1 00:00:02,520 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 2 00:00:13,840 --> 00:00:17,920 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:22,000 Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business App. 4 00:00:22,360 --> 00:00:25,680 Speaker 1: Listen on demand wherever you get your podcasts, or watch 5 00:00:25,760 --> 00:00:27,240 Speaker 1: us live on YouTube. 6 00:00:27,640 --> 00:00:30,480 Speaker 2: Joining us now, someone who is a foundation of Bloomberg 7 00:00:30,880 --> 00:00:34,640 Speaker 2: Surveillance and all we've done for decades. Ghen writing definitive 8 00:00:34,720 --> 00:00:39,760 Speaker 2: at bear Stearns years ago preing capital Right now, let 9 00:00:39,880 --> 00:00:42,280 Speaker 2: John thank you so much for coming in. The clear 10 00:00:42,600 --> 00:00:46,800 Speaker 2: message I received on the trip to Phoenix among people 11 00:00:47,400 --> 00:00:52,160 Speaker 2: that are optimistic about American GDP are innovation or manufacturing, 12 00:00:52,560 --> 00:00:55,160 Speaker 2: is why in God's name are we talking about cutting 13 00:00:55,280 --> 00:00:58,800 Speaker 2: interest rates? What's the case now for cutting rates? 14 00:00:59,320 --> 00:01:01,280 Speaker 3: I don't think there is one. I think there's a 15 00:01:01,320 --> 00:01:04,400 Speaker 3: case for racing rates. If you look at the ism 16 00:01:04,440 --> 00:01:07,160 Speaker 3: reports that we had on Monday for manufacturing and yesterday 17 00:01:07,160 --> 00:01:09,959 Speaker 3: for services, and you put them together, you have a clear, 18 00:01:10,360 --> 00:01:15,160 Speaker 3: very strong uptrend. You've an economy growing above potential. The 19 00:01:15,200 --> 00:01:19,679 Speaker 3: administration itself says the economy is doing well so and 20 00:01:19,800 --> 00:01:22,840 Speaker 3: inflation's above the fetch target, and we still have the 21 00:01:22,920 --> 00:01:26,640 Speaker 3: tariff feedthrough to fully work through and the oil price 22 00:01:26,680 --> 00:01:30,560 Speaker 3: shot of an unknown magnitude. I think there is no 23 00:01:30,800 --> 00:01:34,160 Speaker 3: economic case non whatsoever for cutting rates. 24 00:01:34,200 --> 00:01:38,040 Speaker 2: Your definitive take is it your service to the Bank 25 00:01:38,120 --> 00:01:42,560 Speaker 2: of England, your England, your United Kingdom, and also your 26 00:01:42,600 --> 00:01:46,200 Speaker 2: service to the Federal Reserve. Are the bankers listening to 27 00:01:46,280 --> 00:01:49,320 Speaker 2: the PhDs, the analysts that you know, the kids that 28 00:01:49,360 --> 00:01:50,120 Speaker 2: you used to be. 29 00:01:51,040 --> 00:01:53,600 Speaker 3: Well, I think we all know that there's a voice 30 00:01:53,840 --> 00:01:56,840 Speaker 3: just outside the room that's louder than all those voices, 31 00:01:57,200 --> 00:02:02,320 Speaker 3: and that makes monetary policy difficult to carry out. 32 00:02:02,360 --> 00:02:04,840 Speaker 4: In fact, makes fundamental economics. 33 00:02:04,320 --> 00:02:09,680 Speaker 3: Difficult to carry out in policy circles, I think, but 34 00:02:11,160 --> 00:02:14,040 Speaker 3: there are very good people at the FED. There are 35 00:02:14,160 --> 00:02:17,600 Speaker 3: very good researchers at the FED. I think Raphael Bostik, 36 00:02:17,600 --> 00:02:21,440 Speaker 3: for example, will be greatly missed because he listened to 37 00:02:21,560 --> 00:02:25,760 Speaker 3: his researchers and then made his policy decisions and thoughts 38 00:02:25,800 --> 00:02:28,839 Speaker 3: based on what his researchers were telling him. That's why 39 00:02:28,840 --> 00:02:31,760 Speaker 3: he was the first person to call out transitory. He 40 00:02:31,840 --> 00:02:33,240 Speaker 3: came up with a swear jar. 41 00:02:33,160 --> 00:02:36,359 Speaker 4: In twenty twenty two. So I think there are those 42 00:02:36,360 --> 00:02:36,760 Speaker 4: people there. 43 00:02:36,760 --> 00:02:42,360 Speaker 3: The Cleveland FED has an excellent inflation center, and I 44 00:02:42,440 --> 00:02:47,200 Speaker 3: think that that information is getting worked through. But I 45 00:02:47,240 --> 00:02:50,120 Speaker 3: think under this palle fed we don't know how long 46 00:02:50,160 --> 00:02:52,000 Speaker 3: this powerfited's gonna last. It depends how long it takes 47 00:02:52,080 --> 00:02:58,040 Speaker 3: Kevin to get through hearings. I don't think as much 48 00:02:58,120 --> 00:03:01,640 Speaker 3: chance for great unless something real significantly changes. And the 49 00:03:01,680 --> 00:03:06,200 Speaker 3: one wildcard that can do that would be a many 50 00:03:06,320 --> 00:03:08,919 Speaker 3: nineteen seventies rerun with a short moved higher and oil 51 00:03:09,000 --> 00:03:10,120 Speaker 3: not the kind of move we've had. 52 00:03:10,160 --> 00:03:11,760 Speaker 4: This is, this is contained. 53 00:03:11,840 --> 00:03:13,600 Speaker 5: But if we use. 54 00:03:13,480 --> 00:03:15,440 Speaker 3: Fundamental economics, I know you love that time we go 55 00:03:15,480 --> 00:03:17,960 Speaker 3: back to Alfred Marshall invented the concept of the price 56 00:03:18,000 --> 00:03:21,240 Speaker 3: elasticity at demand. The price elasticity a demand for oil 57 00:03:21,320 --> 00:03:24,280 Speaker 3: is very low. Estimates are about minus point one, which means. 58 00:03:24,200 --> 00:03:26,240 Speaker 2: Okay, I dear Paul wants to jump in here, but 59 00:03:26,280 --> 00:03:30,160 Speaker 2: this is incredible. We're not reliving the nineteen seventies oil show. 60 00:03:30,280 --> 00:03:31,560 Speaker 4: No, no, no, no, we're not. 61 00:03:31,639 --> 00:03:34,840 Speaker 3: I mean if we What that elis system means is 62 00:03:34,840 --> 00:03:37,640 Speaker 3: that if you had a one percent reduction in global 63 00:03:37,720 --> 00:03:41,600 Speaker 3: oil supplies on a semi permanent base for the new term, 64 00:03:41,680 --> 00:03:43,480 Speaker 3: you'd expect to see about a ten percent. 65 00:03:43,400 --> 00:03:44,320 Speaker 4: Increase in prices. 66 00:03:44,360 --> 00:03:48,640 Speaker 3: So if we really have a disruption, and you mentioned 67 00:03:48,680 --> 00:03:51,720 Speaker 3: the strength of the Strait of Home moves. Twenty percent 68 00:03:51,760 --> 00:03:53,400 Speaker 3: of the world's oil goes through there, So if you 69 00:03:53,520 --> 00:03:58,160 Speaker 3: have a serious interruption there, then you're looking at a 70 00:03:58,720 --> 00:04:02,360 Speaker 3: potentially very big move in the price soil. I'm not 71 00:04:02,360 --> 00:04:05,520 Speaker 3: forecasting it. I just think we need economics to frame 72 00:04:06,280 --> 00:04:09,680 Speaker 3: the magnitude of what we're seeing and history to frame 73 00:04:09,720 --> 00:04:11,920 Speaker 3: the magnitude of what we're seeing. And what we're seeing 74 00:04:12,040 --> 00:04:13,960 Speaker 3: is very contained right now. 75 00:04:15,600 --> 00:04:17,240 Speaker 6: Reporting that just in the last week the price of 76 00:04:17,279 --> 00:04:20,520 Speaker 6: gasoline at the pumps up a little over twenty cents 77 00:04:20,720 --> 00:04:23,960 Speaker 6: per barrel. When does that start becoming an inflation risk 78 00:04:24,080 --> 00:04:26,279 Speaker 6: for this economy or does it become a risk just 79 00:04:26,279 --> 00:04:28,400 Speaker 6: to the consumer out there, who probably doesn't need another 80 00:04:28,760 --> 00:04:30,000 Speaker 6: bat of inflation to deal with. 81 00:04:30,279 --> 00:04:32,520 Speaker 4: Well, there's a number of elements. 82 00:04:32,520 --> 00:04:34,839 Speaker 3: First, let me say one of the reasons this isn't 83 00:04:34,880 --> 00:04:37,600 Speaker 3: the nineteen seventies because the US is now self sufficient 84 00:04:37,640 --> 00:04:40,640 Speaker 3: in oil. So in the nineteen seventies, the oil price 85 00:04:40,640 --> 00:04:43,960 Speaker 3: shot transferred income from the US to OPEC countries. Now 86 00:04:44,000 --> 00:04:46,880 Speaker 3: it reshuffles income within the US, but it does shuffle 87 00:04:46,920 --> 00:04:51,000 Speaker 3: income away from the consumer and to producers and owners 88 00:04:51,040 --> 00:04:56,000 Speaker 3: of oil companies. And I think we have to see 89 00:04:56,040 --> 00:04:58,200 Speaker 3: a bigger move. But what it does do for the consumer, 90 00:04:59,279 --> 00:05:02,120 Speaker 3: I believe long time and research has begin to support 91 00:05:02,120 --> 00:05:07,200 Speaker 3: that view that it's the frequent purchases that consumers make that. 92 00:05:07,400 --> 00:05:08,880 Speaker 4: Impact their expectations. 93 00:05:08,920 --> 00:05:11,919 Speaker 3: It is going to the shop during the pandemic, things 94 00:05:11,960 --> 00:05:14,120 Speaker 3: like toilet paper and something that weren't having prize that 95 00:05:14,200 --> 00:05:19,120 Speaker 3: I didn't understand why that influencerer expectations. So groceries gasoline 96 00:05:19,160 --> 00:05:23,240 Speaker 3: that has a big impact. Twenty thirty cents a gallon 97 00:05:24,040 --> 00:05:28,599 Speaker 3: isn't a game changer for the consumer. But you know, 98 00:05:28,640 --> 00:05:31,440 Speaker 3: another favorite letter of people want to talk about in 99 00:05:31,520 --> 00:05:36,080 Speaker 3: the economy, the K shape, that it will hurt those 100 00:05:36,640 --> 00:05:37,520 Speaker 3: at the bottom of the K. 101 00:05:38,240 --> 00:05:41,600 Speaker 6: Economic growth, as you mentioned, continues to be solid, I 102 00:05:41,680 --> 00:05:43,520 Speaker 6: mean kind of across the board. 103 00:05:43,520 --> 00:05:46,000 Speaker 5: Here we had some good ism data points here. 104 00:05:47,160 --> 00:05:50,440 Speaker 6: What is the risk to this US economy to the 105 00:05:50,560 --> 00:05:51,720 Speaker 6: GDP call out there? 106 00:05:51,800 --> 00:05:57,680 Speaker 3: Do you think, well, I think it's one a potential 107 00:05:58,200 --> 00:06:00,880 Speaker 3: and just say a potential, not forecasting for a real 108 00:06:00,960 --> 00:06:05,719 Speaker 3: big oil price shop that would definitely have an impact 109 00:06:05,800 --> 00:06:08,400 Speaker 3: in terms of the costs of non oil companies, who 110 00:06:08,440 --> 00:06:12,560 Speaker 3: are the non oil producing companies are the primary employers 111 00:06:12,600 --> 00:06:15,560 Speaker 3: in the economy. Old companies are much small and more 112 00:06:15,600 --> 00:06:18,920 Speaker 3: contained in size. So I think that's one. And I 113 00:06:19,040 --> 00:06:22,159 Speaker 3: just think the general uncertainty and we've had if you 114 00:06:22,200 --> 00:06:25,839 Speaker 3: think of what this economy is absorbed increases and interest rates, 115 00:06:27,200 --> 00:06:29,719 Speaker 3: you know, all the way up to five and a 116 00:06:29,800 --> 00:06:32,599 Speaker 3: quarter to five and a half percent from effectively zero. 117 00:06:33,279 --> 00:06:35,800 Speaker 3: We didn't the US didn't go into recession. That surprised me. 118 00:06:35,880 --> 00:06:37,400 Speaker 3: I was wrong on that call. 119 00:06:38,920 --> 00:06:41,159 Speaker 4: The tariff shock, which. 120 00:06:41,000 --> 00:06:44,560 Speaker 3: I thought would have pushed the economy potentially over the edge, 121 00:06:45,000 --> 00:06:46,720 Speaker 3: that has been absorbed. And the thing that has done 122 00:06:46,760 --> 00:06:49,159 Speaker 3: that is productivity growth. Now we get productivity in numbers 123 00:06:49,160 --> 00:06:52,680 Speaker 3: at eight thirty this morning. That is the We are 124 00:06:52,800 --> 00:06:56,040 Speaker 3: fortunate in the US in having the potential for this big, 125 00:06:56,440 --> 00:07:00,560 Speaker 3: secular and long running story on productivity at the game. 126 00:07:00,960 --> 00:07:03,600 Speaker 3: It's disruptive on people when they look at history, look 127 00:07:03,640 --> 00:07:07,320 Speaker 3: at statistics, don't look at the people who were disrupted. 128 00:07:07,440 --> 00:07:10,920 Speaker 3: And my hat's off to Governor Barr, who gave a 129 00:07:11,040 --> 00:07:15,040 Speaker 3: terrific speech a couple of weeks ago on AI on 130 00:07:15,080 --> 00:07:17,480 Speaker 3: what monitor policy can do, and cont. 131 00:07:17,520 --> 00:07:20,800 Speaker 2: John writings, who starts wrong? Today? We continue from bringing capital. 132 00:07:20,840 --> 00:07:23,720 Speaker 2: We say good morning to all of you worldwide on YouTube. 133 00:07:24,120 --> 00:07:27,320 Speaker 2: A big message I learned in Phoenix Serious XM yep, 134 00:07:27,600 --> 00:07:30,960 Speaker 2: huge good morning on Serious XM channel one twenty one, 135 00:07:31,400 --> 00:07:34,040 Speaker 2: and this thing building on YouTube every day. Paul and 136 00:07:34,080 --> 00:07:35,880 Speaker 2: I are really unsure of what to do with that. 137 00:07:35,880 --> 00:07:40,360 Speaker 2: The February numbers were gratifying, to say the least. Lots 138 00:07:40,400 --> 00:07:42,840 Speaker 2: of good talk here again we're focused on oil. Eighty 139 00:07:42,920 --> 00:07:45,960 Speaker 2: three sixty nine of two dollars twenty nine really buck 140 00:07:46,120 --> 00:07:50,080 Speaker 2: used up against at eighty four level. John, I really 141 00:07:50,080 --> 00:07:52,720 Speaker 2: want to talk about this productivity issue. Is the better 142 00:07:52,800 --> 00:07:57,400 Speaker 2: productivity now from AI? I don't think so? Or is 143 00:07:57,400 --> 00:08:01,560 Speaker 2: it from something different? Where's this two thous twenty five 144 00:08:01,680 --> 00:08:04,160 Speaker 2: twenty six productivity coming from. 145 00:08:04,520 --> 00:08:08,160 Speaker 3: It's coming from capital spending. I think AI is beginning 146 00:08:08,240 --> 00:08:11,760 Speaker 3: to have an impact. But again, give another shout out 147 00:08:11,760 --> 00:08:15,240 Speaker 3: to a form of fact governor Governor Larry Meyer, he 148 00:08:15,440 --> 00:08:18,240 Speaker 3: cave one of the best speeches I've ever heard from 149 00:08:18,240 --> 00:08:21,360 Speaker 3: a Fed governor back in two thousand and one. I 150 00:08:21,360 --> 00:08:23,800 Speaker 3: think it was whatever happened to the new economy, and 151 00:08:23,840 --> 00:08:27,640 Speaker 3: he documented these historical periods of productivity growth going back 152 00:08:27,680 --> 00:08:32,200 Speaker 3: to eighteen eighty and you had twenty five year phases 153 00:08:33,200 --> 00:08:36,440 Speaker 3: on average in productivity growth, high productivity growth and low 154 00:08:36,480 --> 00:08:39,080 Speaker 3: productivity growth. Now we were in a very low productivity 155 00:08:39,080 --> 00:08:41,360 Speaker 3: growth in the middle of the last decade and we 156 00:08:41,400 --> 00:08:44,400 Speaker 3: started to come out of it. I think that COVID 157 00:08:44,800 --> 00:08:49,600 Speaker 3: was a huge shakeup, and to be honest, I actually 158 00:08:49,640 --> 00:08:51,880 Speaker 3: think that the work from home has enabled people to 159 00:08:51,880 --> 00:08:54,000 Speaker 3: tap more effectively into the workforce. 160 00:08:54,080 --> 00:08:55,320 Speaker 4: That those people who don't need. 161 00:08:55,240 --> 00:08:57,360 Speaker 3: To go into the office are tired by an hour 162 00:08:57,520 --> 00:09:01,480 Speaker 3: as commute. An hour's commute home, there are inevitable destructs 163 00:09:01,480 --> 00:09:04,000 Speaker 3: in the house, but I think that may have been 164 00:09:04,040 --> 00:09:04,440 Speaker 3: a factor. 165 00:09:04,559 --> 00:09:07,559 Speaker 4: But the thing is, whatever. 166 00:09:07,200 --> 00:09:11,440 Speaker 3: The cause is, these swings in productivity tend to last 167 00:09:11,480 --> 00:09:14,480 Speaker 3: for at least ten years and on average for twenty 168 00:09:14,559 --> 00:09:17,560 Speaker 3: five years, and so we could be looking at a 169 00:09:17,640 --> 00:09:21,880 Speaker 3: three percent productivity growth number or higher for the next decade. 170 00:09:22,160 --> 00:09:26,079 Speaker 3: And that kind of productivity has enabled companies to absorb 171 00:09:27,240 --> 00:09:28,240 Speaker 3: the tarreft shop. 172 00:09:28,360 --> 00:09:30,400 Speaker 2: I mean, Paul, you're in cyclopedic gun as you've been 173 00:09:30,440 --> 00:09:35,160 Speaker 2: to Arizona forty seven times. North Phoenix is something we 174 00:09:35,240 --> 00:09:39,600 Speaker 2: don't understand on the East coast. Taiwan's semiconductors coming in 175 00:09:40,000 --> 00:09:45,160 Speaker 2: with manufacturing sites and the real secret is tens or 176 00:09:45,400 --> 00:09:49,280 Speaker 2: hundreds of small suppliers to supply that, and that's that 177 00:09:50,120 --> 00:09:55,120 Speaker 2: capital investment and productivity that we're just missing on a 178 00:09:55,200 --> 00:09:56,719 Speaker 2: landstarved East coast. Yeah. 179 00:09:56,720 --> 00:09:59,880 Speaker 6: Absolutely, and there's lots of places where that money is going. 180 00:10:00,600 --> 00:10:03,319 Speaker 6: John talked to us about just the labor market in general. Obviously, 181 00:10:03,360 --> 00:10:06,600 Speaker 6: that's the other part of the Fed's remit here seems 182 00:10:06,640 --> 00:10:09,280 Speaker 6: to be hanging in there more than hanging in there. 183 00:10:09,679 --> 00:10:12,319 Speaker 6: But are there some concerns underneath the surface for. 184 00:10:12,280 --> 00:10:17,600 Speaker 4: You, Well, there's definitely concerns. We had very very slow, barely. 185 00:10:17,280 --> 00:10:22,360 Speaker 3: Noticeable job growth last year, but it happened, and I 186 00:10:22,360 --> 00:10:24,080 Speaker 3: don't want to get too political, at a time when 187 00:10:25,480 --> 00:10:28,160 Speaker 3: the US was contracting its labor force due to its 188 00:10:28,200 --> 00:10:33,760 Speaker 3: policies on immigration, and so we didn't really see it 189 00:10:33,800 --> 00:10:38,760 Speaker 3: show up in the numbers. Apart from the November you know, 190 00:10:38,880 --> 00:10:41,600 Speaker 3: during the shutdown, household released within a plumb rate pup 191 00:10:41,720 --> 00:10:43,520 Speaker 3: to four point six percent. We're now at four point 192 00:10:43,520 --> 00:10:46,080 Speaker 3: three percent, but within the labor market, and this is 193 00:10:46,120 --> 00:10:49,160 Speaker 3: a bit worrying to me for the US. The US 194 00:10:49,240 --> 00:10:53,120 Speaker 3: labor market has been very dynamic historically. We've got a 195 00:10:53,240 --> 00:10:57,560 Speaker 3: very sclerotic internals to this labor market. We have very 196 00:10:57,679 --> 00:11:02,520 Speaker 3: low hiring and very low firing. And I think the 197 00:11:02,800 --> 00:11:07,360 Speaker 3: uncertainty about tariff's now maybe obviously too certain of impact 198 00:11:07,440 --> 00:11:10,720 Speaker 3: any of the numbers, certainly about oil. That thing sas 199 00:11:10,720 --> 00:11:15,360 Speaker 3: companies like sitting on the sidelines and trying to work 200 00:11:15,440 --> 00:11:17,880 Speaker 3: through and tapping into productivity growth. 201 00:11:18,040 --> 00:11:18,840 Speaker 4: But here's the thing. 202 00:11:19,280 --> 00:11:22,080 Speaker 3: There was the Stanford University paper. There's been other papers 203 00:11:22,080 --> 00:11:26,600 Speaker 3: come out that have said, you know, AI is allowing 204 00:11:26,640 --> 00:11:29,120 Speaker 3: companies not to hire that entry level person in a 205 00:11:29,280 --> 00:11:35,400 Speaker 3: bunch of industries, and that is a problem because you 206 00:11:35,520 --> 00:11:37,880 Speaker 3: need to get those people on board and you need 207 00:11:37,920 --> 00:11:41,400 Speaker 3: to train them. So they moved from being AI competitive 208 00:11:41,679 --> 00:11:44,400 Speaker 3: to AI complementary, if you want to think of it 209 00:11:44,480 --> 00:11:47,920 Speaker 3: that way, and that that is something that monetary policy 210 00:11:48,280 --> 00:11:49,000 Speaker 3: cannot address. 211 00:11:49,040 --> 00:11:51,199 Speaker 2: Okay, so a side caught me up. He says, we 212 00:11:51,280 --> 00:11:53,440 Speaker 2: got to talk to writing about soccer. You forget about 213 00:11:53,440 --> 00:11:56,280 Speaker 2: Preston North End in your commitment there there and off 214 00:11:56,320 --> 00:11:59,319 Speaker 2: your Coventry city maybe or pop up into the Premier 215 00:11:59,520 --> 00:12:03,560 Speaker 2: League over this thing called relegation. Can you imagine the 216 00:12:03,640 --> 00:12:07,920 Speaker 2: Colorado Rockies, the Chicago White Sox and Nathan Hager's Washington 217 00:12:08,000 --> 00:12:12,240 Speaker 2: Nationals out of the Major League Baseball and replaced by 218 00:12:12,280 --> 00:12:16,839 Speaker 2: the Jacksonville Jumbo Shrimp to Scranton Wilkespeare rail Riders and 219 00:12:16,960 --> 00:12:24,080 Speaker 2: the Lehi Valley Iron Pigs. Tottenham relegated, John, That's never 220 00:12:24,160 --> 00:12:25,880 Speaker 2: happened in your lifetime, right, I. 221 00:12:25,760 --> 00:12:31,400 Speaker 3: Think Tottenham has been not in the not in what 222 00:12:31,400 --> 00:12:35,640 Speaker 3: would then called the First Division in my lifetime. But 223 00:12:36,320 --> 00:12:40,959 Speaker 3: you know, it's just tremendously fluid. It's very difficult running 224 00:12:40,960 --> 00:12:45,319 Speaker 3: the economics of a team. I know people who owners 225 00:12:45,360 --> 00:12:50,000 Speaker 3: and managers, and it is it is difficult. But then 226 00:12:50,120 --> 00:12:52,480 Speaker 3: look at Wrexham, right, give a shout out to Ryan 227 00:12:52,520 --> 00:12:53,160 Speaker 3: Reynolds here. 228 00:12:53,360 --> 00:12:54,559 Speaker 4: Look at Wrexham, which. 229 00:12:57,200 --> 00:13:00,480 Speaker 3: In the Championship and will be playing got the email 230 00:13:00,559 --> 00:13:04,000 Speaker 3: yesterday at Yankee Stadium against Liverpool in an exhibition game 231 00:13:05,000 --> 00:13:06,079 Speaker 3: over the summer. 232 00:13:06,120 --> 00:13:07,679 Speaker 4: We should go to that. 233 00:13:08,360 --> 00:13:12,360 Speaker 2: Should be surveillance road trip. See that. I just so 234 00:13:12,480 --> 00:13:15,400 Speaker 2: much wish that American sports had this relegation. 235 00:13:15,000 --> 00:13:16,319 Speaker 5: Though, Oh boy, can you. 236 00:13:16,240 --> 00:13:23,560 Speaker 2: Imagine Colorado Rockies worried about the Jacksonville some Exactly, it's all. 237 00:13:23,440 --> 00:13:26,800 Speaker 3: About protecting the economics. In the US, they're franchises. The 238 00:13:27,120 --> 00:13:29,599 Speaker 3: teams well, I mean they are teams, but the franchises, 239 00:13:29,679 --> 00:13:32,240 Speaker 3: and you know, with the franchise, you get perverse rights 240 00:13:32,360 --> 00:13:34,240 Speaker 3: like the most exciting games at the end of the 241 00:13:34,240 --> 00:13:37,640 Speaker 3: season could be the team between and fourth. 242 00:13:37,360 --> 00:13:37,960 Speaker 4: From the bottom. 243 00:13:38,400 --> 00:13:39,679 Speaker 2: Email me, she says, what are we going to do 244 00:13:39,720 --> 00:13:42,200 Speaker 2: with the tots? John Riding? What does Tottenham have to do? 245 00:13:42,280 --> 00:13:45,240 Speaker 2: They've got that palace of a stadium, They've blown up 246 00:13:45,240 --> 00:13:47,880 Speaker 2: the team over four years. What do they need to do? 247 00:13:48,679 --> 00:13:50,680 Speaker 3: I don't know, I don't I don't pay too much 248 00:13:50,720 --> 00:13:55,319 Speaker 3: attention to the internals of Tottenham. 249 00:13:55,360 --> 00:13:58,240 Speaker 4: But you know, it's all about managing the resources you have. 250 00:13:58,360 --> 00:14:00,959 Speaker 3: And you look at a team like United you're doing 251 00:14:01,040 --> 00:14:05,360 Speaker 3: terribly and to change managers and now they're doing Verry 252 00:14:05,360 --> 00:14:07,800 Speaker 3: Sodleik much better work. 253 00:14:08,320 --> 00:14:12,040 Speaker 4: So it is about managing the resources you have. 254 00:14:12,280 --> 00:14:14,400 Speaker 2: Side says that was a good stager, John writing, thank 255 00:14:14,440 --> 00:14:15,839 Speaker 2: you so much for coming in. We need to get 256 00:14:15,880 --> 00:14:20,520 Speaker 2: you way more offend. Stay with us. More from Bloomberg 257 00:14:20,640 --> 00:14:22,680 Speaker 2: Surveillance coming up after this. 258 00:14:29,920 --> 00:14:33,480 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 259 00:14:33,560 --> 00:14:36,720 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 260 00:14:36,800 --> 00:14:40,200 Speaker 1: Apple Karplay and Android Auto with the Bloomberg Business app, 261 00:14:40,360 --> 00:14:42,120 Speaker 1: or watch us live on YouTube. 262 00:14:42,360 --> 00:14:45,880 Speaker 2: Fiona Greg joins US Global had a policy and research 263 00:14:46,000 --> 00:14:48,760 Speaker 2: at Vanguard, who owns a high ground on this with 264 00:14:48,800 --> 00:14:53,440 Speaker 2: a few other select worthies. We could go two hours here. 265 00:14:53,560 --> 00:14:55,760 Speaker 2: Puss screwed up is our four to oh one K 266 00:14:56,520 --> 00:15:00,240 Speaker 2: experiment coming out of ARISA of nineteen seventy four. 267 00:15:00,760 --> 00:15:03,040 Speaker 7: Well, I would actually beg to differ. I actually think 268 00:15:03,080 --> 00:15:07,040 Speaker 7: we're seeing some strength in terms of the design of 269 00:15:07,080 --> 00:15:09,680 Speaker 7: our four oh and k plans. More and more plans 270 00:15:09,760 --> 00:15:13,640 Speaker 7: are actually auto and rolling people in those plans. We're 271 00:15:13,680 --> 00:15:17,480 Speaker 7: seeing more people get auto and rolled into slightly higher rates. 272 00:15:18,240 --> 00:15:22,560 Speaker 7: And the other big experiment that has been successful is 273 00:15:22,560 --> 00:15:26,080 Speaker 7: getting people auto enrolled into target date funds, which is 274 00:15:26,080 --> 00:15:29,640 Speaker 7: a professionally managed allocation that makes sense for retirement. Now, 275 00:15:29,840 --> 00:15:32,600 Speaker 7: there is a sort of dark side of the cloud, 276 00:15:32,640 --> 00:15:35,520 Speaker 7: which is that if we think about the overall Vanguard 277 00:15:35,560 --> 00:15:39,360 Speaker 7: retirement outlook of our baby boomers on track for retirement, 278 00:15:39,760 --> 00:15:42,080 Speaker 7: well we see about two and five are. That means 279 00:15:42,080 --> 00:15:43,800 Speaker 7: three and five are not, So we still have wood 280 00:15:43,800 --> 00:15:45,600 Speaker 7: to chop on this system. 281 00:15:45,680 --> 00:15:47,600 Speaker 2: Paul and I argue about this, and I'm in the 282 00:15:47,680 --> 00:15:51,240 Speaker 2: camp that we screwed up so bad that our children 283 00:15:51,880 --> 00:15:56,280 Speaker 2: are saving earlier in bigger than we did when we 284 00:15:56,320 --> 00:15:59,040 Speaker 2: are in our twenties and thirties, are you seeing. 285 00:15:58,760 --> 00:16:04,160 Speaker 7: That at Vanguard actually are seeing some strengthening of that savement, 286 00:16:04,320 --> 00:16:08,680 Speaker 7: that saving journey. So younger employees are more likely to 287 00:16:08,720 --> 00:16:12,000 Speaker 7: be on track for retirement, and that is impartly because 288 00:16:12,040 --> 00:16:15,240 Speaker 7: they are benefiting from this stronger plan design and retirement 289 00:16:15,280 --> 00:16:18,840 Speaker 7: plans for more of their careers. Right, So those in 290 00:16:18,880 --> 00:16:21,840 Speaker 7: their fifties and sixties might not have been auto enrolled, 291 00:16:22,040 --> 00:16:24,440 Speaker 7: whereas the typical twenty year old is definitely going to 292 00:16:24,440 --> 00:16:27,320 Speaker 7: be auto enrolled into their plans, so they will be saving. 293 00:16:27,400 --> 00:16:29,840 Speaker 6: Here's some primary research from the Sweeney household. Here were 294 00:16:30,080 --> 00:16:34,000 Speaker 6: my three working folks in late twenties and thirty. They 295 00:16:34,000 --> 00:16:36,320 Speaker 6: are Maxanta, four oh and Ka because I told them to. 296 00:16:37,160 --> 00:16:38,520 Speaker 6: But b they don't. 297 00:16:38,320 --> 00:16:40,120 Speaker 5: Believe they're going to be able to own a home and. 298 00:16:40,400 --> 00:16:43,800 Speaker 6: Have that asset is part of their portfolio like prior generations. 299 00:16:43,880 --> 00:16:47,360 Speaker 5: They think they're foreing ky. That's it, and that. 300 00:16:47,400 --> 00:16:49,320 Speaker 8: Is I can second that my kids. 301 00:16:50,280 --> 00:16:52,640 Speaker 2: I just tell you that the three of us dealing 302 00:16:52,680 --> 00:16:56,800 Speaker 2: with this day to day, the basic blather, not Vanguard, 303 00:16:56,800 --> 00:16:59,200 Speaker 2: but the bladder that we hear, the certitude that we 304 00:16:59,280 --> 00:17:03,480 Speaker 2: hear is way off the mark. The kids, Sweeney's kids 305 00:17:03,520 --> 00:17:04,320 Speaker 2: are petrifig. 306 00:17:04,640 --> 00:17:07,760 Speaker 7: Well, you know, it is definitely the case that the 307 00:17:07,800 --> 00:17:11,920 Speaker 7: younger generation is feeling more of a pinch in certain ways. Right, 308 00:17:12,000 --> 00:17:15,679 Speaker 7: So millennials gen Z they have two x the amount 309 00:17:15,720 --> 00:17:19,880 Speaker 7: of non housing debts that Baby Boomers had at their 310 00:17:20,000 --> 00:17:24,000 Speaker 7: same age. So although there are tailwinds in their favor 311 00:17:24,240 --> 00:17:27,679 Speaker 7: like stronger plan design and retirement savings, et cetera, there 312 00:17:27,720 --> 00:17:31,800 Speaker 7: are also headwinds that they are facing, like student loan debt, 313 00:17:31,920 --> 00:17:34,199 Speaker 7: you know, things of that nature that are putting pressure 314 00:17:34,280 --> 00:17:35,119 Speaker 7: on their pocketbooks. 315 00:17:35,160 --> 00:17:38,240 Speaker 6: My First Wall Street bonus, blew it all. Second Wall 316 00:17:38,240 --> 00:17:40,119 Speaker 6: Street bonus, I paid off all my student loans. 317 00:17:40,280 --> 00:17:43,040 Speaker 5: That's how we rule. But they don't have that opportunity 318 00:17:43,359 --> 00:17:44,040 Speaker 5: for the most part. 319 00:17:44,280 --> 00:17:47,119 Speaker 6: So what are some of the trends here in just 320 00:17:47,160 --> 00:17:49,439 Speaker 6: the four oh one k business? Are people taking more 321 00:17:49,440 --> 00:17:52,200 Speaker 6: of risk with it? Are they changing their allocations or 322 00:17:52,200 --> 00:17:55,720 Speaker 6: are they saying, oh, I need to maybe take put 323 00:17:55,720 --> 00:17:58,520 Speaker 6: more into alternatives investments and things like that, because mine 324 00:17:58,560 --> 00:18:00,359 Speaker 6: is just I just thought it all onto you know, kid, 325 00:18:00,600 --> 00:18:02,920 Speaker 6: just a little onto stock funds. You know that will 326 00:18:03,000 --> 00:18:06,240 Speaker 6: down off a you know, fidelity manager for me. 327 00:18:06,800 --> 00:18:12,240 Speaker 7: Yeah, well, because of qualified default investment alternatives. A person 328 00:18:12,359 --> 00:18:14,720 Speaker 7: enrolling in a four oh one K plan today would 329 00:18:14,760 --> 00:18:17,879 Speaker 7: automatically have that dollar invested in the target date fund. 330 00:18:18,240 --> 00:18:21,320 Speaker 7: So what we're seeing actually among younger generations is that 331 00:18:21,359 --> 00:18:25,680 Speaker 7: they actually have textbook allocations. They have high equity allocations, 332 00:18:25,720 --> 00:18:29,320 Speaker 7: they have very little cash and that is appropriate for 333 00:18:29,400 --> 00:18:32,480 Speaker 7: their age. If you compare them to you know, older 334 00:18:32,480 --> 00:18:34,680 Speaker 7: generations at their same age, they would have had more 335 00:18:34,760 --> 00:18:39,080 Speaker 7: extreme portfolios that might not have been as professionally managed. 336 00:18:39,080 --> 00:18:41,359 Speaker 7: So that is one really positive trend. 337 00:18:42,560 --> 00:18:45,560 Speaker 6: Tomorrow's Jobs Day, we know that Vanguard launched a new 338 00:18:45,800 --> 00:18:48,280 Speaker 6: job market. You have some new data there tell us 339 00:18:48,280 --> 00:18:49,480 Speaker 6: about that and what it's. 340 00:18:49,440 --> 00:18:54,040 Speaker 7: Telling you absolutely, So we're actually using these retirement plan 341 00:18:54,200 --> 00:18:59,640 Speaker 7: data to understand labor market conditions. Why, because we can 342 00:18:59,680 --> 00:19:03,480 Speaker 7: see hiring, we can see separations, we can see income 343 00:19:03,560 --> 00:19:07,359 Speaker 7: growth among people in those retirement plans. You know, seventy 344 00:19:07,400 --> 00:19:11,200 Speaker 7: percent of American workers have access to a defined contribution plan, 345 00:19:11,240 --> 00:19:13,760 Speaker 7: and in Vanguard plans are roughly more than eighty percent 346 00:19:13,800 --> 00:19:16,399 Speaker 7: of them actually participate. So through this we actually have 347 00:19:16,440 --> 00:19:19,640 Speaker 7: a pretty good window into the employment picture. What we're 348 00:19:19,640 --> 00:19:23,200 Speaker 7: seeing is that you know, we're actually seeing a pretty 349 00:19:23,640 --> 00:19:28,119 Speaker 7: quietly resilient labor market. So we are in a low 350 00:19:28,200 --> 00:19:32,440 Speaker 7: higher environment, and normally that would be quite concerning because 351 00:19:32,800 --> 00:19:36,480 Speaker 7: the first thing affirms does in an economic downturn is 352 00:19:36,520 --> 00:19:39,920 Speaker 7: they stop hiring new workers. But at the same time, 353 00:19:40,000 --> 00:19:43,879 Speaker 7: we're also seeing very few separations. So it's a low higher, 354 00:19:44,040 --> 00:19:47,159 Speaker 7: low fire environment, less movement than normal. 355 00:19:47,760 --> 00:19:52,359 Speaker 2: Odd I agree with us. I hear this morning folks 356 00:19:52,359 --> 00:19:55,679 Speaker 2: with Vanguard Investment Strategy Group, and we continue, Good morning 357 00:19:55,720 --> 00:20:00,480 Speaker 2: all of you. Can I go academic nerd time now? Sure, folks, 358 00:20:00,840 --> 00:20:03,720 Speaker 2: darken the door. It's Stanford. This is like the land 359 00:20:03,760 --> 00:20:07,040 Speaker 2: of Michael McFall and of course all of the Hoover Institute. 360 00:20:07,760 --> 00:20:10,840 Speaker 2: Did you have the privilege of the author of the 361 00:20:10,960 --> 00:20:13,119 Speaker 2: End of History? In the last man? Were you in 362 00:20:13,160 --> 00:20:15,000 Speaker 2: the classroom? 363 00:20:14,600 --> 00:20:20,120 Speaker 7: Chase? You're asking me to rewind my life. So I'm 364 00:20:20,160 --> 00:20:24,040 Speaker 7: going to say, I have no idea, no idea. 365 00:20:24,080 --> 00:20:26,640 Speaker 2: But the huge thing you're going back to nineteen ninety 366 00:20:26,680 --> 00:20:29,800 Speaker 2: two in the End of History is the basic idea 367 00:20:29,880 --> 00:20:33,879 Speaker 2: with President Trump is at the end of the democracy 368 00:20:34,000 --> 00:20:38,080 Speaker 2: experiment worldwide as well. What are your thoughts on the 369 00:20:38,160 --> 00:20:41,960 Speaker 2: testing of this After President Trump? Do we revert to 370 00:20:42,600 --> 00:20:44,560 Speaker 2: some form of traditional democracy? 371 00:20:45,480 --> 00:20:49,040 Speaker 7: Look, I mean what we're seeing is our institutions being tested, 372 00:20:49,040 --> 00:20:51,280 Speaker 7: and we're seeing resilience in some of those institutions. So, 373 00:20:51,880 --> 00:20:54,800 Speaker 7: you know, I think we can look to the midterms 374 00:20:54,800 --> 00:20:56,240 Speaker 7: to see what's going to happen exactly. 375 00:20:56,560 --> 00:21:00,119 Speaker 2: These midterms are not normal midterms, are they? 376 00:21:00,400 --> 00:21:03,760 Speaker 7: They're consequential, But every midterm is consequential for any Do. 377 00:21:03,760 --> 00:21:06,840 Speaker 2: You know anyone who's staying in San Jose or Palo Alto, 378 00:21:06,960 --> 00:21:08,359 Speaker 2: or is everyone leaving the state. 379 00:21:09,440 --> 00:21:12,440 Speaker 7: I think some Californians are calling themselves Californians. 380 00:21:12,480 --> 00:21:15,080 Speaker 6: Now, yeah, I tell you the rent I'm paying for 381 00:21:15,160 --> 00:21:17,640 Speaker 6: my number four off spring out there in Santa Clara. 382 00:21:17,920 --> 00:21:20,199 Speaker 6: It's like New York and could get home, you know, 383 00:21:20,280 --> 00:21:22,639 Speaker 6: you could even get home. Yeah, they lost the plane. 384 00:21:23,520 --> 00:21:26,720 Speaker 6: So what are we doing here with this AI? How's 385 00:21:26,760 --> 00:21:30,480 Speaker 6: a AI factoring into your work on the data the 386 00:21:30,560 --> 00:21:33,240 Speaker 6: labor market? Because it seems like the no hire, no 387 00:21:33,359 --> 00:21:36,320 Speaker 6: fire in one of the reasons. Maybe the no hires 388 00:21:36,359 --> 00:21:39,040 Speaker 6: because AI is taking some of those entry level jobs. 389 00:21:39,240 --> 00:21:40,679 Speaker 5: We do we know that for sure. 390 00:21:40,840 --> 00:21:43,520 Speaker 7: Well, you know, in any month we do see you know, 391 00:21:43,840 --> 00:21:47,240 Speaker 7: separations or firing, and in any month there are companies 392 00:21:47,320 --> 00:21:50,480 Speaker 7: laying people off. I think those are actually in February, 393 00:21:50,560 --> 00:21:53,919 Speaker 7: we're seeing a slight downtick in those in terms of 394 00:21:53,960 --> 00:21:58,119 Speaker 7: the overall arching aggregate trends, I wouldn't say there's cause 395 00:21:58,160 --> 00:22:01,639 Speaker 7: for huge alarm, were and to pating maybe more adjustments 396 00:22:01,640 --> 00:22:04,400 Speaker 7: in twenty twenty seven. The other thing I would point to, though, 397 00:22:04,560 --> 00:22:07,800 Speaker 7: is income growth, because the four to win K data 398 00:22:07,840 --> 00:22:11,360 Speaker 7: actually allow us to track what's happening to people's income 399 00:22:11,560 --> 00:22:15,080 Speaker 7: year over year, and there we're seeing considerable growth, actually 400 00:22:15,119 --> 00:22:20,920 Speaker 7: above inflation, and in particular for younger workers who tend 401 00:22:21,000 --> 00:22:24,160 Speaker 7: to change jobs a lot there, you know, and see 402 00:22:24,200 --> 00:22:27,159 Speaker 7: productivity gains. And I mentioned this income growth just because 403 00:22:27,440 --> 00:22:31,480 Speaker 7: you know, AI is a productivity booster and workers may 404 00:22:31,560 --> 00:22:34,959 Speaker 7: be reaping the benefits of that through increased income. 405 00:22:35,160 --> 00:22:38,639 Speaker 2: Fiona, if we get I mean, if I'm elected, free beer, 406 00:22:38,880 --> 00:22:40,960 Speaker 2: so I'm going to give one thousand dollars to everybody 407 00:22:41,000 --> 00:22:43,320 Speaker 2: for investment or retirement. I don't know what the president 408 00:22:43,320 --> 00:22:46,480 Speaker 2: is doing runs a one thousand or three thousands. It 409 00:22:46,640 --> 00:22:50,480 Speaker 2: sounds almost cute, isn't the Only way that's effective is 410 00:22:50,520 --> 00:22:53,480 Speaker 2: that people are forced to give it the some form 411 00:22:53,920 --> 00:22:55,440 Speaker 2: a four to win K provider. 412 00:22:56,400 --> 00:22:58,679 Speaker 7: Well, actually, what you just described sounds a lot like 413 00:22:58,720 --> 00:23:03,080 Speaker 7: Trump accounts. And you know, at Vanguard, we're actually pretty 414 00:23:03,240 --> 00:23:06,240 Speaker 7: bullish on these accounts. Why because they give people an 415 00:23:06,280 --> 00:23:09,760 Speaker 7: early start to saving and investing. We think that people 416 00:23:09,800 --> 00:23:13,040 Speaker 7: should be out there making sure that they get access 417 00:23:13,080 --> 00:23:14,920 Speaker 7: to this free money, that they sign up for the 418 00:23:14,960 --> 00:23:18,080 Speaker 7: account and get the free money that their qualifying kid 419 00:23:18,160 --> 00:23:20,680 Speaker 7: might be available, might be able to get. 420 00:23:21,440 --> 00:23:23,840 Speaker 5: Are those actually happening. Are they in the marketplace? 421 00:23:24,040 --> 00:23:26,840 Speaker 7: Not yet in the marketplace, although you can sign up 422 00:23:26,960 --> 00:23:29,960 Speaker 7: for the account via the tax form, so you can 423 00:23:30,040 --> 00:23:32,720 Speaker 7: indicate that you want the account, but they go live 424 00:23:32,840 --> 00:23:33,720 Speaker 7: July fourth. 425 00:23:33,560 --> 00:23:37,880 Speaker 2: July fourth, Paul, Yeah, I got for those who you tube. 426 00:23:38,280 --> 00:23:42,360 Speaker 2: We have the Fiona greg HP twelve C on our phone, 427 00:23:42,760 --> 00:23:47,280 Speaker 2: one thousand dollars, sixty years of six zero in an 428 00:23:47,359 --> 00:23:50,520 Speaker 2: equity eleven percent per year being don't give me your 429 00:23:50,600 --> 00:23:53,479 Speaker 2: legal compliance time. You got to go at seven percent? 430 00:23:53,800 --> 00:23:58,640 Speaker 2: Are you ready? Yeah, five hundred twenty four thousand dollars. 431 00:23:59,000 --> 00:24:01,679 Speaker 2: President Trump would say, giving you a half a million dollars, 432 00:24:01,720 --> 00:24:04,080 Speaker 2: shut up, yep, yep, that's what I'll say. Yeah, after 433 00:24:04,160 --> 00:24:05,040 Speaker 2: a million dollars. 434 00:24:05,359 --> 00:24:07,200 Speaker 7: Yeah. And one of the benefits of this account is 435 00:24:07,240 --> 00:24:09,680 Speaker 7: that it is going to be invested in a low 436 00:24:09,800 --> 00:24:13,240 Speaker 7: cost equity fund. So that's a great place for a 437 00:24:13,280 --> 00:24:16,680 Speaker 7: baby to start investing, right, low cost index once half. 438 00:24:16,560 --> 00:24:24,320 Speaker 2: A million dollars over sixty years, power of component, that's yeah. 439 00:24:24,359 --> 00:24:26,399 Speaker 7: But you might have a grandson or a granddaughter or 440 00:24:27,520 --> 00:24:29,800 Speaker 7: who would Yeah. 441 00:24:29,359 --> 00:24:30,200 Speaker 5: All right, very good. 442 00:24:30,240 --> 00:24:33,280 Speaker 6: So we appreciate if Fiona Greg appreciate you having us 443 00:24:33,280 --> 00:24:34,760 Speaker 6: here on a Greg Global head of. 444 00:24:34,840 --> 00:24:37,040 Speaker 5: Policy and Research at Vanguard. 445 00:24:38,920 --> 00:24:43,120 Speaker 2: Stay with us. More from Bloomberg Surveillance coming up after this. 446 00:24:50,359 --> 00:24:53,960 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 447 00:24:54,040 --> 00:24:57,560 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on Apple, 448 00:24:57,600 --> 00:25:00,919 Speaker 1: Karplay and Android Atto with the Bloomberg Business Up, or 449 00:25:01,080 --> 00:25:02,600 Speaker 1: watch us live on YouTube. 450 00:25:02,840 --> 00:25:06,040 Speaker 2: Joining us now in well timed Wendy Schiller, Professor of 451 00:25:06,520 --> 00:25:10,320 Speaker 2: political science at Brown University. Her writings are definitive and 452 00:25:10,320 --> 00:25:14,520 Speaker 2: what I'll call civis one oh one across America. Wendy, 453 00:25:14,800 --> 00:25:17,200 Speaker 2: I just think it's so important, and particularly with a 454 00:25:17,600 --> 00:25:21,560 Speaker 2: very brave navy in an ocean, with the first sinking 455 00:25:21,800 --> 00:25:26,000 Speaker 2: by a US submarine of a threat a Navy ship 456 00:25:26,040 --> 00:25:29,679 Speaker 2: here since World War Two in nineteen forty two. We 457 00:25:29,800 --> 00:25:35,639 Speaker 2: declared war in nineteen seventy three things forever changed with 458 00:25:36,000 --> 00:25:41,400 Speaker 2: the War Powers Resolution, Can Congress have anything to do 459 00:25:41,880 --> 00:25:45,119 Speaker 2: with guiding our military in twenty twenty six? 460 00:25:46,840 --> 00:25:50,680 Speaker 9: Well, yes, I mean the Warhouse Resolution gives the executive 461 00:25:50,680 --> 00:25:54,600 Speaker 9: branch some time, you know, so sixty days essentially, and 462 00:25:54,640 --> 00:25:56,760 Speaker 9: then you know, the president can ask for an extra 463 00:25:56,880 --> 00:26:01,640 Speaker 9: thirty day extension ninety days three months to see, you know, 464 00:26:01,680 --> 00:26:04,639 Speaker 9: where it's going, how it's going, and what the needs are. 465 00:26:05,080 --> 00:26:08,480 Speaker 9: And then if it becomes clear that the United States 466 00:26:08,680 --> 00:26:13,200 Speaker 9: needs to stay engaged in what is considerable military action, 467 00:26:13,800 --> 00:26:17,679 Speaker 9: the president technically needs an authorization from Congress for a 468 00:26:17,760 --> 00:26:20,879 Speaker 9: use of force to spend the money on the military. 469 00:26:20,960 --> 00:26:23,399 Speaker 9: So it's really the power of the purse as much 470 00:26:23,440 --> 00:26:27,080 Speaker 9: as it's the War Powers Resolution that gives Congress power. 471 00:26:27,119 --> 00:26:28,560 Speaker 2: Here, when will we see that? 472 00:26:29,920 --> 00:26:31,919 Speaker 9: We won't see it. We won't see it until. I mean, 473 00:26:31,960 --> 00:26:35,160 Speaker 9: the timing is really kind of extraordinary. It's March April. 474 00:26:35,320 --> 00:26:38,840 Speaker 9: May you know, most but not all of this, the 475 00:26:38,880 --> 00:26:41,960 Speaker 9: Republican primaries will be over by the time you get 476 00:26:42,000 --> 00:26:44,000 Speaker 9: to June. There are a couple of ones in July 477 00:26:44,119 --> 00:26:48,080 Speaker 9: and August, but generally speaking, Trump's biggest leverage is obviously 478 00:26:48,119 --> 00:26:51,479 Speaker 9: the primaries. So if he wants to continue this and 479 00:26:51,560 --> 00:26:55,040 Speaker 9: get that authorization for Basically, once you give as we know, 480 00:26:55,119 --> 00:26:57,919 Speaker 9: once you give the president a congressional authorization for use 481 00:26:57,920 --> 00:26:59,679 Speaker 9: of force, as we saw with the Rock, you can 482 00:26:59,720 --> 00:27:02,959 Speaker 9: be there ten years, fifteen years, twenty years. It's you know, 483 00:27:03,040 --> 00:27:06,879 Speaker 9: you've relinquished all of your power essentially. So it's really 484 00:27:07,040 --> 00:27:10,000 Speaker 9: going to be an interesting political situation for the Republicans 485 00:27:10,680 --> 00:27:13,000 Speaker 9: once this time clock expires. 486 00:27:13,480 --> 00:27:14,680 Speaker 7: You know, what do they worry about? 487 00:27:14,680 --> 00:27:15,240 Speaker 8: Do they worry about? 488 00:27:15,280 --> 00:27:17,040 Speaker 9: They don't have to worry about Trump intervening in their 489 00:27:17,080 --> 00:27:20,560 Speaker 9: partners anymore, most of them, and so I'm not sure 490 00:27:20,600 --> 00:27:22,880 Speaker 9: how that goes once we get to June. 491 00:27:23,720 --> 00:27:28,159 Speaker 6: So politically, Wendy, what potentially could be the ramifications for 492 00:27:28,200 --> 00:27:30,879 Speaker 6: this Republican party. We did have the vote yesterday along 493 00:27:31,720 --> 00:27:36,439 Speaker 6: party lines to support the president's actions, but what are 494 00:27:36,480 --> 00:27:38,200 Speaker 6: the political ramifications potentially? 495 00:27:39,440 --> 00:27:42,160 Speaker 9: You know, it's a tricky situation for both parties. 496 00:27:42,240 --> 00:27:43,120 Speaker 7: I think there's two things. 497 00:27:43,160 --> 00:27:46,000 Speaker 9: Loss of life, which we hope stays quite low. 498 00:27:46,880 --> 00:27:49,160 Speaker 7: And gas prices. 499 00:27:49,480 --> 00:27:52,320 Speaker 9: I mean, Americans are pretty predictable in elections over the 500 00:27:52,400 --> 00:27:55,600 Speaker 9: last fifty years. You know, if gas prices are high 501 00:27:55,680 --> 00:27:58,480 Speaker 9: in the summer before the election, even if they come 502 00:27:58,520 --> 00:28:01,360 Speaker 9: down in the fall doing a lot of traveling over 503 00:28:01,400 --> 00:28:05,040 Speaker 9: the summer, voters remember that. So if the Democrats can 504 00:28:05,080 --> 00:28:09,880 Speaker 9: successfully link that to this effort in Iran, then they 505 00:28:09,880 --> 00:28:12,000 Speaker 9: are going to score points to the voters. The problem is, 506 00:28:12,440 --> 00:28:16,320 Speaker 9: if we have tragically more casualties of our service people, 507 00:28:16,840 --> 00:28:20,880 Speaker 9: then the Democrats are capitalizing on that, and that becomes 508 00:28:20,880 --> 00:28:24,480 Speaker 9: politically much more difficult. So it's not an easy path 509 00:28:24,600 --> 00:28:27,640 Speaker 9: for either party, particularly the Democrats, to attack the Republicans 510 00:28:27,960 --> 00:28:31,399 Speaker 9: because if this gets messy, then you're attacking the service 511 00:28:31,400 --> 00:28:34,280 Speaker 9: people who die. So that's a problem for them. But 512 00:28:34,400 --> 00:28:38,160 Speaker 9: gas prices, gas prices, gas prices. This is the sole 513 00:28:38,320 --> 00:28:41,640 Speaker 9: domestic political impact of this conflict at the moment, and 514 00:28:41,800 --> 00:28:43,920 Speaker 9: if they are high in the summer, then I think 515 00:28:43,960 --> 00:28:46,680 Speaker 9: the Republicans go in possibly weaker than they look like 516 00:28:46,680 --> 00:28:47,200 Speaker 9: they're going in. 517 00:28:47,280 --> 00:28:50,440 Speaker 6: Now, when did we had some midterm elections in Texas 518 00:28:50,440 --> 00:28:51,280 Speaker 6: and North Carolina? 519 00:28:51,760 --> 00:28:52,800 Speaker 5: What did we learn there? 520 00:28:54,040 --> 00:28:56,920 Speaker 9: Well, you know, North Carolina looks like Roy Cooper is 521 00:28:56,920 --> 00:28:59,400 Speaker 9: going to be quite a strong candidate to flip that seat. 522 00:28:59,480 --> 00:29:02,280 Speaker 9: But you know Wattley is a very well connected Republican, 523 00:29:02,640 --> 00:29:04,840 Speaker 9: so we think that's going to be quite tight and 524 00:29:05,120 --> 00:29:08,040 Speaker 9: both parties spend a lot of money. But you know, Texas, 525 00:29:08,280 --> 00:29:11,960 Speaker 9: the Democrats the pipe dream of winning statewide, which hasn't 526 00:29:12,000 --> 00:29:15,280 Speaker 9: happened in more than thirty years. But now we have 527 00:29:15,360 --> 00:29:18,640 Speaker 9: Tall Rico, who you know, avoided a runoff, which makes 528 00:29:18,720 --> 00:29:22,520 Speaker 9: him potentially quite strong going into the election. It's really 529 00:29:22,600 --> 00:29:26,160 Speaker 9: up to Donald Trump. But even if Donald Trump endorses Cornyn, 530 00:29:26,640 --> 00:29:28,960 Speaker 9: you saw a lot of Latino voters get out the 531 00:29:29,000 --> 00:29:30,920 Speaker 9: door of the Democrat primary in Texas and vote for 532 00:29:30,960 --> 00:29:33,640 Speaker 9: Tall Rico, and that was really the strength for the 533 00:29:33,680 --> 00:29:34,960 Speaker 9: Republicans in Texas. 534 00:29:35,000 --> 00:29:36,400 Speaker 7: So that's that's a really. 535 00:29:36,240 --> 00:29:38,240 Speaker 2: Wild car any ways to go here, But let me 536 00:29:38,320 --> 00:29:40,960 Speaker 2: just go to the simple one. Money. Somebody told me 537 00:29:41,000 --> 00:29:44,880 Speaker 2: one of the races was forty million dollars plus was spent. 538 00:29:45,120 --> 00:29:47,520 Speaker 2: Did the Democrats have the money to take on what 539 00:29:47,600 --> 00:29:50,440 Speaker 2: I presume is the Trump money juggernaut. 540 00:29:51,720 --> 00:29:53,280 Speaker 7: Well, so this is an interesting thing. 541 00:29:53,320 --> 00:29:55,560 Speaker 9: So you're right, it's forty million on one side. I 542 00:29:55,640 --> 00:29:58,640 Speaker 9: believe it's almost ninety more than ninety million spent on 543 00:29:58,680 --> 00:30:01,560 Speaker 9: the Republican side on that front in that primary. So far, 544 00:30:01,960 --> 00:30:05,760 Speaker 9: Quarnyon's an incumbent, and you know, the incumbents have advantages 545 00:30:05,880 --> 00:30:06,959 Speaker 9: quite a few advantages. 546 00:30:07,000 --> 00:30:08,680 Speaker 7: About eighty seven percent of Senate. 547 00:30:08,440 --> 00:30:11,160 Speaker 9: Incumbents get re elected and ninety four percent of House 548 00:30:11,200 --> 00:30:14,120 Speaker 9: members get re elected when they choose to run as incumbents. 549 00:30:14,160 --> 00:30:16,400 Speaker 7: But you can't do a lot with your. 550 00:30:16,320 --> 00:30:18,959 Speaker 9: Reputation as an incumbent that you haven't already done. It 551 00:30:19,040 --> 00:30:22,120 Speaker 9: is baked in what Texas thinks of John Cornyan. So 552 00:30:22,160 --> 00:30:24,760 Speaker 9: they're going to have to smear tall Rico. And tall 553 00:30:24,880 --> 00:30:27,680 Speaker 9: Rico's had a lot of national press so far, and 554 00:30:28,160 --> 00:30:31,480 Speaker 9: I think that's going to be a problem for the Republicans. 555 00:30:31,760 --> 00:30:35,200 Speaker 9: You know, someone young, someone fresh, someone who's avowed Christian 556 00:30:35,280 --> 00:30:37,240 Speaker 9: faith should appeal to a lot of voters in Texas. 557 00:30:37,400 --> 00:30:39,880 Speaker 9: But Cornyan can't do that much with who he is. 558 00:30:40,520 --> 00:30:41,960 Speaker 7: He's already done what he's done. 559 00:30:42,120 --> 00:30:44,840 Speaker 9: But tall Ico has an opportunity to shape his own reputation. 560 00:30:45,240 --> 00:30:49,160 Speaker 9: And if they go after toal Rico really vehemently, you know, 561 00:30:49,240 --> 00:30:53,200 Speaker 9: that could backfire on them. So I think money here matters, 562 00:30:53,440 --> 00:30:55,560 Speaker 9: But with an incumbent serving as long as he has, 563 00:30:55,840 --> 00:30:58,800 Speaker 9: I think intra party it doesn't quite matter as much 564 00:30:58,800 --> 00:31:00,920 Speaker 9: as it does within the Republican Party. 565 00:31:01,720 --> 00:31:04,840 Speaker 6: Wendy, what do we what's the expectation for the influence 566 00:31:04,880 --> 00:31:07,800 Speaker 6: that President Trump can have on these midterm elections. Does 567 00:31:07,840 --> 00:31:10,600 Speaker 6: he still have this sway over his party that he's 568 00:31:10,680 --> 00:31:12,480 Speaker 6: enjoyed for these so many years. 569 00:31:13,480 --> 00:31:16,560 Speaker 9: Certainly, I think the Republicans in Congress believe that absolutely. 570 00:31:16,840 --> 00:31:19,920 Speaker 9: And getting back to money, that's the interesting thing. If 571 00:31:19,960 --> 00:31:23,520 Speaker 9: Trump ends this runoff in Texas by endorsing Cordon and 572 00:31:23,760 --> 00:31:27,560 Speaker 9: essentially trying to push Baxton out, then they save a 573 00:31:27,560 --> 00:31:29,280 Speaker 9: tremendous amount of money that they can use in other 574 00:31:29,400 --> 00:31:32,200 Speaker 9: races around the country. So money may not matter as 575 00:31:32,280 --> 00:31:34,400 Speaker 9: much in the Texas race, but it's going to matter, 576 00:31:34,440 --> 00:31:37,040 Speaker 9: for example, in North Carolina where there isn't an incumbent 577 00:31:37,120 --> 00:31:40,080 Speaker 9: senator who's running again, and it's going to matter a 578 00:31:40,080 --> 00:31:41,160 Speaker 9: lot in Michigan. 579 00:31:40,800 --> 00:31:41,840 Speaker 7: Where there's an open seat. 580 00:31:41,880 --> 00:31:44,800 Speaker 9: So I think that's where the money equation comes in, 581 00:31:44,840 --> 00:31:46,080 Speaker 9: and that's where Trump comes in. 582 00:31:46,320 --> 00:31:48,200 Speaker 7: But remember Trump is underwater. 583 00:31:48,480 --> 00:31:51,040 Speaker 9: He's underwater in his general approval rating, he's underwater on 584 00:31:51,160 --> 00:31:54,120 Speaker 9: key issues of the economy and immigration that isn't changing 585 00:31:54,160 --> 00:31:56,960 Speaker 9: with the Iran war. So it's really important to remember 586 00:31:56,960 --> 00:31:59,320 Speaker 9: that he could still be quite underwater in the summer, 587 00:32:00,080 --> 00:32:02,400 Speaker 9: and so then does he become a liability after the 588 00:32:02,440 --> 00:32:03,680 Speaker 9: primaries are over. 589 00:32:04,400 --> 00:32:07,480 Speaker 2: I'm just trying to imagine spending ninety million out of 590 00:32:07,600 --> 00:32:11,560 Speaker 2: primary race in Rhode Island. What would ninety million dollars 591 00:32:11,640 --> 00:32:13,280 Speaker 2: do to the Rhode Island economy? 592 00:32:13,680 --> 00:32:17,800 Speaker 9: Wendy Well Charles Brighton, who was a who was a 593 00:32:17,880 --> 00:32:21,560 Speaker 9: colonel ran Nelson Alders's campaigns. Nelson Aldreds was the de 594 00:32:21,560 --> 00:32:23,680 Speaker 9: factor Republican leader in the eighteen nineties and the early 595 00:32:23,720 --> 00:32:26,400 Speaker 9: nineteen hundreds in the Senate, and he paid every voter 596 00:32:26,480 --> 00:32:29,200 Speaker 9: between five dollars and ten dollars for their vote in 597 00:32:29,320 --> 00:32:29,880 Speaker 9: Rhode Island. 598 00:32:30,040 --> 00:32:31,280 Speaker 8: So money could go. 599 00:32:31,240 --> 00:32:33,040 Speaker 7: A long way if you paid people to vote. 600 00:32:33,080 --> 00:32:35,440 Speaker 2: Professor, thank you so much for the brief, particularly there 601 00:32:35,480 --> 00:32:39,240 Speaker 2: on the Texas primaries, which are fascinating to say least. 602 00:32:39,280 --> 00:32:42,240 Speaker 2: Joe Matthew and Kately lines with that earlier a Professor 603 00:32:42,240 --> 00:32:47,560 Speaker 2: Schuller at Brown University. Stay with us more from Bloomberg 604 00:32:47,680 --> 00:32:49,720 Speaker 2: Surveillance coming up after this. 605 00:32:56,960 --> 00:33:00,960 Speaker 1: You are listening to the Bloomberg Surveillance podcast live weekday 606 00:33:01,000 --> 00:33:04,600 Speaker 1: afternoons from seven to ten am Eastern Listen on Applecarplay 607 00:33:04,640 --> 00:33:07,920 Speaker 1: and Android Otto with the Bloomberg Business app, or watch 608 00:33:08,000 --> 00:33:09,120 Speaker 1: us live on YouTube. 609 00:33:09,400 --> 00:33:12,360 Speaker 2: Wayne Sanders joined us now to say he's senior defense 610 00:33:12,480 --> 00:33:17,120 Speaker 2: analyst at Bloomberg Intelligence barely describes his service to the nation. 611 00:33:17,640 --> 00:33:25,280 Speaker 2: Colonel Sanders with the important information engineering information systems engineering 612 00:33:25,320 --> 00:33:28,760 Speaker 2: degree from West Point, Colonel Sanders, thank you so much 613 00:33:28,800 --> 00:33:31,560 Speaker 2: for joining Bloomberg. If you go through the Thayer Gate 614 00:33:32,200 --> 00:33:34,480 Speaker 2: at the bottom of West Point and there's the iconic 615 00:33:34,560 --> 00:33:40,000 Speaker 2: Theyer Hotel, there is a magisterial new building CEAC at 616 00:33:40,000 --> 00:33:44,640 Speaker 2: West Point where the technological magic is made. Describe what's 617 00:33:44,720 --> 00:33:48,479 Speaker 2: going on in that building with the young officers and 618 00:33:48,600 --> 00:33:50,320 Speaker 2: enlisted people in the Mideast. 619 00:33:52,720 --> 00:33:55,360 Speaker 10: Oh, great, thank you so much for having me on. No, 620 00:33:55,480 --> 00:33:59,440 Speaker 10: they do a great job from an innovation integration perspective 621 00:33:59,640 --> 00:34:02,560 Speaker 10: at this point in time, tied into military professionalism, so 622 00:34:03,760 --> 00:34:05,360 Speaker 10: they are actually spending quite a bit. 623 00:34:05,280 --> 00:34:05,800 Speaker 8: Of their time. 624 00:34:06,600 --> 00:34:09,040 Speaker 10: This is a great learning opportunity for the cadets at 625 00:34:09,080 --> 00:34:11,880 Speaker 10: West Point right now as they're going forward to to 626 00:34:11,920 --> 00:34:14,120 Speaker 10: be able to build what it is saying, these are 627 00:34:14,120 --> 00:34:16,719 Speaker 10: the lesson learned. What are we actually finding out about this? 628 00:34:16,840 --> 00:34:18,839 Speaker 10: What does the future of modern warfare it look like? 629 00:34:19,160 --> 00:34:22,319 Speaker 10: When I was a lieutenant, I didn't have AI, I 630 00:34:22,360 --> 00:34:25,560 Speaker 10: didn't have you know, a lot of the technical advancements 631 00:34:25,560 --> 00:34:27,880 Speaker 10: that are going on now so even as an intel 632 00:34:27,920 --> 00:34:31,200 Speaker 10: officer earlier on, I had to rely a lot. 633 00:34:31,040 --> 00:34:33,640 Speaker 8: On you know, single source reporting as they come in. 634 00:34:33,760 --> 00:34:36,040 Speaker 10: So these lieutenants that are coming out of at West 635 00:34:36,040 --> 00:34:38,560 Speaker 10: Point Naval Academy and others, they all have to be 636 00:34:38,600 --> 00:34:41,040 Speaker 10: prepared for a battlefield unlike anything I had ever seen. 637 00:34:41,200 --> 00:34:44,880 Speaker 2: What's the single thing in the American media coverage that 638 00:34:45,000 --> 00:34:48,359 Speaker 2: we get wrong tick by tick on this new war? 639 00:34:49,960 --> 00:34:52,160 Speaker 10: I think probably the biggest one right now is the 640 00:34:52,200 --> 00:34:55,680 Speaker 10: stockpile of munitions, right. I mean think one of the 641 00:34:55,719 --> 00:34:58,120 Speaker 10: biggest things right now is the United States military does 642 00:34:58,120 --> 00:35:00,560 Speaker 10: a great job of what they call contingency. They do 643 00:35:00,640 --> 00:35:02,920 Speaker 10: con plans and they put it together and say, in 644 00:35:03,000 --> 00:35:06,640 Speaker 10: case of a scenario like X or Y, when you 645 00:35:06,680 --> 00:35:09,640 Speaker 10: put those together, saying okay, I have kill chain analysis, 646 00:35:09,920 --> 00:35:13,800 Speaker 10: I've run the war game thousands of times and during 647 00:35:13,800 --> 00:35:16,439 Speaker 10: that timeframe, we think it would take this amount of time. 648 00:35:16,520 --> 00:35:18,520 Speaker 10: We think these are the number of targets. These are 649 00:35:18,520 --> 00:35:20,640 Speaker 10: also the types of munitions that we would need. And 650 00:35:20,719 --> 00:35:23,120 Speaker 10: so they look at this from a two front war perspective. 651 00:35:23,160 --> 00:35:25,799 Speaker 10: They look at it as sustained operations, and they know 652 00:35:25,840 --> 00:35:28,319 Speaker 10: what type of missile stockpiles they need now that's not 653 00:35:28,360 --> 00:35:30,479 Speaker 10: to say that there isn't running the risk of the higher, 654 00:35:31,200 --> 00:35:34,359 Speaker 10: higher end missiles like your Tomahawks and your jasms near 655 00:35:34,360 --> 00:35:37,799 Speaker 10: el rasms that are being used right now. But it's 656 00:35:37,880 --> 00:35:42,120 Speaker 10: not that there's not a worry about them actually running out. 657 00:35:42,200 --> 00:35:43,960 Speaker 10: I think at this point in time, it's how much 658 00:35:44,040 --> 00:35:46,520 Speaker 10: operational and strategic risk you want to take for a 659 00:35:46,560 --> 00:35:51,799 Speaker 10: potential China contingency In twenty twenty seven in the Iran conflict. 660 00:35:51,360 --> 00:35:53,279 Speaker 6: Wayne, I guess one of the questions that a lot 661 00:35:53,280 --> 00:35:55,520 Speaker 6: of observers have, a lot of folks in the market 662 00:35:55,560 --> 00:35:59,800 Speaker 6: have is duration. President Trump suggested four to five weeks 663 00:35:59,840 --> 00:36:04,279 Speaker 6: was the initial outlook, but they can do pretty much 664 00:36:04,320 --> 00:36:07,120 Speaker 6: any They're pretty wide open here in your experience. Do 665 00:36:07,160 --> 00:36:10,040 Speaker 6: you have any sense of the duration of this conflict 666 00:36:10,160 --> 00:36:13,200 Speaker 6: given some of the goals that have been discussed by 667 00:36:13,200 --> 00:36:13,880 Speaker 6: this administration. 668 00:36:15,600 --> 00:36:18,919 Speaker 10: Yeah, you know, it's a difficult, wicked problem, as they say, 669 00:36:19,400 --> 00:36:22,040 Speaker 10: because when you look at it from a military perspective, 670 00:36:22,360 --> 00:36:24,360 Speaker 10: you can take out most of the military targets and 671 00:36:24,360 --> 00:36:26,960 Speaker 10: all that probably by the by mid next week, I 672 00:36:26,960 --> 00:36:30,160 Speaker 10: would say by Wednesday next week would be that for those. 673 00:36:30,000 --> 00:36:31,440 Speaker 8: Original operational targets. 674 00:36:31,480 --> 00:36:33,719 Speaker 10: The problem is that the enemy has a vote and 675 00:36:33,760 --> 00:36:37,200 Speaker 10: they start being able to move around different things around 676 00:36:37,239 --> 00:36:40,400 Speaker 10: the battlefield. What I took is a very positive transition. 677 00:36:40,600 --> 00:36:43,480 Speaker 10: As part of this was the move away from standoff weapons. 678 00:36:43,520 --> 00:36:46,840 Speaker 10: As you heard Secretary of Hex Seth say yesterday, is 679 00:36:46,840 --> 00:36:49,560 Speaker 10: that move away from standoff weapons to more of the 680 00:36:49,600 --> 00:36:52,960 Speaker 10: precision guided munitions and the air superiority means that you 681 00:36:53,000 --> 00:36:55,560 Speaker 10: can ramp up the targets that you're trying to hit 682 00:36:55,640 --> 00:36:59,759 Speaker 10: with cheaper munitions. So moving from the Lockheed Martin, Jazz 683 00:36:59,800 --> 00:37:01,880 Speaker 10: and Nell rasins that run around one one and a 684 00:37:01,920 --> 00:37:05,359 Speaker 10: half million dollars RTX is Tomahawks, which is about one 685 00:37:05,400 --> 00:37:07,480 Speaker 10: and a half to two million dollars, and now you're 686 00:37:07,480 --> 00:37:10,040 Speaker 10: bringing in munitions that are twenty five thousand to forty 687 00:37:10,080 --> 00:37:12,759 Speaker 10: thousand dollars and we have a lot more of them. 688 00:37:12,840 --> 00:37:14,120 Speaker 8: So from an. 689 00:37:13,719 --> 00:37:17,160 Speaker 10: Inventory perspective, even on your jadams for Boeing. Boeing is 690 00:37:17,200 --> 00:37:19,879 Speaker 10: another good one because they have small diameter bombs and 691 00:37:19,920 --> 00:37:23,239 Speaker 10: the joint direct attack munitions. Those ones right there, they've 692 00:37:23,239 --> 00:37:25,200 Speaker 10: been in production for a very long time. We have 693 00:37:25,640 --> 00:37:28,799 Speaker 10: hundreds of thousands that have been produced. Now you have 694 00:37:28,840 --> 00:37:30,200 Speaker 10: to take some of that and say, okay, where have 695 00:37:30,239 --> 00:37:32,480 Speaker 10: they been expended to this point, and obviously we don't 696 00:37:32,520 --> 00:37:35,400 Speaker 10: get a good good say of that right now because 697 00:37:35,400 --> 00:37:38,520 Speaker 10: they keep those numbers as operational risk and operational security, 698 00:37:38,560 --> 00:37:39,719 Speaker 10: they keep those close to the best. 699 00:37:40,000 --> 00:37:40,320 Speaker 8: Wayne. 700 00:37:40,320 --> 00:37:42,440 Speaker 6: One of the challenges I think we've all come to 701 00:37:42,440 --> 00:37:45,000 Speaker 6: know as we over the years, you thought about a 702 00:37:45,080 --> 00:37:47,279 Speaker 6: RAN and its nuclear program is well, a lot of 703 00:37:47,320 --> 00:37:50,680 Speaker 6: the real critical parts of their nuclear program are very deep, 704 00:37:50,760 --> 00:37:54,040 Speaker 6: deep underground, really hard to get to. Is that something 705 00:37:54,080 --> 00:37:57,360 Speaker 6: you think the military will try to attack this go round. 706 00:37:58,920 --> 00:37:59,960 Speaker 8: I think it definitely can. 707 00:38:00,600 --> 00:38:02,880 Speaker 10: It really ends up being where it is on a 708 00:38:02,920 --> 00:38:06,800 Speaker 10: valid military target platform. If you're looking at it and saying, okay, 709 00:38:07,160 --> 00:38:09,560 Speaker 10: we have enough reason to believe that this does exist, 710 00:38:09,640 --> 00:38:13,560 Speaker 10: credible intelligence that says that the fistle material is still there, 711 00:38:13,600 --> 00:38:16,719 Speaker 10: we want to decimate that nuclear program. I absolutely think 712 00:38:16,719 --> 00:38:19,320 Speaker 10: it's going to be a target. It wasn't a target 713 00:38:19,400 --> 00:38:22,279 Speaker 10: necessarily right up front, because they were going after leadership 714 00:38:22,440 --> 00:38:25,759 Speaker 10: and high value targets, air defenses, missilestock files, things that 715 00:38:25,840 --> 00:38:26,960 Speaker 10: could return fire. 716 00:38:26,719 --> 00:38:27,200 Speaker 8: If you will. 717 00:38:27,440 --> 00:38:29,480 Speaker 10: But as long as this goes a little bit longer, 718 00:38:29,520 --> 00:38:32,839 Speaker 10: I think those strategic level targets and those strategic level 719 00:38:32,840 --> 00:38:36,160 Speaker 10: objectives becomes more important better question is whether or not 720 00:38:36,160 --> 00:38:39,560 Speaker 10: they're able to verify without boots on the ground, how 721 00:38:39,600 --> 00:38:42,200 Speaker 10: well can you verify whether or not those strikes were successful. 722 00:38:42,320 --> 00:38:46,000 Speaker 2: We continue with Wayne Sanders, senior Defense analyst Bloomberg Intelligence, 723 00:38:46,040 --> 00:38:49,400 Speaker 2: Colonel Sanders with his service to the nation and expertise 724 00:38:49,440 --> 00:38:54,840 Speaker 2: and information systems. Colonel Sanders, I remember the clearest memory 725 00:38:54,840 --> 00:38:57,640 Speaker 2: of a rock and standing in the Bloomberg Television studios 726 00:38:57,680 --> 00:39:00,719 Speaker 2: at three am and I opened up the you know, Paul, 727 00:39:00,760 --> 00:39:04,960 Speaker 2: the atlas we had as kids, that big national geographic outlasts. Yep, 728 00:39:05,120 --> 00:39:09,200 Speaker 2: I know, yeah, Wait a minute, the geography, Colonel Sanders. 729 00:39:09,200 --> 00:39:14,200 Speaker 2: When you open up the National Geographic Atlas of Iran 730 00:39:14,880 --> 00:39:18,279 Speaker 2: and you look at the geography, how do you respond 731 00:39:18,680 --> 00:39:20,440 Speaker 2: to American boots on the ground. 732 00:39:22,360 --> 00:39:25,000 Speaker 10: It's always been a it has been a tough area 733 00:39:25,080 --> 00:39:27,239 Speaker 10: to be able to go into, especially with the you know, 734 00:39:27,280 --> 00:39:29,839 Speaker 10: the vehicles that we have in tanks and beyond. I 735 00:39:29,880 --> 00:39:32,600 Speaker 10: don't see that being even on the geopolitical side of 736 00:39:32,640 --> 00:39:35,120 Speaker 10: the house. I don't see that being something that President 737 00:39:35,120 --> 00:39:37,960 Speaker 10: Trump would want. The administration would not want to see 738 00:39:37,960 --> 00:39:41,960 Speaker 10: this lagged out, not only for military readiness for contingencies, 739 00:39:41,960 --> 00:39:43,399 Speaker 10: but also to our stockpiles. 740 00:39:43,800 --> 00:39:45,600 Speaker 8: Uh, it ends up being more difficult. 741 00:39:45,800 --> 00:39:48,520 Speaker 10: The air campaign works in this region based off of 742 00:39:48,560 --> 00:39:52,240 Speaker 10: the terrain because it's not it's not the same as Afghanistan, 743 00:39:52,280 --> 00:39:54,719 Speaker 10: where you know, you're looking into uh, you know, deep 744 00:39:54,800 --> 00:39:57,040 Speaker 10: inside of caves and you're not exactly sure where where 745 00:39:57,120 --> 00:39:57,640 Speaker 10: folks are. 746 00:39:58,120 --> 00:40:00,399 Speaker 8: But it still creates a problem the further east you go. 747 00:40:00,600 --> 00:40:04,160 Speaker 10: So you present General Kine when the chairman, when he 748 00:40:04,200 --> 00:40:06,719 Speaker 10: actually showed where those strikes took place. You notice there 749 00:40:06,760 --> 00:40:09,200 Speaker 10: on the western side, we need to get east as well. 750 00:40:09,680 --> 00:40:09,960 Speaker 5: Wayne. 751 00:40:10,120 --> 00:40:12,880 Speaker 6: I think what we've all kind of learned throughout history 752 00:40:12,960 --> 00:40:18,799 Speaker 6: is airpower, while impressive and devastating, has its limits, and 753 00:40:19,320 --> 00:40:23,680 Speaker 6: can airpower alone achieve the goals. 754 00:40:23,360 --> 00:40:24,960 Speaker 5: That have been laid out by this administration. 755 00:40:25,040 --> 00:40:29,600 Speaker 10: Do you think you know there's actually case studies on 756 00:40:29,680 --> 00:40:32,160 Speaker 10: both sides. You know, people bring up you know, Libya 757 00:40:32,239 --> 00:40:35,080 Speaker 10: versus Iraq in terms of you know, limited success from there. 758 00:40:35,120 --> 00:40:37,400 Speaker 10: I think really it does come down to the Iranian people. 759 00:40:37,960 --> 00:40:42,120 Speaker 10: It comes down to the other instruments of excuse me, 760 00:40:42,160 --> 00:40:45,760 Speaker 10: of national power, instruments and national power, diplomatic, information, military 761 00:40:45,760 --> 00:40:48,160 Speaker 10: and economic and being able to put those pieces on there. 762 00:40:48,360 --> 00:40:51,440 Speaker 10: If the military piece can only be done through air power, 763 00:40:51,719 --> 00:40:53,400 Speaker 10: and you're not going to be put boots on the ground. 764 00:40:53,480 --> 00:40:55,920 Speaker 10: You really have to rely on those other mechanisms to 765 00:40:56,040 --> 00:40:58,839 Speaker 10: carry the weight and where that strategic objectives are. 766 00:40:59,080 --> 00:41:00,759 Speaker 8: I think the intelligencemmunity plays a. 767 00:41:00,719 --> 00:41:03,600 Speaker 10: Big part inner this because at that point in time, 768 00:41:03,640 --> 00:41:07,279 Speaker 10: I think it could actually be some level of you know, 769 00:41:07,400 --> 00:41:09,960 Speaker 10: peer to peer if you will, across the line obviously, 770 00:41:09,960 --> 00:41:14,279 Speaker 10: but peer to peer communications across the intelligence apparatus that 771 00:41:14,320 --> 00:41:16,360 Speaker 10: could potentially carry these as well as maybe some of 772 00:41:16,400 --> 00:41:17,440 Speaker 10: the diplomatic pieces. 773 00:41:18,000 --> 00:41:19,600 Speaker 8: The big piece is the resolve. 774 00:41:19,640 --> 00:41:22,239 Speaker 10: If you can continue to go after the IRGC commanders, 775 00:41:22,400 --> 00:41:25,279 Speaker 10: if you can continue to dismantle anybody who would be 776 00:41:25,360 --> 00:41:28,919 Speaker 10: left for command and control, you're taking out systematically any 777 00:41:28,960 --> 00:41:31,279 Speaker 10: type of infrastructure that they have. So now it's really 778 00:41:31,320 --> 00:41:34,040 Speaker 10: about who are the leaders kind of like Ali Larjhani, 779 00:41:35,080 --> 00:41:37,839 Speaker 10: you know, are you know? Obviously the US doesn't want 780 00:41:37,880 --> 00:41:40,560 Speaker 10: Larjanni to be the one who would be next in succession, 781 00:41:40,680 --> 00:41:43,120 Speaker 10: So it's really a question is to can they remove 782 00:41:43,160 --> 00:41:46,400 Speaker 10: the right individuals and work with the other right individuals 783 00:41:46,800 --> 00:41:47,799 Speaker 10: that could bring about peace. 784 00:41:48,040 --> 00:41:50,880 Speaker 2: Colonel Sanders, we hope to call upon your expertise again, 785 00:41:50,960 --> 00:41:56,600 Speaker 2: he writes for Bloomberg. Intelligence or senior defense analyst Dwayne Sanders. 786 00:41:57,000 --> 00:42:01,839 Speaker 1: This is the Bloomberg Surveillance Podcast of available on Apple, Spotify, 787 00:42:01,960 --> 00:42:06,240 Speaker 1: and anywhere else you get your podcasts. Listen live each weekday, 788 00:42:06,360 --> 00:42:09,840 Speaker 1: seven to ten am Eastern on Bloomberg dot com, the 789 00:42:09,920 --> 00:42:13,960 Speaker 1: iHeartRadio app, tune In, and the Bloomberg Business app. You 790 00:42:13,960 --> 00:42:17,360 Speaker 1: can also watch us live every weekday on YouTube and 791 00:42:17,560 --> 00:42:19,280 Speaker 1: always on the Bloomberg terminal