Speaker 1: Now from our nation's capital. This is Bloomberg sound On.
Speaker 1: I ran for president because I believe we're in a
Speaker 1: battle for the soul of this nation. I still believe
Speaker 1: that to be true. Joe Biden has launched an assault
Speaker 1: on the soul of the marriage. I was stunned at
Speaker 1: al divisive. This speech was last night Bloomberg sound On Politics,
Speaker 1: Policy and perspective from DC's tough name. Three and fifteen
Speaker 1: thousand jobs created during the month of August. The labor
Speaker 1: participation for what's number going up as well. So that's
Speaker 1: that's a good way to enter the laby day week
Speaker 1: at Bloomberg sound On with Joe Matthew on Bloomberg Radio.
Speaker 1: President Biden calls MAGA a threat to democracy. Welcome to
Speaker 1: the fastest hour in politics. This day. After the prime
Speaker 1: time speech, we'll talk about the president's message to the
Speaker 1: nation with Virginia Governor Glenn Youngcan and with our panel
Speaker 1: Bloomberg Politics contributor Democratic analyst Gene Schanzano, joined today by
Speaker 1: Republican analyst Boyd Mathieson, former chief of Staff the Senator
Speaker 1: Mike Lee. The August jobs are board brings mostly smiles,
Speaker 1: despite the way Wall Street finished the week, We'll get
Speaker 1: the view of the White House with Jared Bernstein of
Speaker 1: the Council of Economic Advisors. President Biden went straight after
Speaker 1: so called Maga Republicans in the speech from Independence Hall
Speaker 1: last night prime time, warning the nation as he said
Speaker 1: that democracy is at risk. Here he is, I ran
Speaker 1: for president because I believe we're in a battle for
Speaker 1: the soul of this nation. I still believe that to
Speaker 1: be true. I believe the soul is the breath, the life,
Speaker 1: and the essence of who we are. And he called
Speaker 1: out the former president by name, as you do. Happening
Speaker 1: in our country today is not normal, Donald Trump and
Speaker 1: the Maga Republicans representing extremism that threatens the very foundations
Speaker 1: of our republic. Before the speech a prebuttle if we
Speaker 1: can use that word from Minority Leader Kevin McCarthy, as
Speaker 1: if he had already read the script. Still upset as
Speaker 1: well about the President calling at this fundraiser last week
Speaker 1: calling mega Republican semi fascists. Here's Kevin McCarthy. When the
Speaker 1: President speaks tonight at Independence Hall, the first lines out
Speaker 1: of his mouth should be to apologize for slandering tens
Speaker 1: of millions of Americans as fascists, and there was quite
Speaker 1: a bit of criticism from Republican corners this morning following
Speaker 1: the speech last night. That was the backdrop of my
Speaker 1: conversation today with Governor Glenn Youngcan of Virginia, of course,
Speaker 1: one of the most prominent post Trump Republicans to hit
Speaker 1: the national stage, and I started by asking him for
Speaker 1: his reaction to the speech and whether President Biden was
Speaker 1: right about this threat to democracy. I was stunned at
Speaker 1: al divisive this speech was, and at a time where
Speaker 1: people across America, and I know in Virginia are worried
Speaker 1: about some of the most basic issues, rising inflation and
Speaker 1: trying to make ends meet crime and oh, by the way,
Speaker 1: education challenges, and it's a time when, in fact, we've
Speaker 1: got to focus on these issues. And our president jumped
Speaker 1: out and it was incredibly divisive, trying to pit Americans
Speaker 1: against one another. And what we learned last year in
Speaker 1: Virginia is that it's these most important kitchen table concerns
Speaker 1: that when we bring when we bring common sense solutions
Speaker 1: to them, we can bring people together. And when I
Speaker 1: won last year, it wasn't Republicans against Democrats. We we
Speaker 1: won the independent vote. We had lots of Democrats come
Speaker 1: with us, and at the end of the day, this
Speaker 1: is a time when we've got real issues. Runaway inflation.
Speaker 1: I mean, let's be serious, We've got we've we've got
Speaker 1: real challenges and inflation. We've got the Fed having to
Speaker 1: move aggressively in order to slow things down, and Jpal
Speaker 1: came out and said it's gonna hurt. And and yet
Speaker 1: we've got our president trying to divide the nation. And
Speaker 1: I just think it's time to put all that down
Speaker 1: and to focus on these most important kitchen table concerns
Speaker 1: that Americans and I know Virginians have, and we can
Speaker 1: address them with common sense solutions like we're doing in
Speaker 1: Virginia right now, getting taxes down, funding law enforcement, and
Speaker 1: focusing on education. So you reject the president's message, but
Speaker 1: that was a stark warning from the President of the
Speaker 1: United States. Governor, do you believe there are anti democratic
Speaker 1: forces in the Republican Party. I believe that we have
Speaker 1: people who are searching for leadership, and leadership comes and
Speaker 1: it comes at a time when we need to be
Speaker 1: focused on these most important issues, not calling each other
Speaker 1: names and trying to divide the country. I mean when
Speaker 1: we look at when we look at what's happened over
Speaker 1: the course of the last couple of years, we've seen
Speaker 1: our economy fall from having been a good one to
Speaker 1: a real challenged one. Inflation running away, crime really challenged.
Speaker 1: We've got a crisis at the border. We watched America
Speaker 1: actually really fall from the national from the international scene
Speaker 1: in leadership, and I think America kins broadly recognized this.
Speaker 1: We can see it in the president's job approval ratings. Uh,
Speaker 1: he's got just terrible job approval ratings. And at a
Speaker 1: time when we're heading into the mid terms, what do
Speaker 1: you do You change that, You change the narrative. Well,
Speaker 1: let's go back and talk about the economy. Let's go
Speaker 1: back and talk about schools, let's talk about crime, let's
Speaker 1: talk about the border, and let's come up with real
Speaker 1: solutions to these most important issues. Let's not call each
Speaker 1: other names. A new pull from Quinnipiac University Governor shows
Speaker 1: seventy percent of Americans it was sixty to be exact,
Speaker 1: I think democracy is in danger of collapse. When you
Speaker 1: see a number that big, do you worry that our
Speaker 1: institutions are under attack? Well, I just feel like that
Speaker 1: that entire poll question is is an odd one. I mean,
Speaker 1: America's democracy is not gonna collapse. We are we have
Speaker 1: seen tough times historically where we've worked through it. This
Speaker 1: is the most amazing form of government ever envisioned. America
Speaker 1: is the best country in the world, and we're gonna
Speaker 1: work our through our way through this. But what it
Speaker 1: requires is leaders to focus on solutions to those most
Speaker 1: important challenges for Virginians and for Americans again, not calling
Speaker 1: each other names, not trying to divide us further, but
Speaker 1: providing a place like we did in Virginia last year,
Speaker 1: for people to come together. And you know what we've
Speaker 1: done is we've delivered on what we promised and people
Speaker 1: are happy and and I think that's what America needs
Speaker 1: right now, is is a leader. And our president should
Speaker 1: step up and put the rhetoric down and focused on
Speaker 1: solutions to these to these kitchen table concerns. Well. Speaking
Speaker 1: of calling names, Kevin McCarthy, the minority leader in the House,
Speaker 1: says that President Biden should apologize to Republicans for referring
Speaker 1: to mega Republicans as semi fascist. Do you believe the
Speaker 1: President os Americans and apology. I do. I do I
Speaker 1: I again. I just think the day of name calling
Speaker 1: should be pressed down at a time when we're searching
Speaker 1: for leadership and America needs needs to lead again, needs
Speaker 1: to lead again. And this is a chance on on
Speaker 1: the international stage and at home for us to recognize
Speaker 1: that leadership is not a moment to divide, It's a
Speaker 1: time to bring together. Governor, youcan It was widely noted
Speaker 1: that Donald Trump supported your candidacy, which was amazingly less
Speaker 1: than a year ago at this point, but you never
Speaker 1: appeared on stage with him. Did you create the recipe
Speaker 1: for Republicans to win in twenty two and twenty four. Well,
Speaker 1: our campaign was focused on Virginia, and we campaigned as Virginians.
Speaker 1: I'm homegrown. I cared deeply about the Commonwealth of Virginia
Speaker 1: and the issues that we ran on on on crime,
Speaker 1: on education, on cost of living, on a government that
Speaker 1: needs to work for us, on protecting our constitutional rights.
Speaker 1: These are issues that Virginians embraced, and I wanted to
Speaker 1: make sure that they knew that they had someone running
Speaker 1: for governor and then serving them as governor focused on them.
Speaker 1: I do believe that that the candidates across the nation
Speaker 1: Republican governors running need to focus on these issues because
Speaker 1: these are the issues that voters are most concerned about.
Speaker 1: And that's why I'm excited to have some time, not
Speaker 1: a lot, because I'm very busy here to support some
Speaker 1: candidates around the country who I think are in circumstances
Speaker 1: much like I was in Virginia last year, where there's
Speaker 1: republic there's Republican candidates who can take over a state
Speaker 1: that's been run by Democrats and the states have not
Speaker 1: been performing well, just like Virginia was not performing well,
Speaker 1: and they can turn it around. And so I think
Speaker 1: it's a chance for Republican governors to do what Republican
Speaker 1: governors have been doing, which is leading. Well, let's talk
Speaker 1: about the economy for a moment, Governor. We got the
Speaker 1: jobs report better than expected. The unemployment rate in Virginia
Speaker 1: is even lower than the national average at two point
Speaker 1: seven percent. Do you believe it's possible to lower inflation
Speaker 1: without damaging the job market we have right now? I
Speaker 1: think this is a real challenge and it's one that
Speaker 1: we are focused on in Virginia every single day. And
Speaker 1: the key to this is getting people back into the
Speaker 1: job market. You know, Virginia had labor had labor participation
Speaker 1: of about sixty seven percent prior to the pandemic, and
Speaker 1: we were ranked forty seven in the nation and job
Speaker 1: recovery coming out of the pandemic, and so we've been
Speaker 1: very focused on getting people back into the job market UM.
Speaker 1: And since January, we've seen a hundred thousand more jobs
Speaker 1: taken by Virginians and that's the fastest growth Virginia seen
Speaker 1: h in memory. And in fact, we're now ranked in
Speaker 1: the top fifteen in job recovery UM. But at the
Speaker 1: end of the day, the key here is the strength
Speaker 1: of that labor market. And I do have concerns that
Speaker 1: that as the Federal Reserve takes its actions and real
Speaker 1: concerns about economic growth uh manifest themselves into boardrooms and oh,
Speaker 1: by the way, into families, that we're gonna see this
Speaker 1: labor participation number stall and employment stall. That's why we're
Speaker 1: working so hard in Virginia in order to bring regulations down,
Speaker 1: invite new businesses in and joe grow the job market.
Speaker 1: And when companies like Boeing and ray Theon come to
Speaker 1: Virginia and Lego comes to Virginia and drone up who's
Speaker 1: here and Hilton's who's here grow. It's great for Virginians,
Speaker 1: but we're continuing to work to keep confidence high that
Speaker 1: we can meet we we can navigate through the headwinds
Speaker 1: that I think the national economic picture, which has been
Speaker 1: caused by bad policies has created. Well, you've obviously got
Speaker 1: a good story to tell in Virginia, but you come
Speaker 1: from the business world, governor famously at Carlisle, and I
Speaker 1: wonder with your background, are you more worried about inflation
Speaker 1: today or a FED induced recession? Well, they go hand
Speaker 1: in hand. And it is the inflation that was caused
Speaker 1: by unbridled spending at the federal government, um that is
Speaker 1: forcing the FED to take these actions. And and as
Speaker 1: a result, they go hand in hand. And if we,
Speaker 1: of course didn't have inflation, we wouldn't have the FED
Speaker 1: doing what they're doing. So it sounds like you're more
Speaker 1: concerned about a recession at this stage. Oh I am,
Speaker 1: I'm I. I am concerned about economic slowdown. Uh. And
Speaker 1: the anecdote to that is jobs and labor participation. And
Speaker 1: in order to have jobs and labor participation, we've got
Speaker 1: to keep confidence high in the business community. And we
Speaker 1: know that and so I've been encouraged by the confidence
Speaker 1: that Virginia businesses have been showing and expanding and adding
Speaker 1: to their labor force. And I think that's the partnership
Speaker 1: that we've created in Virginia. Governor Glen Youngcan Republican from
Speaker 1: the Commonwealth, just across the Potomac here from the nation's capital,
Speaker 1: I'm Joe Matthew and Washington, and we're gonna have a
Speaker 1: lot more on the job's reports, specifically a little bit
Speaker 1: later on this hour through the eyes of the White
Speaker 1: House as we discussed the numbers and the trends with
Speaker 1: Jared Bernstein of the White House Council of Economic Advisors.
Speaker 1: But we're gonna get back to the speech last night
Speaker 1: and where we started. What we also heard from glennyncan
Speaker 1: his take on this as we play it against the panel.
Speaker 1: Bloomberg Politics contributor Jeanie Chanzano is up next along with
Speaker 1: Boyd Mathison, former chief of staff of Senator Mike Lee.
Speaker 1: Will get the view from both sides on the fastest
Speaker 1: hour in politics. This is Bloomberg. This is Bloomberg sound
Speaker 1: on on Bloomberg Radio. It did feel like a campaign
Speaker 1: style event last night, right with all of the trappings,
Speaker 1: the the optics that clearly were well thought out, and
Speaker 1: the prime time nature of the address. President Biden sticking
Speaker 1: largely to scripts, although he did have a couple of
Speaker 1: moments where he stepped off the the teleprompter as people
Speaker 1: were shouting from across the street. A couple of reactions there,
Speaker 1: as you saw, and what was roughly half an hour
Speaker 1: was about twenty five minute long speech just about as
Speaker 1: predicted it. Lets you know, he did stand or stick
Speaker 1: to the script. So the big knock today was you
Speaker 1: know that this was a political attack. Republicans say, you
Speaker 1: just heard Glenn Youngan, you know, the fiery rhetoric, the
Speaker 1: destructive rhetoric, and so forth. The reaction to that from
Speaker 1: the White House Karine John Pierre, the White House Press Secretary,
Speaker 1: standing up for democracy is not political. Denouncing political violence
Speaker 1: is not political. Defending right uh and freedom is not political,
Speaker 1: and so on and so forth. As we assemble the panel,
Speaker 1: she had a longer answer than that. Actually. Bloomberg Politics
Speaker 1: contributor Jennie Schanzano is here along with Boyd Mathis and
Speaker 1: former chief of staff of Senator Mike Lee. Republican analyst
Speaker 1: the panel, Jennie We talked a lot about this speech
Speaker 1: going into it. Were you surprised by the reaction today?
Speaker 1: You know, I was not surprised by the reaction. I
Speaker 1: do think the criticism about the political nature of the speech,
Speaker 1: or we should say the campaign nature, because everything a
Speaker 1: president does is going to be political. I think that
Speaker 1: is very real. When you're looking at two marines behind
Speaker 1: the president, that is fairer criticism. And I think the
Speaker 1: White House is trying to push back on that, but
Speaker 1: they're going to be hit on that. But I also
Speaker 1: think from a political perspective, Joe Biden, who can no
Speaker 1: longer be referred to as sleepy Joe, I guess, because
Speaker 1: he's any thing but sleepy on this issue. He is
Speaker 1: wide awake. Um. You know, he was doing exactly what
Speaker 1: Democrats wanted to do. He is taking to trolling Donald Trump,
Speaker 1: and it worked because Donald Trump is coming out. He's
Speaker 1: going to be in Pennsylvania tomorrow, and the more Trump
Speaker 1: is out, the better for Democrats. And that really is
Speaker 1: the political strategy here. I think Biden is right on
Speaker 1: the substance about violence. I think there's a hypocrisy there
Speaker 1: as well. But I do think politically he did what
Speaker 1: he needed to do last night, and he is open
Speaker 1: to the criticism because the more Trump is in the
Speaker 1: news and people like McCarthy defending him, the better off
Speaker 1: for Democrats. And Democrats know that well, Jennie. You know,
Speaker 1: the criticism in advance from Democrats was that, hey, he's
Speaker 1: not out there talking about his legislative accomplishments. Here he
Speaker 1: goes on the soul of the nation and calling out MAGA.
Speaker 1: But he did actually, uh, the speech lent itself quite
Speaker 1: a bit to the accomplishments that have been had. He
Speaker 1: kind of creatively walked through them, whether it was the
Speaker 1: burn pits, legisla lation, inflation. I mean, he had it
Speaker 1: all in there at one point or another, the Chips Act,
Speaker 1: talking about competition and uh as as the Democratic strategists
Speaker 1: with us today. Do you see that as a win
Speaker 1: or was that part not heard? You know, I'm not
Speaker 1: sure that part was heard. You're right, was almost like,
Speaker 1: you know, two to three speeches in one and one.
Speaker 1: Part of it was him celebrating his accomplishments, and right
Speaker 1: he should. But of course, in this media environment, what
Speaker 1: got the attention was the attacks, if you will, on
Speaker 1: MAGA Republicans, and that's not a big surprise. So I
Speaker 1: think he put that in there. He tried to talk
Speaker 1: about his accomplishments. It's not going to get this kind
Speaker 1: of attention that it really deserves. But the point of
Speaker 1: the speech was not that. The point of the speech
Speaker 1: was to say, this election coming up in ten weeks
Speaker 1: is a choice between normalcy and extremism. If you vote
Speaker 1: for Republicans who want to look back at you're voting
Speaker 1: for Trump, You're voting for extremism. And so he is
Speaker 1: issuing a warning shot across the bout. What I wish
Speaker 1: he had also did was called out Democrats who were
Speaker 1: supporting those very same MAGA candidates, because that's where the
Speaker 1: hypocrisy comes in. Boyd Matheson, the President tried to draw
Speaker 1: the line between maga Republicans and so called mainstream Republicans.
Speaker 1: It's getting difficult with the labels around here. Do you
Speaker 1: tell a difference? Do you draw that line yourself for
Speaker 1: your own party? Yeah? I think the biggest challenge for
Speaker 1: the President was he was he was kind of blocking everybody.
Speaker 1: He would saying he was about uniting everyone under red, white,
Speaker 1: and blue, and yet he gets continued to break it
Speaker 1: down of well you're a maga. You're an extreme maga.
Speaker 1: You're a regular republic You're an okay Republican, not a
Speaker 1: horrible Republican. You're one of the eighty million people who
Speaker 1: voted for me. You're on the good side. And so
Speaker 1: there was a lot of division within that that I
Speaker 1: just don't think played well. And I think the Genie's point,
Speaker 1: I think the misses for the president, and he had
Speaker 1: some lines in there that were very good. I loved
Speaker 1: his line about I ran for president on this battle
Speaker 1: for the soul of the nation, although I don't think
Speaker 1: the soul of the nations dependent on who wins elections
Speaker 1: or who's in Congress or the Oval office. But the speech,
Speaker 1: he really went down this path. M Hey, we are
Speaker 1: going to divide all of this up. And to me,
Speaker 1: the sad part was this was a an address to
Speaker 1: the nation, and to me, that's a different thing. That's
Speaker 1: the sacred thing. I haven't missed an address to the
Speaker 1: nation from any president of either party in the last
Speaker 1: forty years, because they matter. This was taxpayer funded addressed
Speaker 1: to the nation, and it was a campaign event, as
Speaker 1: Genie pointed out, And I think that's the fact that
Speaker 1: the main networks read the speech and said we won't
Speaker 1: cover it. Uh. Said a real message there as well. Uh.
Speaker 1: And what do you make of that, Genie? That's actually
Speaker 1: it's a great point, Boyd, that the three letter networks
Speaker 1: didn't carry it last night. At one point they were
Speaker 1: expected to. Is that a meaningful rejection for this White House?
Speaker 1: You know? I think it is. And I happened to
Speaker 1: agree with Boyd on that, And what I think was
Speaker 1: the miss is, yes, there is no place in American
Speaker 1: politics or government or any government for violence. And that
Speaker 1: is an important It's a fair point. That's why Joe
Speaker 1: Biden said he ran for office. But the fact is
Speaker 1: you've got to call it out on both sides. And
Speaker 1: I think the miss here is to be seen as
Speaker 1: a leader, it requires criticizing your own as much as
Speaker 1: the other side. Otherwise it's a political speech made in
Speaker 1: a political environment. And you know, another criticism is it
Speaker 1: came in the context of no events, So what had
Speaker 1: precipitated this speech is unclear, and that makes it seem
Speaker 1: very political. Ten weeks before the election, Boyd Mathis and
Speaker 1: Jennie Chanzano our panel for This Friday on the Fastest
Speaker 1: Hour in Politics, It's going by too fast. We'll bring
Speaker 1: him back after we check in with the White House
Speaker 1: on the job's report next. With the Job's report in mind,
Speaker 1: that was the big driver for news today. Now that
Speaker 1: we have moved beyond the speech thousand, that's more than
Speaker 1: we expected. Right And of course, as I mentioned, and
Speaker 1: you've been hearing from Charlie throughout the day, Charlie Pellette,
Speaker 1: that is that under the hood, things look pretty good
Speaker 1: with regard to labor force participation. Especially Marty Walsh, the
Speaker 1: Labor Secretary, was very pleased about that this morning. And
Speaker 1: yet the markets finished lower, but somehow got a jobs
Speaker 1: report that you know, made both the Fed and the
Speaker 1: White House happy. And I talked about it earlier with
Speaker 1: Jared Bernstein of the Council of Economic Advisors at the
Speaker 1: White House. He joined us from the White House where
Speaker 1: he has the ear of the President on economic policy,
Speaker 1: and every data point like this, particularly the monthly jobs report,
Speaker 1: goes a long way to informing their advice. Jared Bernstein
Speaker 1: joins us with his first blush reaction. It's a very
Speaker 1: good news report, no question. You don't have to even
Speaker 1: go too far under the hood to figure that out. Now, Look,
Speaker 1: it's one month. We never made two big, big a
Speaker 1: deal out of a one month report. We like to
Speaker 1: look at the trend. But when we talked, I remember
Speaker 1: saying to you, one of the things I look at
Speaker 1: first is labor force participation. It's just so important. Now
Speaker 1: we know employers have talked about needing more workers to
Speaker 1: come in to meet some of those eleven million open
Speaker 1: vacancies right now. Of course the Suttle Reserve likes to
Speaker 1: see that as well. It's potentially disinflationary. So that increase
Speaker 1: that pop of of thirty basis points on the LFPR
Speaker 1: very welcome. UH is stronger for prime age workers, by
Speaker 1: the way, which is also a good educator with regard
Speaker 1: to labor participation. Here there are famously two openings for
Speaker 1: every person looking for a job in this country. We've
Speaker 1: been waiting for a more pronounced return to work since COVID.
Speaker 1: So what is it? Is it kids going back to school?
Speaker 1: Is it inflation that's causing more people to seek a paycheck?
Speaker 1: What's your take? Yeah, great question. So we we we
Speaker 1: know that the pop that we got on labor force
Speaker 1: participation is a little stronger for women, particularly primate women
Speaker 1: in their working years, and UH one, one perfectly legitimate
Speaker 1: hypothesis is that that does have to do with school reopening. Uh.
Speaker 1: One of the long term agendas of the of the
Speaker 1: Biden administration is to finally stand up a more affordable
Speaker 1: and accessible care sector for childcare and eldercare. And you
Speaker 1: maybe get an inkling as to how important that is.
Speaker 1: But one thing I noted when I again when I
Speaker 1: got into the data and looked at the flows data,
Speaker 1: meaning how how labor market participants are flowing between different
Speaker 1: states in the job market. Over half a million people
Speaker 1: in August moved from out of the labor market too
Speaker 1: into the labor market, which is exactly the flow we
Speaker 1: need again one month. I don't want to over emphasize it,
Speaker 1: but that's what we need to see more of. This
Speaker 1: is a delicate balance we're talking about right now. Jared Bernstein,
Speaker 1: how can you keep this momentum when the Fed is
Speaker 1: hiking interest rates? And I'm not asking you to comment
Speaker 1: on Fed policy, but we heard j Powell Warren that
Speaker 1: that that we need softness in the labor market to
Speaker 1: beat inflation. Is that the choice we're facing. Well, I
Speaker 1: think what you're really referring to here is the soft
Speaker 1: landing versus a hard landing, and obviously, uh, you know,
Speaker 1: the FED is trying a track towards soft. I think
Speaker 1: one of the things that is so important in this
Speaker 1: regard is to see occur what the President actually talked
Speaker 1: about a few months ago and up in the Wall
Speaker 1: Street Journal. He said, we need to move from the
Speaker 1: breakneck pace of growth that characterized one when shots and
Speaker 1: arms and checks and pockets made such a difference to
Speaker 1: standing up the uh, the strong labor market we're now enjoying.
Speaker 1: We need that to slow to a more steady and
Speaker 1: stable pace. If you kind of look at the flow chart,
Speaker 1: and by the way, our friends that the folks I
Speaker 1: know you talked to at Goldman Sachs often look at
Speaker 1: this very flow start that kind of goes from slower
Speaker 1: GDP growth that is moving from well above trend to
Speaker 1: something closer to trend or a bit below trend, to
Speaker 1: slower job growth, the slower wage growth, the slower price growth.
Speaker 1: You know, that's kind of a flow chart that a
Speaker 1: FED watcher might want to be paying attention to. One
Speaker 1: of the things we see here in August is the
Speaker 1: job market cooling in a way that we believe is
Speaker 1: very consistent with the President's view of moving from break
Speaker 1: neck pace to more steady, stable growth. I guess another
Speaker 1: way of asking that would be, you know is this,
Speaker 1: is this a value of good economic news now ahead
Speaker 1: of what we know is going to be a tough winter,
Speaker 1: energy costs rise that starts to push inflation back up again. Well, look,
Speaker 1: I mean I was gonna say, my crystal ball is
Speaker 1: just as cracked as anybody else's right now. So I
Speaker 1: think looking at looking around corners is awfully hard. I
Speaker 1: will say the following. We we have the client and
Speaker 1: gas prices, and I think that that's a really important
Speaker 1: backtrop to everything we've been talking about. We have pretty
Speaker 1: strong consumer balance sheets. We've obviously got a an historically
Speaker 1: stellar labor market. I think all of those create momentum. Now, look,
Speaker 1: if there's some unforeseen circumstance that's going to jam the
Speaker 1: price of oil, obviously that's uh, that's gonna be problematic.
Speaker 1: But again, looking at the momentum, we have. Our job
Speaker 1: as White House economist is keep our heads down steadies.
Speaker 1: We go implement the policies at the Press that has
Speaker 1: managed to legislate to help invest in this future economy,
Speaker 1: and keep these trends going knowing this delicate balance exists
Speaker 1: then and the challenges we could face next year. Does
Speaker 1: that mean the White House and Congress hold off on
Speaker 1: economic outlays following the student loan, the debt forgiveness plan,
Speaker 1: and just let the Fed fix the inflation question? Well,
Speaker 1: certainly when you hear the President tick off his three
Speaker 1: tiered plan for fighting inflation. Tier one is an independent
Speaker 1: FED that does what it needs to do. Tier two
Speaker 1: our policies to help address a cost that a consumers space,
Speaker 1: whether it's student debt costs or the cost of healthcare.
Speaker 1: And we've obviously moved on all of those. And Part
Speaker 1: three is deficit reduction. And that kind of gets to
Speaker 1: your point a second ago. We're on track for historical
Speaker 1: deficit reduction and we need to stay on that track.
Speaker 1: And I'm confident that we will well over a trillion
Speaker 1: dollars of deficit reduction in this fiscal year. That's a
Speaker 1: kind of negative fiscal impulse, a very much compliments to
Speaker 1: sad negative monetary impulse. Thanks to Jared Bernstein of the
Speaker 1: White House Council of Economic Advisors for the deep dive,
Speaker 1: there one that you will only hear on Bloomberg. Of course,
Speaker 1: as I look to the terminal and see gosh go
Speaker 1: figure two. A bit of pessimism here from former Treasury
Speaker 1: Secretary Larry Summers. The headline Summers discounts rise in labor force.
Speaker 1: As we were just discussing with Jared, former Treasury Secretary
Speaker 1: Larry Summers discounting any optimism over an influx of people
Speaker 1: in the US labor force in August, focusing instead on
Speaker 1: the inflationary potential of continued strong employment gains. There's always
Speaker 1: two ways to look at the data, a tendency, he says,
Speaker 1: to exaggerate how much higher participation will reduce inflation. We'll
Speaker 1: get the panels take on this and whether this was
Speaker 1: a good news Friday for the White House. Jennie Chanzano
Speaker 1: is up with us next in the panel today, along
Speaker 1: with Boyd Mathison. I'm Joe Matthew. You in Washington, Welcome
Speaker 1: to sound Off. This is Bloomberg. You're listening to Bloomberg
Speaker 1: sound On on Bloomberg Radio, and Larry Summers pours cold
Speaker 1: water on the job's report. Everyone was so excited about
Speaker 1: this morning. It did seem like good news to most people.
Speaker 1: Looking at this. We analyzed it earlier with Michael McKee
Speaker 1: at Bloomberg. Higher than expected on the top line, more
Speaker 1: jobs than predicted, more people looking for work in the
Speaker 1: assumption it was we just talked about with that Jared Bernstein,
Speaker 1: is that, you know, more people looking for work would
Speaker 1: help to ease inflationary pressures in the labor market. Not so,
Speaker 1: says the former Treasury secretary in an exclusive interview with Bloomberg.
Speaker 1: Speaking in fact on Bloomberg's Wall Street Week, he says,
Speaker 1: no more pain is going to be necessary. I'd be
Speaker 1: surprised if we get to the six get to the
Speaker 1: two percent inflation target without an unemployment rate uh that
Speaker 1: approaches or exceeds uh six percent and unemployed. So we're
Speaker 1: at three point seven today. That means we've got a
Speaker 1: ways to go. Let's reassemble the panel Bloomberg Politics contributor
Speaker 1: Democratic analyst Genie Chanzano along with Republican analyst Boyd Matheson.
Speaker 1: So a Genie six percent or higher that's going to
Speaker 1: happen before election? How does that change the conversation about
Speaker 1: the economy and Democrats specifically though this Biden administration. Yeah,
Speaker 1: it's certainly not what the Biden administration wants to hit here,
Speaker 1: but you know, I'm looking at the terminal as well.
Speaker 1: And Larry Summers makes a really good point. We think.
Speaker 1: He says, we think extra labor supply, but we forget
Speaker 1: the more people employed, the more incomes increase, and the
Speaker 1: more spending and the more inflation. I mean, the logic
Speaker 1: of his argument is really really important to pay attention to.
Speaker 1: And so I think he's it's a message we have
Speaker 1: to listen to. And when we heard the President come
Speaker 1: out today, he said maybe maybe, and I think that
Speaker 1: was the watchword of the day. He's seeing some positive signs,
Speaker 1: but I think even Joe Biden has learned that he's
Speaker 1: got to be cautious because if Summers is right, there's
Speaker 1: a lot more pain ahead before we get to a
Speaker 1: point where inflation slows. If that happens, though, that means
Speaker 1: they I mean, assuming in this scenario, you've got six
Speaker 1: percent unemployment and inflation is licked. So what's more important? Boy?
Speaker 1: Do you know? People say, hey, look, prices are down
Speaker 1: at least, but my neighbor doesn't have a job. That
Speaker 1: doesn't sound like an improvement. Yeah, those are both tough messages,
Speaker 1: I think for either political party to really deal with
Speaker 1: the President. Of course, has got to walk that very
Speaker 1: fine line, as Genie pointed out, to not being overly optimistic,
Speaker 1: knowing that some of this pain is is still coming.
Speaker 1: I think there's also some underlying things that are going
Speaker 1: to be really interesting, especially moving into One of the
Speaker 1: most interesting to me is the fact that you've got
Speaker 1: for every one person, one man man in that fifty
Speaker 1: four categories seeking employment, you've got four that aren't even
Speaker 1: looking at all. You've got six million prime age men
Speaker 1: who aren't working or looking for work, and they're also
Speaker 1: not being active in civil society. They're not volunteering, they're
Speaker 1: not worshiping, they're not giving to charity, they're watching things
Speaker 1: in front of screens, they're dealing with pain. Medications is
Speaker 1: a common thread there, and so I think there's a
Speaker 1: societal component to this that's also going to play into
Speaker 1: the politics of four. To your point, Joe, if my
Speaker 1: neighbors out of work, I feel that one way, If
Speaker 1: I'm staying higher prices at the gas, I'm feeling it.
Speaker 1: This is an area where I think it's going to
Speaker 1: impact society. It impacts single parents, especially single mothers, and
Speaker 1: the load that they carry. So I think there's a
Speaker 1: lot of things beneath the headline numbers that we've got
Speaker 1: to get to. When we're looking at this. It's also
Speaker 1: still this question, Jennie, about why people are coming back
Speaker 1: to work. You know, we spent all of COVID saying okay,
Speaker 1: once you know, the students go back to school, and
Speaker 1: once labor Day hits, and it still hasn't quite clicked.
Speaker 1: But now we're start to see it. And if the
Speaker 1: reason is inflation, we also, by the way, saw a
Speaker 1: big jump in people seeking part time work. If the
Speaker 1: reason is you know what, I can't afford to fill
Speaker 1: the gas tank here, I need a little bit of relief.
Speaker 1: As the President likes to say, that's that's actually not
Speaker 1: a good trend. No, it's not. And you know, one
Speaker 1: number to look at is consumer sentiment. And while that
Speaker 1: is still really low by you know, historical standards, the
Speaker 1: trajectory is going in the right direction, just like the
Speaker 1: presidential approval rating. But I think to urine to Boyd's point,
Speaker 1: you know, when you get to sentiment indexes, I think
Speaker 1: that tells you an awful lot because it tells you
Speaker 1: not just about the people who are actively looking for work,
Speaker 1: and what they're looking full or part time, but what
Speaker 1: consumers are thinking as they approach the economy overall, and
Speaker 1: that is up a little bit but still historically low,
Speaker 1: which is and remains a problem for Democrats as they
Speaker 1: go into this election. Well it's something to consider today. Though.
Speaker 1: What about the news today? Uh, boyd, you can't really
Speaker 1: put too much of a negative spin on this. The
Speaker 1: White US wanted to get out there and talk about it.
Speaker 1: The jobs since pre COVID have been recovered and a
Speaker 1: three point seven percent unemployment rate might actually be what
Speaker 1: saves us from a recession. Do you see it that way? Yeah?
Speaker 1: The President is absolutely right and and going out and
Speaker 1: and touting the numbers there, you can't say that that's
Speaker 1: just a bad thing, it's good. I think the biggest
Speaker 1: challenge is the communication strategy, because if you're touting the
Speaker 1: success of what's going well, but the American people are
Speaker 1: feeling or experiencing something different, it creates a really unique
Speaker 1: disconnect and I think that's going to be the challenge
Speaker 1: for the president. It has been over the last year
Speaker 1: touting some things that actually are good that everybody should celebrate,
Speaker 1: but the American people saying that's not what I'm feeling
Speaker 1: or that's not what my neighbor is experiencing. And so
Speaker 1: that's the balancing. The numbers are good, and we should
Speaker 1: all celebrate good numbers. We want that for the country,
Speaker 1: We want that for our our communities and our neighbors.
Speaker 1: Getting that in alignment from a messaging standpoint is tricky. Well,
Speaker 1: I'll tell you what. It's Labor Day weekend, Genie. And
Speaker 1: this administration is one that has embraced labor, has embraced
Speaker 1: organized labor, has made the Secretary Marty Walsh, uh, you know,
Speaker 1: one of the bright lights of the administration in terms
Speaker 1: of you know, doing media and getting him out there
Speaker 1: with with his messaging. And the President is going to
Speaker 1: be marching in a Labor Day parade by the way,
Speaker 1: with John Fetterman on Monday in Pittsburgh. The head of
Speaker 1: the a f l C. I Oh, who I spoke
Speaker 1: with earlier this week, is also going to be there.
Speaker 1: Does the sort of resurgence of interest and organized labor
Speaker 1: at places like Amazon and Trader Joe's and uh another
Speaker 1: Starbucks other big chains like that, is that also a
Speaker 1: winning message for democrats? It is? And and this is
Speaker 1: something that I don't think the Democratic Party has embraced enough.
Speaker 1: And we've heard this to a certain extent, but it's
Speaker 1: president has been pretty full throated. He has and he is,
Speaker 1: you know, somebody who can really bring this to the forefront.
Speaker 1: And this is the idea of the dignity of the
Speaker 1: American worker, which is sort of the theme that we
Speaker 1: understand he's going to go out with on Labor Day.
Speaker 1: And that is critically important because it fits right in.
Speaker 1: You know, you have to be paid what your work
Speaker 1: is worth you, you're you have to be respected, you
Speaker 1: have to have healthcare, all of the things that Democrats
Speaker 1: believe in. So I do think it is critically important
Speaker 1: and it is a winning message, particularly in these areas
Speaker 1: that Democrats want to win in the rust belt that
Speaker 1: quite frankly, Donald Trump did much better than expected in
Speaker 1: and really you know, blew away some Democrats who didn't
Speaker 1: expect Republicans could play there. He showed they can. They're
Speaker 1: trying desperately to get those back in Ohio is a
Speaker 1: really good example of that, as is Pennsylvania, where the
Speaker 1: president will be Do you see that organizing trend as
Speaker 1: as a real one, boyd as opposed to you know,
Speaker 1: kind of a media narrative. We've also seen cut these
Speaker 1: same chains that I mentioned, Starbucks, Amazon and so on
Speaker 1: close a lot of stores where there was an organizing
Speaker 1: effort beginning to happen. Yeah, I think the I think
Speaker 1: the organizing message is the right is the right message.
Speaker 1: I think they're doing that in a way. I think
Speaker 1: they're doing that effectively in terms of hey, this this
Speaker 1: does matter, as Genius had, the dignity of work, the
Speaker 1: dignity of the worker. I think all of those are
Speaker 1: are good, strong messages. Most of these things, however, have
Speaker 1: been very local that you know, even the Amazon was
Speaker 1: that was a local use doing that, and that's and
Speaker 1: that's actually a really interesting thing. I actually support that.
Speaker 1: I think that's a great thing that on the very
Speaker 1: local level, as opposed to where I think some of
Speaker 1: the distrust is, which is in the big national labor organizations,
Speaker 1: where there's much more likelihood to have some you know,
Speaker 1: some waste and frauds, some views or you know, whatever
Speaker 1: it may be. It's just a big organization. I think
Speaker 1: people filling it close to home. I think that's a
Speaker 1: good message and I think it's an important part of
Speaker 1: the labor market. Labor is going to have a say
Speaker 1: in this selection. Of course, Genie as well is Schueler
Speaker 1: again from the a f L c I O told
Speaker 1: us they have very specific plans to have nine of
Speaker 1: members registered to vote and ten of their local members
Speaker 1: are going to be trained to be a poll watchers
Speaker 1: for what they described as possible Republican shenanigans. I don't
Speaker 1: know what that even really means. I tried to have
Speaker 1: her define that, but I mean, what what kind of
Speaker 1: an image is that for the Union in It's important.
Speaker 1: You know, you had mentioned in your interview with the
Speaker 1: governor earlier, you had mentioned some of these statistics about
Speaker 1: how many Americans are concerned, concerned rather about threats to democracy.
Speaker 1: You know, a CBS News poll found seven out of
Speaker 1: ten Americans concerned, and this is both from the left
Speaker 1: and the right that democracy is in danger, rule of
Speaker 1: laws in danger, or elections are threatened. And so when
Speaker 1: you're talking about poll workers and people trained to go
Speaker 1: in as poll watchers, if you will, that is an
Speaker 1: effort to address some of that concerned and concerned rather
Speaker 1: and I think that's critically important at this time. The
Speaker 1: more Americans engaged in our political process the better, particularly
Speaker 1: at a time when so many poll workers are feeling
Speaker 1: under threat that they don't even want to go to
Speaker 1: work anymore. I think it's important that the unions, and
Speaker 1: I think every organization, civic organizations overall, should support an
Speaker 1: increased in poll workers and poll watchers. And that includes,
Speaker 1: by the way, people in my line of work, faculty
Speaker 1: working with young people who should be engaged in pole
Speaker 1: watching and poll work. It's critically important service to the country.
Speaker 1: I just hope people stay safe, Boyd. More than you know.
Speaker 1: The more people start showing up at the polls with
Speaker 1: the idea of looking for wrongdoing, somebody's going to find
Speaker 1: something that may not necessarily be worth talking about. Yeah,
Speaker 1: and just at a Genie's point that it's all about
Speaker 1: having that trust and being engaged. Everybody's got to be engaged,
Speaker 1: regardless of their line of work. We've we've stress tested
Speaker 1: this democracy of ours under all kinds of situations world war,
Speaker 1: famines and economic collapse and all of that. We've never
Speaker 1: stress tested it in the absence of trust that seeing
Speaker 1: our institutions because that trade we're getting close on some days, Boyd,
Speaker 1: thanks for being here, Boyd. Matthis and Jeannie Chanzano great
Speaker 1: conversation and a great panel for our Friday. As we
Speaker 1: head into the weekend, be sure to stay with Bloomberg
Speaker 1: tomorrow for the Artemis launch. They're going forward again. I
Speaker 1: can't wait to watch this thing go up, and I'll
Speaker 1: meet you back here after what I hope for you
Speaker 1: is a long weekend. I'm Joe Matthew. This is Bloomberg.