WEBVTT - Strong Jobs Report, Remembering Jimmy Carter 0:00:02.520 --> 0:00:08.080 Bloomberg Audio Studios, Podcasts, radio news. 0:00:08.640 --> 0:00:12.640 This is Bloomberg Business Week, Insight from the reporters and 0:00:12.800 --> 0:00:16.800 editors that bring you America's most trusted business magazine, plus 0:00:17.000 --> 0:00:20.799 global business, finance and tech news. The Bloomberg Business Week 0:00:20.840 --> 0:00:25.760 Podcast with Carol Masser and Tim Stenoveek on Bloomberg Radio. 0:00:26.960 --> 0:00:29.680 Let's get two it. As we keep saying, Stock's initially 0:00:29.720 --> 0:00:32.880 getting a bit hammered, bond yields jumping with traders slashing 0:00:32.920 --> 0:00:35.680 their bets for FED rate cuts this year after data 0:00:35.720 --> 0:00:38.240 showed a solid jobs market and an increase in consumer 0:00:38.280 --> 0:00:41.199 inflation expectations. So let's dig into all of it a 0:00:41.320 --> 0:00:45.160 round table Bloomberg News International Economics and Policy correspondent Michael 0:00:45.240 --> 0:00:48.199 McKee to my left and to our right is Bloomberg 0:00:48.200 --> 0:00:51.519 News Rates reporter Michael McKenzie. Michael McKay, Let's start with 0:00:51.560 --> 0:00:54.680 you first. I want to ask you about today's jobs 0:00:54.720 --> 0:00:57.720 and you mish sentiment numbers laid out for us and 0:00:57.760 --> 0:00:59.120 what it says about the US economy. 0:00:59.160 --> 0:01:01.760 I always love Jobs Day because Carol bakes cookies and 0:01:01.920 --> 0:01:07.120 you know, didn't get Tim decorates the tree. 0:01:07.480 --> 0:01:08.240 It's once a month. 0:01:08.319 --> 0:01:10.720 Now you must be thinking of a different holiday. 0:01:11.560 --> 0:01:15.920 Payrolls were obviously very strong. We have to take it 0:01:15.959 --> 0:01:17.360 with a little bit of a grain of salt because 0:01:17.360 --> 0:01:22.640 there's probably some still some hurricane and strike catchup in that. 0:01:23.000 --> 0:01:26.520 And also we had the very late Black Friday, which 0:01:27.000 --> 0:01:31.600 appears to have delayed the hiring of retail employees because 0:01:31.640 --> 0:01:35.480 we saw twenty seven thousand decline in retail in November, 0:01:35.520 --> 0:01:37.640 when normally you'd expect all those people to come on, 0:01:38.160 --> 0:01:42.840 and we saw forty three thousand additional people hired for 0:01:42.920 --> 0:01:47.520 retailers in December, and also forty seven thousand hired in 0:01:47.560 --> 0:01:52.280 the category that includes basically the delivery drivers, the ups 0:01:52.320 --> 0:01:55.440 and FedEx people who are bringing you all those packages. 0:01:55.160 --> 0:01:59.680 Dudes to deliver it before the porch bandit stealer from 0:01:59.720 --> 0:02:00.480 my pirates. 0:02:01.280 --> 0:02:04.000 There was there, There was good news in there, but 0:02:04.320 --> 0:02:07.920 it maybe there may be some payback next week or 0:02:08.000 --> 0:02:10.440 next month orrather. But the good news for the FED 0:02:10.560 --> 0:02:14.320 is that the unemployment rate went down, massive increase in 0:02:14.600 --> 0:02:18.280 the household survey in terms of people hired after a 0:02:18.320 --> 0:02:20.840 big decrease the month before, and everybody said, oh, labor 0:02:20.840 --> 0:02:24.840 market is falling apart, and it's not. That's the bottom 0:02:24.919 --> 0:02:27.720 line here. Which can keep the Fed on the sidelines, 0:02:28.080 --> 0:02:32.960 which will bring Mike mackenzie in to explain all the 0:02:33.200 --> 0:02:35.760 joy that was found in the market. 0:02:35.800 --> 0:02:37.600 I listened to I think you know, we're all listening 0:02:37.639 --> 0:02:39.680 to surveillance this morning when the numbers passed, and it 0:02:39.760 --> 0:02:42.760 was like, I mean, man, the market reaction was pretty swift, Michael. 0:02:43.200 --> 0:02:45.560 Indeed it was. This has been a really tough week 0:02:45.600 --> 0:02:47.720 for the bond markets, right. Fact, what was interesting about 0:02:47.720 --> 0:02:50.920 today was longer day to bondes have been signing off 0:02:50.960 --> 0:02:52.840 the most. So much of this week today is all 0:02:52.840 --> 0:02:55.640 about the front end because the market saying, oh, the Fed, 0:02:56.160 --> 0:02:58.440 he's really going to go on extended pause. Now we've 0:02:58.480 --> 0:03:01.160 pushed out the first rate cut for this year from 0:03:01.160 --> 0:03:04.560 around June. Now we're flirting with a September October timeframe. 0:03:05.200 --> 0:03:07.160 Bank of America come out today and say no, we 0:03:07.200 --> 0:03:09.000 don't see any more rate cuts now for the cycle. 0:03:10.160 --> 0:03:14.680 Goldman City pushing it back. So the real problem now 0:03:14.760 --> 0:03:17.079 is that you've got a series of forces all combining 0:03:17.720 --> 0:03:20.200 to really hurt bonds because there's no really place here 0:03:20.560 --> 0:03:23.200 nowhere here to hide really, because a Frinda yd is 0:03:23.200 --> 0:03:25.840 going to get whacked because if the economy keeps trundling 0:03:25.880 --> 0:03:28.520 along at this kind of pace, and you've also got 0:03:28.520 --> 0:03:30.840 that uncertainty coming from the Trump administration coming in who 0:03:30.840 --> 0:03:33.519 they want to keep the economy going. The FED is 0:03:33.560 --> 0:03:35.440 also going to have to look at inflation a lot 0:03:35.440 --> 0:03:38.400 more closely now, and we've got a really important inflation 0:03:38.640 --> 0:03:42.320 report coming out next Wednesday. So everything's pushing us towards 0:03:42.320 --> 0:03:46.160 the world where the FED is basically done. The December 0:03:46.960 --> 0:03:50.760 expectations for rates where the FED rate will be is 0:03:50.760 --> 0:03:53.600 now above four percent, So four percent is now your flaw, 0:03:54.280 --> 0:03:55.920 and that means the longer end is still going to 0:03:55.920 --> 0:03:58.800 sell off. It hasn't sold off as much today, but 0:03:58.880 --> 0:04:01.040 it's sold off a lot this week. And we did 0:04:01.080 --> 0:04:03.640 test five percent on the thirty year. The twenty year 0:04:03.640 --> 0:04:07.280 bond is already above five percent. Tens when above four 0:04:07.320 --> 0:04:09.040 seventy five where everyone has been saying, oh, that's going 0:04:09.120 --> 0:04:10.960 to be where the buyers turn up, we're not really 0:04:11.000 --> 0:04:11.560 seeing it. 0:04:12.520 --> 0:04:13.280 Ten years right now. 0:04:13.560 --> 0:04:15.120 Yeah, So does that mean we get to five for 0:04:15.200 --> 0:04:17.480 our folks talk that you talked to Michael McKenzie saying 0:04:17.560 --> 0:04:19.040 we could see five percent on. 0:04:19.120 --> 0:04:20.920 Yes, I think you've got a pretty good chance of that. 0:04:21.040 --> 0:04:23.320 We'll see. I mean, inflation next week is expected to 0:04:23.360 --> 0:04:26.280 show the third consecutive monthly rise and the headline rate, 0:04:26.760 --> 0:04:29.800 so we're not trending in the right way. And then 0:04:29.839 --> 0:04:32.240 Scott Besson's going to sit down for the Senate confirmation 0:04:32.320 --> 0:04:35.200 hearing on Thursday, and everyone in the bond market wants 0:04:35.200 --> 0:04:36.839 to hear what he's going to say about what's happening 0:04:36.880 --> 0:04:40.000 in terms of fiscal policy. How do you square this 0:04:40.160 --> 0:04:44.799 incoming administration's efforts to keep on spending bring in tax 0:04:44.839 --> 0:04:49.559 cuts with being fiscally disciplined. And that's what's got people 0:04:49.560 --> 0:04:50.159 worried as well. 0:04:50.200 --> 0:04:52.599 But you guys keep reminding both of you do that. Listen, 0:04:52.640 --> 0:04:55.839 there's a lot that happens, you know, from FED meeting 0:04:55.839 --> 0:04:59.200 to FED meeting, whether it's more reads on inflation, more 0:04:59.200 --> 0:05:02.840 reads on jobs. And then we'll see, Mike, in reality, 0:05:02.839 --> 0:05:05.200 what we get out of this administration that ultimately might 0:05:05.240 --> 0:05:05.880 impact things. 0:05:06.000 --> 0:05:09.839 Yeah, what Michael was talking, I was like, we're all dated. 0:05:10.240 --> 0:05:13.240 I was thinking, you want to pat the bond traders 0:05:13.279 --> 0:05:15.320 on the head and go, you guys are so cute, 0:05:15.480 --> 0:05:18.719 I mean, changing their views like this, and we all 0:05:18.760 --> 0:05:21.919 know in a couple of weeks it'll all change again, 0:05:22.680 --> 0:05:26.680 because yes, CPI is very important next week, but after that, 0:05:26.760 --> 0:05:31.240 the big one is Inauguration Day and the hundred executive 0:05:31.320 --> 0:05:33.760 orders he's going to put out, and then whatever plans 0:05:33.800 --> 0:05:37.360 they go through. I think the only safe bet is 0:05:37.400 --> 0:05:40.400 that we don't know what the FED is going to 0:05:40.400 --> 0:05:42.640 be doing this year, and the FED doesn't know either, 0:05:43.160 --> 0:05:46.320 and they're very happy to go sit in the shade 0:05:46.760 --> 0:05:49.400 and wait this out for a little bit because they 0:05:49.400 --> 0:05:50.920 don't want to be on the wrong side, you know, 0:05:51.560 --> 0:05:54.760 slow the economy or goose it too much, given what 0:05:54.800 --> 0:05:56.440 we don't know about what's going to happen. 0:05:56.640 --> 0:06:00.840 So January twenty ninth is the consensus on the twenty 0:06:00.920 --> 0:06:03.440 ninth than the idea is the consensus says maybe the 0:06:03.440 --> 0:06:07.200 next move comes all the way in the fall summer. 0:06:07.320 --> 0:06:10.800 Well, the consensus for January. You look at the WRP 0:06:11.000 --> 0:06:12.559 page and I think it's written down there. 0:06:12.720 --> 0:06:14.760 We'd be gobsmacked. 0:06:14.000 --> 0:06:18.600 If the let's see WRP moved greats oh it does 0:06:18.640 --> 0:06:20.279 say that, yeah, twenty nine. 0:06:20.480 --> 0:06:22.719 But after that, who knows. 0:06:22.960 --> 0:06:26.520 I mean by March, first of all, we've got the 0:06:26.520 --> 0:06:29.760 dead ceiling hanging over everybody's head. We're going to have 0:06:30.080 --> 0:06:34.480 a government has to be funded in. 0:06:34.560 --> 0:06:37.360 March by March, right, And so you have that little thing. 0:06:37.360 --> 0:06:40.320 Just those two little things alone, let alone any new 0:06:40.360 --> 0:06:43.520 policies to throw people out of the country or imposed 0:06:43.520 --> 0:06:44.600 tariffs or things like that. 0:06:44.680 --> 0:06:46.520 I want to throw two things into it. First of all, 0:06:46.680 --> 0:06:49.039 isn't it great that the job market's doing well and 0:06:49.120 --> 0:06:51.640 this growth is happening, So where's that aspect of it? 0:06:51.800 --> 0:06:53.640 The other thing is, and I heard this on surveillance 0:06:53.640 --> 0:06:57.919 this morning, like what is really behind the growth and rates? 0:06:58.080 --> 0:07:00.799 Is it inflation? Is it that the economies growing? 0:07:00.839 --> 0:07:00.919 Like? 0:07:00.960 --> 0:07:04.000 Do we really know what is truly behind the move 0:07:04.080 --> 0:07:04.720 up in rates. 0:07:05.000 --> 0:07:07.320 It's a combination of factors. But clearly, if you look 0:07:07.360 --> 0:07:10.040 at term premium measures from the New York Fed model, 0:07:10.280 --> 0:07:13.200 it's risen a lot. I mean, it was barely above 0:07:13.320 --> 0:07:16.840 zero a month ago. It's now above sixty basis points. 0:07:16.960 --> 0:07:19.480 So it's moved a lot. And that tells you that 0:07:19.520 --> 0:07:22.400 investors are going to demand a higher premium to own 0:07:22.720 --> 0:07:25.400 longer day to debt rate. You've then got the front 0:07:25.480 --> 0:07:27.600 end of the curve where everybody was really telling me 0:07:27.640 --> 0:07:29.560 for the last month of just stay in the two year. 0:07:29.680 --> 0:07:31.640 That's going to be fine because the Fed's still going 0:07:31.680 --> 0:07:34.080 to cut this year. Well, now that's now kind of 0:07:34.120 --> 0:07:37.120 in question, and in fact, we now have a situation 0:07:37.200 --> 0:07:39.440 is quite rare. The two year yield is now above 0:07:39.680 --> 0:07:42.520 the Fed Fund's effective rate of four thirty three. Now, 0:07:42.560 --> 0:07:44.800 before everyone saying, oh that's got the Fed effective is 0:07:44.800 --> 0:07:46.560 a really tough level to break for the two year, 0:07:46.760 --> 0:07:50.280 well that's just been broken. So you're in an environment 0:07:50.360 --> 0:07:52.200 right now where there's a lot of uncertainty. 0:07:52.360 --> 0:07:54.480 So is it uncertainty that's just moving rates up? Like 0:07:54.480 --> 0:07:55.800 that's what I'm trying to get to do, Like we 0:07:55.840 --> 0:07:57.920 do we really understand why we've seen it? 0:07:57.960 --> 0:07:59.680 Well, I think there's another element to this is and 0:07:59.720 --> 0:08:01.200 if you talk to a lot of us, talking to 0:08:01.280 --> 0:08:03.400 on Greg Peter's at PGA Meda this week, he says, 0:08:03.640 --> 0:08:05.440 we're is going back to where we were before the 0:08:05.480 --> 0:08:09.560 financial crisis, that's when real us were above two percent. 0:08:09.840 --> 0:08:11.640 Inflation is running in a sort of two and a 0:08:11.680 --> 0:08:14.520 half three percent zip code, which means bond yields are going. 0:08:14.440 --> 0:08:16.040 To be at five percent. So back to normal. 0:08:16.120 --> 0:08:17.680 That's kind of back to normal, back. 0:08:17.600 --> 0:08:20.840 To the old normal, the old normal of the new normal. 0:08:20.880 --> 0:08:27.000 But what's funny is you look at the actual cost 0:08:27.080 --> 0:08:29.600 of borrowing, not the FED funds rate, because you're not 0:08:29.720 --> 0:08:32.280 a bank. But if you look at mortgage rates, and 0:08:32.320 --> 0:08:34.640 if you look at credit card rates, and you look 0:08:34.720 --> 0:08:37.760 even look at the prime rate for the best business borrowers, 0:08:38.320 --> 0:08:41.960 none of them have come down since the FED cut 0:08:42.040 --> 0:08:45.080 rates one hundred basis points. And yet the economy is, 0:08:45.160 --> 0:08:48.720 like I said, is just still roaring along, which tells 0:08:48.760 --> 0:08:53.000 you a that the Fed's probably not restrictive enough and 0:08:53.080 --> 0:08:58.040 b that the neutral rate has clearly moved up at 0:08:58.040 --> 0:09:01.720 this point. Now the feds concern is how long does 0:09:01.760 --> 0:09:04.360 it stay up? Do we revert or are we back 0:09:04.400 --> 0:09:06.640 at the old normal? And it stays that. 0:09:06.600 --> 0:09:11.880 Way, Mike, When it comes to the estimate, economists, apart 0:09:11.880 --> 0:09:14.360 from our own Ana Wong here at Bloomberg Economics, they 0:09:14.400 --> 0:09:16.840 got this wrong in terms of the figure that we 0:09:16.880 --> 0:09:19.920 got this morning. Why is that so hard to get. 0:09:20.480 --> 0:09:22.800 Well, there's a lot of moving parts in all of this, 0:09:23.120 --> 0:09:27.400 and then there's some group thing too, and so people 0:09:27.440 --> 0:09:31.079 are looking at what's happened in the past and extrapolating that. 0:09:31.760 --> 0:09:35.720 Some people may have missed the change in the holiday 0:09:35.920 --> 0:09:41.480 and the seasonal effect of that, and it's been for 0:09:41.600 --> 0:09:44.559 months and months, really hard to get a handle on 0:09:44.600 --> 0:09:47.800 what's happening with the labor market. Remember, it was only 0:09:47.800 --> 0:09:49.680 a couple of months ago that the labor market was 0:09:49.800 --> 0:09:52.480 so bad that we had to start cutting interest rates 0:09:52.520 --> 0:09:56.400 to save it. And now you've got this reversal, And 0:09:56.480 --> 0:09:59.959 does that last or is this just a quickie. 0:09:59.600 --> 0:10:02.600 Thing too, like just to kind of wrap up here though, So, Michael, 0:10:02.640 --> 0:10:04.320 is that like we just have to think about folks. 0:10:04.400 --> 0:10:06.240 We're just going back to the way it maybe used 0:10:06.280 --> 0:10:07.200 to be it should be. 0:10:08.040 --> 0:10:10.120 I think you have to because let's face it, so 0:10:10.240 --> 0:10:13.440 many people in this country have locked in very low 0:10:13.440 --> 0:10:16.480 mortgage costs. So even though the thirtieth fixed today is 0:10:16.520 --> 0:10:18.240 going to be above seven percent when we get the 0:10:18.240 --> 0:10:21.080 new numbers next week, it doesn't really affect the majority 0:10:21.080 --> 0:10:23.000 of people. And as long as the job market stays 0:10:23.040 --> 0:10:25.680 tight and potentially could give you tight if you start 0:10:25.679 --> 0:10:29.120 to see people being deported this year, if you don't 0:10:29.400 --> 0:10:32.120 lose your job and you've locked in really low borrowing rates, 0:10:32.320 --> 0:10:34.280 and look, a lot of companies did the same as well. 0:10:34.559 --> 0:10:36.400 And we still have all the fiscal stimulus from the 0:10:36.400 --> 0:10:40.280 Biden administration still flowing through the economy. So again, it's 0:10:40.400 --> 0:10:43.000 very hard to see what's going to knock this economy 0:10:43.040 --> 0:10:45.400 off course. The only silver lining for the bomb market 0:10:45.440 --> 0:10:47.600 right now, The only reason you'd be buying ten year 0:10:47.679 --> 0:10:50.000 yields at these levels and thirties at five percent, is 0:10:50.000 --> 0:10:52.600 that if you think there's going to be enough. We're 0:10:52.640 --> 0:10:55.160 moving into a sort of in a sort of an 0:10:55.240 --> 0:10:58.040 environment where good economic news becomes bad news for the 0:10:58.040 --> 0:11:00.400 equity market. You get a tumble in stock folk and 0:11:00.440 --> 0:11:02.920 you get a back up and credit, then treasuries will 0:11:02.960 --> 0:11:07.000 probably show some haven support. Right But again, it's going 0:11:07.080 --> 0:11:09.600 to be interesting to see how that works, given again 0:11:09.640 --> 0:11:11.440 at the US fiscal position. 0:11:12.080 --> 0:11:14.280 Mike, twenty seconds left here, though, I mean, is there 0:11:14.400 --> 0:11:16.040 enough growth out there in the US economy to keep 0:11:16.080 --> 0:11:16.600 things going? 0:11:17.160 --> 0:11:19.280 Appears to be back right now, and it looks like 0:11:19.400 --> 0:11:22.920 maybe only something that would come from the administration at 0:11:22.920 --> 0:11:26.840 this point, or some exogenous event, some war we didn't anticipate, 0:11:26.960 --> 0:11:29.200 or something would knock it off its pins at the moment. 0:11:29.200 --> 0:11:31.560 All right, Cookies and Christmas tree next time around. All right, guys, 0:11:31.559 --> 0:11:34.000 thank you so much. Bloomberg News International Economics and Policy 0:11:34.000 --> 0:11:37.920 correspondent Michael McKee, along with Bloomberg News Rates reporter Michael McKenzie. Guys, thanks, 0:11:37.960 --> 0:11:38.920 have a great weekend. 0:11:39.080 --> 0:11:42.640 You're listening to the Bloomberg Business Week podcast. Catch us 0:11:42.720 --> 0:11:46.160 live weekday afternoons from two to five pm Eastern. Listen 0:11:46.200 --> 0:11:49.720 on Apple CarPlay and Android Auto with the Bloomberg Business app, 0:11:49.880 --> 0:11:52.560 or watch us live on YouTube. 0:11:52.880 --> 0:11:54.920 Our next guest has spent a decade and a half 0:11:55.360 --> 0:11:59.600 of public service, serving three US administrations, including former Presidents 0:11:59.640 --> 0:12:02.280 Jimmy Carter and Bill Clinton. Joining US right now is 0:12:02.320 --> 0:12:06.080 Stuart Eisenstadt. He's former Deputy Secretary of the Treasury, Undersecretary 0:12:06.080 --> 0:12:09.559 of State for Economic Affairs, former Undersecretary of Commerce for 0:12:09.640 --> 0:12:12.679 International Trade, and former US Ambassador to the European Union. 0:12:12.720 --> 0:12:15.920 He understands a lot of how the world works, certainly 0:12:15.920 --> 0:12:18.360 from a US perspective when it comes to policy and 0:12:18.400 --> 0:12:22.360 geopolitics and more. He was President Jimmy Carter's Chief White 0:12:22.360 --> 0:12:25.520 House Domestic policy advisor and wrote a biography of him 0:12:25.679 --> 0:12:28.680 entitled President Carter The White House Years, and gave a 0:12:28.920 --> 0:12:33.040 eulogy at the state funeral yesterday for former President Carter. Today, 0:12:33.040 --> 0:12:36.160 Ambassador Eisenstadt a senior council member at Covington and Burling, 0:12:36.200 --> 0:12:39.320 and he joins US from Washington. D c Ambassador Eisenstadt, 0:12:39.360 --> 0:12:41.199 thank you so much for being with us, and we 0:12:41.240 --> 0:12:43.600 are very sorry for your loss. 0:12:44.040 --> 0:12:48.160 Thank you very much. As you've known Jimmy Carter for 0:12:48.360 --> 0:12:50.920 fifty five years. I was his policy director when he 0:12:51.000 --> 0:12:53.960 ran for governor of Georgia, then when he ran for president, 0:12:54.040 --> 0:12:57.000 and then four years in the White House as his 0:12:57.080 --> 0:13:00.800 chief domestic advisor. So it was a personal loss. But 0:13:01.160 --> 0:13:03.600 he lived a long life and he in many ways 0:13:03.640 --> 0:13:06.880 taught us how to live a life of purpose, a 0:13:06.920 --> 0:13:12.559 life of faith, a life of determination, of honesty. And 0:13:12.760 --> 0:13:15.000 one of the things that I really tried to stress 0:13:15.840 --> 0:13:20.840 in my eulogy was that we shouldn't only look at 0:13:20.920 --> 0:13:25.760 him as the greatest former president, which he was forty 0:13:25.800 --> 0:13:31.640 three years, curing two African diseases, monitoring over one hundred elections, 0:13:31.640 --> 0:13:36.480 building houses for habitat. Rather, we should later rest the 0:13:36.559 --> 0:13:40.960 myth that his greatest achievements came only as former president. 0:13:41.360 --> 0:13:45.640 And I believe that as we look back at what 0:13:45.880 --> 0:13:49.320 was actually accomplished, that we will see that he was 0:13:49.360 --> 0:13:53.839 one of the most consequential one term presidents in American history. 0:13:53.840 --> 0:13:57.920 And I say that I wasn't nominating him for Mount Rushmore, 0:13:57.920 --> 0:14:01.280 but he belonged in the foothills other presidents who have 0:14:01.400 --> 0:14:04.240 really made the country stronger and the world safer. And 0:14:04.280 --> 0:14:06.520 he did. And I tried to lay out in my 0:14:06.600 --> 0:14:10.760 eulogy what major things he had accomplished. 0:14:11.720 --> 0:14:13.960 You know, maybe not Mount Rushmore, but you did call 0:14:14.040 --> 0:14:16.520 him a renaissance man for all these different things that 0:14:16.559 --> 0:14:19.440 he had done. You mentioned that in your eulogy. I 0:14:19.480 --> 0:14:21.520 want to say that I'm glad you went there in 0:14:21.600 --> 0:14:25.040 terms of his first term or his only term, in 0:14:25.120 --> 0:14:26.880 terms of what he accomplished, because I do feel like 0:14:27.000 --> 0:14:30.160 so much of the narrative and conversation since his passing 0:14:30.200 --> 0:14:33.520 about is all that he achieved once he left. But 0:14:33.560 --> 0:14:36.680 it's remarkable. And in listening to the eulogies yesterday, yours 0:14:36.680 --> 0:14:39.400 and others about the issues that he worked on in 0:14:39.400 --> 0:14:41.560 the White House, whether it was the Middle East, whether 0:14:41.600 --> 0:14:45.160 it was inequalities, whether it was the environment, these are 0:14:45.200 --> 0:14:50.359 things that are with us today and pressing and challenging issues. 0:14:51.160 --> 0:14:52.880 And I think about the environment, and here we are 0:14:52.880 --> 0:14:55.720 watching the fires out on the West Coast. I want 0:14:55.760 --> 0:14:58.760 to kind of go there because obviously this was something 0:14:58.800 --> 0:15:03.360 that President Carter thought about. What is wrong and why 0:15:03.400 --> 0:15:06.400 hasn't our US policy maybe on the environment and climate 0:15:06.440 --> 0:15:09.480 change specifically, why aren't we maybe better? 0:15:10.280 --> 0:15:13.960 And he was I think the greatest environmental president since 0:15:14.000 --> 0:15:18.280 Theodore Roosevelt. He literally double the size of our national 0:15:18.320 --> 0:15:22.680 park system with the Alaska Lands built. He had strong 0:15:23.600 --> 0:15:27.000 amendments to the Clean Air and Clean Water ract But 0:15:27.200 --> 0:15:32.440 interestingly he did the super fun to clean up chemical 0:15:32.480 --> 0:15:37.680 waste and all of these our major accomplishments, and in fact, 0:15:38.160 --> 0:15:41.360 we put out a report in nineteen eighty called the 0:15:41.400 --> 0:15:48.280 Global two thousand Report, which forecast climate change on energy. 0:15:48.880 --> 0:15:54.000 Really did everything together. He deregulated oil and gas, that is, 0:15:54.120 --> 0:15:57.120 ended the price controls, which led to a huge upsurge 0:15:57.600 --> 0:16:00.840 in production, so we're now the number one producer in 0:16:00.920 --> 0:16:04.320 the world of both. But he also had the first 0:16:04.440 --> 0:16:09.240 incentives for conservation like installation, and the first incentives for 0:16:09.400 --> 0:16:15.400 renewable energy like solar and even put symbolically solar panels 0:16:15.440 --> 0:16:17.440 on the White House. I mean this was done like 0:16:17.480 --> 0:16:21.600 in the nineteen seventy eight seventy nine period, so he 0:16:21.760 --> 0:16:26.880 already envisioned that is being a really critical thing for 0:16:26.920 --> 0:16:31.360 the United States. He really inaugurated the whole clean. 0:16:32.040 --> 0:16:36.160 Energy euro Ambassador you talk about all these accomplishments, and look, 0:16:36.720 --> 0:16:38.440 I think it's important for us to look at historical 0:16:38.440 --> 0:16:42.320 context here. Why then do you think voters this didn't 0:16:42.360 --> 0:16:45.600 resonate with voters, and he lost in the election of 0:16:45.640 --> 0:16:48.440 nineteen eighty so badly to Ronald Berry. 0:16:48.440 --> 0:16:52.800 That's that's a good a good question. And all the 0:16:52.800 --> 0:16:56.200 op eds that I've written on his life in the 0:16:56.200 --> 0:17:00.760 Wall Street Journal and elsewhere, I mentioned that I hope 0:17:00.760 --> 0:17:03.640 we don't end by the way before going to deregulation, 0:17:03.720 --> 0:17:08.119 which even Senator Graham or Republican Senator said transformed the 0:17:08.160 --> 0:17:11.760 whole US economy. Let me answer your direct question. I 0:17:11.880 --> 0:17:15.639 call it the three eyes that were against them. First, 0:17:16.080 --> 0:17:20.000 inter party warfare with the liberal wing of the Democratic Party, 0:17:20.280 --> 0:17:24.080 hitted by Ted Kennedy. It divided the convention in nineteen eighty. 0:17:24.560 --> 0:17:28.399 Kennedy never really reconciled and worked for him, and that 0:17:28.600 --> 0:17:33.840 was a huge disability. Second, the second eye is inflation. 0:17:35.520 --> 0:17:38.080 We had inherited high inflation. It was part of the 0:17:38.160 --> 0:17:42.080 nineteen seventies with Nixon who had double digit inflation and 0:17:42.320 --> 0:17:46.439 Ford and we had double digit inflation, but that was 0:17:46.560 --> 0:17:49.879 largely powered as was Nixon's by the way, by the 0:17:49.920 --> 0:17:53.880 oil shock. It was the Opeic embargo against the US 0:17:54.280 --> 0:17:58.000 in nineteen seventy three. It was the Iranian Revolution and 0:17:58.080 --> 0:18:03.800 shock in nineteen seventy nine nineteen eighty that just hugely 0:18:03.880 --> 0:18:07.160 increased the pressures. But here is one of the most 0:18:07.200 --> 0:18:11.159 courageous things he did, and it makes the point that 0:18:11.359 --> 0:18:16.160 much of what he accomplished only blossomed after he left. 0:18:16.320 --> 0:18:20.280 So let's put ourselves in July of nineteen seventy nine. 0:18:20.480 --> 0:18:24.960 Inflation is roaring, gas prices are going up, gas lines 0:18:24.960 --> 0:18:29.240 are occurring, and he decides over the objection, and I'm 0:18:29.240 --> 0:18:33.080 not exaggerating of all of his advisers to appoint Paul 0:18:33.200 --> 0:18:36.800 Voker to head the Federal Reserve, knowing in advance because 0:18:36.840 --> 0:18:40.520 Paul told him in the Oval office that if I'm 0:18:40.560 --> 0:18:42.960 appointed the head of the BED, I'm going to have 0:18:43.040 --> 0:18:46.680 to take drastic actions on interest rates that are going 0:18:46.760 --> 0:18:49.919 to make it very difficult for you in an election. 0:18:50.000 --> 0:18:53.560 You're in nineteen eighty in terms of a potential recession, 0:18:53.840 --> 0:18:59.919 our unemployment, And he said, Paul, I cannot make mon 0:19:00.240 --> 0:19:04.960 legacy leaving this kind of inflation. You take care of 0:19:05.000 --> 0:19:07.800 the economy, I'll take care of the politics. Well, the 0:19:07.880 --> 0:19:11.359 fact is inflation dropped like a rock right for Paul's 0:19:11.800 --> 0:19:16.479 but only in Reagan's first two years, after Carter had 0:19:16.480 --> 0:19:20.760 already left. And third is Iran. The Iran hostage crisis 0:19:20.800 --> 0:19:25.440 four hundred and forty four days was so unbelievably debilitating 0:19:25.480 --> 0:19:30.199 and humiliating. Carter made a choice early on that he 0:19:30.320 --> 0:19:32.520 was going to save the lives of the hostages rather 0:19:32.600 --> 0:19:35.760 than take dramatic military action which would risk their lives. 0:19:36.320 --> 0:19:38.600 All of them did come back, all of them came 0:19:38.640 --> 0:19:42.879 back safe, but he paid a huge political price. 0:19:43.080 --> 0:19:46.760 Well, you know, Ambassador Eisenstadt, you know one of the 0:19:46.760 --> 0:19:49.080 things I think someone said during one of the eulogesus 0:19:49.160 --> 0:19:50.960 that he was far sighted. In other words, he thought 0:19:50.960 --> 0:19:54.359 about longer term impact, not on only the current generation, but 0:19:54.440 --> 0:19:58.320 generations to come. We only have about unfortunately, about three 0:19:58.320 --> 0:20:00.280 and a half minutes or so left here. I do 0:20:00.359 --> 0:20:05.600 think about policies today that he seemed to have some insights, 0:20:05.640 --> 0:20:09.240 some foresight, some foresightedness, whether it was the Middle East, 0:20:09.280 --> 0:20:14.359 whether it was China, whether it was equality in the environment. 0:20:14.680 --> 0:20:20.240 When you look at the divisiveness today and the political 0:20:20.320 --> 0:20:23.840 swings that we are saying and extremes, Americans are looking 0:20:23.880 --> 0:20:28.000 for something else, and maybe they don't feel represented. How 0:20:28.040 --> 0:20:30.960 do you think about the environment today. President Carter tried 0:20:31.000 --> 0:20:32.480 to represent everybody. 0:20:33.000 --> 0:20:38.160 Yeah, let me give you three answers to that. First 0:20:38.200 --> 0:20:42.040 of all, we had much more backpartisanship then much of 0:20:42.080 --> 0:20:46.040 our legislation. We had almost seventy percent of our legislation passed. 0:20:46.680 --> 0:20:50.000 We had regular meetings with Republican leadership, regular breakfasts as 0:20:50.040 --> 0:20:56.679 well as Democratic. Second, he had a major role in 0:20:56.880 --> 0:21:01.280 ending the Cold War. Reagan gets the credit for it, 0:21:01.280 --> 0:21:05.440 and he deserves credit. But all the weapons systems which 0:21:05.520 --> 0:21:08.959 Reagan implemented, the MX mobile missile, the cruise missile, the 0:21:09.000 --> 0:21:13.800 stealth bomber, and intermediate nuclear forces in Europe, every single 0:21:14.000 --> 0:21:18.880 one of them he started. And Brennan, the longtime Soviet 0:21:18.920 --> 0:21:22.639 ambassador and his memoirs, said that Jimmy Carter's human rights 0:21:22.680 --> 0:21:27.600 policy played a major role in undermining Soviet Union. And last, 0:21:28.440 --> 0:21:32.600 he said, I'm going to do the right thing, regardless 0:21:32.600 --> 0:21:35.680 of politics. And let's take deregulation, which would be an 0:21:35.680 --> 0:21:40.880 important subject for Bloomberg. When we came into office, there 0:21:40.960 --> 0:21:44.919 was tight regulation on roots and prices for all of 0:21:44.920 --> 0:21:51.639 our surface and air transportation, no new entrance, rigid prices, 0:21:51.720 --> 0:21:58.200 administered by government agencies. Jimmy Carter deregulated every single one 0:21:58.200 --> 0:22:01.560 of those deregulated air lands, which made it possible for 0:22:01.600 --> 0:22:05.040 competitors to come in. Right today, ninety percent of the 0:22:05.080 --> 0:22:09.200 public flas only less than fifty percent did. Then, trucks 0:22:09.240 --> 0:22:15.920