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Speaker 1: This is Bloomberg Wall Street Week.

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Speaker 2: The global push into infrastructure, breaking the IPO logjam in text.

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Speaker 1: The financial stories that shape.

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Speaker 2: Are were cutting inflation without losing jobs? Do we need

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Speaker 2: rate cuts and if so, how many? Investing in the

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Speaker 2: time of geopolitical turmoil?

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Speaker 1: Through the eyes of the most influential voices.

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Speaker 2: Keen Roguoff economists at Harvard, former FDIC had Shila bet

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Speaker 2: Ge CEO, Larry Kulp, San Francisco FED President Mary Daily, Bloomberg.

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Speaker 1: Wall Street Week with David Weston from Bloomberg Radio.

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Speaker 3: A cooling labor market, a FED that is waiting in

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Speaker 3: the wings, and David Wesson's special edition from Aspen. This

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Speaker 3: is Bloomberg Wall Street Week. I'm scarlet food this week.

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Speaker 3: MIT Professor Christen Forbes on what the FED has been

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Speaker 3: waiting for.

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Speaker 4: There had been a leaning before the pandemic and the

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Speaker 4: post pandemic inflation, to wait till you saw inflation, until

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Speaker 4: you saw the weights of the eyes of inflation.

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Speaker 3: And US Ambassador to Japan Ram and Manual on China's

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Speaker 3: global strategy with.

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Speaker 5: China is stealing and they bring caught.

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Speaker 3: We start with the unexpected cooling in the US labor market.

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Speaker 3: The US economy added one hundred and fourteen thousand jobs

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Speaker 3: in July, lower than the estimated one hundred and seventy

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Speaker 3: five thousand jobs, and the unemployment rate also ticked up

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Speaker 3: to four point three percent. This softness is raising questions

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Speaker 3: about the Fed's decision to wait to cut rates. Bloomberg's

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Speaker 3: Michael McKee joins US now. So not only did we

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Speaker 3: get a miss for the July number, we also had

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Speaker 3: a downward revision to the Jude number as well. What

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Speaker 3: does a breakdown look like in terms of sectors, Well, this.

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Speaker 6: Was a generally weak report across the board. The worst

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Speaker 6: was information services, which is the tech world, and so

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Speaker 6: that is not completely surprising. Government also hiring sloads significantly there,

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Speaker 6: but there wasn't a particular area that stood out other

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Speaker 6: than we like to look at temporary health services and

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Speaker 6: they lost almost nine thousand jobs in that area, which

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Speaker 6: is sometimes a harbinger of worse things to come as

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Speaker 6: companies cut back on temporary workers before they let go

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Speaker 6: of their own.

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Speaker 3: Now, speaking of worse things to come, the other thing

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Speaker 3: about the rise and the unemployment rate to four point

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Speaker 3: three percent is that it triggered a recession call. And

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Speaker 3: this has to do with something called a Sam rule.

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Speaker 6: Claudia Sam, former FED official, designed the rule, and basically

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Speaker 6: it posits that if you get a certain level of unemployment,

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Speaker 6: certain change in the amount of unemployment.

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Speaker 7: When you get to that level, which is half.

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Speaker 6: A percent above the low, then it goes up much

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Speaker 6: faster and you're already in recession at that point. And

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Speaker 6: it's been a slow grind up as unemployment has risen.

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Speaker 6: And while we didn't exactly get to the half percent move,

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Speaker 6: it's close enough. And so that's why you're seeing the

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Speaker 6: reaction that we have seen on Wall Street is because

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Speaker 6: everybody's afraid now that this portends really bad news for

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Speaker 6: the overall economy.

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Speaker 3: So that's Wall Streets reaction. But I know you speak

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Speaker 3: with FED officials, you look at economists notes. What do

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Speaker 3: FED officials think of this latest jobs report?

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Speaker 6: Well, the first thing they're going to tell you is

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Speaker 6: that we never look at one piece of data and

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Speaker 6: make a decision based on that, And this is one

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Speaker 6: data report.

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Speaker 7: There'll be another Job's.

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Speaker 6: Report to CPI reports before we get to the next

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Speaker 6: FED meeting on September eighteenth, and so they're going to

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Speaker 6: want to look at a lot of other different things,

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Speaker 6: but it does appear clear that the economy is slowing.

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Speaker 6: You have to remember that that's what they wanted. They

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Speaker 6: wanted the economy to slow down. The labor market was overheating.

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Speaker 6: One hundred and fourteen thousand jobs isn't a bad number.

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Speaker 6: It's about the replacement level that the FED would be expecting.

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Speaker 7: It's just that we got there in.

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Speaker 6: One month rather than over a slow period of time.

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Speaker 6: So they're going to push back on the panic aspect

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Speaker 6: of it in the markets and say we still have

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Speaker 6: a strong economy. GDP has been strong, and we'll wait

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Speaker 6: and see what the rest of the data tell us.

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Speaker 3: I guess they could also pushback using another data point

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Speaker 3: in today's report, which is the participation rate for prime

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Speaker 3: major Americans actually rose to the highest in two thousand

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Speaker 3: and one, to eighty four percent. So that is a

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Speaker 3: silver lining, isn't it.

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Speaker 7: It is a silver lining. It's something the FED has

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Speaker 7: been wanting to see.

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Speaker 6: And really, the unemployment rate went up because a lot

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Speaker 6: more people entered the labor force. People think they can

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Speaker 6: get jobs and so they start looking, and because that

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Speaker 6: number gets larger, the denominator gets larger.

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Speaker 7: It makes the unemployment rate a little bit bigger.

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Speaker 6: One reason that even Claudia Sam says the sum rule

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Speaker 6: may not hold this time because normally it's based on

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Speaker 6: the idea of your going into recessions of companies or

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Speaker 6: cutting workers.

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Speaker 7: But we're not really seeing that.

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Speaker 3: So that's an interesting point, the fact that the market

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Speaker 3: will bring rates lower on its own, and you could

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Speaker 3: see that with bond's rallying hard after the latest jobs report.

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Speaker 3: Who does it not help out to have just market

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Speaker 3: rates come down, but the Fed's key rates stay where

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Speaker 3: it is.

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Speaker 6: It's not going to help the con consumer borrowing as much.

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Speaker 6: We know that credit card rates are very sticky, and

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Speaker 6: that's what people notice the most about tight credit is

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Speaker 6: that they're paying more on a monthly basis for interest.

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Speaker 6: It'll probably be slow to hit the housing market. Housing

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Speaker 6: rates may come down some, but we're around seven percent

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Speaker 6: and have been for a couple of years, and we

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Speaker 6: don't know how low mortgage rates have to go before

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Speaker 6: people feel comfortable borrowing again, but some say four to

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Speaker 6: five percent, so it'll take a while to get there.

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Speaker 6: And then car sales are the other big interest rate

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Speaker 6: sensitive sector, and again we don't know whether companies will

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Speaker 6: go back to offering incentives, something to drive the purchases.

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Speaker 3: All right, Bloomer's Michael McKee, thank you so much, our

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Speaker 3: international economics and policy correspondent.

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Speaker 2: We spent the week in Colorado at the Aspen Economic

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Speaker 2: Strategy Group, where each summer, prominent economists gather with leaders

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Speaker 2: from government and industry to talk about issues that affect

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Speaker 2: markets and investors and ultimate all of us. One of

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Speaker 2: the subjects of discussion this year was that sudden switch

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Speaker 2: to Vice President Kamala Harris as the Democratic nominee for

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Speaker 2: president and what that could mean for the policy alternatives

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Speaker 2: this November. One of those attending was US Ambassador to

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Speaker 2: Japan Ram Emmanuel, who gave us the view from Asia.

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Speaker 5: From your friend's side, they very much interested in America selection,

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Speaker 5: as is your foe. But from a different perspective. Take

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Speaker 5: President Biden's leadership that created the Japan Korea Trilateral which

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Speaker 5: is historic. One of China's basic principles is the three

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Speaker 5: of us can never get on the same page big time,

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Speaker 5: then the United States, Japan, and Korea never happened before

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Speaker 5: that twilight and this kind of hub and spoke strategy

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Speaker 5: that's now becoming more like a lattice work. All of

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Speaker 5: it depends on the indispensable presidence power of the United

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Speaker 5: States and the permanence of that. Your foes have a strategy,

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Speaker 5: which is America's a receding power and don't bet long

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Speaker 5: on them. You got to bet on us. And so

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Speaker 5: people want to know whether there's going to be a

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Speaker 5: foreign policy that counts out. You know, you can't have

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Speaker 5: alliances without allies. Are they going to be counted? And

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Speaker 5: we're making historic strides, at least in Japan, but I

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Speaker 5: can say in other countries also of among friends, and

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Speaker 5: so their big concern in the election is are we

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Speaker 5: going to stay on this path or is it going

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Speaker 5: to be a radical change to friend and foe where

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Speaker 5: you not being able to tell the difference.

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Speaker 2: So tell us more about that. I think it's called

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Speaker 2: trilateral minister's meeting you had for ten days. I think

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Speaker 2: with South Korea, no, no.

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Speaker 5: No, no. I have patients, but not that much patience.

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Speaker 8: In fact, I have zero patience.

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Speaker 5: So this weekend was there were four first time ever events.

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Speaker 5: One is the United States in what's the Secretary of

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Speaker 5: State and Defense met with their counterparts and for the

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Speaker 5: first time in seventy years, America is going to update

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Speaker 5: their military presence and for structure in Japan, We're going

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Speaker 5: to go from management to operational command and control, biggest

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Speaker 5: change in seventy years, and bring parts of Indo Pacific

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Speaker 5: in Honolulu forward to theater. Second, we've been making since

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Speaker 5: Camp Davids President Biden's meeting there, making a lot of

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Speaker 5: progress on the political diplomatic side. For the first time ever,

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Speaker 5: the defense ministers of the three countries met and planned

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Speaker 5: military exercises and strategy and integration.

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Speaker 2: For the for the next four years.

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Speaker 5: Third, extended to terms, which is America's nuclear commitment to

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Speaker 5: the security and safety of Japan at a ministerial level

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Speaker 5: had never been so it's raised the level, especially given

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Speaker 5: to China's increase in nuclear capability with what North Korea

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Speaker 5: is doing. And then fourth, the first time ever in

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Speaker 5: agreement with an ally about military industrial co production and

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Speaker 5: code development. And when you take for those principles, the

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Speaker 5: quantitative aggregate is a qualitative significant change and it is

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Speaker 5: the biggest kind of the last thirty six hours. A

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Speaker 5: lot of news in America, but for the Indo Pacific

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Speaker 5: strategy for what we're trying to do in the sense

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Speaker 5: of building dimatic, political and military alliances. The most significant

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Speaker 5: weekend in American into Pacific presence.

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Speaker 2: And how durable do you think that is? Because there

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Speaker 2: are a lot of disagreements in this election between the

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Speaker 2: Democracs of Roehunts. The one bipartisan points seems to be

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Speaker 2: a real concern about China. I think that position ourselves.

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Speaker 5: If I can. I think there's two countries that have

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Speaker 5: bipartisan agreement, one about China and about Japan, but from

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Speaker 5: different perspectives, and I do think.

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Speaker 7: It's durable.

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Speaker 5: Japan today, in the last three years, has made changes

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Speaker 5: to five separate seventy year old policies. They've gone from

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Speaker 5: one percent to two percent on GDP. For defense, they'll

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Speaker 5: become the third largest military in the world. They're adopting

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Speaker 5: counter strike capability. They've changed their export capability. They've opened

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Speaker 5: up and stabilized their relationship with Korea. So when you

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Speaker 5: aggregate all those capacities, they're coming up as a full partner.

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Speaker 5: And then the most important thing, which we sometimes don't

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Speaker 5: fully in my view, appreciate in the Indo Pacific Asian countries,

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Speaker 5: Japan's the most popular country. Seventy years of development, diplomatic

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Speaker 5: work huge political benefit to the alliance. There we are

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Speaker 5: going as two countries from kind of alliance management to

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Speaker 5: alliance or alliance kind of protection to alliance per UH projection,

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Speaker 5: and Japan can be a significant partner in the region

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Speaker 5: and is a significant partner, and that accrues to America's

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Speaker 5: kind of hur our diplomacy while very good. We come

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Speaker 5: in with a lot of resources and assets. Japan comes

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Speaker 5: in what's dubbed soft power, but it accrues to huge

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Speaker 5: political benefit to the UH alliance.

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Speaker 2: Do you see a path forward to a world in

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Speaker 2: which we engage with China economically? We don't just isolate them,

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Speaker 2: that's unrealistic given their size, but do not enable them

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Speaker 2: because it feels like the United States is going back

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Speaker 2: and forth.

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Speaker 5: You know, I nobody would ever look at this and

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Speaker 5: say this is a diplomat. So where deterrence ends and

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Speaker 5: provocation begins, I don't know, and nobody knows. It's more

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Speaker 5: art than it is science. You can have engagement. So

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Speaker 5: here's just a short I thought it was the right

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Speaker 5: strategy when you look at equities where China was better

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Speaker 5: to have them in the tenth than out. What the

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Speaker 5: mistake was in twenty twelve. Basically, when President She comes

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Speaker 5: to power, we went from they went from thinking of

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Speaker 5: America in the West as strategic competitors to strategic adversaries.

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Speaker 5: We held onto strategic competitors a decade too long. Now

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Speaker 5: we're accelerating realizing that this is different. You can't have

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Speaker 5: a system where somebody's part of it, where intellectual property

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Speaker 5: theft is a norm. It's just too volatile to a

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Speaker 5: system based on trust and law. They're stealing stuff from Google.

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Speaker 5: That's not a case. They're stealing stuff from ASML. And

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Speaker 5: I'll take one case. ASML makes a SUITAE my conductor

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Speaker 5: laser technology. Tokyo Electron is a big competitor. Nikon's a

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Speaker 5: big competitor. They compete, they out innovate, They don't steal

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Speaker 5: from each other. But China is stealing and they've been

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Speaker 5: caught stealing. You can't have an international system, so can

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Speaker 5: we have. Sure, you can trade, but you can't steal.

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Speaker 5: You can't cheat, okay, and you can't subsidize your private

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Speaker 5: sector to the point that their whole strategy is to

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Speaker 5: crush the opposition. That's a different economic model, to the

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Speaker 5: point that it is destructive.

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Speaker 2: That was Ram Emmanuel, US Ambassador to Japan. Coming up,

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Speaker 2: we get a view from the other side of the

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Speaker 2: aisle with Kevin McCarthy, former Speaker of the House.

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Speaker 8: So if you ask me to run the race, it's

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Speaker 8: all about Pennsylvania.

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Speaker 2: That's next on Wall Street Week on Bloomberg.

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Speaker 1: This is Bloomberg Wall Street Week with David Weston from

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Speaker 1: Bloomberg Radio.

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Speaker 2: This is special edition of Wall Street Week coming from

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Speaker 2: the Aspen Economic Strategy Group meetings in Colorado. Former Speaker

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Speaker 2: of the House Kevin McCarthy was one of those at

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Speaker 2: the meetings and we asked him about what the next

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Speaker 2: president will face, whether it is Donald Trump or Kamala Harris.

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Speaker 8: We're already facing it. We are paying more an interest

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Speaker 8: than we paid in defense, the proportion of GDP. What

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Speaker 8: dead is We haven't seen this since World War Two,

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Speaker 8: but we were fighting to save the world. Right, What

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Speaker 8: are we doing now? And it's just on a spiral

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Speaker 8: effect that if we don't do something now, the options

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Speaker 8: will be taken away for us to save those programs

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Speaker 8: that we know are so critical for this country.

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Speaker 2: In your own party, you have somebody like a Glenn

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Speaker 2: Youngkin who has some experience with business he really understands

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Speaker 2: the way a budget works. Do you have hopes that

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Speaker 2: a Glenn Youngkind who's not going to be the vice

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Speaker 2: president of nominee now a contrary to what I think

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Speaker 2: you would have preferred. Is there a voice for a

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Speaker 2: Glenn Youngkin right now in your party?

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Speaker 9: Yeah?

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Speaker 8: And you have to remember a vice president is just

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Speaker 8: one position. You pick a team and a cabinet. I

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Speaker 8: think Glenn Youngkin would be perfect a cabinet because now

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Speaker 8: not only does he have business experience, he has government

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Speaker 8: experience as a governor, that's a manager. I think governors

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Speaker 8: make better presidents.

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Speaker 1: Right.

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Speaker 8: They can't print more money, but they have to balance

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Speaker 8: a budget, they have to run agencies they didn't create,

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Speaker 8: and they have to work with both sides of the aisle.

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Speaker 8: And what Glenn also did was understand the importance of

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Speaker 8: education and the power of what that changes individual lives.

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Speaker 8: I think Glenn inside would be fabulous, And there's a

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Speaker 8: lot of people out there that I think can add

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Speaker 8: to the ticket to actually make it more powerful on

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Speaker 8: both sides.

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Speaker 2: You've said that you think Donald Trump is a changed

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Speaker 2: man after that attempt on his life. You've seen him,

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Speaker 2: you've dealt with him, you believe that. Is he a

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Speaker 2: changed man when it comes to economic policy.

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Speaker 8: You know, there's certain things that he believed long before

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Speaker 8: he ever ran, and some of them are really we're

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Speaker 8: Republican ideas in the turn of the century. You know,

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Speaker 8: he believes in a strong nation. He's always said that,

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Speaker 8: he believes that tariffs not let other countries have their.

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Speaker 1: Way about him.

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Speaker 8: Get mad at the way he delivered, but he was

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Speaker 8: one hundred percent right when he went to NATO and said,

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Speaker 8: you got to pay more. You promised all this time,

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Speaker 8: and these other people would invade. He gives America greater strength.

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Speaker 8: The only time Putin never invaded as he was in

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Speaker 8: charge was under Trump's administration. So, I mean, there's certain

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Speaker 8: things he fundamentally believes, but he does get by being

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Speaker 8: a business person. Now that may set people off differently

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Speaker 8: because he'll say things that seem out of the ballpark

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Speaker 8: for a politician, but it's not for a business person

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Speaker 8: who's negotiating.

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Speaker 2: Well, what about the other side. I understand you're a Republican,

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Speaker 2: but now have Kamala Harris. Does she have an opportunity

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Speaker 2: to make some sort of a pivot on bidnamics that

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Speaker 2: might make sense towards the center. Do you have any

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Speaker 2: hope of that she does.

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Speaker 8: But you want to look at history what's interesting, and

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Speaker 8: this race is totally different. The last six weeks of

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Speaker 8: politics in America is something we probably will never see again.

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Speaker 8: A top candidate being convicted, a debate that a sitting

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Speaker 8: president collapses on an assassination attempt you probably haven't seen

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Speaker 8: since the sixties, and the president pulling out. Now the

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Speaker 8: vice president is a part of that ticket, so all

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Speaker 8: those policy things she's still rapped to. She comes from

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Speaker 8: San Francisco, so she comes from being in the Senate.

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Speaker 8: She was rated as the furthest to the other side.

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Speaker 8: But it's a new day for Democrats when they were

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Speaker 8: about to completely can collapse. But it looks a lot

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Speaker 8: a lot like nineteen eighty eight. Do Caucus becomes the nominee.

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Speaker 8: He's a liberal governor from Massachusetts and picks a moderate

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Speaker 8: Democrat senator from Texas. He's ahead by seventeen points mid

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Speaker 8: July coming out of their convention. You got George Bush

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Speaker 8: behind being the VP. He picks this young senator from

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Speaker 8: the Midwest that doesn't take off very well. Right, sounds similar,

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Speaker 8: But what happened you saw those policies come out across

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Speaker 8: the Willie horton the week on crime when crime's a

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Speaker 8: big concern to people. Then you saw the moment of

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Speaker 8: Ducaucus in a tank, So the question became are they

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Speaker 8: prepared for the three am call? Then you got that

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Speaker 8: moment in time in a debate or you still opposed

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Speaker 8: to the death penal even if your wife was raped?

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Speaker 8: And he said yes. So it was out of step

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Speaker 8: where America was. So it really did come down to

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Speaker 8: policies and lo and behold, George Bush had a really

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Speaker 8: big election. I don't know if that happens there now.

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Speaker 8: But you've got a history of Kamala starting very strong

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Speaker 8: in campaigns, but as the campaign goes, she doesn't do

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Speaker 8: as well. Now this is a short campaign, so maybe

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Speaker 8: advantage to her, but she has a long history of

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Speaker 8: the policies that are kind of out of step when

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Speaker 8: it comes to crime, inflation, and the border, and she

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Speaker 8: had a responsibility for it. So she's going to have

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Speaker 8: to overcome that. Now Trump has a ceiling to where

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Speaker 8: he was before and the last presidential race, Biden won

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Speaker 8: it by forty nine hundred eight team votes. So if

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Speaker 8: you ask me to run the race. It's all about Pennsylvania.

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Speaker 8: If Trump only kept the states that he won last

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Speaker 8: time when he lost, and he only picked up Pennsylvania

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Speaker 8: and Georgia and won the majority of votes in Maine,

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Speaker 8: that's two seventy he wins. So it's going to be

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Speaker 8: interesting that Kamla It's got the ability to pick her

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Speaker 8: VP candidate after knowing all the cards are held out.

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Speaker 2: It's an advantage to her.

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Speaker 9: Where does she go?

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Speaker 2: Well, that sounds like instead of picking a senator from Texas,

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Speaker 2: she said, pick a governor from Pennsylvania named Shapiro. Is

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Speaker 2: your advice to her?

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Speaker 8: No, I don't want to give her good advice.

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Speaker 2: I pick somebody else.

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Speaker 8: Look, I think Shapiro would be smart, just as I

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Speaker 8: thought if you picked Youngkin. It's like a game of chess.

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Speaker 8: You want to put more states in play. It would

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Speaker 8: have put Virginia in play and it would have been

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Speaker 8: a better play down. But she may look to Arizona

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Speaker 8: thinking she could play out West right, Deny Trump, Arizona,

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Speaker 8: Nevada reshape the debate when it comes to the border.

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Speaker 8: Mark Kelly being an astronaut, he's a very interesting Hitit

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Speaker 8: go to Tim Walls, a manager I think if she's

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Speaker 8: being a senator, I'd pick a governor, a manager, right

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Speaker 8: and try to get away from what she's already tried

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Speaker 8: to those policies. But look, you're ninety nine days out.

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Speaker 8: The advice i'd give anybody, I would listen to Al Davis,

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Speaker 8: just win, baby, whatever it takes, just win.

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Speaker 2: That was former House Speaker Kevin McCarthy. Wall Street Week

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Speaker 2: traveled to Colorado this week for the Aspen Economic Strategy

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Speaker 2: Group meetings, and the focus on the FED and where

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Speaker 2: it is in an extraordinary period. This included a pandemic

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Speaker 2: and a series of dramatic rate increases was very much

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Speaker 2: a topic of conversation. MIT Professor of economics Kristin Forbes

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Speaker 2: has studied rate cycles through history and took the opportunity

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Speaker 2: in Aspen to put what we're seeing into a broader context.

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Speaker 4: There had been a leaning before the pandemic and the

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Speaker 4: post pandemic inflation to wait till you saw inflation, until

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Speaker 4: you saw the weights of the eyes of inflation. And

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Speaker 4: mcalesson has learned need to allow center banks to be preemptive.

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Speaker 4: They need to be able to start raising interest rates

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Speaker 4: ahead of time when they think prices are going to

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Speaker 4: pick up quickly. Related to that, I think an important

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Speaker 4: lesson we've learned is that as economists central bankers, we

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Speaker 4: focus on inflation. So there's a lot of discussion now

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Speaker 4: on how inflation is coming back. It's heading back to

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Speaker 4: two percent. This has been a remarkably pain free recovery,

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Speaker 4: but it hasn't been paid free. The price level has increased.

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Speaker 4: It's more expensive for consumers to buy what they need

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Speaker 4: to buy to keep their households afloat. And is the

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Speaker 4: economists we forget that this price of a basket of

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Speaker 4: goods matters to people. Things are more expensive. Is the

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Speaker 4: price level that matters to people, not just the rate

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Speaker 4: of change of prices. So I think we've learned an

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Speaker 4: important lesson that the level of prices does matter. Even

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Speaker 4: if inflation comes back down, the increase in inflation and

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Speaker 4: the interim can be painful.

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Speaker 2: You're an economist, of course, not a politician, But I

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Speaker 2: wonder what you just said, Well, that might help explain

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Speaker 2: something that I find remarkable. The economy is quite strong

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Speaker 2: in the United States right now, and yet a lot

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Speaker 2: of people don't feel good about it, and we keep

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Speaker 2: saying we inflation is coming down we're getting our control,

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Speaker 2: and it doesn't seem to be registering.

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Speaker 4: Yeah, I think that's exactly why is that as economists

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Speaker 4: we see inflation coming down heading to two percent, they

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Speaker 4: think everything's fine. If you look at actually where we

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Speaker 4: are in this cycle, it's quite remarkable. We have had

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Speaker 4: remarkable swings where unemployment increase and now it's come back down.

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Speaker 4: We saw GDP growth collapse and now it's come back.

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Speaker 4: So things look good in terms of the finish point.

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Speaker 4: Inflation is coming down too, but yet in the interim

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Speaker 4: we sell the price level increase and everything just costs more.

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Speaker 4: So even though the endpoint looks good, there's been a

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Speaker 4: lot of pain to get there.

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Speaker 2: You've said that we should not wait till we see

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Speaker 2: the whites of the eyes of inflation. That means they

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Speaker 2: should be a little faster on the trigger. Is a

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Speaker 2: correlaor that that they should be more flexible and coming

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Speaker 2: back down as well. I mean there's some sense, but

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Speaker 2: once we start moving in one direction, we have to

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Speaker 2: keep going in that direction. We're even talking about that

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Speaker 2: now with cuts. Once they start to keep going, do

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Speaker 2: they have to be a little more flexible on the

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Speaker 2: up and down sides?

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Speaker 4: So I think another lesson we've learned is that central

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Speaker 4: banks need to be cautious about boxing themselves in ahead

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Speaker 4: of time. There's always there's always surprises. You need to

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Speaker 4: keep your options open to go in both directions, and

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Speaker 4: you need to be able to pivot quickly. I think

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Speaker 4: part of the reason why central banks were slow raising

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Speaker 4: interest rates this time is they had locked themselves into

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Speaker 4: so much forward guidance, locked themselves into asset purchases. It

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Speaker 4: was slow to pivot when the situation changed. And similar

440
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Speaker 4: now as we're looking forward, there could be some major

441
00:22:20,400 --> 00:22:23,560
Speaker 4: changes in economic policy, which might mean the central bank

442
00:22:23,600 --> 00:22:26,480
Speaker 4: will have to change policy quickly, so they should keep

443
00:22:26,520 --> 00:22:27,680
Speaker 4: options open going forward.

444
00:22:28,320 --> 00:22:31,480
Speaker 2: In law, we say hard cases make bad law. Is

445
00:22:31,480 --> 00:22:33,440
Speaker 2: there an equivalence in economics?

446
00:22:33,480 --> 00:22:37,760
Speaker 4: The change in the FEDS mandate and how it responded

447
00:22:38,080 --> 00:22:41,520
Speaker 4: was partly a response to the decades of very low inflation,

448
00:22:41,640 --> 00:22:44,480
Speaker 4: where people were less worried about inflation picking up, and

449
00:22:44,520 --> 00:22:47,080
Speaker 4: now we're seeing the oppositeere inflation can pick up quite quickly.

450
00:22:47,400 --> 00:22:50,600
Speaker 4: So as central banks go back and rethink mandates that

451
00:22:50,680 --> 00:22:53,720
Speaker 4: should be front and centers, we rethink mandates for all

452
00:22:53,720 --> 00:22:55,119
Speaker 4: different scenarios going forward.

453
00:22:55,400 --> 00:22:59,200
Speaker 2: You've done research and analysis about the sort of rate

454
00:22:59,240 --> 00:23:02,520
Speaker 2: cycles going back quite a way. Was this one different

455
00:23:02,520 --> 00:23:03,160
Speaker 2: from all the others?

456
00:23:03,280 --> 00:23:07,159
Speaker 4: Yeah, great question, which fascinating when you look at this

457
00:23:07,200 --> 00:23:09,959
Speaker 4: most recent rate cycle. There's some ways this is unique

458
00:23:10,000 --> 00:23:12,920
Speaker 4: and unprecedented. There's other ways it's just like great cycles

459
00:23:12,960 --> 00:23:16,240
Speaker 4: from the nineteen eighties and nineteen nineties. We recently wrote

460
00:23:16,240 --> 00:23:18,200
Speaker 4: a long paper on this for CenTra with a couple

461
00:23:18,280 --> 00:23:20,639
Speaker 4: co authors at the World Bank, and we described this

462
00:23:20,720 --> 00:23:23,240
Speaker 4: rate cycle as similar to the parable of the blind

463
00:23:23,240 --> 00:23:25,480
Speaker 4: men and the elephant. In some ways, it's like nothing

464
00:23:25,520 --> 00:23:27,639
Speaker 4: that's come before. In some ways it's a lot like

465
00:23:27,640 --> 00:23:30,200
Speaker 4: past cycles. But let me give you a concrete example

466
00:23:30,200 --> 00:23:32,399
Speaker 4: of some ways this is unique that we haven't seen before.

467
00:23:32,680 --> 00:23:35,840
Speaker 4: One is just the swings in economic activity, the collapse

468
00:23:35,840 --> 00:23:39,720
Speaker 4: in activity, the collapse in employment, and then also the rebound.

469
00:23:39,720 --> 00:23:42,520
Speaker 4: We've never seen such a quick rebound in the labor market,

470
00:23:42,600 --> 00:23:46,200
Speaker 4: in activity, and in inflation. Another way the cycle has

471
00:23:46,200 --> 00:23:48,840
Speaker 4: been unique is that central banks, on average across the

472
00:23:48,880 --> 00:23:51,840
Speaker 4: advanced economies were slow to respond to the pickup in

473
00:23:51,880 --> 00:23:55,400
Speaker 4: inflation and recovery, but then they responded by being unusually

474
00:23:55,400 --> 00:23:58,119
Speaker 4: aggressive to make up for being slow. So it's the

475
00:23:58,160 --> 00:24:01,080
Speaker 4: most synchronized period of rate high we have ever had,

476
00:24:01,160 --> 00:24:03,480
Speaker 4: at least in the data I've looked at since nineteen seventy.

477
00:24:04,119 --> 00:24:07,080
Speaker 4: And it was also followed by central banks keeping rates

478
00:24:07,119 --> 00:24:09,720
Speaker 4: on hold for longer on average than they ever have

479
00:24:09,960 --> 00:24:13,600
Speaker 4: at their peaks, so unusually slow start, but then aggressive

480
00:24:13,640 --> 00:24:18,359
Speaker 4: response hold rates at their peaks for longer. And what's remarkable,

481
00:24:18,400 --> 00:24:22,360
Speaker 4: despite all those unprecedented characteristics of the cycle, we're now

482
00:24:22,359 --> 00:24:24,440
Speaker 4: settling about where you settle two and a half to

483
00:24:24,480 --> 00:24:26,160
Speaker 4: three years after you start hiking rates.

484
00:24:26,280 --> 00:24:28,240
Speaker 2: And giving your study of rate cycles, do you have

485
00:24:28,280 --> 00:24:29,879
Speaker 2: a sense because some people think we're going to end

486
00:24:29,920 --> 00:24:32,199
Speaker 2: up at a higher level than we were before you

487
00:24:32,280 --> 00:24:34,919
Speaker 2: call it our star nutur rate or whatever. Other people say, no,

488
00:24:34,920 --> 00:24:36,600
Speaker 2: we're going to go back down to lower rates. Do

489
00:24:36,640 --> 00:24:37,439
Speaker 2: you have a view on that?

490
00:24:38,040 --> 00:24:41,280
Speaker 4: So, based on my study of historic rate cycles, what

491
00:24:41,359 --> 00:24:43,600
Speaker 4: it suggests is rates may not go down as low

492
00:24:43,640 --> 00:24:46,320
Speaker 4: as most people expecting, or say the FEDS dot plot

493
00:24:46,359 --> 00:24:50,160
Speaker 4: is predicting. Based on this historical comparison, looks like things

494
00:24:50,200 --> 00:24:52,840
Speaker 4: are largely normalizing now where you would at this point

495
00:24:52,840 --> 00:24:56,600
Speaker 4: in a rate cycle, which means rates are probably settling

496
00:24:56,720 --> 00:24:59,320
Speaker 4: not far off where they're going to settle in rates

497
00:24:59,359 --> 00:25:03,080
Speaker 4: now about five in a quarter, which means they would

498
00:25:03,119 --> 00:25:04,920
Speaker 4: not be going all the way down to the sort

499
00:25:04,960 --> 00:25:07,200
Speaker 4: of three two and a quarter three and a half

500
00:25:07,240 --> 00:25:10,040
Speaker 4: that is in the FED stop plight right now, given

501
00:25:10,119 --> 00:25:12,560
Speaker 4: where all the other measures of economic activity are.

502
00:25:13,160 --> 00:25:18,840
Speaker 2: That was MIT economics professor Kristin Forbes coming up some

503
00:25:18,920 --> 00:25:21,680
Speaker 2: thoughts on what Vice President Harris needs to think about

504
00:25:21,800 --> 00:25:24,880
Speaker 2: as she resets the presidential campaign. From the man who

505
00:25:24,920 --> 00:25:28,359
Speaker 2: oversaw policy and speech writing for George Herbert Walker Bush

506
00:25:28,520 --> 00:25:29,480
Speaker 2: is Bob Zelik.

507
00:25:29,840 --> 00:25:30,840
Speaker 7: She's got to step.

508
00:25:30,560 --> 00:25:33,479
Speaker 10: Out of the shadow inherit some of the benefits, but

509
00:25:33,560 --> 00:25:35,640
Speaker 10: reintroduce herself to the public.

510
00:25:37,119 --> 00:25:39,440
Speaker 2: That's next on Wall Street Week on Bloomberg.

511
00:25:40,840 --> 00:25:45,080
Speaker 1: This is Bloomberg Wall Street Week with David Weston from

512
00:25:45,200 --> 00:25:46,119
Speaker 1: Bloomberg Radio.

513
00:25:52,640 --> 00:25:54,840
Speaker 2: This is a special addition to Wall Street Week, coming

514
00:25:54,880 --> 00:25:58,440
Speaker 2: to you from the Aspen Economic Strategy Group meetings. Kamala

515
00:25:58,480 --> 00:26:00,760
Speaker 2: Harris is trying to move from Vice president to be

516
00:26:00,800 --> 00:26:03,960
Speaker 2: elected as president. The last person to do that was

517
00:26:04,000 --> 00:26:07,600
Speaker 2: George Herbert Walker Bush, and before his service as World

518
00:26:07,600 --> 00:26:10,720
Speaker 2: Bank President and Deputy Secretary of State, Bob Zelik ran

519
00:26:10,880 --> 00:26:14,600
Speaker 2: policy and speech writing for the Bush campaign. He shared

520
00:26:14,640 --> 00:26:17,800
Speaker 2: with US his thoughts on the road ahead for miss Harris.

521
00:26:19,680 --> 00:26:23,280
Speaker 2: Vice president is clearly an in the shadow position. So

522
00:26:23,440 --> 00:26:26,160
Speaker 2: one of the challenges for Bush in eighty eight and

523
00:26:26,240 --> 00:26:29,760
Speaker 2: now for Vice President Harris is she's got to step

524
00:26:29,800 --> 00:26:32,719
Speaker 2: out of the shadow inherit some of the benefits, but

525
00:26:32,800 --> 00:26:37,560
Speaker 2: reintroduce herself to the public. She also has to try

526
00:26:37,560 --> 00:26:40,560
Speaker 2: to figure out how she's going to define her opponent,

527
00:26:41,320 --> 00:26:43,600
Speaker 2: and she's got relatively short time to do that. So

528
00:26:44,760 --> 00:26:48,919
Speaker 2: Bush used his convention speech to very good effect to

529
00:26:49,040 --> 00:26:52,520
Speaker 2: kind of reintroduce himself, talk about his background, his story,

530
00:26:52,600 --> 00:26:54,879
Speaker 2: kind of his mission. Critically, why do you want to

531
00:26:54,880 --> 00:26:55,359
Speaker 2: be president?

532
00:26:55,480 --> 00:26:55,640
Speaker 4: Yeah?

533
00:26:55,720 --> 00:26:56,639
Speaker 10: People want to hear.

534
00:26:56,520 --> 00:26:56,919
Speaker 2: That to her.

535
00:26:57,200 --> 00:26:59,560
Speaker 10: So I think that's one thing to watch. The second

536
00:26:59,760 --> 00:27:04,080
Speaker 10: is her vice presidential choice. That's always the first opportunity

537
00:27:04,119 --> 00:27:08,560
Speaker 10: for candidate to take his or her own decision. And third,

538
00:27:08,720 --> 00:27:10,920
Speaker 10: depending on what happens with the debate, that'll be another

539
00:27:10,960 --> 00:27:14,200
Speaker 10: defining area because Biden had so much trouble and now

540
00:27:14,240 --> 00:27:16,480
Speaker 10: you sort of see sort of Trump moving back and forth.

541
00:27:16,960 --> 00:27:19,560
Speaker 10: Is the one other thought that I would express on

542
00:27:19,640 --> 00:27:22,760
Speaker 10: this is that in some ways she has a strength

543
00:27:22,800 --> 00:27:27,280
Speaker 10: that Biden and George Herbert Walker Bush didn't have, which

544
00:27:27,320 --> 00:27:30,880
Speaker 10: is that she's got a very enthusiastic base. Bush didn't

545
00:27:30,920 --> 00:27:33,320
Speaker 10: have that so much on the right, and Biden had

546
00:27:33,359 --> 00:27:36,040
Speaker 10: a little bit of problem with their progressives. That actually

547
00:27:36,040 --> 00:27:38,600
Speaker 10: gives her a little room to edge towards the center

548
00:27:39,000 --> 00:27:42,040
Speaker 10: and seat of send some messages. It doesn't have to

549
00:27:42,080 --> 00:27:44,480
Speaker 10: be on big policies, but just even in terms of

550
00:27:45,040 --> 00:27:48,280
Speaker 10: language on issues that I think could could help her.

551
00:27:48,520 --> 00:27:53,119
Speaker 2: So, George Herbert Walker Bush, with whom you served, succeeded.

552
00:27:53,359 --> 00:27:57,320
Speaker 2: He won the office, but like forty states, but what

553
00:27:57,560 --> 00:28:00,680
Speaker 2: brought him to that? Was that policy or was that politics?

554
00:28:00,720 --> 00:28:03,080
Speaker 2: The vice presidential choice of Dan Quaill was not well

555
00:28:03,119 --> 00:28:05,680
Speaker 2: thought of by some people at the time, but as

556
00:28:05,720 --> 00:28:08,280
Speaker 2: I recall, one of the important things is how actually

557
00:28:09,000 --> 00:28:12,200
Speaker 2: he managed to position Michael Ducacis with the Willie horton

558
00:28:12,280 --> 00:28:14,480
Speaker 2: issues on law and order, with the tank that he

559
00:28:14,560 --> 00:28:16,359
Speaker 2: was riding around in. So how much of this for

560
00:28:16,440 --> 00:28:18,199
Speaker 2: her is going to be? Here are my positions as

561
00:28:18,200 --> 00:28:22,200
Speaker 2: opposed to not allowing the Donald Trump campaign to characterize her.

562
00:28:22,520 --> 00:28:25,000
Speaker 10: I think you need a positive but also what we

563
00:28:25,119 --> 00:28:29,200
Speaker 10: call a contrast as opposed to sort of a negative side,

564
00:28:29,359 --> 00:28:32,080
Speaker 10: because again, remember people don't really know who she is

565
00:28:32,200 --> 00:28:34,720
Speaker 10: or what she stands for. So one of the things

566
00:28:34,760 --> 00:28:38,120
Speaker 10: that Bush did in September and October. People forget this

567
00:28:38,320 --> 00:28:40,720
Speaker 10: is that we had sequences of two, three, four or

568
00:28:40,760 --> 00:28:42,920
Speaker 10: five days. He'd give a positive speech, he'd gave a

569
00:28:42,960 --> 00:28:47,080
Speaker 10: contrast speech, the venues would send a message, we'd have

570
00:28:47,120 --> 00:28:49,400
Speaker 10: the paid advertising, and would stead of hit the theme,

571
00:28:49,760 --> 00:28:50,920
Speaker 10: including on weaknesses.

572
00:28:50,960 --> 00:28:52,880
Speaker 2: So you remember we went to Boston Harbor and sort

573
00:28:52,920 --> 00:28:55,320
Speaker 2: of put the environmental issue on the map. And so

574
00:28:55,440 --> 00:28:57,680
Speaker 2: I think part of her challenge will be to find

575
00:28:57,760 --> 00:29:00,880
Speaker 2: some of those issues where she can try to do

576
00:29:01,000 --> 00:29:04,160
Speaker 2: the same now. But also, you know, politics.

577
00:29:03,800 --> 00:29:07,000
Speaker 10: Is partly political culture just messaging to people.

578
00:29:07,320 --> 00:29:08,760
Speaker 2: So Bush, as.

579
00:29:08,560 --> 00:29:10,680
Speaker 10: You mentioned with Dacaca's focused on the pledge of the

580
00:29:10,680 --> 00:29:15,000
Speaker 10: Allegiance because Ducaca said, veto to Bill about pleasure of allegiance,

581
00:29:15,480 --> 00:29:17,160
Speaker 10: and so you know, it may seem kind of basic,

582
00:29:17,200 --> 00:29:19,920
Speaker 10: but it was a message about patriotism. If I were

583
00:29:19,920 --> 00:29:23,000
Speaker 10: a Kamala Harris, I would just hammer on the notion

584
00:29:23,160 --> 00:29:25,480
Speaker 10: that I'll accept the result of the election, will you,

585
00:29:25,960 --> 00:29:28,800
Speaker 10: And I just keep hidding that because talking to me,

586
00:29:28,800 --> 00:29:30,680
Speaker 10: you don't have to go back to the twenty twenty election,

587
00:29:30,760 --> 00:29:33,280
Speaker 10: just say this election. And I think the average American

588
00:29:33,400 --> 00:29:36,000
Speaker 10: understands if this is a fair play, you got to

589
00:29:36,000 --> 00:29:36,760
Speaker 10: accept the result.

590
00:29:37,240 --> 00:29:40,240
Speaker 2: Bob, You've had a very distinguished career, a long career,

591
00:29:40,520 --> 00:29:45,000
Speaker 2: largely in international economics and trade and international economics. That

592
00:29:45,200 --> 00:29:48,000
Speaker 2: probably won't be what this elections decided on. But as

593
00:29:48,040 --> 00:29:50,440
Speaker 2: you look at Donald Trump as one candidate, Kamala Harris

594
00:29:50,480 --> 00:29:52,880
Speaker 2: is the other, what is important in terms of their

595
00:29:53,080 --> 00:29:56,400
Speaker 2: policies when it comes to international economics, Well, the two

596
00:29:56,480 --> 00:29:56,960
Speaker 2: do mix.

597
00:29:57,080 --> 00:29:59,560
Speaker 10: I mean, what we discovered is people aren't so keen

598
00:29:59,600 --> 00:30:02,200
Speaker 10: on in right, and so that's been a real drag

599
00:30:02,280 --> 00:30:06,160
Speaker 10: for Biden. And so if I were Kamala Harris, one

600
00:30:06,160 --> 00:30:08,520
Speaker 10: of the things I would do is I'd sort of look, admit,

601
00:30:08,840 --> 00:30:11,120
Speaker 10: we haven't gotten where we need to be. And by

602
00:30:11,120 --> 00:30:13,240
Speaker 10: the way, when you're the new person, you can seat

603
00:30:13,240 --> 00:30:16,520
Speaker 10: of say, look, this didn't work out exactly right, but

604
00:30:17,120 --> 00:30:20,160
Speaker 10: inflation's coming down, interest rates will probably be coming down.

605
00:30:20,320 --> 00:30:22,800
Speaker 10: But then she can hammer Trump on saying, look, if

606
00:30:22,840 --> 00:30:25,600
Speaker 10: you put on all those extra tariffs, okay, which you're

607
00:30:25,640 --> 00:30:28,680
Speaker 10: going to increase sort of inflation, you know, frankly, if

608
00:30:28,680 --> 00:30:31,680
Speaker 10: you try to job beyond the Fed on interest rates,

609
00:30:31,720 --> 00:30:34,840
Speaker 10: if you try to deport sort of all these people

610
00:30:35,160 --> 00:30:37,680
Speaker 10: you're going to have a very bad effect on inflation,

611
00:30:37,760 --> 00:30:40,880
Speaker 10: and markets will react. It's a good example, David of

612
00:30:40,960 --> 00:30:43,920
Speaker 10: kind of how she needs to take a positive position

613
00:30:44,240 --> 00:30:46,760
Speaker 10: but then also sort of turn it, I mean, take

614
00:30:46,800 --> 00:30:49,960
Speaker 10: another one where obviously she's already set on abortion. That's

615
00:30:50,040 --> 00:30:53,160
Speaker 10: a very powerful issue for her and that's a part

616
00:30:53,160 --> 00:30:55,360
Speaker 10: of her base. But at the same time, what she

617
00:30:55,400 --> 00:30:58,560
Speaker 10: can also do is, you know, hammer Trump on sort

618
00:30:58,600 --> 00:31:01,200
Speaker 10: of well, look the reason we lostro V Wade, but

619
00:31:01,280 --> 00:31:04,480
Speaker 10: then Hammerman is waffling. But also if she could sort

620
00:31:04,480 --> 00:31:07,640
Speaker 10: of say, look, this is my position, but I understand

621
00:31:07,680 --> 00:31:10,120
Speaker 10: people that have a different view on life. You know,

622
00:31:10,200 --> 00:31:14,080
Speaker 10: the abortions are very sad issue, and you know, support adoption.

623
00:31:14,640 --> 00:31:17,080
Speaker 10: These are little ways that she can be consistent with

624
00:31:17,120 --> 00:31:19,880
Speaker 10: her base, but also kind of signal look, don't put

625
00:31:19,920 --> 00:31:22,400
Speaker 10: me into the box, because Trump's going to try to

626
00:31:22,440 --> 00:31:24,840
Speaker 10: put her in the as you said, you know, radical

627
00:31:24,880 --> 00:31:26,280
Speaker 10: San Francisco liberal box.

628
00:31:26,760 --> 00:31:29,120
Speaker 2: So you mentioned it is really tricky to both have

629
00:31:29,200 --> 00:31:31,680
Speaker 2: continuity with it. Came before it was George herb at

630
00:31:31,720 --> 00:31:35,560
Speaker 2: Walker Bush with Reagan. This time it's Kamala Harris with Biden.

631
00:31:35,600 --> 00:31:37,880
Speaker 2: At the same time, you're saying you're somewhat different. And

632
00:31:37,960 --> 00:31:40,400
Speaker 2: let me give you a specific example, the border, which

633
00:31:40,440 --> 00:31:43,840
Speaker 2: they're going to necessarily tar her with because she was

634
00:31:43,880 --> 00:31:46,960
Speaker 2: assigned to some immigration issues that has not gone so well.

635
00:31:47,120 --> 00:31:50,200
Speaker 2: What does she do to not just throw over everything

636
00:31:50,240 --> 00:31:53,320
Speaker 2: to Joe Biden had said, but also have a break.

637
00:31:53,560 --> 00:31:56,560
Speaker 10: Another good example. You know, when you got an issue

638
00:31:56,560 --> 00:31:58,880
Speaker 10: like that that matters to people, you got to face

639
00:31:58,920 --> 00:32:02,080
Speaker 10: it direct. Okay, she needs to say, we haven't done

640
00:32:02,120 --> 00:32:03,240
Speaker 10: everything that we need to.

641
00:32:03,600 --> 00:32:05,400
Speaker 2: You know, we're going to have to do better on this.

642
00:32:05,840 --> 00:32:07,000
Speaker 10: And then, however, she.

643
00:32:07,000 --> 00:32:10,720
Speaker 2: Has a gift because there was a bill from the

644
00:32:10,800 --> 00:32:12,960
Speaker 2: Senate that Republican Center.

645
00:32:12,800 --> 00:32:13,959
Speaker 7: Lank For encouraged.

646
00:32:14,320 --> 00:32:15,680
Speaker 2: That's got a lot of good issues.

647
00:32:15,720 --> 00:32:18,080
Speaker 10: She should talk about those and say Trump's the one

648
00:32:18,080 --> 00:32:21,040
Speaker 10: who torpedoed this and so and by the way, you

649
00:32:21,040 --> 00:32:24,000
Speaker 10: know what did Trump's expensive border wall do? Did that

650
00:32:24,040 --> 00:32:26,240
Speaker 10: sort of solve the problem? And by the way, if

651
00:32:26,240 --> 00:32:28,520
Speaker 10: you deport all these people, what's that going to do?

652
00:32:28,920 --> 00:32:31,680
Speaker 10: On both a humanitarian and an economic sect. So it's

653
00:32:31,720 --> 00:32:34,440
Speaker 10: a good example acknowledge where you need to do better.

654
00:32:34,560 --> 00:32:36,600
Speaker 2: One of the big issues for both parties has been

655
00:32:36,720 --> 00:32:40,200
Speaker 2: our dealings with China economically and otherwise. But specifically on

656
00:32:40,240 --> 00:32:43,200
Speaker 2: the economic dealings with China. Does she try to distance

657
00:32:43,200 --> 00:32:45,640
Speaker 2: herself or really depart from what Donald Trump is saying

658
00:32:45,800 --> 00:32:47,720
Speaker 2: or are they pretty much in the same lane.

659
00:32:48,160 --> 00:32:49,840
Speaker 10: I think the way that I would try to deal

660
00:32:49,840 --> 00:32:53,320
Speaker 10: with the Chinese issue for her, given her background, is

661
00:32:53,400 --> 00:32:55,760
Speaker 10: to take a strong position on defense. You talked about

662
00:32:55,760 --> 00:32:59,600
Speaker 10: Michael Dukakis and the tank. Every presidential candidate has to

663
00:32:59,600 --> 00:33:02,160
Speaker 10: demons straight that they're up for the number one job,

664
00:33:02,200 --> 00:33:05,600
Speaker 10: which is the defense of the country. And so interestingly,

665
00:33:05,800 --> 00:33:10,920
Speaker 10: under both Trump and Biden, the defense modernization did really

666
00:33:10,920 --> 00:33:12,040
Speaker 10: go where it needed to go.

667
00:33:12,440 --> 00:33:13,720
Speaker 2: So she should say this is.

668
00:33:13,720 --> 00:33:15,440
Speaker 10: The point she's going to stress and that she's going

669
00:33:15,480 --> 00:33:18,360
Speaker 10: to focus on modernization. She's going to work with allies

670
00:33:18,400 --> 00:33:21,520
Speaker 10: where Trump has had that sort of possibility. So I

671
00:33:21,520 --> 00:33:24,600
Speaker 10: don't think she has to be hostile, but she needs

672
00:33:24,640 --> 00:33:27,240
Speaker 10: to understand if we're going to be effective in deterrence,

673
00:33:27,320 --> 00:33:30,720
Speaker 10: we need to be able to have the military. And then, frankly,

674
00:33:30,880 --> 00:33:32,840
Speaker 10: this is where she should take an issue like AI

675
00:33:33,400 --> 00:33:37,160
Speaker 10: and look, it's now reversed. Where Biden was the old guy,

676
00:33:37,240 --> 00:33:39,880
Speaker 10: now Trump's the old guy, so she should own the future.

677
00:33:39,960 --> 00:33:42,560
Speaker 10: She should say, look, AI is an important part of

678
00:33:42,560 --> 00:33:46,480
Speaker 10: our future. The Republican Convention, however, sort of dismissed any

679
00:33:46,520 --> 00:33:49,520
Speaker 10: of the safety concerns. But hasn't everybody watched what just

680
00:33:49,560 --> 00:33:50,560
Speaker 10: happened with CrowdStrike.

681
00:33:50,840 --> 00:33:52,720
Speaker 2: You know. CrowdStrike was the guy who was supposed to

682
00:33:52,800 --> 00:33:56,600
Speaker 2: be helping dealing with cybersecurity. So whether it's biological security,

683
00:33:56,640 --> 00:33:59,640
Speaker 2: whether it's sort of some of the issues.

684
00:33:59,240 --> 00:34:02,160
Speaker 10: On the cyber aarya, and so, to be honest, I

685
00:34:02,200 --> 00:34:05,320
Speaker 10: think she's got an interesting hand to play. But you know,

686
00:34:05,400 --> 00:34:08,440
Speaker 10: we'll watch watch the convention speech, watch the VP selection,

687
00:34:08,680 --> 00:34:11,839
Speaker 10: watch the debate, and then if she could take two

688
00:34:11,920 --> 00:34:14,040
Speaker 10: or three of these issues we're talking about, you know,

689
00:34:14,160 --> 00:34:17,400
Speaker 10: and just sort of sort of move on them, and frankly,

690
00:34:17,400 --> 00:34:19,640
Speaker 10: I think it'll drive Trump nuts, and that's the best

691
00:34:19,680 --> 00:34:20,400
Speaker 10: thing she can do.

692
00:34:21,280 --> 00:34:24,600
Speaker 2: Each year we ask those attending the Aspen Economic Strategy

693
00:34:24,600 --> 00:34:27,680
Speaker 2: Group meetings about what they're reading or what they've read

694
00:34:27,719 --> 00:34:31,279
Speaker 2: that they recommend this year. Before giving us his recommendation,

695
00:34:31,680 --> 00:34:34,759
Speaker 2: US Ambassador to Japan Ram Emmanuel told us about the

696
00:34:34,800 --> 00:34:38,440
Speaker 2: library in his official residence in Tokyo and his efforts

697
00:34:38,520 --> 00:34:39,279
Speaker 2: to beef it up.

698
00:34:41,120 --> 00:34:45,160
Speaker 5: So one day early on in my tenure, the person's

699
00:34:45,160 --> 00:34:46,920
Speaker 5: a little late, so I actually go over and look

700
00:34:46,920 --> 00:34:49,560
Speaker 5: at the books and it's tokyo on five dollars a

701
00:34:49,640 --> 00:34:51,360
Speaker 5: day of kid So it's stuff that you leave, you know,

702
00:34:51,680 --> 00:34:54,120
Speaker 5: behind at a hotel and it said a better breakfast.

703
00:34:54,200 --> 00:34:58,520
Speaker 7: It is a mess. And I love libraries.

704
00:34:59,280 --> 00:35:01,000
Speaker 5: I do read on a kindle now, but I love

705
00:35:01,160 --> 00:35:02,960
Speaker 5: We have three at our home in Chicago. I just

706
00:35:03,040 --> 00:35:07,040
Speaker 5: love them, and I Amy and I decide that's going

707
00:35:07,120 --> 00:35:09,800
Speaker 5: to be our project, so I know you find it

708
00:35:09,880 --> 00:35:12,720
Speaker 5: heart to believe. I raised one hundred and fifty thousand dollars.

709
00:35:12,920 --> 00:35:16,160
Speaker 5: This is initiated pretty quickly. And there's two things. So

710
00:35:17,080 --> 00:35:20,840
Speaker 5: we redid about four hundred and fifty to five hundred books,

711
00:35:21,640 --> 00:35:24,960
Speaker 5: all on the presidential history, great American literature and poetry,

712
00:35:25,600 --> 00:35:28,839
Speaker 5: great American events. Then we did a section on both

713
00:35:29,040 --> 00:35:33,600
Speaker 5: Japanese history, Japanese authors, literature, et cetera. And it's a

714
00:35:33,680 --> 00:35:40,440
Speaker 5: traditional Americana beautiful library with gold at the top, and

715
00:35:40,480 --> 00:35:43,640
Speaker 5: it's all walnut wood paneling, if you can kind of

716
00:35:43,640 --> 00:35:46,120
Speaker 5: put that in your mind's eye. And the books are

717
00:35:46,160 --> 00:35:48,160
Speaker 5: worthy of the library, and the library is worthy of

718
00:35:48,160 --> 00:35:48,759
Speaker 5: the books.

719
00:35:49,120 --> 00:35:52,040
Speaker 2: Not surprisingly, Ram Emanuel is quite a reader.

720
00:35:52,520 --> 00:35:52,920
Speaker 1: One of the.

721
00:35:52,880 --> 00:35:55,680
Speaker 2: Books he recommends highly is about The Plight of Males

722
00:35:55,760 --> 00:36:00,840
Speaker 2: in our Society Today. Of Boys and Men by Richard Reeves.

723
00:36:00,760 --> 00:36:03,200
Speaker 5: On kind of sociology. The two things that I do

724
00:36:03,320 --> 00:36:06,640
Speaker 5: this one of boys and men. I think we have

725
00:36:06,680 --> 00:36:13,480
Speaker 5: a challenge at home, specifically among boys and men. And

726
00:36:13,520 --> 00:36:18,000
Speaker 5: I think I always do. One sociological book this year

727
00:36:18,480 --> 00:36:22,640
Speaker 5: was I Went back Bowling Alone. You know what ye

728
00:36:22,840 --> 00:36:25,960
Speaker 5: came out two thousand and When you think about where

729
00:36:26,000 --> 00:36:28,080
Speaker 5: America is, you think about the opiate crisis, you think

730
00:36:28,080 --> 00:36:33,759
Speaker 5: about the law of community, etc. How one professor looking

731
00:36:33,800 --> 00:36:38,919
Speaker 5: at data three turns ahead, realizes where America is going?

732
00:36:39,320 --> 00:36:41,920
Speaker 2: It kind of is. Jen Dooliac of Arnold Venture spends

733
00:36:41,960 --> 00:36:45,200
Speaker 2: her life researching and then writing out her results. So

734
00:36:45,280 --> 00:36:47,319
Speaker 2: she pointed us in the direction of a book about

735
00:36:47,360 --> 00:36:51,480
Speaker 2: the difficulties in the creative process and how to overcome roadblocks.

736
00:36:51,800 --> 00:36:54,279
Speaker 2: The War of Art by Stephen Pressfield.

737
00:36:55,040 --> 00:36:57,360
Speaker 9: So one of my all time favorites is called The

738
00:36:57,360 --> 00:37:02,600
Speaker 9: War of Art by Stephen Pressfield. Was a longtime researcher,

739
00:37:02,640 --> 00:37:05,640
Speaker 9: which meant my job was mostly writing. Still is in

740
00:37:05,680 --> 00:37:10,239
Speaker 9: many ways, and this book is basically all about how

741
00:37:10,280 --> 00:37:12,920
Speaker 9: if you are engaged in any kind of creative pursuit,

742
00:37:13,400 --> 00:37:16,439
Speaker 9: you have to just show up and work every day,

743
00:37:16,960 --> 00:37:19,880
Speaker 9: have a routine, show up at your desk, be a professional.

744
00:37:20,600 --> 00:37:23,959
Speaker 9: Waiting for inspiration to strike is not the way any

745
00:37:24,000 --> 00:37:27,680
Speaker 9: sort of any professional writer or creative is actually going

746
00:37:27,719 --> 00:37:30,239
Speaker 9: to have their big ideas or get things done.

747
00:37:30,440 --> 00:37:34,120
Speaker 2: As President and COO Blackstone, John Gray spends much of

748
00:37:34,160 --> 00:37:37,080
Speaker 2: his time dealing with challenging situations, but not half so

749
00:37:37,160 --> 00:37:40,120
Speaker 2: difficult as those faced by the survivors of the eighteenth

750
00:37:40,120 --> 00:37:43,320
Speaker 2: century shipwreck told in the book he recommends The Wager,

751
00:37:43,520 --> 00:37:45,960
Speaker 2: a tale of shipwreck, mutiny and murder.

752
00:37:46,719 --> 00:37:49,239
Speaker 11: More recently, I read The Wager, which was about a

753
00:37:49,280 --> 00:37:53,719
Speaker 11: failed British expedition to chase down some Spanish ships in

754
00:37:53,840 --> 00:37:58,320
Speaker 11: the seventeen forties, and I'm often interested in these people

755
00:37:58,320 --> 00:38:03,040
Speaker 11: who face incredible challenge and when they survive and that perseverance.

756
00:38:03,120 --> 00:38:06,240
Speaker 11: Shackleton was like that as well. You know, in business

757
00:38:06,239 --> 00:38:09,040
Speaker 11: and investing, oftentimes things go wrong, not as bad as

758
00:38:09,040 --> 00:38:11,239
Speaker 11: those books, but you learn a little bit and you

759
00:38:11,320 --> 00:38:14,120
Speaker 11: want to be smarter how to deal with crises and challenges.

760
00:38:15,000 --> 00:38:15,560
Speaker 7: That does it.

761
00:38:15,640 --> 00:38:18,520
Speaker 2: For this episode of Wall Street Week from Aspen, Colorado,

762
00:38:18,760 --> 00:38:21,720
Speaker 2: I'm David Weston. This is Bloomberg. See you next week.

763
00:38:21,840 --> 00:38:22,919
Speaker 2: Back in New York,