Sound On: Cheney Primary Loss, Outlook For GOP

On with Joe Matthew on Bloomberg Radio. Well, the FED says eventually they're going to have to slow down on interest rate increases. We'll have to talk about when that is. Congresswoman Liz Cheney won't rule out a presidential run after her anti Trump primary loss. The CDC also acknowledged big mistakes in their coronavirus response. I'm Jack Fitzpatrick standing in today for Joe Matthew. We're gonna talk to Congressman French Hill, a Republican on the Financial Services Committee in the House,

about the state of the economy. Will ask Michael Steele, the former RNC chairman, about the state of the Republican Party and Bloomberg Politics contributors Rick Davis and Jennie shen Zano will help me analyze the top news of the day. Well, the minutes from the FEDS late July meeting July say they're going to keep increasing the policy rate and then slow down at some point and reassess. We're joined now by Congressman French Hill, Republican from Arkansas. Congressman is on

the Financial Services Committee, a great go to for banking issues. Congressman, very happy to have you on here. The first basic question about the Fed minutes that came out today, do you read these as airing on either the hawkish or devish side. Well, Jack, it's good to be with you. I think they just reinforced that they're serious to get back to focusing on price stability and if eating inflation.

I think that's the important mission that they have, and I took the minutes to mean they're going to keep at it. Uh. And look when we saw inflation still high at eight point five per cent. We've seen reports of higher economic output in some sectors of the economy, slower in others, but nonetheless high inflation for inputt points and also on salaries and compensation still going up, So I took it as they're staying on mission for their

tightening plan. The minutes acknowledged a risk this is a quote, a risk that the Committee could tighten the stand of policy by more than necessary to restore price stability. Uh, what are the risks at this point of a recession. I think the data is very mixed. I don't see that risk fully apparent yet. I think we're getting mixed reports on hiring still very a strong in most sectors of the economy, and yet we had the the week first and second quarter, but early data here in the

third quarter continues to show some signs of growth. And that's why you have growth, you have decent employment numbers, you have high inflation. And that's why my instinct is that they'll continue to press on both with shrinking the balance sheet and a rate increase in the next month. And what is your view on the timing of this? These minutes were a bit vague. The phrase they used was it would become appropriate at some point to slow the pace of policy rate increases. What what is at

some point to you? At some point to me, when we start seeing sharply lower inflation expectations. Even in the survey data last week when you looked at inflationary expectations that was still at six point two percent for one year out. That's three times uh the FED target of two percent. Actual inflation still in at four times the fed's target rate. So that's what makes me think that they'll stay in a tightening mode here over the next between now and the end of the year. Do you

have a history lesson for us? Should are there historical parallels that you think they're looking at our ore? Is it fair to see these are unprecedented times? Well, it's different. We have stagflation, we have commodity price shots due to the Biden administration's policies on fossil fuels and Russia's invasion in Ukraine, which is impacted the food, fiber, and fuel markets in a negative way. But we have this strong employment market and we still have help wanted signs all

across the country. So it's a mixed message on that, but it causes me to be biased toward higher rates, and they don't. They're behind the curve jack. That's the main point. The main history lesson here is that the FED did not take the punch bowl away in time to prevent embedded, stubborn inflationary expectations, and fiscal policy was far too stimulative coming out of the pandemic. Right, Well, so you mentioned the stimulative fiscal policy, fossil fuels, the

Russian invasion of Ukraine. Um, how much is a major X factor? How much is there just confusion on what supply constraints will exist due to the pandemic and international responses to the pandemic. Well, we've seen container prices begin to shrink. We've seen like you just had a news report on some chip improvements via the deliveries of technology

projects projects. So I think that some of the supply constraints that was related to the pandemic are healing themselves, and so that will help be a counter to some of these continued inflationary pressures on the compensation side and sharp increases in in UM some issues like as I said, food and fuel and fuel don't forget what fossil fuels being such a critical input factor. I don't see that uh falling and therefore you're going to continue to have

input costs much higher than they were a year ago. Okay, Now, the minutes also mention some concern over digital assets like stable coins that they say are subject to runs and fire sales and excessive leverage. Do you take that as a nudge from the Fed toward Congress with an eye

toward clearer regulations at all? I think clearer regulations related to digital assets would be helpful, and I think a good start that would be very carefully crafted bipartisan stable coin piece of legislation that would define stable coins being used for payment purposes, define what a good one is, which would bring certainty to the regulatory system, provide clarity for consumers and users. So I've be supportive of that process, and we have work being done with the administration and

with Congress on that important point. I think it was brought home by the sell off and digital assets over the last few weeks. I also want to ask, I know you've been participating, Uh there's the events sent fintech summit in Little Rock, Arkansas. Can you tell us at all about what's what's happening in your home state to either attract business or develop help startups develop. What's going

on in the world of fintech businesses in your home state. Well, here in Arkansas, we just had the fin sent Summit where we had five hundred people from around the world here showcasing their fintech innovations. Uh. This has been anchored by Fidelity Information Systems f i S and the Independent Community Bankers of America i c b A, both of which have selected Little Rock as their cornerstone center for

fintech innovation. And it was an exciting conference and it's a big part of our effort in Arkansas to create a more dynamic economy with a faster growth rate. We think fintech is absolutely at the center of that. And Arkansas has a long standing fifty year relationship with financial technology innovation. So this is sort of our mission, Jack to meet Steve Case's effort to have the rise of the Rest, where the flyover states step up and do their part to create a more dynamic economy that's not

on the East or West coast. And when you say create a more dynamic economy, is this I guess to what extenter your goals attracting businesses that currently exist in other states? Or is this more of a startup incubator kind of thing. Uh? How do you balance those two approaches to startups? Beginning in Arkansas. Are you trying to get people to relocate to Arkansas. It's a key point, you know. I've always felt that startups were a way

to grow your own success stories. And so of the hundred companies that have gone through Fidelity Information Systems Incubator Accelerator program over the last seven years, can have located here and in Little Rock and are growing here in Little Rock with one recent announcement yesterday. So I think

it's important to do both. We have a dynamic environment that attracts outside companies and outside employment, but I think it's critical for us to increase our economic growth rate by doing that by growing our own right here in central Arkansas. I've got to ask, because this has obviously been a major thing in the news recently, whether it's

maybe it's more relevant to attracting outside companies. But a state like Arkansas with an abortion ban that went into effect, uh doesn't have exceptions for rape or incest just about across the board band in Arkansas. Does that create um difficulties for the state to attract employers that might want to come there and tract employees Jack. It's a good question.

I haven't seen any evidence that it has that's something that the legislature, of course, will deal with in its first regular session following the road decision, which will convene in January. But no, I've not seen it raised. And we had five hundred people from around the world visiting Little Rock as a business location in an accelerated location this week. That seems syndicate we've been we're doing something

right here on the business front. One other big picture question I've got to ask you about Liz Cheney losing her primary, not ruling out the idea of running for president. What what is Liz Cheney's place in the Republican Party and in American politics right now? Well, Liz Cheney has served the people of Wyaomi, and they made another decision yesterday to send her back to the private sector and

have her leave her service in Congress. She has a track record as a can servative policy expert on national security, and UH is devoted to this country. But look, running for president requires the nomination of a political party, and the Republican Party has to find consensus around that candidate. And right now, with that defeat in Wyoming, I think that challenges live Cheney's ability to find that consensus in the Republican Party in the their term to be nominated

for a president. Congressman, thank you so much, really helpful to to talk state of the economy. Seat of the Republican Party. That's Congressman french Hill, Republican from Arkansas. We'll see you when you come back to d C in September. We're gonna talk a little later to Michael Steele, the former r n C chairman. Coming up, though, we've got to have our panel Bloomberg Politics contributors Rick Davis and Jeannie she and Zano. I've got to see what they

think about this. CDC maya culpa on mystiques made responding to the coronavirus pandemic. I'm Jack Fitzpatrick. This is Bloomberg. This is Bloomberg Sound On with Joe Matthew on Bloomberg Radio. CDC director Rochelle Wilensky with a bit of an indictment of her own agency's response in the early days of the coronavirus pandemic U. These are her words, and this story has a lot of detail on the Bloomberg terminal.

She said, to be Frank, we are responsible for some pretty dramatic, pretty public mistakes from testing to data to communications. We've got to discuss this more with our panel. I'm Jack Fitzpatrick from Bloomberg Government, sitting in for Joe Matthew. Today. We've got Bloomberg Politics contributors Rick Davis and Jennie she

and Zano with us to discuss this. Uh. The c d C said today two employees they're going to impose changes aimed at replacing its insular academic culture with one that's supposed to be quicker to respond to emergency ease. UH what does that mean? That means more quickly turning research into health recommendations, working with other parts of the government. Uh, in improving the way CDC communicates with the public. Guys, I want to at least start with the basics here.

Maybe communication with the public is the easiest to identify. What did did the CDC do wrong? What do we know about what they need to improve? Rick, let's start with you. Well, I think you know the director Rochel Olinsky is a well known person in the media these days, right.

I mean, she played an important role in communicating to the public about UH UH COVID and and I think sort of gets the fact that, UH, the c d C probably has been confusing, uh, if not lack of transparency throughout the course of this and and and has

focused on communications is one of the big reforms. In fact, it was one of the few things that are actually gonna have a revamp at the staffing level versus you know, some of these policy changes you mentioned, Jack So Um, you know, I just I see this as sort of a a decision in a vacuum. I mean, at the same time she's talking about doing this, there's been a

new Assistant Secretary for Preparedness created and HHS house at work. Um, you know, no comments really, I've seen in the reporting about uh, some of the confusing interface between f d A and CDC that has created some of these communication problems. So I think we're gonna watch this very closely, but they've got a long way to go before I think the American publics and renew their confidence in the CDC. Now.

One thing I think is an obvious example in the communication that has cited pretty frequently is the back and forth on their guidance as to whether people should wear masks at the very beginning of COVID. It may have been March. I don't know, if that's the only issue they had. Obviously there was a whole vaccination campaign with mixed results across the country. Genie, what stands out that they need to the CDC needs to fix when they're

looking back at their response to COVID. You know, it's critically important that Dr Wilenski did this, and and obviously the experience during COVID exacerbated what has been a tremendous and long term problem at the c d C. A lot of people today are citing as an example going back to the Ebola epidemic and some of the problems there in in in around, but you can go back even further than that, and you just mentioned some of the issues, you know, the the masking and the mitigation measures,

the public messaging on that was very confusing, um in terms of data being released too late to inform decision making. Critically important that they fixed that they were releasing flawed testing to public health labs. I mean the extent of the problems you could go on and list. I have to tell you, Jack, and for you, as somebody who follows Congress so closely, I think two of the most important changes that they're talking about making that I think

are terribly important. Deal with Congress Number one, Congress getting allowing the CDC to have some powers to mandate jurisdiction share their data. This isn't the mandate they've relied on, you know, the goodwill of localities, counties, and states to release data voluntarily. That is not good in a federal system. If Congress can fix that, that would be critically important. And also flexibility on funding. The CDC is dealing with

about a hundred and fifty individual budget lines. The earmarks that are going out there for the c d C make it hard for them to respond quickly to a public health emergency. And again, when you look at Ebola, people were saying they couldn't even get some of their experts on the ground because they didn't have the budget lines to pay for flights to get them there. Those kinds of fixes with Congress would go a long way. And I agree with you and Rick on certainly the

messaging as well. Well, all right, that's a lot that they can fix. To look at the other side of the coin, is there any significant extent to which this uh mayo culpa is the CDC taking the blame from former President Trump? Rick how much how much is this the CDC taking the blame when at the time, in the early days, the president was saying that the virus

would go away magically. Yeah. I obviously post Donald Trump, there have been a lot of examinations of what the White House UH influence on the c d C did to actually exacerbate the covid UH public health emergency. And and and I think part of what the way I read the announcements that Director will Well Sky put out today is that it's they're kind of looking past that, right.

There's some mention of the difference between um UH permanent staff who have been there for decades and and and political staff who were only there for know, sometimes months at a time, and the but that's in every agency of government, that is not exclusive to c DC. But they did seem to sort of blow past, you know, some of the turmoil that the Trump White House was created,

both of you know, h hh S and CDC. On that note, i'd also note political reports a group of House Democrats are calling on President Biden to use the Defense Production Act on the Monkey Pops vaccine. Coming up, we're gonna talk to Michael Steele, the former r N C chairman on the state of the Republican Party. I'm

Jack Fitzpatrick. This is Bloomberg. As I said, Liz Cheney lost her her House primary re election bid to a member backed by former President Donald Trump in a very high profile UH Trump versus Anti Trump race, and Cheney did not rule out a presidential run. There's quite a bit of uh. I. I'm very curious as to what else she does. Is it a superpack and nonprofit? What exactly will Liz Cheney's role be in the Republican Party. We're joined out by Michael Steele, former RNC chairman use

RNC chairman from two thousand nine to eleven. UH would go on to be quite critical of former President Trump and his role in the Republican Party. Was active with the Lincoln Project. Uh. Michael, very glad to have you with us at following Congresswoman Cheney's primary loss. I'm curious what you see as her most effective role should she run for president, should she start an outside group? Where would she be effective in your opinion? Well, first off,

thanks for having me on. Really appreciate it being back with you guys. Bloomberg. As they say, she got options, she is a woman political actor who will set whatever course she wants UM. And it's still rather buffuddling to me the chanale inside the GOP that thought that if the wiser move would be a too uh strip her of her leadership and be kick her out of part out of the party and then see unseat her from

her congressional seat. Um. She is someone who has been consistent, has amassed UM an amazing cross section of voters around the country. Now, whether that translates favorably in a presidential bid A lot remains to be seen on that. But in the short term she can be an excruciatingly painful UM pain in the side. Do you, or Republicans, especially Trump, do you really think that the House Republican Conference could have kept her in the fold given her activity with

the January six committee? Was there really an option to I guess men defenses with her, and there's always an option leadership. Look, I I can tell you the county, state and national chairman. You always have options with with candidates and and and elected officials who don't necessarily uh you know, ride the in the car the way you liked them to. Uh. They keep sticking their head out the of the window and screaming, you know, roll up the window. I mean their options blocked the window. Um,

that's my point. And and and the fact of the matter is the leadership didn't do that because they were more driven by what trust desires were, not what was in the best entrance of the party. Um. And and so from my perspective, um, you know, Liz did what she had to do because she wasn't getting the kind of leadership and cooperation to push back against the the big lie. The leadership stood there and basically after January seven said Okay, well we'll just look at it, says

you know, another day. And it was then that well, I'm curious, then, what's trying to do what she did? So I'm curious what you make of the other news today at this politics and Eggs event in New Hampshire, when former Vice President Mike Pence said he'd consider appearing before the January six committee if he is asked by the committee to do so. Would that what kind of

escalation would that be? Would that take the former vice president from someone who obviously doesn't have a good relationship with Trump and put him firmly in the anti Trump camp, or what would that mean, you know, first off, you know, I'm a little bit bored with the anti Trump. Trump is the outlier here. I don't know why we keep treating him like he's somehow a normal fixture in American politics.

He isn't. He's the outlier. So from that standpoint, his vice president um seemingly at least interested after you know, nearly getting killed on January six wanting to testify about that. Yeah,

it's a big deal. Um, it does matter, particularly given how loyal the vice president has been to Trump, how much he's safeguarded that relationship, even though Trump clearly didn't care about it, as evidence from what we've seen from the January sixth Committee and members of the of the administration who testified about how the President viewed the vice

president's role that day. So, yeah, it's a big deal if he decides to do it, Um, and that, but that remains to be seeing if he does actually pull the trigger. Well then on the other side, I'm curious, because you ended up endorsing Joe Biden in do you think he should run again as he's the strongest Democrat in the field. I have no say on who the Democrats to put out there. Um, I'm not supporting Donald Trump.

I'm hoping that the Republicans will will get their collective senses together and nominate a strong conservative candidate to run for the presidency. If you know, I was very clear if our nominee had been Vice President Pence, there would not have been any endorsement of Joe Biden. Um. So if the Vice president can make his way through the primaries,

that's that's that's a good thing for the party. If if Liz Cheney or or Larry Hogan, or Charlie Baker or any number of highly qualified, uh non sycophanic Republicans, um can can uh you know, break this Trumpian fever um and get through the primary, they would be um formidable uh likely uh successful candidates for the presidency. But until the party shows it's ready to do that, you know, let me ask you real quick, where does Disantis fall in that conversation? Uh gotta wait and see what he

what he can deliver. I'm not impressed with what I've seen and how he handled something. Again, I don't need I don't need. I don't need to prove the prop that I'm a Republican, right, what you need to prove it to the American people, which Michael Steele, thank you so much for joining us, former RNC chairman. We'll go back to the panel. Coming up. I'm Jack Fitzpatrick. This is Bloomberg. You're listening to Bloomberg Sound On on Bloomberg Radio.

What happened to acceptance and concession speeches in American politics? You heard Liz Cheney's concession speech last night, in which she really didn't concede the main point at least to her, which is her fight against former President Donald Trump's role in American politics. Let's listen to her opponent who won the House primary, Harriet Hagman, to see how her victory speech compared last night. Wyoming has spoken on behalf of everyone who is concerned that the game is becoming more

and more ranked against them. And what Wyoming has shown today is that while it may not be easy, we can dislodge entrenched politicians who believe they've risen above the people they are supposed to represent. It, sir, so the fight continues on both sides in a sense. I'm Jack Fitzpatrick from Bloomberg Government, stepping in today for Joe Matthew. Let's go to the panel. Bloomberg Politics contributors Rick Davis and Genie she and Zano uh Rick, I'm curious about

the word rigged. That was an emphasis of the the Republican primary victor's speech last night in Wyoming. What is she getting at by by talking about her appeal to people who feel that the system is rigged against them? Well, I think these are just talking points coming out of Marrow Ago is to how she got the Trump uh nod for the for her campaign and and frankly the

fundamental issue that she ran on. I mean, she's just aping Donald Trump talking points and and that's why she was able to get the support and the money uh to uh wage this campaign against against Liz Cheney. So I mean, that's just more the same. You expect to hear the exact same thing when she she wins her seat, she comes to Washington. It's whatever the doc talking points are gonna be gonna gonna be saying them. And it seems to me that's a reference to Genie. I mean,

am I reading into this too much? It rigged? It seems that uh denying the outcome of the presidential election is a key point in congressional Republican primaries at this point, Genie, might or am I reaching there? No? I mean, we look at the Republican ballot and it is full of these election deniers, from you know, attorney generals to secretaries of states to googernatorial candidates, House and senatorial candidates. So

this is a reality of Republican politics today. They're on the ballot for two and of course she has now committed with this great task pack to ensuring or trying to use her money in her sway to make sure voters don't support them. I think in the short term it is an uphill battle for Liz Cheney, but clearly, as usual, Liz Cheney has decided she's willing to lose a battle to win a longer term war that she thinks is critically important, and she's putting her name, her job,

her money, and everything else her reputation behind this. What Genie, do you think is the idea behind a possible Liz Cheney presidential run. Would she be running to win? Would she be running to try to focus on certain states to take those away from Trump if he runs again? What what's the strategy in that idea? You know, somebody described it as you know, one of the very rare

serious presidential campaigns. If it happens, that's a kama Kaze mission because at this point she'd have very little chance of actually winning. What she would be doing, to your point, is stopping Trump. But there's so many hurdles she would face along that path. You know, if she's going to run as a Republican, which we assume if she decides to she would, that would of course raise all kinds

of questions. She's faced serious security threats already. Imagine if she announced it for the presidency, could the GOP somehow keep her off the ballot, deny her a place on the stage because in debates she refuses to endorse their nominee. If Trump's nominated. I mean, these are big challenges she would face. So to your point, I think she could run to stop him, it would be an uphill battle, very little chance she'd get the nomination unless things change

in the next couple of years dramatically. In the Republican Base, Rick, we covered some interesting ground with Michael steal in the last segment of the former RNC chairman. He he didn't quite like my amount of focus on the phrase anti Trump in the context of the Republican primaries, and he

used the word outlier. It may be the case that former President Trump was a pretty unpopular president in national polls fairly consistently, But is there any reality to the idea that Trump is anything but the dominant figure in Republican politics right now? Yeah, Jack, I was interested by your conversation with him, because you can't call Donald Trump

an outlier. He is the core of this party. I mean, you can be unhappy with the status of the Republican Party these days, and you can be hopeful that there are leaders coming up through the ranks who can take it to a different place. But Donald Trump owns the Republican Party almost lock stock and barrel. We've seen it with his influence with primary wins when he backs people like Harriet Hageman against Liz Cheney. Uh. Liz Channey one seventy pc of the vote two years ago. Uh, and

she lost almost that much this time. So it's Donald Trump's GOP, whether we like it or not. And I think the focus needs to be on, Okay, how do we change that? What? What then, do you see as the role of Rhonda Santis in the Republican Party? You know, I had to ask Michael about that. Decantis seems to not be a palatable option for the people who have turned against Trump in the Republican Party. Uh if if De Santis runs, is there the same amount of division

in the Republican Party? Rick? You know, maybe he's a transitional figure, right, I mean, nothing changes overnight in politics, and so um, you know, maybe uh de Santist becomes a person who's maybe just a little less crazy than Donald Trump, but more mains you know, stream Republicans get on board. Who knows? I mean again, part of that's going to depend upon what cost to do Santis having

Trump not run or getting his blessing. Um. We've seen Republicans turned themselves into pretzels um trying to get Donald Trump to not say bad things about them, which is basically an endorsement. And so does the Santis believe that he needs to have that done at some point in time in order to ensure a nomination or does he think he's powerful enough to get that vote that's Trump supporters,

um without having a cow tow to Donald Trump. This is going to be an interesting thing to see because that relationship seems already strained between Governor de Santis and former President Trump. And let's talk about Mike Pence again, Jennie, What do you think would be the significance if Pence does in fact end up appearing or or complying in

some way with the Congressional January six committee. You know, that would just be you know, certainly earth shattering in my view if we heard that Mike Pence was going to change his mind and agree to participate. And so I was stunned when I heard him say what he had to say today. But as you listen very closely to his words, um, you know, I'm not so sure

he has actually changed his mind. He said he would consider it, but and then there was an incredibly long explanation, very worthy, which seemed to suggest that everything before that but was a lie. So I'm not so sure he's changed his mind. He got some news coverage off of it, but I I don't see him agreeing to participate at this point. Yeah, he talked a bit about how it would be unusual for a former vice president to be called before Congress. I I think it's fair to point

out January was pretty unusual. There's not that much historic precedent for people overrunning the capital. Uh rick is it? It? Would it be that unusual? Am I overlooking some um, some code in which the former president is not supposed to be called before this kind of committee. Well, I'm sadly old enough to remember there are vice presidents have got themselves in a lot of trouble like SPARROWAG. So

there there is not a president on this. You're right, I mean, but he's not vice president anymore, right, I mean, I think, you know, one of the things we've seen is that when you're out office, you're out of office. And it's admirable that he still, as he said in his statement, you know, will uphold his oath of office. But he doesn't have that office anymore. He's a private citizen and and he is responsible for the powers of

our our of our Congress. I mean, we've seen all these very strange things happening, as you say, around an incredibly strange and divisive event. I mean, when was the last time we saw the FBI search a president former president's home. So I think he needs to get with the new reality, which is this isn't going away, and he needs to be cooperative. One other pretty significant piece of news in terms of what the Republican Party looks like. Uh, came from Alaska last night, or at least we're waiting

for some more news. I'm very interested in the Senate race. This is going to be a Republican on Republican general election. Lisa Murkowski, the incumbent senator, and her opponent, Kelly Chibaka, who's the Trump supported figure, both going into the general election. Rick, how does this work if you've got two Republicans Murkowski considered more of the moderate How how does that play out in Alaska when we go to the general election.

You know, it's it's it's part of a facet of this system that Alaska has adopted to go through their elections rank order voting. And look, I mean, I would think she will do well. She's still popular amongst a certain segment of Republican voters and overwhelmingly popular amongst independents and Democrats, and so um, will there be criticism that she gets elected, not in small part because Democrats voted

for her, Sure, but she's coalescing with Republicans. I mean, why would anybody argue about having another Republican in the United States Senate? Uh, it's the only kind of thing Republican on Republican crime. So we'll wait to see how this all works out. It's going to be very fascinating. But I would think this process actually nerves to the benefit of Lisa Murkowski. I I think that is probably

safe to say. And remember the Senator Murkowski has one even in stranger ways, She's the one who ran the write in campaign successfully for the Senate after losing her primary in one of her earlier earlier elections. That's it for us today. Thank you again to our guests. Congressman French Hill, Republican from Arkansas, Michael Steele, former r n C chairman turned uh. Maybe he doesn't want me to say anti Trump, but critical of Trump certainly. Rick Davis,

Genie she in Zano, he points today, good discussion. I'm Jack Fitzpatrick. This is Bloomberg