839
Speaker 3: David.

817
00:43:47,840 --> 00:43:50,200
Speaker 4: I won't ask you about two percent, but I wonder

818
00:43:50,239 --> 00:43:51,800
Speaker 4: which has your attention today.

819
00:43:51,960 --> 00:43:54,760
Speaker 13: Well, I must say politically, as I looked at those numbers,

820
00:43:54,760 --> 00:43:58,640
Speaker 13: which actually did surprise me a bit, I think President

821
00:43:58,680 --> 00:44:02,359
Speaker 13: Biden keeps getting the answer to the wrong question in

822
00:44:02,400 --> 00:44:04,640
Speaker 13: the sense that, boy, people are getting jobs, which has

823
00:44:04,640 --> 00:44:06,759
Speaker 13: got to be good. Wages are going up, which has

824
00:44:06,760 --> 00:44:07,359
Speaker 13: got to be good.

825
00:44:07,440 --> 00:44:07,520
Speaker 9: Right.

826
00:44:07,600 --> 00:44:09,600
Speaker 13: The economis are strong, which's got to be good. But

827
00:44:09,640 --> 00:44:12,640
Speaker 13: people are concerned about inflation, how much they're paying for things,

828
00:44:12,680 --> 00:44:14,719
Speaker 13: and this doesn't help them on that score at all.

829
00:44:15,040 --> 00:44:16,880
Speaker 13: I feel a little badly for them, because I say

830
00:44:16,920 --> 00:44:19,640
Speaker 13: these should be good answers, but I'm not sure their

831
00:44:19,719 --> 00:44:22,000
Speaker 13: answers to what people are really pressing about right now.

832
00:44:23,040 --> 00:44:25,120
Speaker 4: Yeah, and it's easy to write a statement, I suppose

833
00:44:25,120 --> 00:44:27,399
Speaker 4: if you're in the White House Communications office talking about

834
00:44:27,400 --> 00:44:29,680
Speaker 4: as stronger than expect. The jobs market just keep beating

835
00:44:29,680 --> 00:44:31,920
Speaker 4: the drum. But the investment community, the markets look at

836
00:44:31,920 --> 00:44:34,560
Speaker 4: this a lot differently. Are we wiping out chances for

837
00:44:34,600 --> 00:44:35,560
Speaker 4: a rate cut this year?

838
00:44:35,719 --> 00:44:38,040
Speaker 13: Well about wiping out? I mean there are some who

839
00:44:38,040 --> 00:44:41,799
Speaker 13: have been skeptical all around, certainly reducing reducing chances and

840
00:44:41,840 --> 00:44:44,319
Speaker 13: reducing the number of rate cuts. And again coming back

841
00:44:44,360 --> 00:44:47,160
Speaker 13: to the political side of it, which is your Baileywick Joe.

842
00:44:47,160 --> 00:44:48,839
Speaker 13: I mean, if people are trying to get relief from

843
00:44:48,920 --> 00:44:52,320
Speaker 13: higher interest rates, these numbers don't particularly point in that direction.

844
00:44:52,520 --> 00:44:54,799
Speaker 13: I mean, it's not only that they're paying more at

845
00:44:54,800 --> 00:44:57,120
Speaker 13: the pump and paying more for groceries, but also they're

846
00:44:57,120 --> 00:44:59,120
Speaker 13: paying more in their mortgages and by the way, on

847
00:44:59,280 --> 00:45:02,040
Speaker 13: credit card debt and auto debt and things like that

848
00:45:01,600 --> 00:45:04,279
Speaker 13: that a lot of working Americans are feeling day in

849
00:45:04,280 --> 00:45:04,799
Speaker 13: and day out.

850
00:45:05,880 --> 00:45:08,040
Speaker 4: We've got an interesting conversation today that we're going to

851
00:45:08,040 --> 00:45:10,880
Speaker 4: bring to our listeners and viewers now with a prominent

852
00:45:10,920 --> 00:45:14,160
Speaker 4: voice in the financial markets and his view on this

853
00:45:14,280 --> 00:45:15,719
Speaker 4: economy today, David.

854
00:45:15,640 --> 00:45:19,360
Speaker 13: Yeah, Scott Bessen, who actually was a Soros Chief investment

855
00:45:19,400 --> 00:45:21,919
Speaker 13: officer at one point. Scott Besson has got his own fund.

856
00:45:21,960 --> 00:45:24,879
Speaker 13: Now he's got his own company. But he's talked about

857
00:45:24,920 --> 00:45:27,080
Speaker 13: a fair amount because he's a smart man, he knows things.

858
00:45:27,280 --> 00:45:31,200
Speaker 13: But also he talks to Donald Trump quite frequently, and

859
00:45:31,239 --> 00:45:33,879
Speaker 13: his name has been kicked around, as you know, Joe

860
00:45:33,920 --> 00:45:37,480
Speaker 13: Well as a possible Treasury secretary. Who knows whether that

861
00:45:37,560 --> 00:45:39,279
Speaker 13: might come to PSS or not. But that's people are

862
00:45:39,280 --> 00:45:40,920
Speaker 13: paying a lot of attention to Scott Besson right now.

863
00:45:40,960 --> 00:45:41,320
Speaker 9: Joe.

864
00:45:42,640 --> 00:45:44,680
Speaker 4: Yeah, it's interesting. We talk about a shortlist for a

865
00:45:44,719 --> 00:45:47,399
Speaker 4: lot of things for a potential Trump administration, but it's

866
00:45:47,400 --> 00:45:51,600
Speaker 4: hard to pinpoint the Trump economic philosophy, David outside of well,

867
00:45:51,640 --> 00:45:54,840
Speaker 4: I guess tariffs and extending making permanent the twenty seventeen

868
00:45:54,920 --> 00:45:55,480
Speaker 4: tax cuts.

869
00:45:55,480 --> 00:45:56,160
Speaker 7: What else is there?

870
00:45:56,320 --> 00:45:59,120
Speaker 13: Yeah, I think also it's fair to say, and Scott

871
00:45:59,120 --> 00:46:03,360
Speaker 13: Besson does talk about it. This President Trump, foreign Persident Trump,

872
00:46:03,440 --> 00:46:06,360
Speaker 13: maybe future President Trump doesn't like regulation much. You remember

873
00:46:06,400 --> 00:46:08,359
Speaker 13: when he was president the first time. Yes, he had

874
00:46:08,400 --> 00:46:10,919
Speaker 13: that rule about taking away more regulations than you put in,

875
00:46:11,880 --> 00:46:14,160
Speaker 13: and he's been pretty outspoken on that front, which I

876
00:46:14,200 --> 00:46:19,640
Speaker 13: think you could expect. He also tends to like a

877
00:46:19,680 --> 00:46:22,480
Speaker 13: weaker dollar and lower interest rates. That's been his pattern

878
00:46:22,480 --> 00:46:24,160
Speaker 13: in the past. Some people say it might have to

879
00:46:24,160 --> 00:46:27,080
Speaker 13: do with his background as a prominent real estate developer,

880
00:46:27,080 --> 00:46:29,759
Speaker 13: which is pretty common there. But you're right, Joe, the

881
00:46:29,840 --> 00:46:33,359
Speaker 13: question is how do we anticipate what's coming around this time.

882
00:46:33,400 --> 00:46:35,200
Speaker 13: I think it's fair to say from stuff you and

883
00:46:35,200 --> 00:46:37,799
Speaker 13: I have both seen, Joe that that in fact, this

884
00:46:37,960 --> 00:46:40,000
Speaker 13: Donald Trump has done a lot more work, at least

885
00:46:40,000 --> 00:46:41,520
Speaker 13: had people around him do a lot more work on

886
00:46:41,560 --> 00:46:43,919
Speaker 13: their plans than the first time. There have been people

887
00:46:43,960 --> 00:46:46,160
Speaker 13: working on these things, and they have some ideas.

888
00:46:46,200 --> 00:46:46,480
Speaker 3: I think.

889
00:46:48,280 --> 00:46:50,399
Speaker 13: So we did take us into this conversation. Yeah, sure,

890
00:46:50,440 --> 00:46:52,800
Speaker 13: Well we did get to talk to Scott Beston earlier

891
00:46:52,840 --> 00:46:55,200
Speaker 13: today and this is basically.

892
00:46:54,880 --> 00:46:55,640
Speaker 3: What he had to say.

893
00:46:55,719 --> 00:46:58,240
Speaker 13: He started out with sort of a zinger about Bidenomics.

894
00:47:01,920 --> 00:47:04,880
Speaker 14: Maybe a better alternative name is bidenitis, and it's like

895
00:47:04,920 --> 00:47:08,680
Speaker 14: an acute disease. You never know when it's going to

896
00:47:08,680 --> 00:47:12,520
Speaker 14: be fatal. But look, Bidenomics is a return to central

897
00:47:12,600 --> 00:47:16,239
Speaker 14: planning that was discredited in the sixties and seventies. We

898
00:47:16,320 --> 00:47:21,000
Speaker 14: got the same kind of inflation through that, and I

899
00:47:21,080 --> 00:47:27,360
Speaker 14: think that it depends on this incredible level of government spending,

900
00:47:28,440 --> 00:47:36,319
Speaker 14: state intervention, and kind of a disregard for markets it's

901
00:47:36,440 --> 00:47:38,800
Speaker 14: going to be the opposite of what Trump one point

902
00:47:38,840 --> 00:47:44,879
Speaker 14: zero was, which was a private sector solutions. The other

903
00:47:44,960 --> 00:47:48,040
Speaker 14: thing that it is part of Bidenomics is you have

904
00:47:48,160 --> 00:47:52,239
Speaker 14: this massive wave of government spending, but it's met by

905
00:47:52,520 --> 00:47:57,240
Speaker 14: increased regulation, So you're constricting the supply side, and that's

906
00:47:57,280 --> 00:47:59,000
Speaker 14: why that's why you get.

907
00:47:58,840 --> 00:48:01,440
Speaker 13: Inflation on the spending side. There's a lot of talk

908
00:48:01,440 --> 00:48:03,760
Speaker 13: about the growth of government and objections to growth government.

909
00:48:03,920 --> 00:48:06,759
Speaker 13: At the same time, you may know, Rashir Sharma has

910
00:48:06,800 --> 00:48:08,920
Speaker 13: actually been writing on the subject saying, you know what

911
00:48:09,040 --> 00:48:11,680
Speaker 13: it has ever been thus, at least in modern history,

912
00:48:11,880 --> 00:48:14,719
Speaker 13: even the days of Ronald Reagan. President Ronald Reagan, the

913
00:48:14,760 --> 00:48:17,160
Speaker 13: government actually didn't shrink at all. It continued to grow

914
00:48:17,400 --> 00:48:19,520
Speaker 13: during that period of time. Do you take a issue

915
00:48:19,520 --> 00:48:21,000
Speaker 13: with that? Do you think there was a time when

916
00:48:21,000 --> 00:48:23,560
Speaker 13: the government actually was smaller and we had the results

917
00:48:23,560 --> 00:48:23,839
Speaker 13: of it.

918
00:48:25,120 --> 00:48:29,200
Speaker 14: Well, David, I'm actually not an economist. I'm an economic historian,

919
00:48:29,280 --> 00:48:34,000
Speaker 14: so I and I am boring enough that I could

920
00:48:34,080 --> 00:48:36,000
Speaker 14: quote the size of government all the way back to

921
00:48:36,080 --> 00:48:39,440
Speaker 14: Alexander Hamilton. So there was a time when the government

922
00:48:39,640 --> 00:48:44,759
Speaker 14: was smaller, and with good reason. A lot of the

923
00:48:44,800 --> 00:48:50,400
Speaker 14: programs have been increased, but traditionally in terms of revenues

924
00:48:50,560 --> 00:48:54,040
Speaker 14: tax intake as a percent of GDP, in modern times,

925
00:48:54,239 --> 00:48:57,720
Speaker 14: we've averaged about seventeen to nineteen and a half percent

926
00:48:57,760 --> 00:49:00,719
Speaker 14: of GDP, and I think that it's a pretty.

927
00:49:00,480 --> 00:49:02,280
Speaker 9: Good baseline level.

928
00:49:02,680 --> 00:49:07,400
Speaker 14: But what's worrying here are the size of the deficits

929
00:49:07,440 --> 00:49:07,919
Speaker 14: which are.

930
00:49:07,840 --> 00:49:09,520
Speaker 9: Being driven by spending.

931
00:49:10,120 --> 00:49:15,879
Speaker 14: And I think that somehow that this Biden promise that

932
00:49:15,920 --> 00:49:21,960
Speaker 14: we will do better in twenty twenty five is pretty disingenuous.

933
00:49:22,440 --> 00:49:28,120
Speaker 14: That you spent three four years spend, spend, spend, and

934
00:49:28,160 --> 00:49:33,120
Speaker 14: then now there's no choice but to increase taxes. And

935
00:49:33,760 --> 00:49:35,680
Speaker 14: I don't think they're going to cut back on spending,

936
00:49:35,920 --> 00:49:39,920
Speaker 14: but in their ten year projection, the only thing they

937
00:49:39,920 --> 00:49:42,560
Speaker 14: do want to cut back on is defense spending. There's

938
00:49:42,600 --> 00:49:46,120
Speaker 14: a twenty one percent decrease in defense spending, which I

939
00:49:46,200 --> 00:49:51,440
Speaker 14: find alarming given the international environment that this administration has created,

940
00:49:51,760 --> 00:49:57,520
Speaker 14: Given what any administration, Democrat or Republican it was faced

941
00:49:57,239 --> 00:50:03,160
Speaker 14: with the challenge of China, Russia, Iran, North Korea. Now

942
00:50:03,239 --> 00:50:05,880
Speaker 14: Venezuela is getting in on the act. So now I

943
00:50:05,920 --> 00:50:10,160
Speaker 14: think decreasing defense spending is just the wrong.

944
00:50:10,000 --> 00:50:10,480
Speaker 9: Way to go.

945
00:50:10,800 --> 00:50:13,520
Speaker 14: And you know, I would note that because of these

946
00:50:13,560 --> 00:50:17,480
Speaker 14: blowout deficits, the inflation, and the high interest rates, this

947
00:50:17,520 --> 00:50:23,680
Speaker 14: will be the first year that interests service on the

948
00:50:23,719 --> 00:50:28,319
Speaker 14: debt is higher than defense spending. And that tells me

949
00:50:28,800 --> 00:50:31,840
Speaker 14: that this high debt is a national security issue.

950
00:50:32,920 --> 00:50:36,000
Speaker 13: As you say, Scut, we have something about normost a

951
00:50:36,080 --> 00:50:39,480
Speaker 13: constant seventeen percent of GDP actually in receipts. At the

952
00:50:39,480 --> 00:50:42,200
Speaker 13: same time expenditures, even during a Rod Reagan they were

953
00:50:42,239 --> 00:50:44,279
Speaker 13: twenty percent. They went up actually twenty three or twenty

954
00:50:44,280 --> 00:50:46,440
Speaker 13: four percent, they came back down close to twenty percent.

955
00:50:46,480 --> 00:50:48,160
Speaker 13: The only time it's gone down as a percent of

956
00:50:48,160 --> 00:50:50,680
Speaker 13: GDP was actually during Clinton. What do you think is

957
00:50:50,680 --> 00:50:53,600
Speaker 13: a realistic number for a Trump two point zero? If

958
00:50:53,640 --> 00:50:55,880
Speaker 13: President Trump gets elected again, what do you think is

959
00:50:55,880 --> 00:50:59,720
Speaker 13: a realistic number for government expenditure is a percentage of GDP?

960
00:51:01,120 --> 00:51:03,400
Speaker 14: Look, I think we got to stay right in that

961
00:51:04,719 --> 00:51:10,239
Speaker 14: seventeen and a half to nineteen percent range. And I'm

962
00:51:10,280 --> 00:51:16,319
Speaker 14: a big believer that for Trump two point zero, that

963
00:51:17,000 --> 00:51:22,000
Speaker 14: we can control spending by freezing the discretionary component except

964
00:51:22,000 --> 00:51:26,799
Speaker 14: for defense and moving toward a three percent deficit by

965
00:51:26,880 --> 00:51:29,920
Speaker 14: twenty twenty eight. I think that would be music to

966
00:51:29,960 --> 00:51:34,240
Speaker 14: the market's ears. I think the debt market would respond

967
00:51:34,239 --> 00:51:36,000
Speaker 14: to that. I think rates would go down. I think

968
00:51:36,040 --> 00:51:39,440
Speaker 14: inflation would go down. So there's a chance here for

969
00:51:39,440 --> 00:51:41,040
Speaker 14: a self reinforcing cycle.

970
00:51:41,800 --> 00:51:44,520
Speaker 13: You mentioned regulation as being the other force that we'll

971
00:51:44,560 --> 00:51:47,640
Speaker 13: have to contend with, and obviously President Trump does not

972
00:51:47,760 --> 00:51:50,800
Speaker 13: like regulation. You've said we should have less regulation. But

973
00:51:50,880 --> 00:51:52,600
Speaker 13: let me ask you about one specific form of regulation

974
00:51:52,640 --> 00:51:55,760
Speaker 13: that's an a trust regulation, because you've also expressed concerns

975
00:51:55,760 --> 00:51:58,960
Speaker 13: about incumbency as it's called, and we do have growing

976
00:51:58,960 --> 00:52:01,160
Speaker 13: in concentration pretty much as I understand it through the

977
00:52:01,239 --> 00:52:04,640
Speaker 13: US economy. Isn't anna trust a useful mechanism and is

978
00:52:04,640 --> 00:52:07,759
Speaker 13: it something that perhaps Tresident Trump, a second President Trump

979
00:52:07,840 --> 00:52:10,759
Speaker 13: would use to try to reduce concentration, which after all,

980
00:52:10,840 --> 00:52:12,560
Speaker 13: would likely reduce costs.

981
00:52:14,400 --> 00:52:18,680
Speaker 14: Well, look, I think anti trust is a last resort.

982
00:52:19,080 --> 00:52:21,879
Speaker 14: I think the real problem is we have too many

983
00:52:21,960 --> 00:52:26,080
Speaker 14: barriers to intrigue. So once you cut regulation and there's

984
00:52:26,160 --> 00:52:30,680
Speaker 14: more local finance available. You know, I'm a big proponent

985
00:52:30,840 --> 00:52:37,680
Speaker 14: of local community banks, and Main Street can flourish along

986
00:52:37,760 --> 00:52:41,120
Speaker 14: with Wall Street. And you know what really drives Main

987
00:52:41,160 --> 00:52:45,600
Speaker 14: Street are these local banking institutions. But I think Once

988
00:52:45,640 --> 00:52:52,600
Speaker 14: you cut regulation, then you get more entrance into the economy.

989
00:52:53,560 --> 00:53:00,239
Speaker 14: And I think the anti trust is a final solution.

990
00:53:01,200 --> 00:53:08,520
Speaker 14: It's the draconian solution because you have priced out the startups.

991
00:53:09,560 --> 00:53:13,080
Speaker 14: In my hometown of Charleston, South Carolina, we have a

992
00:53:13,080 --> 00:53:17,520
Speaker 14: couple of new startup airlines and the rates, the prices

993
00:53:17,560 --> 00:53:21,240
Speaker 14: are low, the destinations are new, and it's pretty exciting.

994
00:53:21,840 --> 00:53:24,600
Speaker 13: Scott, Let's talk about the FED independence, something that's really

995
00:53:24,640 --> 00:53:26,399
Speaker 13: gotten talked about a lot. I know, if I'm talking

996
00:53:26,440 --> 00:53:29,080
Speaker 13: to before, you have some question about how independent the

997
00:53:29,120 --> 00:53:32,520
Speaker 13: FED is right now. But to President Trump of his returns,

998
00:53:32,520 --> 00:53:35,360
Speaker 13: how important would FED independence be or is it important

999
00:53:35,440 --> 00:53:36,319
Speaker 13: youth to him at all?

1000
00:53:36,400 --> 00:53:37,280
Speaker 9: Should it be important?

1001
00:53:38,680 --> 00:53:42,200
Speaker 14: So look, FED independence is always important. And I think

1002
00:53:42,239 --> 00:53:46,000
Speaker 14: the original sin here with the Biden administration that set

1003
00:53:46,040 --> 00:53:49,880
Speaker 14: off this great inflation play was politicizing the FED.

1004
00:53:50,360 --> 00:53:50,880
Speaker 9: So J.

1005
00:53:51,160 --> 00:53:56,839
Speaker 14: Powell's appointment was the latest appointment this century for a

1006
00:53:56,920 --> 00:54:01,320
Speaker 14: FED share. They did not announce his reappointment until November

1007
00:54:01,680 --> 00:54:05,439
Speaker 14: twenty twenty one. When in August of twenty twenty one,

1008
00:54:05,520 --> 00:54:07,680
Speaker 14: if you go back and read the notes of the

1009
00:54:07,760 --> 00:54:14,600
Speaker 14: Jackson Hole Meeting, his speech, he clearly knew that inflation

1010
00:54:14,760 --> 00:54:18,360
Speaker 14: was on the rise. He expressed concern about inflationary pressures.

1011
00:54:18,719 --> 00:54:23,360
Speaker 14: But because President Biden did not announce his reappointment until January,

1012
00:54:23,680 --> 00:54:26,080
Speaker 14: he was reluctant to do anything. And then you know,

1013
00:54:26,239 --> 00:54:31,480
Speaker 14: the first hike wasn't until March. So look, FED independence

1014
00:54:31,800 --> 00:54:35,640
Speaker 14: is very important. I think it's a personnel issue. I

1015
00:54:35,640 --> 00:54:38,719
Speaker 14: think Donald Trump is always going to make his opinion known.

1016
00:54:39,160 --> 00:54:45,000
Speaker 14: And I will note in hindsight, when he was complaining

1017
00:54:45,080 --> 00:54:49,239
Speaker 14: about the high rates in December of twenty eighteen and

1018
00:54:49,320 --> 00:54:53,319
Speaker 14: the Jay Powell was making a mistake raising rates that

1019
00:54:53,760 --> 00:54:57,880
Speaker 14: he did a final rate hike in December, crashed the markets.

1020
00:54:57,960 --> 00:55:00,680
Speaker 14: John Williams had to come out, the head of the

1021
00:55:00,719 --> 00:55:02,680
Speaker 14: New York Fed had to come out the next day

1022
00:55:03,160 --> 00:55:04,680
Speaker 14: and calm things down.

1023
00:55:05,040 --> 00:55:06,320
Speaker 9: And then within.

1024
00:55:06,200 --> 00:55:09,840
Speaker 14: Several months there were three rate hikes, I mean, excuse me,

1025
00:55:09,960 --> 00:55:14,040
Speaker 14: rate cuts. After that fall of twenty nineteen, when Donald

1026
00:55:14,080 --> 00:55:17,560
Speaker 14: Trump was complaining about how rates, we had the repo

1027
00:55:17,680 --> 00:55:19,880
Speaker 14: market blowout and the Fed had to put in a

1028
00:55:19,920 --> 00:55:25,520
Speaker 14: standing repo facility. So you know, President Biden mentioned rape

1029
00:55:25,520 --> 00:55:27,600
Speaker 14: cuts in the State of the Union. He's mentioned him

1030
00:55:27,600 --> 00:55:31,440
Speaker 14: twice since then, So you know, jaw boning is fine.

1031
00:55:32,080 --> 00:55:37,719
Speaker 14: Senator Warren likes to jaw bone, and I think it's

1032
00:55:37,800 --> 00:55:40,680
Speaker 14: her right to talk about lower rates, and you know,

1033
00:55:41,440 --> 00:55:45,799
Speaker 14: I think as long as it's in a public forum

1034
00:55:46,239 --> 00:55:47,200
Speaker 14: that it's healthy.

1035
00:55:48,160 --> 00:55:51,080
Speaker 13: Finally, Scott, you mentioned personnel are really important. Let's talk

1036
00:55:51,080 --> 00:55:53,600
Speaker 13: about personnel. Your name has been mentioned as a possible

1037
00:55:53,600 --> 00:55:56,080
Speaker 13: treasure secretary. You said you have a full time job.

1038
00:55:56,120 --> 00:55:58,440
Speaker 13: I know, although I don't think you've said you wouldn't

1039
00:55:58,440 --> 00:56:01,920
Speaker 13: take it. But apart from Indivis Jewels, in talking with

1040
00:56:01,960 --> 00:56:05,000
Speaker 13: President Trump, advising President Trump, what sorts of people would

1041
00:56:05,040 --> 00:56:07,600
Speaker 13: you advise he attracted for his economic team? And how

1042
00:56:07,640 --> 00:56:09,920
Speaker 13: important is it to send reassurance to the markets.

1043
00:56:12,040 --> 00:56:13,920
Speaker 9: Well, i'll take the last question. First.

1044
00:56:13,960 --> 00:56:17,040
Speaker 14: Reassurance to the market is going to be very important.

1045
00:56:17,520 --> 00:56:21,000
Speaker 14: And I think that he would like to contrast with

1046
00:56:21,120 --> 00:56:23,240
Speaker 14: the Biden cabinet because if you look at the Biden

1047
00:56:23,320 --> 00:56:27,000
Speaker 14: cabinet now, even the head of the Small Business Administration

1048
00:56:27,600 --> 00:56:31,400
Speaker 14: I think has been mostly in government work for the

1049
00:56:31,400 --> 00:56:38,160
Speaker 14: past decade or so. The Biden cabinet is lawyers, it's politicians,

1050
00:56:38,320 --> 00:56:42,480
Speaker 14: it's regulators, it's full time government people. Like there's this

1051
00:56:42,600 --> 00:56:45,800
Speaker 14: saying that they've never signed the front of the paycheck.

1052
00:56:47,320 --> 00:56:49,960
Speaker 14: And you know, I would say, they've probably never gotten

1053
00:56:50,239 --> 00:56:53,359
Speaker 14: a paycheck that they've they've been in big government, and

1054
00:56:53,400 --> 00:56:55,799
Speaker 14: you know they just get it through direct deposits. So

1055
00:56:56,200 --> 00:56:59,800
Speaker 14: you know, I think a much better blend of private

1056
00:57:00,080 --> 00:57:04,440
Speaker 14: sector expertise coupled with people who have experienced in government

1057
00:57:04,480 --> 00:57:06,320
Speaker 14: would be an ideal cabinet.

1058
00:57:07,880 --> 00:57:12,360
Speaker 4: Fascinating conversation with Scott Bessen, the CEO, chief investment officer

1059
00:57:12,400 --> 00:57:19,760
Speaker 4: at Keyscore Capital Management, talking with Bloomberg's David Weston. Thanks

1060
00:57:19,800 --> 00:57:22,960
Speaker 4: for listening to the Balance of Power podcast. Make sure

1061
00:57:22,960 --> 00:57:25,880
Speaker 4: to subscribe if you haven't already, at Apple, Spotify, or

1062
00:57:25,920 --> 00:57:28,600
Speaker 4: wherever you get your podcasts, and you can find us

1063
00:57:28,640 --> 00:57:32,160
Speaker 4: live every weekday from Washington, DC at noontime Eastern at

1064
00:57:32,200 --> 00:57:33,440
Speaker 4: Bloomberg dot com