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Bringing you all of the information you need today, not just Wall Street, which boy does not feel good right now, and that's why we stay in touch with Charlie throughout the fastest show in politics to see what's happening on this job's day.
Of course, it has its own look.
The news about Donald Trump breaking a short time ago, we'll get into this.
He is not going to jail.
If you listen to this broadcast or watch us on YouTube, you knew that already. But he will enter the White House with a criminal record sentencing a short time ago. This is the New York hush money case, the Stormy Daniels case, sentence to no jail time. We'll have more on that coming up with Wendy Benjamin s want to dig further into jobs though this is big stuff today obviously looking at the market reaction and trying to get a sense of exactly where this job market is as
Joe Biden leaves the White House. That's the last one. That's the last report you're going to get. We spent some time earlier today knowing that this number blew the doors off here the most jobs since March, unemployment rate down unexpectedly. The Acting Labor Secretary, Julie Sue spoke with us earlier on Bloomberg with Katie Greifeld.
Let's listen today's numbers, following on the heels of consistent, steady, stable growth, sixteen point seven million jobs sin since President came into office. He is the only president that has had positive job growth every single month of his presidency. And that is what we hand off because we knew that that's what the American people deserved, and we knew that if we focused on what was good for workers first,
that we could have recovery like no other. And that's certainly what this month's numbers reflect.
Yeah, I believe we're looking at forty eight months with consecutive payroll gains, and that of course is going in data going back to nineteen thirty nine. I do want to talk about the manufacturing sector because if you're looking for some pain. You're going to find it there in the manufacturing sector shedding jobs again in December. What do
you think is going on specifically in that industry. Can we draw a line between those job losses to all of the different labor disputes that we've been seeing.
No, I would draw the line to really decades of economic policies, trade policies that have not favored workers and of commitment to jobs, which is also why President Biden came in and said we're going to invest in manufacturing. As a result, the recovery that we've seen since twenty twenty one is the only economic recovery in this century in which the manufacturing sector actually bounced back from a crisis like the one we inherited, and so there's more
work to do, there's no question about it. And we know that workers in states where manufacturing has been the foundation need continued investments, and there's some uncertainly about that because the incoming administration has raised questions about whether those
investments would continue. But what we've seen is that doing that, having the Inflation Reduction Act right, having investments in bringing manufacturing back to the United States into our heartland is the right way to build the economy.
Julie Sue's last job's day, the acting Labor Secretary with us earlier today on Bloomberg with the ambience of the fire alarm ringing at the labor department?
Is there symbolism there?
By?
The way can we get an indoor studio for the next labor secretary? It was like three degrees when she was out there in the snow and the wind, and the whole thing is it's not like that at every agency they're always out on the porch. Right, there's beautiful shot on TV, but the poor secretary ends up freezing. Maybe there's symbolism there too. We better ask Anna Wong, who is our winner today on the Price is Right, Bloomberg's chief US economist at Bloomberg Economics.
You came closest.
You have the highest consensus, highest number in the consensus when it comes to this job before.
What do you know that no one.
Else does too?
Job market is warming the winter around us, so that's the only hot things. So that we track high frequency data and that data. When I saw that data a couple of weeks ago, I was surprised by this broad based, unseasonablely strong hiring across sector. So this is why we made this forecast. Our forecast is always made based on actual data, and so I think there is genuine signs that the labor market is stabilizing. And Joe, you know me, I have been pretty down in the labor market for
most of last year. I would still say that, you know, the non farm payroll is still overstating the degree of hiring. An in the next month report, we're going to see benchmark revisions which will be downward revising most of the data last year. Nonetheless, I will say that this report is genuinely good and it would be rational to be hopeful about the future.
Well, yeah, the market's freaked out. The S and P five down two percent, same as the Nasdaq. The VIX is up ten percent. Are we given up on interest rate cuts?
I think the I think the fix in the stock market is reacting to definitely the fixing come traders pricing out one whole seven exactly. So, so immediately after the payrolls report, the traders were prising out one rate cut out of twenty twenty five. And now the earliest for a rate cut is September now, so it would be a pretty long pause.
What's inside this report that has your attention when it comes to ages, when it comes to participation.
What should we know?
Yeah, I think that, you know, the private sector employment jump in the household survey really caught my eyes because I thought that the household survey was going to show more weakness because it doesn't suffer from the overstatement problems measurement problems as the establishment survey. But we saw actually a very strong showing of private sector hiring, in particular
the increase in hiring and retail trade sector. And I have to wonder whether some of that reflect that firms are front running the tariffs, and we have seen anecdotes of you know, firms stocking up before expectations of higher rate tariffs, and therefore that's basically boosting the logistics sector and retail sector.
So front running like that though, can lead to weakness later in the years.
Yes, exactly.
So that if that that's the reason why there was such a strong showing in the trade and logistics sector, then one shouldn't expect this increase to be endurable.
Fascinating. You close the border, you conduct a mass deportation, and what happens to the job market, then.
Well, you know. So if everything stays constant, as an economist would say, then if you reduce the labor force, you would actually tend to reduce the unemployment rate. However, it really depends on the details, which is where do
these numigrants tend to work? So I suppose that they tend to work in construction sector, which is undergoing a downturn, particularly in the South, then a reduction in the labor supply geared toward the construction sector actually would not really boost prices in the construction sector given the slack in the market there.
There's been a greater conversation, and I don't know if this come to the form of legislation or not about work vices as a new element of the debate. Let's say lawmakers crack down on border security but also raise the cap on H one b's. Would it have a meaningful impact on the job market or would that be isolated to the tech sector and not show up in national numbers like these?
Yeah, I mean from a pure economous perspective, so the economy needs more immigrants in sector that's experiencing shortages, and also it would be great for the economy to receive more immigrants in sectors that innovate. So in high tech sphere we have a lot of form born immigrants who are contributing significantly to TFP productivity increase.
So I think that you ask Elon Musk right, right.
Exactly, So raising the cap so allow more to come in actually would be great for the economy.
And would actually show up in numbers. Though, would you see something in the household employment surveys where you'd actually make a dent in the data on a jobs day like this.
Well, I think not yet. So what we have seen is a labor force decline in the last in November and October that's more driven by cyclical hiring weaknesses and construction, sexual leisure and hospitality, which seem to have reversed in December. But I would say that the first sign of contraction and labor supply would be more due to cyclical forces like slow down and hiring rather than deportations.
Anna Wong always a pleasure. It's a clinic with Anna Wong, whose number in the consensus was the highest. We should have played plinko while we have the chance with Anna. Thank you so much.
You're listening to the Bloomberg balance of power podcasts. Catch us live weekdays at noon and five pm e's durn on Apple Cockley and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York's station Just Say Alexa played Bloomberg eleven thirty.
It looks like a labor market that's in pretty good shape as a new administration gets ready to come in. Not just the two hundred and fifty six thousand on payrolls, but an unemployment rate that went down to four point one percent.
Yeah, it's obviously this has been a difficult time for forecasting all the way around, and it's an opportunity to spend some time with Ben Harris, who is with us at the desk here in Washington, vice president director Economic Studies Program at Brooking's former Assistant Secretary of the Treasury for Economic Policy.
Welcome back. It's great to see you. Happy jobs Day, Happy job say.
At least we're not outside shivering with Julie suit exactly. People were so far off on this, I will say, Anna Wong at the highest number in the consensus at Bloomberg Economics, how come we can't get close to these It's not just this month where we're just far off the mark in the market.
Yeah.
So when we're talking about payrolls, I think one of the things that makes it so difficult is immigration. And research coming out of Brooking showed that when we're getting these really high payroll prints at the beginning part of the recovery, one of the reasons why you could see the high prints was because we had so many people coming into the country, both seeking asylum and through illegal means,
and so I think it really complicates things. I mean, it could mean we'll see an extra one hundred thousand jobs in a month that we just didn't anticipate on the household side. So for the unemployment rate, that's just a story of non response. And you saw this coming out of Governor Bowman's comments from the other day where she said, look, we just can't rely on the U
three like we used to. And this is true of surveys across the spectrum, whether we're talking about the survey of consumer finances coming out of the FED or we're talking about consumer confidence. People just don't answer surveys the way they used to, and I think that makes forecasting that much more difficult.
Okay, So forecasting is tough, but then you get the data and it paints a story for those who have to make decisions around it, like the Federal Reserve. The market today is reading this data as a sign that this is not an economy that needs the FED to ease policy as they have been doing. Some on the street are suggesting no cuts this year. Perhaps a height could be back on the table. How do you see it?
Bent, Yeah, So the way that markets seem to be looking at this is that we will be in a period of an elongated pause and the Fed will need some sort of drastic data print to push us off that. So you either need to see something happened on the inflation side to get us back into the hiking cycle, or potentially, you know, we'll need to see several prints of weakness in order to see cuts that might materialize.
Right now, I think markets are expecting cuts either in the summer or potentially in the early fall in the September meeting, But for right now, it feels like we're an elongated pause.
Well, of course, there are a lot of folks that will tell you there's a big tank of gasoline that Donald Trump's about to pour on that fire and that reinflation will be the buzzword next year after Trump tax cuts or extended tariffs are implemented, deficits explode.
Were you on that, Yeah, I mean I would describe this economy as that don't mess it up economy. And it was similar to the last time, I mean Trump came into office. The unemployment rate had been falling. It was four point seven percent when he was inaugurated, but had been falling for years. The economy right now is even better than it was then. So you've got household balance seats are really strong, Debt relative to disposable income is really low. You know, there's some bad news as
far as transitions into delinquencies on credit cards. We really have to squint in order to find any sort of story which suggests that the US consumer's going to slow down anytime soon.
And then you're seeing similarly, you're seeing nearly.
A perfect labor market. I mean, we're seeing real wage gains. You've got plenty of jobs. You didn't have that type of imbalance like you saw in twenty twenty when they're just you know, we're just so many openings per worker. So we have this really strong, healthy labor market, and that means, you know, my advice, not that Trump's asking for it, but it's like, just don't mess this up.
And so there's real concerns around tariff policy, there's real concerns around overborrowing through a reconciliation pill, and I think there's real concerns that are about being too strict on immigration policy and possibly seeing net out migration, which is something we haven't seen in my lifetime.
Well, so as we consider this notion that maybe everything is just right and we're kind of in this Goldiglocks phase right now, it doesn't seem though Trump necessarily agrees with that. He had a press conference in mar A Lago earlier this week in which he said interest rates are far too high. And we actually asked the former House Financial Services Committee Chairman Patrick McHenry about that on this program earlier this week. This is what he told us.
Mean tweets that does not make monetary policy. And the board of governors at the Feederal Reserve have long terms, as Congress designed so they can have this longer term view. And I think Jay pal has done a fabulous job is share the FED. But this president will speak his mind publicly where other presidents privately complained and that is a big distinction between now and what was then.
So when we consider that distinction in this question of the independent operation of monetary policy setting in the United States for the FED, what would it mean if the data is suggesting the FED can stand pat but the President of the United States is saying no interest rates need to go lower.
Well, this has been in my mind in part because you saw President Carter's funeral yesterday and thinking about some of the lessons that came out of the administration, and yeah, Vulgal, So one of the lessons that came out with Look, if you want to fight inflation, the first, second, and third best thing to do is to appoint a credible FED share and let that share do their job.
And so, you know, I think that a lot of people do.
Worry about FED independence under this administration, but that's something we will probably not have to worry about until the middle part of twenty twenty six when Palace term is up. When you look at the names of possible people who'd be considered for FED share, they are all credible people, people like Kevin Hassett and Kevin Warsh and Mark Summerlin and people Larry lindsay, people, some of them have political backgrounds, but all credible people.
And so.
Obviously Tonald Trump doesn't want to repeat some of the sins of the nineteen seventies the early part of the decade before or does the Fed?
Or does the Fed?
And my senses is that you have to look at what Donald Trump does, not so much what he says, whether you're talking about a trade war, you're talking about a corporate tax cut.
I mean, sometimes his bark is much.
Worse than this.
Seriously and literally, Oh yes.
I've heard that people. Well you said speaking of if you said something important referred to immigration. And we're still trying to get a sense of how serious or literal Donald Trump is about mass deportation. Let's say we close the border. Let's say this mass deportation takes place. Caps are not lifted on H one b's whereas the job market.
Yes, So one thing I realized coming out of research out of Brookings is that you don't have to have this oppressive deportation scheme in order to get net out migration. So you can do other things right, So you can put more agents of the border, you can transition people who are here legally into illegal status, they're going to leave. The rhetoric I think has a chilling effect, and you can have people who are here legally who decide they want to leave because it's no longer a spitable place
to legal immigrants. And so pretty quickly, even without these mass deportation programs, you can get to net out migration, a shrinking of the labor force, which might precipitate something which we thought we might see in the last administration
but didn't, which is a wage price spiral. And so if we get to the point where the labor market is so tight that you start to anticipate future tightness down the road, companies start giving raises prematurely, consumers start buying anticipation, you know, then that's that's something which we haven't dealt with in a long time, and that possibly cuddled coupled with a non credible FED, or a FED which is seen as being political, it could be terrible news for inflation.
I want to talk about something else regarding the incoming administration and those affiliated with it that has been in the news this week. Elon Musk talking about the Department of Government efficiency maybe pulling back expectations a little bit. Maybe it's not going to be two trillion dollars in spending cuts, but if they aim for two, they could get one trillion dollars. Even if we assume that that level is achievable, one trillion dollars is not an inconsequential
amount of money. When whether they're talking about pulling back the scope and scale of the federal government, what would that actually do economically if that drastic kind of cut is implemented, Well.
It depends on the nature of the cuts.
And my guess is that based on the type of cuts are considering, which is non defense discretionary spending, which is a pretty small share of the overall federal budget, these are the type of things that a tend to make us a richer country, So investments in education, R and D, science, spending cancer research that improves health.
I think that that's more or less.
Just a hit on our natural national prosperity down the road. If they're talking about cuts to medicare to social security, that has serious implications for the wellbeing of retired households, but less so for the future prosperity of our country.
This was the final jobs report, while Joe Biden is in office. What should Donald Trump prepare for in the early phases of his administration. We'll get I guess what would technically be Joe Biden's last jobs reporter partial month while he's in office. How do you come off.
Data like this, Well, I mean, you're handed a terrific economy, and I would just encourage those who are in policy making positions to move slowly when it comes to tariff policy. I looked the last administration, the last Trump administration, where the average tariff rate went up about one hundred fifty basis points. It was not a trade war, it was a trade war with China. So the average terrify on Chinese imports went from three percent up to eleven percent.
So certainly consequential for China. But if you're talking about goods it came from anywhere but China, the tariff movements were almost zero. And so my hope is that he doesn't come in too strong with changes in our trade policy. My hope is that they are as worried about the deathsit as many economists are, and you don't see big increases in issuance coming out of a reconciliation package. I think right now, markets are expecting around five trillion dollars
in new borrowing. If you came in with seven trillion dollars, I really I think theoud royal fancial markets so like, we have to step back, take a pause. We don't know what to do with all this new issuance. So I would say move slowly, honor the terrific stay of the economy and realize that all this rhetoric Nestley isn't a good thing for business conditions, isn't a good thing for American households, and maybe dall it back a bit.
Donald Trump's always watching, so he'll get Yeah, he definitely cares what Ben Harris, thank you so much. It's great to see you. Let's compare notes in a couple of weeks. We do have headlines from the White House, Kaylee as Joe Biden is briefed on the wildfires in California, FEMA turning on its Critical Needs Assistant program, and they are making some progress on containment in the last twenty four hours. We'll have more ahead here on Balance of Power on Bloomberg.
You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and five pm. Eastern on almal Coarckley and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
Thanks for being with us here.
It's Friday on the fastest show in politics. This is Balance of Power and I'm Joe Matthew alongside Kaylee Lines in Washington. We have our signature panel with us. Kayley with a lot more to talk about here. It's all on to mar A Lago this week, and are you going to Florida?
Did not get a little warm weather like half the House of Representatives.
The Republican Conference is going along with one Democrat by the name of John Fetterman, who is reaching across the aisle here. He says he wants to be the next Pope of Greenland. We can save the comedy for our signature panel. They're with us here Rick Davis and Genie Shanzano. He is Republican strategist and partner at Stone Court Capital.
Genie is our democratic analyst of course, political science professor at Iona University and Senior Democracy Fellow with the Center for the Study of the Presidency and Congress.
I'm compelled by this.
John Fetterman situation here, Genie, I mean it was actually news that the Republican Main Street Partnership would have a representative at Marra a Lago. They're coming from the center, they're coming from the right, and we've got a Democrat from Pennsylvania there.
What's he doing?
Yeah, I think it makes sense. He's gotten some criticism, as you can imagine, from the left for going, but he has said, look, it is this is the incoming president of the United States. I am from a fifty to fifty state. It is incumbent on me to open these conversations and continue them. And this is sort of
a really interesting trajectory of Fetterman. You know, he was often seen initially as a real progressive lightning rod and attacked, but since I pay attention to conservative media over the last year or so, he's become really something of a darling of the conservative media. He was the first Senator the other day to support first Democrat, I should say senator to support the Lincoln Riley Act, which pertains to
border security. So I think he is really making a name for himself and trying to lead the way to work with Donald Trump and the Republicans. When they can on issues they agree on, and certainly for John Fetterman, there's a lot from Israel and the border to the economy, so I'll think it makes sense.
Well, it makes me wonder, Rick, if we're going to be having to watch the way John Fetterman votes and the confirmation votes for Trump's nominees. Is he going to be the one Democrat potentially that crosses the line on some of the more controversial ones.
I don't know about the more controversial ones, but he has said publicly I will vote for Donald Trump confirma nominees to be confirmed. And you know the proviso to that is obviously, you know, pending background checks and things like that. But at the end of the day, I think he is opening up this session of the Senate basically saying I'm here to cooperate and get stuff done.
Tired of the politics of the past, the division, the partisanship, and let's get something going on here that can change.
Now.
What I think is really interesting is here's a guy, John Fetterman, who's going down to Marlago basically preach bipartisanship, and there is not a clear leader of the Democratic Party who will be the loyal opposition at this point to Donald Trump. I mean, you've just had a presidential campaign, and the Democratic Party seems completely without a rudder to say,
we're not for what he's trying to accomplish. And that is just from a purely political point of view, a real missing element to this Democratic Party.
You know, we talk about bipartisanship a lot around here. Jeanie is John Fetterman the smartest politician in Washington. Look at this tweet he just put up here with his Republican counterpart in the Senate Pennsylvania, David McCormick. He's retweeting McCormick here, and he writes, two dudes, two better halves, bipartisanships, sixty seven counties, a stronger Pennsylvania. They went out to dinner together. I know they're had some diner of something here,
which really shouldn't take the wives. Jeannie with the wives. Yes, look at this, Look at the smiles. Does he have something figured it out?
They do?
And I'm so glad you raised that tweet because again he got so much flack for going and eating and sitting with you know, Dave McCormick and his wife and Fetterman and his wife, But I think he is onto something. The reality is is Pennsylvania is a big, complicated state. It's a fifty to fifty state, and to Fetterman and McCormick's points, they represent the entire state, and so I think it's incumbent on him to work with Dave McCormick and you know, try to do what's best for Pennsylvania
in the country. The other part of this is I agree with them on bringing civility back to Washington. We need people to bring civility back. And a few weeks ago Fetterman, I think he was talking on EBC. He said, look, I'm not rooting against Donald Trump. I want what's best for my state and for the country. And I think that's approach. We hope all Americans, and certainly are representatives in Congress take to Rick's point, and it's a good one.
Democrats also have to pick and choose their battles, and they do need somebody to stand up when Donald Trump is doing something or the Republicans are that's against the interest of the lower middle class and to say so and to you know, represent the opposition. And they're going to have to find their way to do that because they don't have a lot of leadership there, although they do have Hockem. Jeffries and they have Chuck Schumer.
Well Joe as Genie talks about civility in Washington. We arguably saw that on display yesterday when the state funeral services for former President Jimmy Carter were held to the National Cathedral and all five living presidents were an attendant sitting in pews together, talking, maybe even laughing together in the case of Donald Trump and Barack Obama. And Donald Trump actually spoke about that interaction last night.
It did look very friendly. I must say, I didn't realize it. I didn't realize it how friendly it looks. I saw it on your wonderful network just a little while ago before I came in, and I said, boy, they looked like two people that like each other.
And we probably do.
We have little different philosophies, right.
But we probably do.
I don't know. We just got along, but I got along with just about everybody and that we you know, we met backstages, you know, before we went on, and I thought it was a beautiful service.
But we all got along very well, which is good.
They probably do like each other. Rick Davis, you buy that or was this a one day only thing.
Oh, You're gonna need experts much more capable of than I to determine whether or not Barack Obama and Donald Trump like each other. That being said, I mean, you know, it is a celebration of our institutions when you can have these former presidents in a pew together and a fight doesn't break out right after an election. Kudos to Jimmy Carter for bringing these people all together, and maybe that does usher in an era of good feeling. I
mean this point about Fetterman. I mean, up until this election, we only had five states with split delegations in the United States Senate where there was one Republican and run Democrat. We live in a hyperpartisan, divided country, and all of a sudden we start to see a little movement toward the center, even amongst Republicans, you know, which may be a good reason to have them all down to Florida for a cold weekend in Washington, that's right.
I don't know Genie your take on this. By the way, I'm not sure if there's a stage in the National Cathedral that would justify a backstage. It wasn't a show. It was a funeral yesterday. But nonetheless, I'd love to know, by the way, what Donald Trump and Mike Pence said to each other when they shook hands.
But what do you think, is.
He getting soft in his age or is this the mainstreaming of Donald Trump or what's happening.
Yeah, I wouldn't say he's getting soft, but you guys know, I love the New York Post. Cheers to the New York Post. And they had a lip reader there, and the lip reader had some very interesting things to say that Obama and Trump were talking about. Apparently, he said, we need to find a quiet place later in the day to discuss a matter of importance. So who knows what they were discussing. There was sort of speculation it
was like an international agreement. So you know, remember like the liver readers, the body language folks that come on. I love that, So who knows what they were discussing. But you know, the reality is is that there was an interaction with Donald Trump to your point, and Mike Pence, but Karen Pence not so much, and who can blame her? After January sixth, so a lot of intrigue in the personal space there and I thought it was fascinating.
Yeah, no handshake offered by the former second lady.
Oh that's correct, she was a smile.
Yeah, not down for that. Yesterday, Jeanie Schanzeno and Rick Davis, our signature political panel, thanks as always for joining us. Of course, they'll be back for more in the late edition of Ballads of Power coming up at five pm. But before we go, in this early edition, we got to talk about TikTok. It was arguments heard at the Supreme Court today. I'm seeing the courts necessarily anti ban at this point.
Donald Trump may not like the way this works out. We may not be blocking the talk. We'll find out next. On Bloomberg.
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Today is the sentencing of no jail time for Donald Trump. This is the hush money case, Kayley, the Stormy Daniels case in New York. He had asked the Supreme Court to intervene, yep, and no such luck. Even Amy Comb Barrett took a pass on that. So he was in fact in a sentencing hearing virtually and we heard from the President elect at least an audio form.
Listen.
This has been a very terrible experience.
I think it's been a tremendous setback for New York and the New York court system.
This is a case that Alvin Bragg did not want to bring. He thought it was, from what I read and from what I hear, inappropriately handled before he got there.
But of course the case was brought, it was tried, and a jury in New York did find Donald Trump guilty of these thirty four crimes. He was convicted, but, as Joe mentioned, won't really face punishment for that conviction. No jail time, no probation, and unconditional discharge is what he received. So for more, let's go to June Grosso, host of Bloomberg Law here with us on balance of power. June, given that this really is not consequence at all, necessarily
no real punishment here for Donald Trump. What is the important thing about this? Is it just that he will now take the of office ten days from now as a convicted felap.
Well, I mean that's the main thing on his side, On the judge's side, he said that all the protections that a president gets can't erase a jury verdict. So I think that was the important thing for the justice system, that the jury verdict stands and is honored. Donald Trump
what he was trying to avoid. He knew that he wasn't going to get any prison time, but yet in the last few weeks there have been furious legal motions, even as you mentioned to the Supreme Court, because he wanted to avoid the stigma of being the only president, the only US president in office as a convicted felon, And so that was what he was trying to avoid,
and now that's happened to him. There also is one thing is that he won't be able to vote as a felon in Florida, although people I've talked to have said that they think that the governor will make some exceptions for him.
Well, so we're done here, right, No, we're not. You could see a special Council report that may or may not be released with regard to this case. Anybody come back around in four years. Donald Trump is now in the clear.
Well see, and what the Supreme Court said was take up all your evidentiary issues at appeal, where normally the normal defendant would get sentenced and appeal and then might go to the Supreme Court if they had enough money to do that. But so now we're going to go through with the appeal. He has thirty days to appeal. You know he's going to appeal because he's appealed every single thing else. And he mentioned that he was going to appeal the night before last night. Things have been
happening so fast, I'm trying to keep track. Last night at mar A Lago when he made some statements, he mentioned that he was going to appeal. And they do have some appellate issues based on presidential immunity, so that will might take years to get through the court systems, and I think we'll end up at the Supreme Court again.
Still well, busy justices they are, and they certainly were today June where this morning they heard arguments in the TikTok case. It's really mentally a case about national security and how it stacks up against the right to free speech in the United States. Are reporting and analysis signals that the justices do seem open to keeping this band that is set to go into effect on January nineteenth, allowing it to go into effect. But how did you read arguments?
So when you say national security, the courts seem to freeze national security. And when a president says something as national security a risk, then in Congress does then the courts think that that's the most important thing. It has precedence over anything else, including it seems like from these oral arguments today free speech concerns. And you have to remember something, you know, the Congress, no one has really sort of set out what are the national security concerns here?
What has TikTok done that would give pause? You know, I mean it's sort of like the nip on steel US steel ban where Biden said it's national security concerns, but no one says what are those concerns? And apparently there is a you know, secret record that Congress has only seen, but the public hasn't seen it. And the public is going to be very very annoyed a lot of the public if that date comes and the ban
goes into effect. And so from the Supreme Court, one thing that they did say, I mean, it was discussed could they possibly put this off, give it a stay of the law until Donald Trump takes office, because he filed a brief with the court, not mentioning any constitutional issues, but just mentioning his deal prowess and how he'd be the only one who'd be able to put this all together and solve it. So, you know, that is a possibility.
Perhaps the court will put it off, but they certainly seem to think that the national security concerns overrode everything else, and they didn't you know, the lawyers for TikTok and the lawyers for the creators of the program on the app didn't seem to get much play for their arguments.
Jude's good to see you. Thank you so much, June Grosso, Bloomberg Law, of course, as we want to add another voice of experience to this conversation, Sarah o'lam, Senior fellow at the Technology Policy Institute. Sarah, welcome to Bloomberg TV and Radio. What do you think here do national security concerns override the First Amendment in this case?
Well, we have to go back and look at the law that was passed and signed by President Biden. It went through the House, and it passed three hundred and sixty votes to fifty eight in March. It passed the Senate seventy nine votes to eighteen in April, and then it was signed in April twenty fourth, twenty four. So you know in the record, Congress is concerned about the corporate ownership of TikTok by Bye Dance, and they have concerns about the data collection operations and label China as
a foreign adversary. And so that is the posture that we're looking at with this deadline that's coming up January nineteenth. What's interesting, though, is that President Trump he started all of this with executive orders in twenty nineteen. So this conversation about TikTok has been ongoing for five years now. SIPHIUS, the Committee on Foreign Investment had a finding in twenty twenty.
They've been trying to go through risk mitigation and plans for monitoring by Oracle, and so there's been a lot of back and forth. But really what happened was Congress passed the law, the President signed it, and so now the Supreme Court is in this position where they're being asked to maybe extend the deadline from January nineteenth, or as the DOJ asked them to let it go through to January nineteenth and see what happens if by Dance will divest.
Yeah, and we'll have to wait for a ruling on that, which presumably could come any time in the next nine days, since that's the deadline we're up against here, Sarah. It does seem though, that this really does just come down to the question of ownership, specifically that it doesn't necessarily matter what is being propagated or posted on TikTok or by who. It only matters where ultimately the ownership lies.
Is that a correct way of reading this, and that's the out that Congress gave TikTok right, just change the ownership, make sure that it doesn't lead back to China.
Well, what was really interesting was I listened to the oral arguments this morning. They went on from ten am to twelve thirty, so right before this time, and it was very interesting to hear the nine justices talk with the solicitors about these questions. And so they kept trying to separate the content free speech concerns from the ownership concerns.
But there is a chicken and egg ish you here, where you have a corporate parent that is related to a nation state that has control over the algorithms that implicate content. There was discussion though about how in the law it doesn't seem to end. Congress doesn't seem to be concerned about the dance videos, the cat videos, just so long as the ownership is by a different type
of entity. So the justices, you know, they picked apart the different arguments, asking hypotheticals, what if this statute didn't have anything to do with speech, what if it was just ownership? And they did address questions of what level of scrutiny to apply it by looking at the first Amendment questions is it strict scrutiny, is it intermediate scrutiny. So what's going to be interesting is to see how
they decide their place in the separation of powers. So they've been asked to come in and even be between the future president who will be installed in January twentieth.
And like the reporter before me said, he did file an amicus brief in this case asking for a stay, saying that the deadline is a bit arbitrary and that it happens to be right before the change of administration, and so there could be some wiggle room there to say, and the statute includes a ninety day extension for certain circumstances, so there are some reasons that the court might say, you know, we don't want to make an emergency decision here.
We'll let things sort out by giving an extension of time.
So that answers my next question, which is be more what's more likely an extension on this deadline or an imminent ruling. The Court's going to need to take some more time, right, they have to question, DOJ officials where you going to be watching.
In the day's head?
Right?
Well, they did ask questions about can the president not enforce the law? And so the president is the one who enforces the deadline. But if it is law, TikTok and its partners. So they were saying, all the cloud providers and contracted partners, if the law is in effect January nineteenth, they can't provide the services that they currently are. So you would see a blackout on the app. And there was discussion about analogs to broadcast TV and communications law.
We've seen blackouts for you know, sports and different contracting, so it's not unprecedented that there could be a blackout.
It would be.
It would make one hundred and seventy million people, you know, confused. But this is where we are.
And just quickly, Sarah, as we're having this conversation around free speech and First Amendment rights as it pertains to TikTok and obviously goes well beyond that, Meta we learned this week is pulling back on fact checking, saying that there's kind of a new political reality with this incoming administration. How do you think widely across technology, the approach to these free speech issues and questions of censorship is going to change in the next four years.
Well, I think it's very interesting that we're in a time where user generated content is growing in volume. People are used to being able to express themselves. There are AI bots that are automated that are pushing out more content, and so really this case is a good kind of microcosm of where we are in technology. Meta is trying to promote more speech on its platform, and there is a competition with Chinese companies. So really in the next five years or so, you're going to see more competition
between US companies and Chinese companies. But then there's also a lot of like cross commerce, so TikTok wants to operate in the US and our companies want to be in China, and so there there is that interplay and also competition.
And therein lies the rub. Sarah o'lambs, Senior Fellow at the Technology Policy Institute, joining us on Balance of Power here in Bloomberg TV and Radio. Thank you so much. I would point out Joe as it's looking not that great for TikTok and the Supreme Court Meta is a beneficiary of that today on a down day for financial markets up three percent in this Friday trade.
It's about as good as it's looked all session as well. This could be good news from Mark Zuckerberg. We'll find out that's part of the motivation. So you're write their friends.
Now again, Yeah, problem.
Trump, than they're warming up to each other probably. Thanks for listening to the Balance of Power podcasts. Make sure to subscribe if you haven't already, at Apple, Spotify or wherever you get your podcasts, and you can find us live every weekday from Washington, DC at noontime Eastern at Bloomberg dot com.