Speaker 1: Brought you by Bank of America, Mary Lynch. Investing in
Speaker 1: local communities, economies and a sustainable future. That's the power
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Speaker 1: Member s I p C. Welcome to the Bloomberg Surveillance Podcast.
Speaker 1: I'm Tom Keene with David Gura. Daily we bring you
Speaker 1: insight from the best of economics, finance, investment, and international relations.
Speaker 1: Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, Bloomberg dot Com,
Speaker 1: and of course, on the Bloomberg. Can I bring Richard Os?
Speaker 1: Please bring in Richard? Host Joins is now President of
Speaker 1: Council and Form Relations, author of A World in Disarray,
Speaker 1: American Foreign Policy and the Crisis of the Old Order.
Speaker 1: He's in our Bloomberg eleven three our studios with Tom
Speaker 1: in New York. Sorry about that, Chard. Let me let
Speaker 1: me start by asking you about what's happening in New
Speaker 1: York today. The Secretary of State rex dealers and headed
Speaker 1: up to the U n UH. He'll be talking about
Speaker 1: North Korea. What do you expect to hear from What
Speaker 1: would you like to hear from him on the issue
Speaker 1: of North Korea today at the U n What the
Speaker 1: United States is doing and the presidents doing it regularly
Speaker 1: in his tweets. It's just essentially saying this is an intolerable,
Speaker 1: unacceptable situation, and they're signaling Beijing that they have got
Speaker 1: to put much more pressure on North Korean And I
Speaker 1: think this is the prelude to in the uh to
Speaker 1: an effort to open up a negotiation between the United
Speaker 1: States and North Korea to see not if we can
Speaker 1: resolve the problem, but at least put a ceiling on
Speaker 1: it in the way both sides can live with. When
Speaker 1: you look at what the President said thus far, is
Speaker 1: he indicating that he's moving toward likely preemptive strikes? He does,
Speaker 1: he want to have more conversations as he want to
Speaker 1: rely more on on sanctions. When you look at what
Speaker 1: that policy might be, what do you see as the
Speaker 1: contours of it. Well, what you're seeing is the putting
Speaker 1: the military option quote unquote on the table, as the
Speaker 1: cliche goes, and they keep talking about it, but no
Speaker 1: one's anxious to go to war. The reality of what
Speaker 1: a second Korean war be is it should make anyone
Speaker 1: pause and then pause again. But they've got to put
Speaker 1: that out there because it is a real option, because
Speaker 1: the whole idea of allowing this to continue to drift
Speaker 1: is a truly unattractive future. And this though, is a
Speaker 1: necessary prelude to set the table again for a negotiation,
Speaker 1: and that requires Chinese pressure on North Korea. Let me
Speaker 1: ask the right wing question, can we negotiate with a nation?
Speaker 1: I guess it's a nation that barely is ruled by law?
Speaker 1: I mean, do they even observed the North Korea even
Speaker 1: observe international law to a limited extent? And the answer is, well,
Speaker 1: you know, again, the alternatives are lousy. That's where the
Speaker 1: Chinese come in to put to use their leverage. And
Speaker 1: we'll try. And we've had negotiations with North Korea before,
Speaker 1: both bilateral and multilateral. We've had shall we say, limited success,
Speaker 1: which is another way of saying also limited failure, And
Speaker 1: you know, we'll go at it one more time. David
Speaker 1: Guray in Washington and Tom keenan New York. David, we
Speaker 1: have Douglas holtz Eken coming up later on tax reform.
Speaker 1: Maybe that's a good way to secure you with Ambassador
Speaker 1: hass into the domestic front. Yeah, when you look at
Speaker 1: all of the let's let's use the hundred day metric,
Speaker 1: and we've had a president here has been uneasy about
Speaker 1: people holding that up. He was keen to talk about
Speaker 1: all that he hoped to accomplish in the free hundred
Speaker 1: days earlier on in them, and now he's he's downplaying
Speaker 1: the importance of it. When you look at the ambitiousness
Speaker 1: of his foreign policy and domestic policy, how do you
Speaker 1: how do you rate sort of what what he's been
Speaker 1: able to do and and what's he learned about governing
Speaker 1: here in these first hundred days. On the farm policy
Speaker 1: society's probably had two pluses, the limited use of force
Speaker 1: in Surria and the marshaling of pressure on on North Korea.
Speaker 1: I think the real diant downside on FIGM policies. He's
Speaker 1: injected so much uncertainty into American FIGN policy that he's
Speaker 1: really worked against the fabric of almost all of our
Speaker 1: alliance relations. I think at home he's learned the difference
Speaker 1: between campaigning or business life on one hand, on political
Speaker 1: governing on the other, whether it's health care or now
Speaker 1: these other issues. He's having real problems building a viable
Speaker 1: coalition with Congress, and more broadly, I think he's seen
Speaker 1: the strength of independent institutions in American democracy. So he
Speaker 1: has his his orders on homeland security and immigration and refugees,
Speaker 1: and time and time again has been rebuffed by the courts.
Speaker 1: So this is almost a course. And Professor Dick new
Speaker 1: stat my former colleague at Harvard about that we have
Speaker 1: separate institutions, each wielding independent power. I think Mr Trump
Speaker 1: is basically getting Civics one O one. You know, after
Speaker 1: after the US launched those tomahawk strikes on Syria, I
Speaker 1: think a lot of people wondering what would happen next?
Speaker 1: Have we gotten any more clarity on what has changed
Speaker 1: when it comes to US Syria policy? And can you
Speaker 1: draw a line between what happened in Syria and indeed
Speaker 1: what our outlook is, what our policy is at toward
Speaker 1: North Korea? Are they Are they connected? On the first part.
Speaker 1: Not a whole lot of change with the American Syria policy.
Speaker 1: We're not going to make the removal of Bosher Alassa
Speaker 1: and his regime of priority. We we can't. Instead, you're
Speaker 1: going to have a focus on hammering isis trying to
Speaker 1: eliminate their control of territory, and the real challenge there
Speaker 1: will coming up with a policy for who would run
Speaker 1: it if and when they don't. I think the use
Speaker 1: of force in Syria wasn't part meant to signal China.
Speaker 1: If you remember, the use of force happened while she
Speaker 1: Jumping was dining in Mara Lago with that delicious chocolate cake,
Speaker 1: and I think it's most delicious. It was. It was
Speaker 1: a message to him and North Korea that this is
Speaker 1: an administration that's more comfortable with the use of military force.
Speaker 1: Then was Mr Obama's help me with with a president's doctrine?
Speaker 1: How long did it take before we got the so
Speaker 1: called Obama historical on a Friday? Well, I'm not so
Speaker 1: quite sure we ever had in Obama. You don't think so, No,
Speaker 1: I think what we had was a bias towards restraint
Speaker 1: and retrenchment. The doctrines have to be real explanations of
Speaker 1: what you're going to do in the world. They have
Speaker 1: to explain big things. They've got to be enduring. I'm
Speaker 1: not sure Mr Obama had one again, much more than theme. No,
Speaker 1: I thought it. Usually doctrines are conferred by history in retrospect.
Speaker 1: Anytime you you declare a doctrine, you don't you haven't
Speaker 1: done looking a little bit silly doctrines are the judgment
Speaker 1: of his three that what you've done really matters and
Speaker 1: really lasts. I have failed David Gura this morning, and
Speaker 1: that I did not speak to Richard hass about the
Speaker 1: Canadian events of the week. We featured the Canadian dollar
Speaker 1: at the beginning of the show one thirty six forty.
Speaker 1: Christiph Friedland, their Foreign Affairs minister, was quite sharp with
Speaker 1: our Matt Miller about how they've never lost on the
Speaker 1: lumber issue. What is the CFR backgrounder on this relation
Speaker 1: that we just take for granted? Well again on this
Speaker 1: on the lumber issue, there's nothing new. When I worked
Speaker 1: in the European Bureau of the State Department in the
Speaker 1: early this was Teddy Roosevelt. It feels like there was
Speaker 1: lumber one of those roads belts. We had the same issue.
Speaker 1: Then every day we'd start the European Bureau staff meeting
Speaker 1: with the latest on softwood lumber. Very little hash j
Speaker 1: became actually something have a standing joke. Well here we are,
Speaker 1: you know, thirty forty years later, the same issue. I think,
Speaker 1: more broadly, though it wasn't a bad day for Canada yesterday.
Speaker 1: The fact that the president got pushed by so many
Speaker 1: of his senior adviceisers to essentially say enough with breaking
Speaker 1: up napptick. You know, whatever your tactical positioning, this relationship
Speaker 1: is simply too important with Canada and Mexico. So I
Speaker 1: actually think things yesterday got back to reality. In your
Speaker 1: study of history and all the work of the Council
Speaker 1: on Foreign Relations, can you teach a dealmaker to negotiate
Speaker 1: within the US world? Uh? So far at least it's
Speaker 1: not clear. The president still New York Times actually is
Speaker 1: a story about it today. Is his whole approach is
Speaker 1: what worked in real estate. You are these narrow, one
Speaker 1: off approaches. You come out out of the box tremendously
Speaker 1: ambitious or aggressively, and what happens then is you've almost
Speaker 1: always got to back down. We had to do it
Speaker 1: with the Chinese over Taiwan. We're doing it with the
Speaker 1: Mexicans over the Wall. So you get a reputation for
Speaker 1: backing down, But in the meantime, you not only lose
Speaker 1: credibility with others, you undermine your friends. The thing with Canada,
Speaker 1: to be so aggressive with your friends sends the message
Speaker 1: we don't really value this relationship. I really think Mr
Speaker 1: Trump has got to figure out the difference between what
Speaker 1: what purportedly worked for him in real estate and being president.
Speaker 1: It's a totally different tool set. You sound like a
Speaker 1: marriage counselor my wife would tell you probably Richard as
Speaker 1: the president of the Council on Foreign Relations and of
Speaker 1: course a former ambassador with work in Northern Ireland a
Speaker 1: few years ago in our studios in New York. Right now,
Speaker 1: we are thrilled to bring you Horondo Rodriguez with black Rock,
Speaker 1: but more importantly with immense public service to finance and
Speaker 1: Treasury for the government of Mexico and uh out of
Speaker 1: Stanford and economic systems and operation research as a Horodo.
Speaker 1: We were talking earlier about Mexico, but we really didn't
Speaker 1: get the NAFTA to President Trump caused damage with a
Speaker 1: relationship with Mexico. This they have nft off and then
Speaker 1: left back on. I think that, um, what he did
Speaker 1: is introduced an additional element of uncertainty that had been
Speaker 1: going away. Um. Mexico again is not considered political or
Speaker 1: economic threat by any relevant political constituency in the US.
Speaker 1: It is a country that has been a strategic ally
Speaker 1: in liberal matters when it comes to trade, when the
Speaker 1: world when when the US engages with the rest of
Speaker 1: the world. So that the work that has been done
Speaker 1: on both sides prior to the recent comments is one
Speaker 1: of preparing institutions, preparing Congress for an upcoming negotiation. There
Speaker 1: is a clear interest to improve NAFTA, and these in
Speaker 1: a way is just sending a message that you've gotta
Speaker 1: be careful because surprise may comment use. Three or four
Speaker 1: years ago, Mexico was opposed to child for an eleven success.
Speaker 1: Is that success still there? I think I'm a growth
Speaker 1: of Mexico. I think it is, But other things have
Speaker 1: happened at the same time. Mexico sort of stood out
Speaker 1: because of its reform impetus, not only the willingness but
Speaker 1: the capacity to push through several reforms of the constitutional
Speaker 1: and legal level, opening up the energy sector, telecoms, competition label,
Speaker 1: and other things. Now, at the same time, what has
Speaker 1: happened is that oil prices and oil production in Mexico
Speaker 1: decline significantly, creating macroeconomic challenge especially on the fiscal side,
Speaker 1: that have been starting to be addressed, But at the
Speaker 1: same time also challenges on corruption matters at the federal
Speaker 1: and state government level have actually created a political environment
Speaker 1: where the popularity of the president is at all time
Speaker 1: lows and in anticipation of next year's presidential election. Clearly
Speaker 1: the left wing candy they UH left wing party candidate
Speaker 1: has been benefiting from all these sort of UH social
Speaker 1: dynamics in Mexico. Where is their their opportunity right now? Yes,
Speaker 1: in Mexico, but in Latin American more generally, when you're
Speaker 1: when you're looking at where to investor, you're looking at corporate,
Speaker 1: so you're looking at sovereign's what's attractive to you. So
Speaker 1: clearly as you say that the Mexican peso, with the
Speaker 1: weakness around these commerses, is clearly one of the most
Speaker 1: attractive investment opportunities that we see out there in the
Speaker 1: emerging world. We like Colombia as well. Columbia is an
Speaker 1: interesting a case where the macro rebalancing after major shocks
Speaker 1: both on production and other agricultural elements, have forced a
Speaker 1: significant adjustment of the external and physical accounts. In UH Colombia,
Speaker 1: the central Bank is in the middle of an aggressive
Speaker 1: easing cycle, so long term rates in Colombia is actually
Speaker 1: something that we like. We like Brazil on the equity
Speaker 1: side as well, the very aggressive easing cycled by a
Speaker 1: central bank. I mean they're lowering a hundred basis points
Speaker 1: per meeting, perhaps going to a hundred and twenty five
Speaker 1: next meeting. It is an economy that has turned the corner.
Speaker 1: The country has also turned the corner politically. It's starting
Speaker 1: to get ready for the next year's presidential election. And
Speaker 1: although the economy is somewhat of flatlining at this point,
Speaker 1: the prospects of reform to restart economic growth in Brazil
Speaker 1: is looking good. It is clearly one of our topics
Speaker 1: on the equity side, Brazilian equity markets. Thank you so much.
Speaker 1: Quickly this wanting too quick with black Rock as well
Speaker 1: in Mexico, Thank you so much. And the course on
Speaker 1: Emerging Markets with black Rock Worldwide, brought to you by
Speaker 1: Bank of America. Mary Lynch dedicated to bringing our clients
Speaker 1: insights and solutions to meet the challenges of a transforming world.
Speaker 1: That's the power of global connections. Mary Lynch, Pierce, Feeder
Speaker 1: and Smith Incorporated Member s I p C. There's something
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Speaker 1: Bloomberg dot com slash lens. Join me here in our
Speaker 1: Bloomberg ninty nine studios. Now is Zekemmanuel, healthcare expert zekem Manual,
Speaker 1: Professor of healthcare Management at the University of Pennsylvania. As
Speaker 1: we look at what's happening on a Capitol Hill, there
Speaker 1: was some optimism in the Republican camp that there would
Speaker 1: be the votes needed to get their legislation through this week.
Speaker 1: It seems that last night all of that change. There
Speaker 1: will not be a vote here this week. The House
Speaker 1: leadership saying, Zeke Manuel, great to have you you with us,
Speaker 1: get us up to speed. You've been talking to to lawmakers.
Speaker 1: What's what's the objective here? Is is policy driving? This
Speaker 1: is politics driving this? What what Republicans hope to do?
Speaker 1: Where is their agreement between these two sides. This is
Speaker 1: definitely not about policy. The two point oh Republican reform
Speaker 1: bill is, if any worse than one point oh uh,
Speaker 1: and so it's gonna have a hard time. I don't
Speaker 1: think there's as much attention on it. But um, moderate
Speaker 1: Republicans do not like it. It doesn't bode well for
Speaker 1: them in the election. The public doesn't like it because
Speaker 1: what the public is concerned about is the high costs
Speaker 1: of healthcare. They're concerned about high deductibles, high copayments, high
Speaker 1: drug costs, and this bill does absolutely nothing on that.
Speaker 1: And so I think this builds chance of success are
Speaker 1: law I was not at all surprised that, in fact,
Speaker 1: they didn't. They pulled a vote because they don't have
Speaker 1: the votes, and they're not going to have the votes,
Speaker 1: and I've predicted that they won't pass anything, and hopefully
Speaker 1: after we go through this feudal exercise a few more times,
Speaker 1: we will actually get too serious negotiations about policy and
Speaker 1: about what to do about the state of healthcare. There
Speaker 1: was a great piece by bloom Review. Comes Peter Rizager
Speaker 1: looking at this and saying, if if you want by partisanship,
Speaker 1: if you want something to happen, focus here on containing
Speaker 1: consts and improving value. Is that the problem of the
Speaker 1: legislature is that where that needs to happen or can
Speaker 1: it happen elsewhere? Well, there are some things the administration
Speaker 1: can do from a regulatory basis, and UH that you
Speaker 1: know that those are would be good. Unfortunately, Secretary Price
Speaker 1: put on hold some of those changes when he put
Speaker 1: on hold introducing the bundled payments for cabbage bypass surgery
Speaker 1: and acute my cardial infarction. We need those bundle payments,
Speaker 1: we need different ways of paying um, and we should
Speaker 1: not put them on hold for re examination. I think
Speaker 1: over the long term, UH, costs are going to be
Speaker 1: the key thing that Americans care about, and I would
Speaker 1: just have your listeners remember Massachusetts in two thousand and six,
Speaker 1: they began this sort of universal coverage approach. They've gotten
Speaker 1: pretty well, they're sort of covered in Massachusetts. And then
Speaker 1: once you get coverage, you then automatically more or less
Speaker 1: shift to costs and trying to get costs under control
Speaker 1: and I think that's where we are in the United States.
Speaker 1: We did the Coverage Bill. It's not perfect, but it
Speaker 1: actually advanced things pretty well. We're about ten percent uninsured
Speaker 1: in the country now, um and so naturally people, I've
Speaker 1: got coverage, but it's really hard and expensive to use,
Speaker 1: and let's get the system better, both in terms of
Speaker 1: costs and in terms of quality. And that's I think
Speaker 1: the natural progression of these debates. It strikes me that
Speaker 1: the chief challenge here as Republican lawmakers look at this,
Speaker 1: is there aren't components of the affordable caring that are
Speaker 1: well liked by a lot of people. Be that letting
Speaker 1: your kids stay on your plan until he's X age,
Speaker 1: be that not having to worry about pre existing conditions
Speaker 1: that makes reform difficult. Having those things that everyone seems
Speaker 1: to like, well for Bloomberg people. You guys know behavioral
Speaker 1: economics pretty well, and there's something called loss of version.
Speaker 1: Once I have something, I don't like it being taken away,
Speaker 1: and that's what we're seeing with healthcare. Oh, I got
Speaker 1: have this health insurance. I don't like it taken away.
Speaker 1: I have the safety net under me that if you know,
Speaker 1: God forbid, my employer pulls the insurance or I become unemployed,
Speaker 1: or I want to start my own company. I have
Speaker 1: the safety that I can get coverage. People don't like
Speaker 1: that being taken away, but they also want it now
Speaker 1: to be affordable. And they've their drug prices go up.
Speaker 1: They've seen the deductive bowls go up, and they are
Speaker 1: very upset by that. So I think that's our next,
Speaker 1: our next phase. Tom Keene in New York City with
Speaker 1: John Tucker, wonderful spring morning. It's beautiful. David's in Washington.
Speaker 1: David's in Washington, And don't let our steam guests know
Speaker 1: that the only reason we booked him was because maybe
Speaker 1: he can get US Cubs tickets. I possibly we'll broker that.
Speaker 1: We'll broker that during the next break. Zac Comnuel with
Speaker 1: us here, professor of healthcare management at the University of Pennsylvania,
Speaker 1: joining us in our Bloomberg Students time. I know you
Speaker 1: want to talk about insurance here in just a moment,
Speaker 1: but Zeke, let me ask you about lobbying might in
Speaker 1: this town during the Trump administration. Every article I read
Speaker 1: about what's been happening on Capitol Hill says special interest
Speaker 1: groups have been key in scuttling this or pushing it
Speaker 1: one way or another. How does healthcare lobbying look look
Speaker 1: to you? And the year two thousand seventeen, it's pretty
Speaker 1: intense as usual and getting the right people, uh to
Speaker 1: listen to you. The drug companies still have a lot
Speaker 1: of might. But you know, one of the reasons I think,
Speaker 1: for example, this Republican proposal is not doing so well
Speaker 1: is the fact that the A m A, the American
Speaker 1: Hospital Association a r P, and a whole slew of
Speaker 1: other people in the healthcare industry are against it. They
Speaker 1: want the exchanges shored up, and uh, this bill doesn't
Speaker 1: do that, and so they've come out strongly against it.
Speaker 1: And so when you've got all the healthcare industry against it, uh,
Speaker 1: and uh, you know, it's a hard, uphill fight. Zeke
Speaker 1: help us here into the weekend. And that I see
Speaker 1: map aftermap of regions of the nation with four insurers,
Speaker 1: three insurers, two insurers, one insurer, and the scary thought
Speaker 1: of no insure under the Affordable Care Act. What do
Speaker 1: those insurers want? Do they want to be part of
Speaker 1: the Affordable Care Act? Or is this just an excuse
Speaker 1: to run Well, let me let me make two points. First,
Speaker 1: if you look at Anthem recently reported that they're doing
Speaker 1: well and the exchanges, thank you very much. Despite all
Speaker 1: chatter out there, most of the insurance companies who are
Speaker 1: participating are doing okay. Uh. They raised their rates and
Speaker 1: they got that matched their risk pool, and so they're
Speaker 1: doing okay. The big problem is insurance hate uncertainty, and
Speaker 1: what we have and how is a huge amount of
Speaker 1: uncertain Three things would actually make them much happier and
Speaker 1: therefore would bring rates down. Uh, and certainly rate increases down. First,
Speaker 1: say you're gonna enforce the individual mandate so that you
Speaker 1: get more young people coming in, and don't say you're
Speaker 1: not going to enforce it and not impose penalties and
Speaker 1: undermine the situation. Second, we need risk corridors and reinsurance payments. Uh.
Speaker 1: Those were scuttled by our good friend Senator Rubio. Uh.
Speaker 1: Those are very important in case a insurance company gets
Speaker 1: a disproportionate number of sick people. That again brings rates down.
Speaker 1: Sometimes I've heard as much as five uh. And then
Speaker 1: the third element is these cost sharing subsidies. So for
Speaker 1: families in America earning up to two of poverty who
Speaker 1: are on the exchanges that means they're earning sixty roughly
Speaker 1: or less um. They get help paying the deductibles and
Speaker 1: the code pays um. And if they don't, uh get
Speaker 1: government support for that. The insurance companies around the hook
Speaker 1: and they're like, oh, why should I participate? And the
Speaker 1: Republicans say, oh, we'll decide those on a month to
Speaker 1: month basis. That that is no good for literally no
Speaker 1: help for insurance company. And again that's worth another ten
Speaker 1: percent on the premiums. So you want to get premiums down,
Speaker 1: attract insurance companies in because the market is stable. You
Speaker 1: have to do those three kings. And you know, and
Speaker 1: they're not by the way, Tom, they're not complicated. Everyone
Speaker 1: knows they're there um. And if you you know, if
Speaker 1: the Republicans upset the market by not paying the cost
Speaker 1: sharing subsidies, not enforcing the mandate, everyone knows who knows
Speaker 1: who's at fault. Now, when you control all branches of government,
Speaker 1: you can't point the finger and say, oh, it's a
Speaker 1: Democrats problem. No, you have the power to solve the problem.
Speaker 1: You have to solve it. My theme for the first
Speaker 1: hundred days has been the phrase the minority majority Party
Speaker 1: and that's a Republican party struggling with leadership and governance,
Speaker 1: and what what is their majority position going to be?
Speaker 1: What do the moderate Republicans want out of the Zeka
Speaker 1: Manuel world? What's their best outcome? I think the best
Speaker 1: outcome is let's fix the Affordable Care Act UH and
Speaker 1: get what's working working, and let's get some meaningful cost
Speaker 1: control enacted that will actually, over the long home the
Speaker 1: next four or five years, get costs down to growing
Speaker 1: so healthcare costs doesn't don't go any faster than the
Speaker 1: overall economy. Those two things eminently possible. There is a
Speaker 1: deal here. There is a bipartisan approach to this. Cost
Speaker 1: control is not one or the other. What the problem
Speaker 1: with the UM Republican bill, and I've said this over
Speaker 1: and over and I've said that to the President and
Speaker 1: to UH Speaker Ryan, is this is a cost shift bill.
Speaker 1: It's not a cost control bill. It takes costs from
Speaker 1: the government shifts them to individuals. That is not a
Speaker 1: solution to keep for the long term. We do have
Speaker 1: and you know, I have produced paper on this for
Speaker 1: various people. We do have a number of ways that
Speaker 1: we can actually reduce costs in the system. We could
Speaker 1: start with drugs, since there's a big bipartisan group for that,
Speaker 1: the American public wants to do that, but we have
Speaker 1: to extend it to hospitals and doctors and everyone in
Speaker 1: the system. But there is a very, very big middle.
Speaker 1: What we can't be UH is wagged by either the
Speaker 1: far right Freedom Caucus, which seems to control the day
Speaker 1: and doesn't want to do anything UH to have the
Speaker 1: government intervene, or fire left people who are only interested
Speaker 1: in single pay. There's a vast middle, and that's where
Speaker 1: we have to focus. And if we did focus on that,
Speaker 1: we would have a bipartisan UH group that would support
Speaker 1: a lot of reforms, again shoring up the exchanges, making
Speaker 1: sure everyone can get coverage, and then moving on to
Speaker 1: good cost control. And I think you can do it
Speaker 1: all together. As you go to the White House into
Speaker 1: Capitol Hill and talk to policymakers here in Washington and elsewhere,
Speaker 1: is there anyone who says the Affordable Care Act as
Speaker 1: it stands is fine? In other words, is there agreement
Speaker 1: that there needs to be some reform to the legislation. Well,
Speaker 1: even Hillary Clinton, when she ran for the presidency, said,
Speaker 1: you know, we need to make fixes Look, it's been
Speaker 1: seven years in one month roughly since the Affordable Care
Speaker 1: Act has been passed. You know, problems are going to develop,
Speaker 1: un anticipated problems as well as problems that the bill
Speaker 1: was never perfect in the first place. So we know
Speaker 1: it needs to reforms. Does it need drastic surgery? Uh? No?
Speaker 1: And uh, you know, I think that's where the big
Speaker 1: mistake is. And the American public once't you say we're
Speaker 1: taking it away, whoa, whoa. No, we don't want it
Speaker 1: to go away. We do want it to be fixed. Um.
Speaker 1: And so I think that's where the public is. And
Speaker 1: that's one of the reasons it's so hard for the
Speaker 1: Republican Party to just repeal it. I mean, it's a
Speaker 1: eight piece of rhetoric to get elected, but it's not
Speaker 1: a great way to govern. And I think unfortunately these
Speaker 1: things have come together so that all we have now
Speaker 1: is rhetoric on the political campaign rather than substance. Let's
Speaker 1: roll up our sleeves and actually do something substittive here
Speaker 1: that most people will be happy with. Let me just
Speaker 1: situate this in all that's going on the conversation about yes,
Speaker 1: government funding, but also tax reform and financial market to
Speaker 1: regulation reform. There's a lot happening. Can you attribute the
Speaker 1: fact that we're maybe not having the kind of serious
Speaker 1: conversation you'd like to the fact that there were so
Speaker 1: many distractions. We've talked to people who have said, look,
Speaker 1: in any given year, if you would have just pursue
Speaker 1: tax reform alone, that would be an ambitious undertaking for
Speaker 1: this Congress. Are there simply too many distractions or is
Speaker 1: it that coupled with the politics. I think it's all
Speaker 1: of it. I don't. I don't. I wouldn't call them distractions. Look,
Speaker 1: you have an agenda that you want to get past.
Speaker 1: I actually think the irony is if you could get
Speaker 1: bipartisan agreement on healthcare, it would actually give you more
Speaker 1: political capital to attack things like a tax reform, h
Speaker 1: infrastructure build. Those are the three big issues. Let's do
Speaker 1: them serially and go for the middle. And that has
Speaker 1: not been what's happening. Uh. They have tried to go
Speaker 1: for an extreme one party uh a solution, and that
Speaker 1: won't work because the Republican parties have shown we're not
Speaker 1: unified on the Republican right. UH. And so we need
Speaker 1: to go to the middle where it's going to be
Speaker 1: both Some you know, a fair number of Democrats and
Speaker 1: a fair number of Republicans, and that's I think where
Speaker 1: we're directed. But if you did that, then people say, hey, yeah,
Speaker 1: I can work with these people. We can find some
Speaker 1: modern solutions. I'm not going to get everything. We'll go
Speaker 1: back to actual politics, where politics is the art of
Speaker 1: the compromise, the art of the deal, where not everyone
Speaker 1: walks away with everything they wanted, but things actually improve.
Speaker 1: And that I think is what's really uh missing here.
Speaker 1: Um we've got you know, uh controlled by the most
Speaker 1: extreme elements, and we've seeded control. If the Republicans say
Speaker 1: we're only going to pass this bill with republic looking volks,
Speaker 1: then you have the most extreme people dictating what's at stake,
Speaker 1: and that is no formula for success. That is for
Speaker 1: sure not gonna work. You remember twenty three uh House
Speaker 1: Republicans uh are in districts that Mrs Clinton won. Okay,
Speaker 1: they're not inclined to vote the way the Freedom Caucus
Speaker 1: wants to go. Uh. So you just can't pass anything
Speaker 1: under those circumstances. You know, I think the real important
Speaker 1: thing is is for us to look, you know, two
Speaker 1: or three years down the line and say all right,
Speaker 1: what's the big issue. There's a lot of cost control.
Speaker 1: That's the big issue, all right. See Commanuel joining us
Speaker 1: here our nine studios with the University of Pennsylvania. This
Speaker 1: is Blomberg Surveillance. David Gura and Tom Keane David Garray
Speaker 1: in Washington, d C. Today, Tom Keane in New York
Speaker 1: looking forward to this interview we'reou to have here with
Speaker 1: Douglas Hoole, Seek and the president of American Action Form,
Speaker 1: former director of the Congressional Budget Office. We spent a
Speaker 1: lot of time, Doug yesterday talking about your opinion piece
Speaker 1: in the Washington Post. Trump's tax plan is built on
Speaker 1: a fairy tale. We also were marveling at what that
Speaker 1: tax plan looked like, just physically. This this one page document,
Speaker 1: two hundred words, a variety of typefaces. Here we are
Speaker 1: ninety nine days in. Did you expect that we were
Speaker 1: going to get more from the White House than we did? Look,
Speaker 1: I think we have to acknowledge the accomplishment. Not only
Speaker 1: is the return now on a postcard, the tax code
Speaker 1: is one page. I mean, it's never been done before.
Speaker 1: Let's let's let's dig into the substance a little bit here,
Speaker 1: A lot of what was on that piece of paper
Speaker 1: mirrored what the President had been talking about on the
Speaker 1: campaign trail when he was a candidate. What what did
Speaker 1: you see there that you like? And what did you
Speaker 1: see that you didn't? Uh? What I saw that I
Speaker 1: liked was a focus on some things that would be
Speaker 1: genuinely pro growth, lower tax rates on business, a move
Speaker 1: to a territorial tax system for our corporations. That's a
Speaker 1: switch from the campaign, I think, a significant switch. Um.
Speaker 1: And you know, we saw some movement down in the
Speaker 1: individual rates. So in terms of the sort of basic
Speaker 1: recipe of of tax form, lower rates, broader base, you
Speaker 1: see the lower rates. Um. What's missing, and the thing
Speaker 1: that troubles me the most is the absence of any
Speaker 1: real discussion of the base broadening and the casual assertion
Speaker 1: by the Secretary of Treasury that we can just grow
Speaker 1: enough that will it'll pay for itself. And that's that's
Speaker 1: simply not true. And that's the part I don't like
Speaker 1: about that casual assertion. I mean, we hear in time
Speaker 1: and time again the prospects of getting to three percent growth.
Speaker 1: We hear the Treasury Secretary saying what we here the
Speaker 1: President saying it as well. And there's something elliptical about
Speaker 1: this that you would be in favor of taxi form
Speaker 1: because that's gonna boost growth, and boosting growth is gonna
Speaker 1: pay for taxi form. It goes around and around and around.
Speaker 1: How problematic is that? It's absolutely true that if you
Speaker 1: have a solid piece of pro growth tax reform that
Speaker 1: is revenue neutral and as a result, could be passed
Speaker 1: in a permanent fashion, you could have a significant impact
Speaker 1: on the growth rate. I don't think you can get
Speaker 1: a percentage point, and I certainly don't think it pays
Speaker 1: for itself. So if for example, you fleshed out the
Speaker 1: House Blueprint, passed that as a piece of legislation in
Speaker 1: revenue neutral fashion, the joints of the antaxation is going
Speaker 1: to give it something that looks like maybe three five
Speaker 1: hundred six hundred billion dollars in in feedback. But but
Speaker 1: there's a limit to what you can get, and you
Speaker 1: should just acknowledge. If we assume that the President United
Speaker 1: States Doug has not read Intertemporal Analysis of State and
Speaker 1: Local Government spending tests this by Douglas Hole, teacon As Tilly,
Speaker 1: and the wonderful RV. Rosen. If they haven't gone back
Speaker 1: and read your ra that's French word there, Doug, help
Speaker 1: me with the who instructs the President and the Secretary
Speaker 1: of the Treasury on how this gets done. If they're
Speaker 1: not listening in their fairy tale two people like you,
Speaker 1: who will they listen to get legitimate reform. So I
Speaker 1: think there was some good news that came out of this,
Speaker 1: and I will answer the question. The good news was
Speaker 1: the President signaled by by having this rollout and by
Speaker 1: putting out the proposal, however thin that rough outline was
Speaker 1: that the status quo is unacceptable, and that really is true.
Speaker 1: The status quoto. We all know that. Okay, So step
Speaker 1: number two. If you look at that that proposal, it
Speaker 1: does not rule out anything that has been discussed on
Speaker 1: Capitol Hill. There's nothing in this blueprint they got ruled out.
Speaker 1: There's nothing in the Senate integration approaches that that got
Speaker 1: ruled out. And that's where they're going to end up
Speaker 1: going for the expertise. Now they have it in house,
Speaker 1: if they can get staffed up, if they could have
Speaker 1: an Assistant Secretary for tax policy, that would help sort
Speaker 1: if they did those sort of you know, appointments and
Speaker 1: got them done Treasury has a very deep bench. It's there,
Speaker 1: it just isn't being put into action at the moment.
Speaker 1: You represented Senator McCain in his effort for higher office.
Speaker 1: Maybe he wouldn't have played as much golf as a president, Doug,
Speaker 1: What will the Senate first toward war zones for creation?
Speaker 1: What will be the response of good senators to a
Speaker 1: deal making president on taxed from I can't get there. Look,
Speaker 1: the White House has to has to provide a lot
Speaker 1: of leadership to get tax form done. I mean, we
Speaker 1: we learned that in the thirty one years since we
Speaker 1: last got it done. It took a Ronald Reagan running
Speaker 1: for reelection on the promise to tax reform. He won
Speaker 1: forty nine states, which is pretty good. He then wrote
Speaker 1: the tax reform, sent it to Capitol Hill, and it
Speaker 1: still was extraordinarily hard to get it done. So in
Speaker 1: this environment, you're going to need a President Trump saying
Speaker 1: to the people who sent him to Washington to make
Speaker 1: the economy better, this is what I want. This is
Speaker 1: what's going to help the average American. And they're gonna
Speaker 1: have to be all in. Now, what they're all in
Speaker 1: on is an important thing, and they're gonna have to
Speaker 1: negotiate with that with the House of the Senate in
Speaker 1: the White House. That's the process that that needs to
Speaker 1: get deeper and richer over the course of next couple
Speaker 1: of months or simply isn't gonna happen. Tuck the sole
Speaker 1: Teken with us here in our Bloomberg nine nine studios
Speaker 1: in Washington, d C. We're gonna come back and talk
Speaker 1: more perhaps about the prospects of a government comment shutdown,
Speaker 1: talk about funding, talk about what was reported to be
Speaker 1: a return to regular order. I've yet to see the
Speaker 1: contract of that coming to finder focus. But we'll talk
Speaker 1: about budget policy as well with the cold t can hear,
Speaker 1: former director of the Congressional Budget Office, on Bloomberg Surveillance
Speaker 1: and from Bloomberg Radio. Taka sold Tea can here with
Speaker 1: us in the Bloomberg nine. Is you want to react
Speaker 1: to the to the numbers here that just generally speaking,
Speaker 1: react to s the growth that we're seeing in the
Speaker 1: US right now. Expected it was, um, I thought it's
Speaker 1: coming out point eight, So you know that's that's exactly
Speaker 1: the same number. It has the characteristics that I worried about,
Speaker 1: which is the soft PC number. We saw the household
Speaker 1: sector weekend. Over the course of the second half of
Speaker 1: two thousand sixteen, we've seen sort of mixed data coming
Speaker 1: out of the monthly data, and so I'd say the
Speaker 1: jury is still out on genuine acceleration UM And I'm
Speaker 1: with the President in the sense that I think there
Speaker 1: needs to be a turning of the dial on the
Speaker 1: policy front and some genuinely UM supportive pro growth policies.
Speaker 1: The biggest of those would be the tax form we
Speaker 1: talked about if that was done and done well. But
Speaker 1: but I will say I think one of the things
Speaker 1: that the administration and Congress have done that hasn't really
Speaker 1: been appreciated is just the complete freeze on on regulatory activity.
Speaker 1: And the difference between what was going on and now
Speaker 1: is really quite dramatic. Yeah, we're joking about watching Painter.
Speaker 1: I think there are a lot of people in this
Speaker 1: town who would love to watch Painter. I would love
Speaker 1: to see return to regular order here. We are looking
Speaker 1: at the projects for another short term spending bill. Will
Speaker 1: get something that will keep the government open for a
Speaker 1: week while Congress continues to hammer out what their what
Speaker 1: they're hammering out, how used to that is washing at
Speaker 1: this point were used to continuing resolutions. It is way
Speaker 1: too used to to that. I mean, how often in
Speaker 1: the past decade have they passed twelve appropriations bills in
Speaker 1: the House of Sentence signed them the way they're supposed to.
Speaker 1: It doesn't happen. I think it's happened once, maybe twice.
Speaker 1: And so this stop gap way of doing business has
Speaker 1: become the norm. It was supposed to be the exception,
Speaker 1: and I don't I don't think it benefits anyone, Doug,
Speaker 1: I want to rip up the script here the uproar
Speaker 1: today in pagedro over it, pay the cost over it.
Speaker 1: Business Insider had a great article on this. I think
Speaker 1: it was in Foreign Policy. Can't remember yesterday on speaking feast,
Speaker 1: the Senator Warren of Massachusetts is I was troubled by
Speaker 1: that that being a large speaking fee by the former
Speaker 1: president of the United States. I don't accept speaking feast, folks.
Speaker 1: That's part of my agreement with Bloomberg. But Doug, you
Speaker 1: do is an esteem public official. You've got many agencies
Speaker 1: including l A. I isn't somebody able to serve public
Speaker 1: service at the low salary like you did at CBO.
Speaker 1: You made like forty eight thousand, three hundred dollars a
Speaker 1: year or whatever it's CBO and then when you get out,
Speaker 1: you got to make the bacon to catch up, don't you. Uh.
Speaker 1: In my case, I had two kids in college and
Speaker 1: it was the way to pay the bills, and I
Speaker 1: was happy to do it. Um. I don't have any
Speaker 1: deep objection to this. Uh, it's why are we having
Speaker 1: this upward now that it's a world to make a
Speaker 1: big fat fee to provide immense wisdom to people after
Speaker 1: X number of years of government service. UM, I don't
Speaker 1: understand this. There's a a close corollary, which is accepting
Speaker 1: the large fee speaking and then somehow being tasked to
Speaker 1: change policy. But but that's that's not what goes on.
Speaker 1: I think that's the concern that somehow, by accepting the fee,
Speaker 1: you've turned in this case the foreign president United States
Speaker 1: into the agent of of some some group. That's that's
Speaker 1: a that's a fantasy. That's not what happens. And David,
Speaker 1: to help you out here Google with room room board
Speaker 1: and fees combine Dennison University sixty thousand, seven hundred ten dollars,
Speaker 1: that's where darken the door you have to look forward to. Yeah,
Speaker 1: I mean, David, I mean, I I don't mean to
Speaker 1: get up on my soapbox, but once again this Friday,
Speaker 1: David Gurrow, we have this uproar over speaking face. There
Speaker 1: you go. We do, We certainly do on the news
Speaker 1: that President bomb I think it's going to travel to
Speaker 1: Europe to give a speech for for four it's a
Speaker 1: big I mean, the whole seacons now at that level, well, yes,
Speaker 1: I would you would accept it if for those for
Speaker 1: those listening who are concerned about giving the president dollars
Speaker 1: give it to me. He will gladly. I just ask
Speaker 1: you about congressional leadership, and let me let me pivot
Speaker 1: away from that just a little bit. We looked at
Speaker 1: President Obama here for for wisdom on the future of
Speaker 1: the Democratic Party. Where else are you seeing leadership in
Speaker 1: the Democratic Party? In the Republican Party? You mentioned John
Speaker 1: McCain during War zones on on on his holiday getting
Speaker 1: out there doing. Who are the iconic figures in these
Speaker 1: two parties right now? Aside from from the President, I
Speaker 1: think the party's in flux. I think we saw that
Speaker 1: in the two thousand and sixteam election. The sort of
Speaker 1: traditional standard bears and the presidential primary didn't do very well.
Speaker 1: We saw Donald Trump win the nomination in the end,
Speaker 1: uh that that bleeds back into the House in the Senate,
Speaker 1: where there's a clear leadership at the moment, but it's
Speaker 1: not obvious who's the next in line. So that's sort
Speaker 1: of pecking. You know. Republicans have traditionally always liked to
Speaker 1: know who the next person was, and it's not been
Speaker 1: that way for quite some time though. Tuchas will taken
Speaker 1: with us here in our Bloomberg nine Studios the Breaking
Speaker 1: the American Action form. Former director of the Congressional Budget Office,
Speaker 1: former Chief Economist to the President, George Which Council of
Speaker 1: Economic Advisor David this interview was like a fairy tale.
Speaker 1: Do do read his Do read his piece in the
Speaker 1: Washington Post Again, Trump's tax plan is built on a
Speaker 1: fairy tale. I'll put that out on Twitter. I know
Speaker 1: you will as well. Top, but a useful read here.
Speaker 1: As the conversation about tax reform in Washington continues. Secretary
Speaker 1: State Rex Taylors And in New York today meeting with
Speaker 1: members of the UN Security Council. He will share a
Speaker 1: special meeting on Worth Korea here at ten o'clock at
Speaker 1: Wall Street Time. Force and perspective on this. Let's go
Speaker 1: to Victor Jaws. He's the Korea Chair at the Center
Speaker 1: of Strategic and International Studies, the Song Chair the Department
Speaker 1: of Government, the School of Foreign Service at Georgetown University,
Speaker 1: and former Director for Asian Affairs at the National Security Council.
Speaker 1: I looked at the Reuter's interview that's making a lot
Speaker 1: of headlines this morning, Professor Chaw, the President saying, quote,
Speaker 1: there's a chance that we could end up having a major,
Speaker 1: major conflict with North Korea, and perhaps worryingly more worryingly
Speaker 1: to people who read that interview, the word absolutely following it.
Speaker 1: What did you make of what the President had to
Speaker 1: say and what do you expect to hear from the
Speaker 1: Secretary of State today when the UN Security Council meets. Um, Well,
Speaker 1: I think there are a lot of there. There are
Speaker 1: a number of conflicting signals coming out of the administration
Speaker 1: right now. On the one hand, as you mentioned, President
Speaker 1: Trump made those comments about conflict. On the other hand,
Speaker 1: yesterday UH Secretary tell us and said the United States
Speaker 1: was also ready for diplomacy with North Korea. So Um,
Speaker 1: I think, I think what they are doing, they're putting
Speaker 1: all their options on the able. Right now, the focus
Speaker 1: is on trying the economically pressure North Korea through the
Speaker 1: China relationship, but the purpose of the pressure is to
Speaker 1: try to get them back to the negotiating table for
Speaker 1: some sort of deal. I think that the message at
Speaker 1: the u N is going to be one, UM, this
Speaker 1: is the number one national security issue for the United
Speaker 1: States today. I've heard that all week in Washington, d C.
Speaker 1: On Capitol Hill and around town. And to that, UM,
Speaker 1: the u N has to be ready to move quickly
Speaker 1: with sanctions and a new you are and Security Council resolution.
Speaker 1: If North Korea does a six nuclear test. Where do
Speaker 1: you see that the pressure being applied. I look at
Speaker 1: the rhetoric in particularly with the rhetoric on Twitter as
Speaker 1: ones want to do here under this UH, this current administration,
Speaker 1: the president seemingly expressing a lot of confidence in his
Speaker 1: his friendly relationship with with the Chinese president, moving away
Speaker 1: from labeling the country a currency manipulator. What kind of
Speaker 1: pressure can the US apply on China at this point
Speaker 1: when it comes to North Korea. So I think there
Speaker 1: are two types of pressure. One is um our movement
Speaker 1: of military assets to the region, as we've seen with
Speaker 1: the carrier strike group that Carl Vincent that eventually made
Speaker 1: it to the waters off the kreen eventually that eventually
Speaker 1: made it there off the Korean peninsula, And that I
Speaker 1: think is something that Chinese don't like. Um. And then
Speaker 1: the other is really Trump leveraging the overall US China
Speaker 1: relationship that Chinese want. They don't want instability to see here.
Speaker 1: This is the year of their big Party Congress, So
Speaker 1: Jumping doesn't want a crisis on his border. Um. And
Speaker 1: China does have a lot of economic influence on North Korea.
Speaker 1: They don't have any political influence. But you know on
Speaker 1: North Korea's trade is with China. You are truly one
Speaker 1: of our nation's experts on Korea. I would suggest I
Speaker 1: need education, and maybe the President of United States needs education.
Speaker 1: Outside of the capital, What does North Korea like? If
Speaker 1: I take the road north northeast from the capital and
Speaker 1: I'm distant from the Yellow River, there's Chang Gang or
Speaker 1: John Chung Chang Gang. I can't pronounce it. I guess
Speaker 1: it's a mining district. How medieval. How backward is the
Speaker 1: rest of North Korea? Um? It is pretty backward. I mean,
Speaker 1: once you get out of the capital, city, the pattemptin
Speaker 1: village of of the of kung young Um it deteriorates rapidly,
Speaker 1: very little electricity electricity. I once took a drive when
Speaker 1: I was in government doing this, and I drove for
Speaker 1: about sixty miles and I didn't through farmland, and I
Speaker 1: did not see a mechanized vehicle anywhere. The only thing
Speaker 1: I saw was a farmer with a with an ox
Speaker 1: and a plow um. And you pass buildings that have
Speaker 1: no windows in them, but you know people live in
Speaker 1: them because there's laundry hanging in the windows. Um it is.
Speaker 1: It is quite quite bad. And when you talk about
Speaker 1: the mining areas, this is this is an area where
Speaker 1: they have a lot of a lot of their uh
Speaker 1: their human rights violations. They have they who they deemed
Speaker 1: political criminals working in the mines, you know, digging, digging
Speaker 1: out with their bare hands, with no safety precautions whatsoever.
Speaker 1: Do we have intelligence on this? I think of the
Speaker 1: failure of US intelligence at nineteen I believe it was
Speaker 1: eighty nine with the collapse of the Soviet Union. Would
Speaker 1: you suggest that the president has available a level of
Speaker 1: intelligence where informed decisions can be made? Um? Well, North
Speaker 1: Korea is famously known as the hardest intelligence target in
Speaker 1: the world. UM, and and I think that is true.
Speaker 1: I think our intelligence community does the best they can
Speaker 1: with the equipment and the capabilities they have. But of
Speaker 1: course we don't. We are not able to penetrate North
Speaker 1: Korea like we can other countries, Iran or other places.
Speaker 1: It's just not it's just not the same. So it
Speaker 1: is this is the biggest security challenge and it is
Speaker 1: also at the same time the hardest intelligence target. That's
Speaker 1: not a good combination. Professor jaw A few Americans have
Speaker 1: been in the room negotiating with the with the North Koreans.
Speaker 1: You've been there as part of that Six Party Talk
Speaker 1: delegation team a while back. What do they like in negotiations?
Speaker 1: What what is North Korean diplomacy look like? And and
Speaker 1: judging based on that, how how how high is the
Speaker 1: likelihood here we can have a diplomatic solution. Um. So,
Speaker 1: I you know, they're they're not sort of banging the
Speaker 1: table and screaming. I mean they are professional diplomats. They
Speaker 1: have a brief, they have instructions. Um. They you know,
Speaker 1: they're aiming to get in agreement as well as everybody
Speaker 1: else at the table. Um. I would say one of
Speaker 1: the big differences is that they have absolutely no flexibility. Um.
Speaker 1: They it's harder for them to call back to capitals
Speaker 1: to get approval, to to try out a new idea. UM.
Speaker 1: So in that sense, Um, their inflexibility is really a
Speaker 1: function of the way their whole system is organized. And
Speaker 1: for that reason they cannot They're not very nimble negotiators. UM,
Speaker 1: they're sort of they have one brief, that's all they
Speaker 1: can say, and then everybody else has to figure out
Speaker 1: how to try to make it work because they really
Speaker 1: can't move. And in the last thirty seconds, so we
Speaker 1: have with here, we are we seeing market change. You
Speaker 1: when it comes to US policy toward North Korea. We
Speaker 1: you've mentioned this with attention that the issue is is
Speaker 1: getting is the policy itself changing? I think the context
Speaker 1: of the policy is changing, and that is largely because
Speaker 1: North Korea is driving too for an i CBM threatn
Speaker 1: interconno ballistic missile threat that can range the United States.
Speaker 1: That's something no previous U S presidents has had to
Speaker 1: deal with. That makes it a homeland security threat. And
Speaker 1: so for that reason, I think that means the United
Speaker 1: States is willing to take more risk, whether that's in
Speaker 1: terms of military policy or in terms of diplomacy. President
Speaker 1: Trump is going to have to sect except more risk
Speaker 1: as he maps out of policy and strategy for North Korea.
Speaker 1: Thanks for listening to the Bloomberg Surveillance Podcast. Subscribe and
Speaker 1: listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast
Speaker 1: platform you prefer. I'm on Twitter at Tom Keene. David
Speaker 1: Gura is at David Gura. Before the podcast, you can
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