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Speaker 1: I hope all the moms had a great Sunday, and
Speaker 1: welcome back to reality. I'm Joe, Matthew and Washington of
Speaker 1: the fastest show in Politics, live from Washington here on
Speaker 1: Bloomberg Radio, on the satellite and on YouTube. And if
Speaker 1: we just take a second here to stop and listen
Speaker 1: and look around, we realize we're in the eye of
Speaker 1: the hurricane. Lawmakers aren't back till tomorrow. President's making his
Speaker 1: way back from rehob Beach. And yes, I know there's
Speaker 1: a trial underway in New York, and we're going to
Speaker 1: get to that a little bit later on this hour
Speaker 1: with June Grosso and our panel. But we have an
Speaker 1: enormous opportunity here, and we're taking this opportunity for you
Speaker 1: to bring you a series of important conversations with thought
Speaker 1: leaders that bring context. That's what we promise here at Bloomberg.
Speaker 1: Right this is our chance today before we get into
Speaker 1: the fray of breaking news and the divisions that surround us, divisions,
Speaker 1: by the way, that are reinforced by an important series
Speaker 1: of polls today conducted by Siena College along with The
Speaker 1: New York Times and the Philadelphia Inquirer. Will get to
Speaker 1: some of this later on, because you've certainly heard the
Speaker 1: story before, split down the middle as the story of
Speaker 1: America and whether Joe Biden or Donald Trump win the election,
Speaker 1: it'll probably be by a couple of percentage points and
Speaker 1: will likely be decided by only a handful of states.
Speaker 1: And so we seek context in terms of how we
Speaker 1: got here and maybe find some solutions about how we
Speaker 1: get beyond this point with Seth Kaplan, who I've been
Speaker 1: looking forward to bringing you here on Bloomberg Radio and
Speaker 1: on YouTube. You can find us right now for this conversation.
Speaker 1: Go to YouTube and search Bloomberg Global News. You'll find
Speaker 1: our live stream. Seth is a lecturer at Johns Hopkins University,
Speaker 1: and he's author of this book, Fragile Neighborhoods. An expert
Speaker 1: on fragile states. He brings it down to the zip
Speaker 1: code level, which apparently is where we find the truth
Speaker 1: in this conversation. Seth, it's great to see you. Welcome
Speaker 1: to Bloomberg.
Speaker 3: Thank you, Joe, pleasure to be here.
Speaker 1: You've done remarkable work here in our sort of off
Speaker 1: air conversations. At least you've mapped out a very interesting
Speaker 1: look at things. You're in demand right now as author
Speaker 1: of this book in both red and blue states, red
Speaker 1: and blue capitals and towns and neighborhoods. You're all about
Speaker 1: social contexts. So when we look at this Siena poll
Speaker 1: or any of the others. Bloomberg will have its swing
Speaker 1: state pole out next week, and we see essentially two countries,
Speaker 1: two Americas, are the answers at the hyperlocal level.
Speaker 3: I mean, I would say yes. I think we always
Speaker 3: need to remember how is the average American experiencing life
Speaker 3: in this country? And I think there's a huge gap
Speaker 3: between with somebody in Kentucky and someone in Washington, or
Speaker 3: someone in Ohio or someone in Michigan some of these
Speaker 3: key states. And I think people's opinions about what's happening
Speaker 3: is we talk about inflation and other material concerns. But
Speaker 3: I would tell you that to the extent that there's anger,
Speaker 3: to the extent that there's frustration is because people don't
Speaker 3: feel the society and the economy is delivering for them
Speaker 3: at a hyper local level.
Speaker 1: Now there are examples of where it is working, and
Speaker 1: you found in your research that it does not matter
Speaker 1: on levels of wealth or income. Necessarily, the zip codes
Speaker 1: that are working seem to have little to do with money.
Speaker 3: I think if you look at the level of social connection,
Speaker 3: the abundance of local institutions, you can tell a lot
Speaker 3: about how people are experiencing life. When someone lives in
Speaker 3: a place and they don't know their neighbors, they don't
Speaker 3: have any local associations or local schools, or local churches,
Speaker 3: or local shops that they can have relationships with or
Speaker 3: they can join, I think you're experiencing life completely differently.
Speaker 3: And so when I look at my research, you certainly
Speaker 3: see a problem of what I would call spade deal
Speaker 3: any place based inequality economically, but there's also this great
Speaker 3: place based inequality socially. We have economic poverty, and we
Speaker 3: have a lot of social poverty that we never talk about.
Speaker 1: But that's the part that you are talking to us
Speaker 1: that's different. Yes, So what do we need to learn
Speaker 1: when you wake up and see the pole of the day.
Speaker 1: As I keep pointing out here and you see forty
Speaker 1: nine fifty one. Here we go again, and everybody hates
Speaker 1: each other in Washington. We're lacking social nourishment on what level.
Speaker 3: And what we're again, let's think about zip codes, Let's
Speaker 3: think lower than that. Let's think about neighborhoods. What are
Speaker 3: people actually experiencing So I would be looking at I mean,
Speaker 3: you can map it out what places are doing well economically,
Speaker 3: which we all talk about, but I would also be
Speaker 3: asking what places are doing well socially. And you can
Speaker 3: look at some simple numbers, and I'm pretty certain you're
Speaker 3: going to find that people's attitude towards institutions, trust of politicians,
Speaker 3: feelings towards Washington, attitude towards the political candidates will very
Speaker 3: much depend upon not only some economic indicators we'll talk about,
Speaker 3: but very much about how they're experiencing life in their neighborhood.
Speaker 1: Let's define that level of social frustration. Is it because
Speaker 1: we're not going to church, We're not shopping in the
Speaker 1: same places, I'm not going out to the same restaurants
Speaker 1: on Saturday?
Speaker 3: What is the practical We can look at it. Many
Speaker 3: likes levels it's churches, it's local businesses. Imagine you're in
Speaker 3: a place in which all the local businesses have closed
Speaker 3: and all you can do is go to a Walmart,
Speaker 3: and so you have no relationships with Walmart. You just
Speaker 3: have transactions. Imagine that there used to be a whole
Speaker 3: lots and lots of local institutions, you know, like the
Speaker 3: Veterans Association and Rotary Club, and now we have we
Speaker 3: have nothing. We have large nonprofits doing the delivering services.
Speaker 3: So I used to be able to participate. We used
Speaker 3: to have lots of volunteering in this country. We have
Speaker 3: very little volunteering locally. We used to have a lot
Speaker 3: of local giving of your time and your resources.
Speaker 1: That's way down side effect though, or what's causing that
Speaker 1: drop and involvement.
Speaker 3: I mean, I think there's so many causes. It's the
Speaker 3: changes in our careers and our ambitions. People seek out
Speaker 3: national goals, people don't seek out local goals. It's changes
Speaker 3: and basically people going back a few generations, people would
Speaker 3: not have cars to you have. You have careers. You
Speaker 3: have the nationalization of politics, the nationalization of business to
Speaker 3: some extent, the nationalization of nonprofits. Even government is more
Speaker 3: centralized and local authorities have less to influence.
Speaker 1: That's why your work is so important to us here
Speaker 1: because I keep hearing every day on this broadcast, and
Speaker 1: it's true that all politics are national, that we're running
Speaker 1: national campaigns, even for local office. In this case, right,
Speaker 1: it's either Maga or Biden or whatever the heck it
Speaker 1: is that you're going to put your label on that day.
Speaker 1: Did the shopping mall and the destruction of Main Street
Speaker 1: start all of this?
Speaker 3: Well, I would say if you're asking about the frustration
Speaker 3: and the alienation and the anger, I would say yes.
Speaker 3: And that's your only driving a large share of the population.
Speaker 3: They don't believe our political class and our elites, and
Speaker 3: our major cities where a lot of decisions are made.
Speaker 3: They don't think that those people and places are delivering
Speaker 3: for what used to be Main Street. And I certainly
Speaker 3: think that plays an enormous role in what people are
Speaker 3: experiencing and how they're voting. And if we're thinking about
Speaker 3: what we could be doing differently, we ought to be
Speaker 3: asking ourselves, how do we ensure every American lives in
Speaker 3: a flourishing neighborhood, a flourishing zip code, and the politician
Speaker 3: who steps up and says, this is my vision to
Speaker 3: ensure that our country works more horizontally and less vertically,
Speaker 3: to ensure that every place is gaining socially economically. The
Speaker 3: politician who can speak to that need is going to
Speaker 3: win a lot of votes.
Speaker 1: Is't that something? It sounds like the social context follows
Speaker 1: the money in many cases. Though, right when we were
Speaker 1: done with shopping malls, we decided we'd all go to Amazon.
Speaker 1: We asked for these problems.
Speaker 3: I mean, certainly there's a consumer demand, but I think
Speaker 3: we've made a lot of choices.
Speaker 1: Was that just because it was easier though, or because
Speaker 1: we didn't want to be around other people?
Speaker 3: Again? I believe that we all want to be around
Speaker 3: other people, do we? Well, what do you do in
Speaker 3: your free time? You go into your cave.
Speaker 1: And I'm lucky enough to talk to people for a living.
Speaker 1: I'm probably not the best exact.
Speaker 3: So you go home and don't talk to anybody. I
Speaker 3: bet you know, I bet you know your neighbors and
Speaker 3: things like that. So I would just say, I mean,
Speaker 3: as a person who I live in a neighborhood, that's joyful.
Speaker 3: How many people listening or watching today live in a
Speaker 3: neighbor so It's joyful because I know hundreds of.
Speaker 1: Children laughing in the street.
Speaker 3: You hear children. I go into the local restaurant and
Speaker 3: I smile and say lor to the owner. I say
Speaker 3: hello to a few people. They're not my friends, but
Speaker 3: I know them. I know their faces. It's enough that
Speaker 3: I have a relationship. If there's an emergency, my my
Speaker 3: daughter drops her son. Just happened several years ago, and
Speaker 3: he's got a bleeding chin. My wife picks up the
Speaker 3: son and without even telling me, runs down the street.
Speaker 3: What is she doing? I don't even know where she went.
Speaker 3: Does he even call me? Comes back in thirty minutes,
Speaker 3: he's bandaged up. She went to the nearest nurse. Do
Speaker 3: you know where the nearest nurse is? To where you
Speaker 3: imagine a life in which you know your neighbors. You
Speaker 3: have lots of institutions. I'm on the board of an institution.
Speaker 3: I'm very involved with the second institution organizations. The more
Speaker 3: we feel that we can control our context, the more
Speaker 3: we feel we can contribute, the more we feel that
Speaker 3: our surroundings are familiar and I have a stake in it,
Speaker 3: I will feel agency.
Speaker 1: So you just said everything This is about feeling like you're.
Speaker 3: A stakeholder, feeling like you're a stake So.
Speaker 1: How do you maintain that in an upwardly mobile economy
Speaker 1: where people are moving for work, they get a better house, whatever.
Speaker 1: There are so many reasons to disrupt the neighborhood you're describing.
Speaker 3: Well, that's true, but a good neighborhood in America will
Speaker 3: only have about one out of twenty households moving every year.
Speaker 3: A neighbor that's not doing well will have one in
Speaker 3: four about that. So if you think about think about
Speaker 3: we talk about that, and the average American lives within
Speaker 3: twenty miles from where they're born. So yes, we're upperly mobile.
Speaker 3: But I think most Americans and I would say it's
Speaker 3: if you have kids, it's more true. If you're old,
Speaker 3: it's more true if you're young. Your neighborhood matters so
Speaker 3: much to your well being. And so how do we
Speaker 3: do that? We need policies that will empower neighborhoods. We
Speaker 3: need government that works more around not just we don't
Speaker 3: need more housing units, Yes of course we do, but
Speaker 3: we don't need government to work around housing, education, healthcare.
Speaker 3: What would happen if government work more on making sure
Speaker 3: every neighborhood was flourishing. What would happen if for zoning
Speaker 3: wasn't single function but was multifunction. Therefore neighborhoods would have
Speaker 3: places to meet. What would happen if libraries were not
Speaker 3: just places to fill knowledge gaps? We don't have knowledge
Speaker 3: gaps today, we have relationship gaps. So what happened if
Speaker 3: neighbor libraries were broken up and distributed so they became
Speaker 3: more like neighborhood hubs? So you can think through every
Speaker 3: rule were thinking libraries?
Speaker 1: Our lawmakers or policy makers are not though, because we
Speaker 1: layer on the internet on top of this world. You're
Speaker 1: very riving politics here. Yeah, you've got a lot of
Speaker 1: lonely people out there with a big megaphone. Now yeah,
Speaker 1: what does that do to distort the neighborhood?
Speaker 3: I mean again, if you're in a strong neighborhood and
Speaker 3: you stakeholder, was great. So I'm a stakeholder my neighborhood. Yes,
Speaker 3: I'm more likely to not be on the megaphone angry.
Speaker 3: I'm more likely to engage with people. I might not
Speaker 3: only be talking to my neighbors. I might be doing
Speaker 3: something or someone might be doing something with me. I'm
Speaker 3: with them together, and you would feel that your role
Speaker 3: to be influential is local. If people have nothing local
Speaker 3: they can engage with, of course they feel the only
Speaker 3: way I can matter is national campaigns, national politics, and
Speaker 3: that it's all abstract, it's all far away, it all
Speaker 3: I wouldn't say it's very productive. If you think local
Speaker 3: and you engage local, you actually can make a really
Speaker 3: big difference in real people and real places. So, yes,
Speaker 3: the Internet makes things harder, It's like headwinds. But this
Speaker 3: trend goes back to nineteen sixties. It's been going on
Speaker 3: for decades. The internet is an accelerator, but it's not
Speaker 3: to start, and we need to rethink institution after institution
Speaker 3: and policy after policy, and consider what does it mean
Speaker 3: for relationships even schools. We think of schools how well
Speaker 3: do kids do on tests? But community schools great incubator
Speaker 3: of relationships. How often do we think of schools as
Speaker 3: a way to incubate and nurture the relationships between kids,
Speaker 3: the relationships between parents. We don't even think about in
Speaker 3: our debates about what it is we're doing and how
Speaker 3: it affects people.
Speaker 1: I've got a minute left. I want to end with
Speaker 1: a dose of hope. Here. Yes, well, I see young
Speaker 1: people going home, going back to small towns, maybe to
Speaker 1: open a business, maybe to do something different on main street,
Speaker 1: that the touchstone means more to them than people in
Speaker 1: my generation or maybe yes, our generation. Is that how
Speaker 1: this ends? Is that the solution?
Speaker 3: I think, yes, there is a tendent or trend in
Speaker 3: that direction. We need to.
Speaker 1: Encourage the back last year, there's.
Speaker 3: Organized I mean the internet, the positive side of the Internet,
Speaker 3: I mean the negative we talk about. The positive is
Speaker 3: I can move to Cleveland, as a friend of mine did. Yes,
Speaker 3: I can move back to eastern Kentucky as I know
Speaker 3: people do. I can stay in Kansas or southern Minnesota,
Speaker 3: and I can still be connected, and I can still
Speaker 3: jump on a plane. I can still do a lot
Speaker 3: virtual It's upside. We ought to be encouraging small business development,
Speaker 3: nonprofit development, encouraging young people to be leaders in their communities,
Speaker 3: and not all end up in five cities.
Speaker 1: About that.
Speaker 3: That would be very helpful for the country.
Speaker 1: What an absolutely wonderful conversation, Seth Kaplan. Thank you for
Speaker 1: coming to see us the tonic that we need in
Speaker 1: a moment like this, and nowhere else will you hear
Speaker 1: a conversation like this today but on Bloomberg the book
Speaker 1: again Fragile Neighborhoods, seth Kaplan. Thank you for being with us.
Speaker 1: I'm Joe, Matthew and Washington. This is Bloomberg.
Speaker 2: You're listening to the Bloomberg Balance of Power podcast. Ken
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Speaker 4: Here in Washington. A lot of the conversation in recent
Speaker 4: days show has in fact been focused on geopolitics, the
Speaker 4: US relationship with allies as well as with adversaries. Of course,
Speaker 4: Israel policy front and center, but increasingly, especially in the
Speaker 4: context of the twenty twenty four campaign, trade and competition
Speaker 4: with both allies and adversaries has been very much in focus,
Speaker 4: as we have the Biden administration getting set tomorrow to
Speaker 4: announce new tariffs or the higher tariffs on things like
Speaker 4: Chinese evs and solar cells, and of course other countries
Speaker 4: in addition to the second largest economy in the world,
Speaker 4: have to be paying attention to that too.
Speaker 1: Well, that's absolutely right. Emmanuel Macron is right in the
Speaker 1: middle of it. Obviously, as the leader of France, he
Speaker 1: has unique insights on a number of the issues that
Speaker 1: you just mentioned in a conversation that we're going to
Speaker 1: bring you now here on Bloomberg. The tariffs did come up, Kaylee,
Speaker 1: just one of many topics that arose in this sweeping
Speaker 1: interview at the Choose France summit, where the President was
Speaker 1: invited and brought foreign executives from around the world and
Speaker 1: has done so for the past seven years. Here sat
Speaker 1: down with Bloomberg's editor in chief John Mickelthwaite and they
Speaker 1: began their conversation on investments in France. Let's listen.
Speaker 5: We delivered a lot of reform since the very beginning
Speaker 5: twenty seventeen. Tax cuts fed techs. On capital gains, we
Speaker 5: decreased from thirty three point three to twenty five percent
Speaker 5: corporate taxes. We made a lot of reforms on labor
Speaker 5: law and after COVID. During this the past two years,
Speaker 5: with inflation war in Ukraine, we passed reform and on
Speaker 5: pension scheme and unemployment mechanisms. I don't see a lot
Speaker 5: of countries around us having done so, so you.
Speaker 6: Don't just want to be compared to Europe.
Speaker 5: To you, no, no, no, My point is. My point
Speaker 5: is just to say we delivered, We do deliver, and
Speaker 5: we will deliver. And this is why we will launch
Speaker 5: this week a new bunch of reform on labor market.
Speaker 5: We will launch a new bunch of simplification and attractiveness
Speaker 5: package for finance, and we will prepare for We've already
Speaker 5: launched new simplification and we will prepare for September a
Speaker 5: new bunch of reform on label markets. So it's a
Speaker 5: permanent work. But I see where we come from and
Speaker 5: where we want to go. France, who was lagging behind
Speaker 5: clearly in Europe because of too much bureaucracy, a strong system,
Speaker 5: a lot of strength, but lack of competitiveness. I think
Speaker 5: we bridge I don't think. I see that we clearly
Speaker 5: bridge the gap with the others and now we are
Speaker 5: in Europe. My concern is not just France, is Europe
Speaker 5: in comparison with US and China. And this is the
Speaker 5: point you mentioned. During the three past decades. If you
Speaker 5: take this three the last three decades, we created half
Speaker 5: of the value per capita created by the US. Why
Speaker 5: lack of innovation, lack of investment. This is the main reason.
Speaker 5: This is why now my top priority is to have
Speaker 5: a European policy saying we have to be much more innovative,
Speaker 5: we have to create a much more efficient capital MA gets,
Speaker 5: we have to invest much more from a common budget
Speaker 5: as Europeans and from the private sector, and we have
Speaker 5: to deliver in parallel our decabination, because I do believe
Speaker 5: that climates, digital growth and job creation are the stripillars
Speaker 5: of what we have to deliver.
Speaker 6: And those we will come. Go through all of those.
Speaker 7: But just on that point about the European economy, you
Speaker 7: had a full scale attack on it at the Sorbonne
Speaker 7: where you said it is sclerotic, it is being left behind.
Speaker 7: Do you think that from the EU's point of view,
Speaker 7: that sclerotic economy is a bigger long term challenge and say,
Speaker 7: I think this is.
Speaker 5: One Aladimir, I think this is clearly linked to what's
Speaker 5: happening as well. But we have to completely reset our model.
Speaker 5: I think now France clearly is one of the leading economy.
Speaker 5: We are number one in attractiveness. We've been wandering the
Speaker 5: past five years, and if you take job creation, growth
Speaker 5: we are one or second in the Eurozone.
Speaker 6: Do you think so?
Speaker 5: You might own? So we are here now when I
Speaker 5: take Europe and especially the EU as a whole, But
Speaker 5: it's as well for UK. We have this issue in
Speaker 5: terms of business model. Why because we had low cost
Speaker 5: energy thanks to Russia, production thanks to santral and Eastern
Speaker 5: European countries with quite low costs, a market for exports China,
Speaker 5: and a geopolitical umbrella US. These pillars are being completely
Speaker 5: revised totally, yes, and it's no more valid. So we
Speaker 5: have to reinvent one and how by creating much more
Speaker 5: value on our own by being much more innovative, by
Speaker 5: creating much more jobs and jobs with value, good jobs,
Speaker 5: I would say, on our continent. The key point is
Speaker 5: deliver much more innovation and productivity policy public and privates.
Speaker 5: The second key reforms is to accelerate the cabination and
Speaker 5: especially our electricity policy, because through renewables and nuclear energy
Speaker 5: we can deliver low carbon, sovereign and low cost energy,
Speaker 5: which is much more than important gas and fossil fuels. Third,
Speaker 5: we need much more investment based on common budget. On
Speaker 5: my view, I mean based on public reports and figures.
Speaker 5: We need one trillion more in terms of budget, in
Speaker 5: terms of spending, and in parallel, we have to make
Speaker 5: the capital market union a reality, which is not.
Speaker 7: Yet col market union, because you have here an example,
Speaker 7: you have BNP.
Speaker 5: Yeah.
Speaker 7: Now probably Europe's definitely the US owns most successful bank,
Speaker 7: worth eighty billion dollars. But you know you are entertaining
Speaker 7: these people like JP Morgan and someone JP Morgan is
Speaker 7: worth five hundred and fifty billion. It's it's nine times
Speaker 7: as big Bank of America, four times as big. And
Speaker 7: the reason why is BMP Parry Bar cannot expand throughout
Speaker 7: the European Union and take over other banks.
Speaker 5: This is very cool.
Speaker 7: You would like to see BMP take over one of these,
Speaker 7: take over a German bank or an Italian one.
Speaker 5: I want. I mean, we do need a consolidation, but
Speaker 5: we do need as well an actual domestic market as Europeans,
Speaker 5: which is not the case. We have to deal with
Speaker 5: twenty seven regulations. You know, an energy, finance and Delco
Speaker 5: are the key sig doors were single market doesn't exist.
Speaker 5: It was a choice at the very beginning. I do
Speaker 5: agree that we have now to open this box and
Speaker 5: to deliver a single market approach. With much more efficient.
Speaker 5: So our our view is that now we want to
Speaker 5: elaborate Fanco German consensus on capital marketingion to have a
Speaker 5: single system of resolution, a single supervision and a much
Speaker 5: more integrated capital marketingion.
Speaker 7: Would you be happy with, say Spain Santandre coming and
Speaker 7: buying society general, I.
Speaker 5: Mean part of that, it's part of the market. But
Speaker 5: dealing as Europeans means that you need consolidation as Europeans,
Speaker 5: you're not.
Speaker 6: So it could be cross emerges for directions.
Speaker 5: But this one is for banking union, it's already on track.
Speaker 5: Now we have to do it for capital marketingion, which
Speaker 5: is broader and even more difficult. But we started to
Speaker 5: do so at a political level during the last Console,
Speaker 5: and I do believe that we can find aco German agreement.
Speaker 5: But why I want you to just anderstand the challenge
Speaker 5: for US. Seventy five percent of our financing as Europeans
Speaker 5: go through banks and in so we need much more consolidation.
Speaker 5: But we need a clear circulation of the savings all
Speaker 5: around the place. This is the first objective to be
Speaker 5: much more efficient and to be sure that our savings
Speaker 5: will be invested in the right sectors and the right geographies. Second,
Speaker 5: every year three hundred billion savings goes to finance the
Speaker 5: US economy because we are not attractive. So in parallel
Speaker 5: with this capital market union and the simplification having an
Speaker 5: equal single market, we clearly need the same level playing
Speaker 5: field as the US in terms of financing, which means
Speaker 5: when you take solvency in Basel, as long as it's
Speaker 5: not implemented by the US competitors, it should not be
Speaker 5: implemented by the European competitors. Otherwise this is a killer
Speaker 5: for his taking because these regulations just prevent you, i mean,
Speaker 5: our banks from investing in equity, which is exactly what
Speaker 5: we need. And if you take the key driver of
Speaker 5: this difference between the US and Europe, the key driver
Speaker 5: is the fact that the US economy innovated and invested
Speaker 5: much more iniquity and innovation than the European economy. I
Speaker 5: think we did much better during in POSTCOVIC than what
Speaker 5: we did during the financial crisis. But now this is
Speaker 5: a totally new world and we do need this new
Speaker 5: business model for the Europeans, more innovation, more investment, single
Speaker 5: market and capital market onion, and a relevant trade policy.
Speaker 5: Because I want to at this point known the US
Speaker 5: and now China are compliant with the WUTO. Today we
Speaker 5: are the only one in the room to respect just
Speaker 5: the regulation of the BLUTO, and we are to know
Speaker 5: if we are to open both of them protect their
Speaker 5: players and the economies. Can we have to do the thing?
Speaker 7: Can we come back to the issue of China later?
Speaker 7: But just another French company, Total Energy Totals CEO, has
Speaker 7: talked about moving its primary listing away from France towards
Speaker 7: New York. Would you be happy with that?
Speaker 5: Not at all? And I would be very surprised. No,
Speaker 5: I I wait for any confirmation. I understood it was
Speaker 5: remorse so, but.
Speaker 7: It's interesting that it's tied with the idea that he
Speaker 7: would face extra ESG measures here that he would not
Speaker 7: face in America.
Speaker 6: So thinks that would affect his valuation.
Speaker 5: Do you mean that we are more serious than the
Speaker 5: US in terms of green economy and transition?
Speaker 6: Yes, But you.
Speaker 7: Also in your speech at the Sorbonne you said, as
Speaker 7: I paraphrase, you said you cannot let decarbonization and exactly
Speaker 7: be enemies.
Speaker 6: And this would be exactly be an example.
Speaker 5: And this is my point. But the point is just
Speaker 5: we have to be sure when we regulate. We should
Speaker 5: not have regulate. Yes, and I think now we have
Speaker 5: to deliver. We need in your op much more investment.
Speaker 5: We have to cut that TBS have more flexibility. But
Speaker 5: in parallel everybody has to be seious. I saw a
Speaker 5: lot of funds, a lot of asset managers seeing we
Speaker 5: are with you on climate change. Where is a beef?
Speaker 5: Are you sure you are sufficiently compliant? Are you sure
Speaker 5: you are clearly addressing to the same issues. This is
Speaker 5: my point, and this is why we need the resting
Speaker 5: cognization between the US and Europe. The restrict cognization is
Speaker 5: number one. The US regulation in terms of cremachant as
Speaker 5: should be more serious and realigned on the European once. Second,
Speaker 5: the Europeans have to invest much more and be more
Speaker 5: serious and realign themselves on the US.
Speaker 7: I let just to ask you for another French company.
Speaker 7: I've asked you about total and BMP, LVMH. I look,
Speaker 7: and nobody has done better under the Macron presidency. He
Speaker 7: is now his wealth has increased by one hundred and
Speaker 7: seventy billion euros and he is now the richest man
Speaker 7: in the world, probably the first Frenchman to have that
Speaker 7: honor since Napoleon, and I think we can both say
Speaker 7: brother to mister na he's done it in a more
Speaker 7: peaceful way. But it's interesting you look at the people
Speaker 7: who've right at the very top of the wealthiest people
Speaker 7: in France, mostly either as or in fashion or both,
Speaker 7: and I wonder whether that is the kind of France
Speaker 7: you talked about creating. You always talk about technology, but
Speaker 7: the people who've done really well are these old style businesses.
Speaker 5: You're right, all of them. I don't think it's all
Speaker 5: style of business, but it's a business where we have
Speaker 5: competitive advantage luxury fashion and so because France is one
Speaker 5: of the great places, and Bernardo consolidated this market very early.
Speaker 5: It was one of the front owner in this industry.
Speaker 5: And I think it is very good and this is
Speaker 5: a chance for us because first we speak about a
Speaker 5: lot of jobs which are located in France, because a
Speaker 5: lot of these jobs are impossible to be relocated elsewhere.
Speaker 5: When you speak about alcohol, when you speak about cognac, maniac, champagne,
Speaker 5: fashion and making a lot of this stuff, it's added value.
Speaker 5: It's low qualified and very qualified jobs. And in tall
Speaker 5: it consolidated the market elsewhere, and thanks to the fact
Speaker 5: that he is listed in France. We Consoli did a
Speaker 5: lot of value and value creation as well as is
Speaker 5: why thanks to total themh BNP and so on. But
Speaker 5: we are the second largest place of the world to
Speaker 5: least your company.
Speaker 7: But there is a there is a tension, isn't there
Speaker 7: If I look at all those people, or certainly there's
Speaker 7: LVMH carrying all those ones. They have done spectactically well
Speaker 7: by exporting to places like China. They've done very well
Speaker 7: out of globalization and all the prescriptions you were just
Speaker 7: talking about in terms of Europe having higher top trade walls,
Speaker 7: being tougher with China. You know what will happen in
Speaker 7: a couple of months time. The Europeans will say we
Speaker 7: want to put tariffs on electric vehicles. And what will
Speaker 7: happen is mister g despite what he may have told
Speaker 7: you last week, he will come back and he will
Speaker 7: he will put tariffs on Cognac and that will help those.
Speaker 6: Very successful French business people.
Speaker 5: Look, I think this is exactly the mistake we made
Speaker 5: twenty years ago on solar panels, and we killed them
Speaker 5: our industry. I'm very simple. I don't like to earn
Speaker 5: blackmail anybody. I just look at the picture. When you
Speaker 5: have taries of ten for your electric for Chinese electric
Speaker 5: vehicles entering into our market, and when you are taxed
Speaker 5: between fifteen and twenty four when you go to the
Speaker 5: Chinese market, you have an issue. And on all the
Speaker 5: different sectors. What we want is just reciprocity. We want
Speaker 5: and in fact more than that marges and regarding the
Speaker 5: relation with China, level playing field. So what we ask
Speaker 5: for is exactly that we want to be sure that
Speaker 5: in terms of tariffs, subsidies, rules of production, we have
Speaker 5: a fair competition. And I mentioned it very openly to
Speaker 5: prison sheet. So it's not a geopolitical agenda. We don't
Speaker 5: want to blackmail and push back some of that production.
Speaker 5: We want to be sure it is fair. It's fair
Speaker 5: to launch precisely inquiries and look in details of the
Speaker 5: situation and revise it. If we are weak, if we
Speaker 5: are threatened by the fact that you can have retortion measures,
Speaker 5: you just don't do what you have to do. We
Speaker 5: had this discussion and this is why they decided not
Speaker 5: to implement the first measures on Cognac, but to withdraw
Speaker 5: the first one. So I think it's it's a normal approach.
Speaker 5: But look at the situation today. The European Union is
Speaker 5: the most open place of the world. But you cannot
Speaker 5: survive if at the same time you have subsidieson of
Speaker 5: a capacities in China and protection in some part of
Speaker 5: the market, and inflation reduction acts and buy American acts
Speaker 5: in the US. It doesn't fly once acond.
Speaker 6: So Europe has gone to get tougher now.
Speaker 5: But this is a necessary not because we are protecttionsanists,
Speaker 5: just because we want to protect our.
Speaker 6: German The Germans do not agree with you about.
Speaker 5: I think it depends whom in Germany and for which perspective.
Speaker 5: It's certainly true that some German companies, when they are
Speaker 5: incorporated in China, for instance, benefiting from subsidition, not just German,
Speaker 5: European American. Their interest is probably to preserve that and
Speaker 5: to sell themselves their over capacities in China to the
Speaker 5: rest of the world and especially the European markets. But
Speaker 5: the German economies interest is totally aligned with the French
Speaker 5: economies interests, meaning creating jobs, creating value, but just protecting
Speaker 5: your business and your people when they are attacked by
Speaker 5: unfirm measures and it's normal. It's part of the business,
Speaker 5: so for me, it's just a no brainer.
Speaker 4: That was an exclusive conversation between French President Emmanuel Macron
Speaker 4: and Bloomberg editor in chief John Micklethwaite in Paris, and
Speaker 4: so interesting their joe to hear them talking about not
Speaker 4: just China when it comes to trade and competition, but
Speaker 4: the US as well. We just heard the French president saying,
Speaker 4: while the EU is one of the most open places
Speaker 4: in the world, you can't survive if you have subsidies
Speaker 4: and overcapacity in China and things like the Inflation Reduction
Speaker 4: Act in the US. He specifically mentioned electric vehicles.
Speaker 1: Well, yeah, and we knew that the EV subsidies in
Speaker 1: the IRA were a problem for a lot of our
Speaker 1: allies in Europe. But it's interesting today we just had
Speaker 1: this fascinating conversation with the President of France that very
Speaker 1: same issue, and specifically competition with China by way of
Speaker 1: tariffs that we expect to be announced as early as
Speaker 1: tomorrow by the Biden administration came up as well. Our
Speaker 1: colleague gan Marie Horde Dern caught up with Janet Yellen,
Speaker 1: who is in Fredericksburg Virginia to talk about something altogether different,
Speaker 1: the use and implementation of infrastructure money. But of course
Speaker 1: conversation continues to return to China. Here's what the Treasury
Speaker 1: Secretary said earlier on Bloomberg.
Speaker 8: We do think that the laying field should be fair
Speaker 8: and trying to engages in unfair practices like massive subsidies
Speaker 8: of industries they've decided are critical, and those are cases
Speaker 8: where we will like to protect ourselves.
Speaker 4: Treasury Secretary Janet Yellen earlier Today.
Speaker 2: You're listening to the Bloomberg Balance of Power podcast. Catch
Speaker 2: Just Live weekdays at noon Eastern on Apple car Play
Speaker 2: and then roun Otto with the Bloomberg Business app. Listen
Speaker 2: on demand wherever you get your podcasts, or watch us
Speaker 2: live on YouTube.
Speaker 4: Meantime, today, we have to have a lot more not
Speaker 4: on the policies that would be pursued by a second
Speaker 4: Trump administration, but the way that the presumptive Republican nominee
Speaker 4: is spending his time these days, including today in court
Speaker 4: in New York. Although his criminal hush money trial is
Speaker 4: on a lunch break as we speak, we have had
Speaker 4: hours of testimony from Michael Cohen, his former fixer and
Speaker 4: attorney the prosecution's star witness in this case, who has
Speaker 4: been testifying to his relationship with Donald Trump and what
Speaker 4: exactly went down with the payments made to catch and
Speaker 4: kill stories in the national acchoir in the days leading
Speaker 4: up to the twenty sixteen election. High drama in the
Speaker 4: courtroom once again, So how does it factor into his
Speaker 4: political ambitions? Joining us now is our signature political panel,
Speaker 4: Rick Davis and Jeanie Shanzay. No, they are Bloomberg Politics
Speaker 4: contributors and Genie. Obviously, you are up in New York
Speaker 4: where all of this has been going down for several weeks.
Speaker 4: So much has already been unveiled in this case so far,
Speaker 4: we already heard last week's salacious testimony from Stormy Daniels.
Speaker 4: But is Michael Cohen the last piece of the puzzle
Speaker 4: that comes together to create potentially a massive headache for
Speaker 4: Trump and his campaign?
Speaker 9: Yeah, this is what the prosecutors are hoping. This is,
Speaker 9: you know, the big sort of moment in this trial.
Speaker 9: He's at the easy part of this at this point,
Speaker 9: because he's going to have to face I think what's
Speaker 9: going to be a blistering cross examination and we'll have
Speaker 9: to see how he holds up under that. You know,
Speaker 9: Michael Cohen had a really, really difficult time in front
Speaker 9: of the Senate, so he had a bit of time
Speaker 9: to practice with this. By all accounts, this should be
Speaker 9: a little more tame, but it's going to be tough,
Speaker 9: and this is the heart of the prosecution's case. And
Speaker 9: you know, Donald Trump's team is going to go hard
Speaker 9: on Michael Cohen. And what I think has been, you know,
Speaker 9: noteworthy today has been Donald Trump and Michael Cohen have
Speaker 9: both behaved themselves so far, if you will, And that's
Speaker 9: what both of their sides wanted them to do. Not
Speaker 9: get emotional, not have any outbursts, and so far both
Speaker 9: of them have done that.
Speaker 1: I'm reading this fascinating Trump trial blog live blog on
Speaker 1: the terminal Rick and it is entertaining. It was certainly
Speaker 1: salacious during Stormy Daniel's testimony, and maybe this will become
Speaker 1: the same He's describing hearing about the access Hollywood tape
Speaker 1: while on vacation and all the drama that followed. But
Speaker 1: does any of this actually change anyone's mind politically? I
Speaker 1: realize it's important to the legal case that's being made,
Speaker 1: but this is a political program and if you're a
Speaker 1: Trump supporter, you know about Michael Cohen already. If you're
Speaker 1: a Joe Biden supporter, you probably feel the same way. Right,
Speaker 1: It's hard to tell.
Speaker 10: How much voters are really paying much attention to the
Speaker 10: details of each of these I mean, we obsess over
Speaker 10: this a lot of coverage.
Speaker 1: Yeah, the media's.
Speaker 10: Extravaganza, But so far we haven't seen a lot of
Speaker 10: movement in any of the surveys that we've seen through
Speaker 10: the course of this. We've now had about three or
Speaker 10: four weeks of good sample and nothing really is moving it.
Speaker 10: And so I think it's really what you were saying,
Speaker 10: is like, how does this determine the outcome of the trial?
Speaker 10: Because there is some clear indication that voters who have
Speaker 10: concerns about Trump say that they're more likely not to
Speaker 10: vote for him if he's convicted of a crime, and
Speaker 10: it is certainly in that case. So clearly this is
Speaker 10: the probably biggest headline star in the case, next to
Speaker 10: Stormy Daniels herself. And I think the distinction he's already
Speaker 10: made today was in his testimony that this wasn't about Milania.
Speaker 10: Trump didn't seem to care about Milania. Finding this stuff
Speaker 10: out it was all about making sure he could get
Speaker 10: elected and getting through the election. And I think that's
Speaker 10: because really this is an election finance case. It's got
Speaker 10: really less to do with the salacious details of having
Speaker 10: an affair with a porn star or a playboy model,
Speaker 10: and a lot more to do with hiding the money
Speaker 10: and keeping it from the public view, which would have
Speaker 10: become public if they had adhere to strict campaign finance laws.
Speaker 3: So I think we're now.
Speaker 10: Starting to see the case turn to that issue more
Speaker 10: than just the sort of salacious details of the relationship.
Speaker 4: So we know Rick that Michael Cohen's in the courtroom,
Speaker 4: as well as the prosecutors, Trump's attorneys, donald Trump himself.
Speaker 4: But there are a few other members of Congress who
Speaker 4: decided to show up and show support for the former
Speaker 4: president today. Congresswoman Nicole Malia Takis of New York was there.
Speaker 4: Senator Tommy Tubberville coach as you may know him. Senator
Speaker 4: jd Vance, who has also been listed on the at
Speaker 4: least reported shortlist of potential vice presidential candidates who would
Speaker 4: be on the ticket alongside Donald Trump, but Donald Trump
Speaker 4: said this weekend at least one person is not on
Speaker 4: that shortlist, Rick Nikki Hayley, Does that surprise you, Yeah, it.
Speaker 10: Didn't surprise me. I mean, they never really made up.
Speaker 10: She hasn't endorsed him after her withdrawing from the primary campaign,
Speaker 10: and it's a concert reminder to him that she hasn't
Speaker 10: done that, because there are still people as much as
Speaker 10: twenty percent who are voting for her in the primary
Speaker 10: against him, even as he has already accumulated enough delegates
Speaker 10: to become the nominee. So she is an irritant to
Speaker 10: Donald Trump. Now if it goes beyond irritant to the
Speaker 10: point where he insults her enough that those voters who
Speaker 10: are Republican voters don't show up in the general election,
Speaker 10: could actually cost him. So I was actually surprised he
Speaker 10: was as negative toward her as he was in his
Speaker 10: response to questions about whether or not they he would
Speaker 10: consider her for VP. Doesn't seem to care about that
Speaker 10: twenty percent, But I sure what if I was running
Speaker 10: his campaign.
Speaker 1: We spent some time talking earlier about the new Sienna
Speaker 1: pol New Sienna College bullets out today with New York
Speaker 1: Times Philadelphia Inquirer, and it's not good news for Joe Biden.
Speaker 1: Genie who's losing to Donald Trump in a majority of
Speaker 1: swing states covered here. When you consider the weekend that
Speaker 1: Donald Trump had on the Jersey Shore, big rally, huge turnout.
Speaker 1: He referred to Alvin Bragg as fat Alvin. He talked
Speaker 1: about wan Moreshawan, the judge of course, presiding over the
Speaker 1: trials quote highly conflicted unquote, talked more about how the
Speaker 1: cases doing the bidding of President Biden. He'll probably, I'm assuming,
Speaker 1: face more concerns about violating the gag order in this case.
Speaker 1: But when you look at that Siena pole, getting back
Speaker 1: to what Rick said a little earlier, is any of
Speaker 1: this moving the needle on the campaign trail because it
Speaker 1: looks like they're existing in two separate worlds.
Speaker 9: It sure doesn't seem to be. I mean, the first
Speaker 9: takeaway from this pole is consistency. It is consistent with
Speaker 9: what we have seen over and over again almost since
Speaker 9: the fall. So you know, the trial at least so
Speaker 9: far hasn't seemed to move the needle. And I would say,
Speaker 9: you know, local officials on the Jersey Shore, I don't
Speaker 9: know if Snooky was there, who was there? They're saying
Speaker 9: eighty one hundred thousand people turned out, that was our
Speaker 9: big numbers for Donald Trump. And I'm going to go
Speaker 9: out on a limb here and call this VP race
Speaker 9: for Doug Bergham. I think that was the story of
Speaker 9: the weekend, you know, speaking of Nicky Yeah, there we go,
Speaker 9: speaking of Nicky Haley, NICKI Haley. She's a big problem
Speaker 9: these quote unquote zombie voters who are increasing numbers. It
Speaker 9: was Indiana to two point twenty two percent. But Doug
Speaker 9: Burgham helps to alleviate some of that challenge. So between
Speaker 9: his money, which is another problem Donald Trump has, the
Speaker 9: Nicky Haley voters and abortion, I'm I'm saying my bet
Speaker 9: is on Doug Bergham at this point. A really good
Speaker 9: showing for Doug Burgham out there on the campaign trail
Speaker 9: for for Donald Trump. And I know, I know JD.
Speaker 9: Vances is in the courtroom today, but he hasn't won
Speaker 9: me over yet on his.
Speaker 6: Not that it mess.
Speaker 4: Okay, So Genie makes her call.
Speaker 1: Yeah, we're marking this down. What do we have your
Speaker 1: thirteenth of May? Genie Burgham got.
Speaker 4: It, yep, noted, putting it on our little checkerboard here,
Speaker 4: bingo card maybe campaign We're all going to be playing
Speaker 4: this game probably up until the day before the Republican
Speaker 4: Convention starts in July. But Genie, just on this New
Speaker 4: York Times Siena pol when you look at the demographic
Speaker 4: figures as well, perhaps it spells trouble for the Biden campaign.
Speaker 4: They're essentially tied with Trump among eighteen to twenty nine
Speaker 4: year olds and Hispanic voters, even though Biden got more
Speaker 4: than sixty percent of the vote of both of those
Speaker 4: groups in twenty twenty and mister Trump wins support of
Speaker 4: more than twenty percent of Black voters, which is the
Speaker 4: highest level of support for any Republican presidential candidate since
Speaker 4: the enactment of the Civil Rights Act of nineteen sixty four. Genie,
Speaker 4: when you look at figures like that, what's most concerning?
Speaker 9: Uh, that is the most concerning thing about this poll.
Speaker 9: Exactly what you just said, Kaylee. You know, the idea
Speaker 9: that double Trump could if the election was held today,
Speaker 9: double the number of African Americans who support him is
Speaker 9: just stunning. Its historic. It suggests we are in a
Speaker 9: period of realignment. And boy does the Biden team know this.
Speaker 9: If you look at his schedule for this week the NAACP,
Speaker 9: He's going to Morehouse to do the commencement he's talking
Speaker 9: at the African American Museum. I mean, they are going
Speaker 9: to try desperately to shore up this Black vote, which
Speaker 9: he really does need. And he's got some work to
Speaker 9: do on that. Because Donald Trump is doing what no
Speaker 9: other Republican has been able to do in decades, which
Speaker 9: is he is attractive to African American, particularly young voters.
Speaker 9: Joe Biden's best hope is that they don't come out
Speaker 9: in as much numbers as you know some of the
Speaker 9: elderly people who support Joe Biden.
Speaker 1: Well, I'm fascinated by that answer. Rick, A period of realignment.
Speaker 1: If that's the case, how a Republican seize on it.
Speaker 10: Well, I mean there already has been quite a bit
Speaker 10: of realignment with Donald Trump. What we saw in twenty
Speaker 10: sixteen was his ability to get blue collar, white rural males,
Speaker 10: especially who had been voting Democratic for most of their lives,
Speaker 10: to switch over and start voting Republican and became really
Speaker 10: the basis of the MAGA movement. The question now is
Speaker 10: is there further movement toward that realignment. It's certainly not
Speaker 10: your grandfather's Republican Party, But the reality is I think
Speaker 10: they still fall along the lines of education and income
Speaker 10: and geography. If you are a black Mail without a
Speaker 10: college education, You're going to be more likely to vote
Speaker 10: for Trump, regardless of your skin color. Same with Hispanics.
Speaker 10: And what we're seeing is, you know, where you live matters.
Speaker 10: If you live in an urban area or suburb, less
Speaker 10: likely to vote for Donald Trump. So you know, these
Speaker 10: are the realignments that are happening. Whether or not it
Speaker 10: continues to enforce this election cycle too early to tell.
Speaker 10: I would say the thing that upsets the Apple card
Speaker 10: is turnout. In twenty twenty, we saw the largest turnout
Speaker 10: in one hundred years. Seventy percent of the voters said, Hey,
Speaker 10: I'm interested in this outcome and I care this time.
Speaker 10: Every single survey we're seeing says, you know what, I
Speaker 10: don't care about the rematch. It is not interesting to me,
Speaker 10: and I don't want to vote. And so you have
Speaker 10: almost half the country now saying don't count on me
Speaker 10: to be an election day voter. So that changes the
Speaker 10: model completely. And how that, you know changes we may
Speaker 10: not know until election day.
Speaker 1: Really smart analysis today from Rick and Jeanie are signature panel.
Speaker 1: Rick Davis and Jeanie Shanzano or Bloomberg Politics contributors. Thank
Speaker 1: you both for weighing in here. I guess the big
Speaker 1: question remains, if this is a period of realignment, will
Speaker 1: it out last Donald Trump.
Speaker 2: You're listening to the Bloomberg Balance of Power podcast kens
Speaker 2: Just Live weekdays at noon Eastern on Apple car Play
Speaker 2: and then roud Oro with a Bloomberg Business app. You
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Speaker 2: New York station, Just Say Alexa play Bloomberg eleven thirty.
Speaker 4: For much of the last week, conversation really has been
Speaker 4: dominated by a policy shift. In some instances, the Biden
Speaker 4: administration has undergone in regard to Israel decision last week
Speaker 4: to withhold a shipment of large bombs to Israel overconcerned
Speaker 4: that they may be used in Rafa Gossen City, in
Speaker 4: which more than a million Palestinians have sought refuge and shelter,
Speaker 4: and administration officials this weekend Joe standing by the decision.
Speaker 1: Yeah, that's for sure. We talked about it a lot
Speaker 1: in this space as it was happening. Of course, that
Speaker 1: the White House might bristle at the idea of this
Speaker 1: being reflected as a change in policy, but it certainly
Speaker 1: feels like when to a lot of lawmakers and as
Speaker 1: a result, Kayley, there's an effort a foot on Capitol
Speaker 1: Hill by the very small Republican majority here the Republican Conference,
Speaker 1: pushing a resolution to ensure funding for Israel. It might
Speaker 1: be something we see get some attention this week.
Speaker 4: Yeah, certainly something we're going to keep an eye on,
Speaker 4: just as we were keeping an eye on of the
Speaker 4: messaging with the Secretary of State Anthony Blincoln, who was
Speaker 4: asked about this on one of the Sunday shows over
Speaker 4: the weekend, and this is what he said about the
Speaker 4: administration's thinking on these weapons for Israel.
Speaker 3: We don't have double standards.
Speaker 11: We treat Israel one of our closest allies and partners,
Speaker 11: just as we would treat any other country, including and
Speaker 11: assessing something like international U Meaniterran law and its compliance.
Speaker 3: With that with that law.
Speaker 1: Invite people to read the report.
Speaker 11: They can see for themselves everything that we've laid out
Speaker 11: in the report. The report also makes clear that this
Speaker 11: is an incredibly complex military environment.
Speaker 1: Speaking on NBC's Meet the Press, the Secretary of State
Speaker 1: talking about the report submitted to Congress at the end
Speaker 1: of last week that raises concerns about Israel's use of
Speaker 1: US provided weapons in theater. But as we mentioned, there
Speaker 1: is a resolution that could see the light of day
Speaker 1: in the US House this week that would ensure funding
Speaker 1: military support for Israel and joining us to talk about
Speaker 1: this and a few other stories. Congressman Chuck Fleischman, the
Speaker 1: Republican from Tennessee's third district, If you're with us on
Speaker 1: Bloomberg TV, you can see is literally in the field
Speaker 1: here doing constituent services. And Congressman, I appreciate your stopping
Speaker 1: your day for us as you prepare to return to
Speaker 1: Washington this week, will the House pass that resolution? What
Speaker 1: do you think needs to happen.
Speaker 12: We need to be unequivocal in our support for Israel,
Speaker 12: absolutely after what happened to Israel on October the seventh,
Speaker 12: the United States needs to back its ally in the
Speaker 12: Middle East, Israel and its right to defend its borders,
Speaker 12: and its right to fix the situation with Hamas in Gaza.
Speaker 12: And we do not need to pause, We do not
Speaker 12: need to be vague. We need to be one hundred
Speaker 12: percent behind Israel so they can wrap this situation up,
Speaker 12: deter terrorism wherever it exists in the Middle East and
Speaker 12: move forward.
Speaker 4: Well, Congressman. At the end of the day, though, knowing
Speaker 4: that this is largely a messaging bill, is there any
Speaker 4: further action that you would like to see your Chamber
Speaker 4: take that is not just largely symbolic and meant to
Speaker 4: send a west message to the White House.
Speaker 12: Well, we were more than symbolic when we passed a
Speaker 12: to Israel. We've passed it time and time again, through
Speaker 12: the appropriations packages, through the supplementals and the like. But
Speaker 12: our speaker, our leaders, our membership has been on the
Speaker 12: Republican side overwhelming Even Democrats have joined us. Many Democrats
Speaker 12: have joined us as they should. Support for Israel needs
Speaker 12: to be bipartisan, needs to be by cameral, and we
Speaker 12: needed to start from.
Speaker 1: The White House.
Speaker 12: We need to tell Joe Biden loud and clear, unequivocally
Speaker 12: that he's got to support Israel, no pauses, no offens
Speaker 12: or butts. Support Israel, get them the aid, get them
Speaker 12: the arms, let them secure their borders. Complete this mission,
Speaker 12: and then let's work for peace in the Middle East.
Speaker 1: Are you concerned about the findings and the State Department report,
Speaker 1: Congressmen that questions some of Israel's tactics in using US
Speaker 1: provided weapons in Gaza. Should Congress be concerned about this.
Speaker 12: I'm personally not. October the seventh, Hamas was not concerned
Speaker 12: when they went in, raped, pillaged, plundered, killed, engaged in
Speaker 12: terroristic acts that are unspeakable, unfathomable. This was an incursion
Speaker 12: into the sovereign state of Israel, which cannot be ever tolerated,
Speaker 12: can never be condoned. So no or as heck. War
Speaker 12: is horrible, but and casualties happen in war that are
Speaker 12: sometimes unintended. But remember this, in the streets of Gaza
Speaker 12: they were celebrating on October the eighth, when Israel had
Speaker 12: been hit and terrorized. They still have American hostages. They
Speaker 12: still have Israeli hostages. Hamas is not giving them up
Speaker 12: until Hamas decides to do the right thing, give up
Speaker 12: the hostages and agree to stop incursions into Israel. Think
Speaker 12: about it, They're still wanting to fire rockets into Israel.
Speaker 12: They're still calling for the destruction of Israel. So again,
Speaker 12: the United States needs to be unequivocal in its support
Speaker 12: for Israel, for funding for arms, for diplomatic aid, anything
Speaker 12: that it takes to secure ISRAE position in the Middle
Speaker 12: East with its neighbors.
Speaker 4: So we'll look to see further action from the House
Speaker 4: in regard to Israel this week. Congressman, there's also another issue,
Speaker 4: perhaps more time pressing, that will need to be taken up,
Speaker 4: the FAA reauthorization. The House last week passed a one
Speaker 4: week extension. The Senate passed the full five year bill
Speaker 4: last week. Will be the House's turn to take it up,
Speaker 4: and we understand it will be done under suspension of
Speaker 4: the rules. Do you anticipate any difficulty in getting that
Speaker 4: passed in time?
Speaker 2: I don't.
Speaker 12: We need to get the FAA passed. It's a good bill,
Speaker 12: it's not a perfect bill, but doing an under suspension,
Speaker 12: for your viewers, means that it will require two thirds
Speaker 12: as opposed to majority. What that means is when you
Speaker 12: cannot pass a rule, and we've had some problems passing
Speaker 12: rules in the majority. I've always voted for the rule
Speaker 12: in the majority as a Republican. Some of my colleagues
Speaker 12: have chosen not to, respectfully, I disagree with that, but
Speaker 12: since we can't guarantee the passage of a rule, I
Speaker 12: think our best chance is to do this on suspension.
Speaker 12: Get two thirds. I think we'll get that done very
Speaker 12: quickly and with relative ease.
Speaker 1: Congressman, I want to ask you a question from your
Speaker 1: view on the Appropriations Committee. We just went through a
Speaker 1: painful process to keep the government funded that sucked up
Speaker 1: the first third to half of this year. Knowing that
Speaker 1: we've seen at least a markup session on a Republican bill,
Speaker 1: We've seen the President the White House drop their budget proposal.
Speaker 1: Can we get to work where your committee start before
Speaker 1: the last minute, say this summer or fall, for a
Speaker 1: regular order appropriations process Fiscal twenty five.
Speaker 3: Joe, You're absolutely right. I believe in regular order.
Speaker 12: I believe in sub committees, full committees, doing their work,
Speaker 12: getting to the floor, getting appropriation bills passed, and getting
Speaker 12: them ready for conferencing with the United States Senate and
Speaker 12: ultimately to be signed. The reality is we are doing
Speaker 12: our work. I cheer the Energy and Water Subcommittee of Appropriations,
Speaker 12: but I can assure you Chairman Cole and all of
Speaker 12: the other twelve cardinals of which I'm one subcommittee chair
Speaker 12: people will be working on their bills. Some of the bills, Joe,
Speaker 12: are easier to pass than others. My biling Energy and
Speaker 12: Water bill is a bill that is much easier to
Speaker 12: pass than some of the others. Legislative branch is an
Speaker 12: easier one, milkon VA is an easier one, but some
Speaker 12: will be harder. What I anticipate will happen is we
Speaker 12: will write our bills, pass our bills out of full committee,
Speaker 12: get them to the floor in the best position to
Speaker 12: be passed. But the reality is, and I hate to predict,
Speaker 12: but with an election year, the reality I think probably
Speaker 12: will be a short term cr into the latter part
Speaker 12: of the year, largely due to some of the complexities
Speaker 12: between the House and the Senate and Republicans and Democrats.
Speaker 12: But I'm going to work night and day to make
Speaker 12: sure that our bill gets done and that my colleagues
Speaker 12: who have other bills as appropriators will get their work
Speaker 12: done and get it done in due course. So I
Speaker 12: expect a better year. I expect all twelve bills to.
Speaker 1: Be done, all right.
Speaker 4: Republican Congressman Chuck Fleischman of Tennessee, thank you both. Thank
Speaker 4: you for joining us on both Bloomberg Television and radio.
Speaker 4: We appreciate your time and insight into the work of Congress,
Speaker 4: but we want to focus now on the work of
Speaker 4: one regulator, the Federal Energy Regulatory Commission, is taking aim
Speaker 4: at the grid fork, approving today two rules to speed
Speaker 4: the development of new long range electric transmission lines. One
Speaker 4: is smoothing out the regional process for planning and assigning
Speaker 4: costs for projects, and the other rule allows FERK to
Speaker 4: issue federal permits for transmission lines that are blocked by
Speaker 4: state regulators. Joining us now for more is Willie Phillips.
Speaker 4: He is the chair of FURK. Joining us here in
Speaker 4: our Washington, d C studio. Mister chairman, welcome, Thank you
Speaker 4: so much for being with us. When we look at
Speaker 4: this pair of rules, how are they going to support
Speaker 4: a US power grid that has proven time and again
Speaker 4: that it is quite strong.
Speaker 13: Well, I have to say thank you so much for
Speaker 13: having me here today. The US electric power grid, it
Speaker 13: is the backbone for our American economy. But our grid
Speaker 13: is being stressed. It's being tested today in ways we
Speaker 13: never seen before, in the face of rising demand, extreme weather,
Speaker 13: and new technologies that are shaping the resource mix in
Speaker 13: this country. We took historic, historic action today at FIRK
Speaker 13: to address these really these urgent matters. It's urgent, it's now.
Speaker 13: We have to act now to plan for the future,
Speaker 13: because if we don't, we doom the reliability of our system.
Speaker 13: America cannot wait.
Speaker 1: You must be getting calls about AI and data centers
Speaker 1: every day. This is all we're hearing about. When Constellation
Speaker 1: reported earnings last week, the entire conversation was not about
Speaker 1: how do they open a new nuclear power plant? It
Speaker 1: was how do we get data centers tied to nuclear
Speaker 1: because there's not enough power available here to train all
Speaker 1: these language models that are going to apparently change our
Speaker 1: lives in the next couple of years. What is FERK
Speaker 1: gonna do about the demand alone from AI?
Speaker 13: You know, you're absolutely right. I hear from leaders across
Speaker 13: our industry all the time talking about how the unprecedented
Speaker 13: demand and load that they're seeing from data centers that
Speaker 13: really that's empowering this AI revolution that we're seeing around
Speaker 13: the country. It's in Ohio, it's in Virginia, which is
Speaker 13: the data center capital that's right of the United States.
Speaker 13: We see projections that Ohio is going to put as
Speaker 13: much load on a system that's equal to the total
Speaker 13: amount of load of Manhattan.
Speaker 7: Wow.
Speaker 3: In the near term.
Speaker 13: This is a problem again for the nation's grid and
Speaker 13: so our rule it's gonna help bring on more generation.
Speaker 13: It's gonna help us. There's no one thing that we
Speaker 13: can do that can address the reliability needs of our system.
Speaker 13: Then long term and regional planning.
Speaker 4: Do you expect that these rules, though, we'll run into
Speaker 4: any legal issues. Potential litigation is if the federal regulator
Speaker 4: is coming in to potentially step over state regulators in
Speaker 4: some cases.
Speaker 13: I can tell you this as a former state regulator myself.
Speaker 13: I look carefully at these rules. We had over fifteen
Speaker 13: thousand pages of public comments from two hundred individual parties.
Speaker 13: I am extremely confident that these rules are legally durable
Speaker 13: and that they will be upheld.
Speaker 3: That's a fact.
Speaker 1: Texas remains an exception to the national grid, if I
Speaker 1: can call it that, what happens if Tesla starts cranking
Speaker 1: up these data centers or if this AI demand starts
Speaker 1: coming from Texas while they play along.
Speaker 13: So Texas, of course you mentioned they proud of the
Speaker 13: fact that they have their own independent grid. But let's
Speaker 13: be clear, Texas is also a bell weather You don't
Speaker 13: have to look any further than some of the extreme
Speaker 13: weather events that have happened in Texas and other places
Speaker 13: and how it costs billions of dollars and it costs
Speaker 13: hundreds of lives. We know that Texas leaders also know
Speaker 13: that transmission reform is the best way to address these
Speaker 13: regulatory challenges and the reliability challenges.
Speaker 1: That we have on the grid that they call you
Speaker 1: for help.
Speaker 13: We learn from Texas, and I think Texas learns from us.
Speaker 13: We're all in this together. That's what Congress said when
Speaker 13: they established the Federal and Interrogatory Commission, that we're going
Speaker 13: to have a national role in making sure that we
Speaker 13: protect the reliability of.
Speaker 4: Our country, which is much more difficult in terms of
Speaker 4: reliability when you are seeing those extreme weather events and
Speaker 4: climate related events that you were just alluding to. Obviously,
Speaker 4: these rules are intended to make sure there is more
Speaker 4: investment in transmission. But I would imagine none of this
Speaker 4: happens overnight when we're seeing these kind of weather events
Speaker 4: in real time. How fragile is the grid in this
Speaker 4: mode in terms of exposure to that kind of thing.
Speaker 13: Look, we know the grid is on the stress, and
Speaker 13: we know that things take a long time. They take
Speaker 13: too long to build a new transmission. That's why these
Speaker 13: rules are so important. It will speed up the time
Speaker 13: that it takes to bring these resources that are waiting
Speaker 13: in the wings to come on. This rule is the
Speaker 13: best chance that we have to protect the reliability and
Speaker 13: affordability for our consumers.
Speaker 3: Imagine this. Imagine you're a senior.
Speaker 13: You're at home, it gets cold, the lights go out,
Speaker 13: it gets colder, maybe a little confused, you freeze the
Speaker 13: death in your home. That's what happens. This is our
Speaker 13: best chance to address that need and to help consumers
Speaker 13: throughout our country.
Speaker 1: These are the people who are obviously in your mind
Speaker 1: when you go to bed at night. Here are we
Speaker 1: in a crisis then in a remaining moment? Or are
Speaker 1: you averting one?
Speaker 13: We are absolutely addressing the need for reliability in this country.
Speaker 13: If we don't address it, we are facing a reliability crisis.
Speaker 1: Absolutely. I'm really glad you could come see us at
Speaker 1: the table today. Don't be a stranger, all right, give
Speaker 1: us an update on the progress at some point as
Speaker 1: soon as the Chairman of FIRK, Willie Phillips, and a
Speaker 1: fascinating conversation Kaylee once again that you will not hear
Speaker 1: anywhere else. We started this broadcast with the promise that
Speaker 1: we would take advantage of this calm here in the
Speaker 1: storm the eye of the hurricane to bring you some
Speaker 1: context and some smart conversations, and Kaylee I certainly learned
Speaker 1: a lot. Thanks for listening to the Balance of Power podcast.
Speaker 1: Make sure to subscribe if you haven't already, at Apple, Spotify,
Speaker 1: or wherever you get your podcasts, and you can find
Speaker 1: us live every weekday from Washington, DC at noontime Eastern
Speaker 1: at Bloomberg dot com.