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Happy Friday to everyone.
What a week it has been.
What a several weeks, honestly, and a lot seems to have changed in just the last couple of weeks, because, of course, it was just about what two and a half weeks ago that the Fed cut rates by fifty basis points out of concern about protecting the labor market, not wanting to see it deteriorate further. And then today we get a picture of strength in the labor market,
maybe not in all sectors. Manufacturing is a week spot, but at lower unemployment rate, a blowout on non farm payrolls, and the market now saying, all right, maybe the Fed's not only not going to cut fifty basis points again in November, not even pricing a full twenty five basis point cut.
Well, there's nothing manic about this, obviously, knowing that we had massive downward revisions on a series of reports throughout the summer. Bloomberg Economics is already saying that October number that's going to come right before the election, by the way, may not look very good. And there's a lot of noise in this report. So I'm curious with Catherine Edwards
thinks about this. She's back with us at the table here in Washington, economic policy consultant and contributor to Bloomberg Opinion, Catherine, thank you. Are we ever going to get this right? How come we're so far off for better or worse every month?
We just haven't been here before.
I mean, how many times have we come down from historically high inflation without landing in a recession and get interest rates down, keep unemployment right down. We're all in some ways in uncharted waters, and so it's not surprising to me.
I mean, we were going over the forecast this morning.
They ranged from seventy thousand to two twenty, and the consensus.
Was really just whatever was in the middle.
I think there's a lot that people don't know of what the next six months looks like, and that's okay. I mean, the economy itself told us this morning that the labor market is strong. That's the most important takeaway.
Well, the last time you were here in the studio with us, it was right before that FED rate decision, when you were talking about a little bit of concern you had in the labor market and your hope that the FED would recognize that and perhaps go fifty, which of course they did. So riddle me this then, Catherine, do you still have that same concern today? Is there something that's not in the headline data that you're paying attention to.
Yes, the biggest concern in the US labor market right now is hiring. Hiring rates are at where they were kind of nine months into the two thousand and seven two thousand and eight recession. So we have seen job growth kind of stay low but positive, but we have not seen hiring pick up, which means that if you have a job, you might be safe in your job, but if you're looking for a job, it is a struggle.
And that, for me, is what I am waiting for to say that the labor market is truly out of danger when employers start to hire again, start to hire in good numbers. It's been falling for almost two years.
The Instant analysis on our blog this morning from end to Curran was this is a holy jobs Batman moment. What if you work in manufacturing though, or in the auto sector, what does this market feel like?
Well?
I mean, I think there is good note there's always good news for moving with the tailwind.
Right.
It's harder for manufacturing to do well when the rest of the economy is doing poorly. It's easier for manufacturing to do well when the rest of the economy is doing well. And so although I would have liked manufacturing numbers to be hired this morning, I think that they have a lot, you know, more room to grow in a positive direction if they're catching up with the labor market as opposed to define an overall trend.
Well on the manufacturing point, that was something that is being pointed to today by the Trump campaign, which put out a statement, Kamala Harris and Joe Biden have built back broke. This is a quote I'm reading here. Losing thirty four thousand manufacturing jobs in this just the past two months as foreign countries benefit from Harris's weak economic Paul and Harris's open border policies have destroyed eight hundred and twenty five thousand jobs for Native born Americans while
one point two million foreign born workers gained employment. Catherine, I don't know if you have a reaction to that specific statement, but immigration is a factor here, right.
Yeah, Well, let's peace through what could be factually correct there.
Vice.
Presidents don't have economic policies or much economic power to speak of, so I don't particularly.
Like that characterization.
Presidents have even muted powers on their own. But that's, you know, an election year that we don't think that. We do not count the number of jobs by the nativity of the person holding it. When we count the number of jobs, we count the employer's industrial sector.
That is how we count jobs.
It comes off of the survey of employers. When we count people through the household survey, we can look at the composition of nativity. What that number, which I've seen making the rounds on so many different platforms, is saying that, you know, basically, the number of non native workers in our economy is growing relative to the number of native workers declining. But they're looking at the sixteen and older population.
So what all they've told you is that lots of people are retiring and that the age composition of the US workforce is changing. You in hand with the immigration composition of the US workforce. And I don't think that they're using that statistic accidentally. And that's what makes me quite upset about it is I think that they know what they're doing, and they know what they're counting, and they know what's driving it, and they're just trying to
get people out there to hate immigrants. And I don't think that you can have one in five American workers we're not born here and somehow divide the labor market of the good ones and the bad ones of the people who were born here.
And who weren't.
What happens to the job market if we close.
The border, Well, in general workers are good and fewer workers are bad. I think that's a good policy to think of. In turn, the labor market, the economy is growing, which means the need for the American for a workforce is growing. And if we have not produced enough Americans or have high enough labor force partis patient among Americans, then we always as a country have looked to immigration to fill that hole. Immigrants work at higher participation rates
than native born Americans. They have very good earnings trajectories, and they've always been a part of our economy to turn away from what has typically made us very strong and resilient in the past, is I mean, it's not just a bad choice, it's obviously a hateful choice because it's not driven by what's good for the economy, but what makes people upset.
Catherine. We just have about a minute left here. But obviously, as we consider the rhetoric in this campaign, it brings to mind election days. Two days out from the next FED decision, we might not know who wins by the time the Fed has to make a call. If you had to make the call to day with this data in hand, knowing the uncertainty that could be there, do you think they go twenty five fifty?
Not at all.
I think that I would expect Powell to do what he has done so far, which is to stay the course. They telegraphed how much rate reduction they expected over the course of the year, and to change course dramatically on the heels of an election would be so much more political than I would consider him to be capable of. They made a plan that was priced into the labor market, priced into business decisions, and to suddenly change course halfway through and say, actually, we're not going to drop a
point in a half. We're going to stop right now because we're scared. I think that they don't like surprising people, and it's not a good time to surprise people.
All right, Catherine Edwards, Bloomberg opinion contributor and economists, thank you so much for being here with us on this job's day. As we consider how this does have political implications, it's worth noting that this stronger print comes at a time where polling is suggesting Kamala Harris is doing better on the economy. In fact, a new American University poll that pulled women specifically has just come out that finds forty six percent trust Harris on the economy relative to
thirty eight percent for Trump. To address inflation, the numbers are fifty one percent for Harris thirty seven percent for Trump. So for more on how this factors into the political scheme here and what kind of policies each of these candidates could pursue, we bring in Kevin Brie, former US Congressman for Texas and now spokesman for the Alliance for Competitive Taxation. He of course used to share the House wass and Means Committee as well. Congressman welcome back to
Bloomberg TV and Radio. It's good to have you. We do want to get into tax policy, but if we could just consider the economic landscape we find ourselves in now and how this is playing in this cycle. Is the economy no longer a winning argument for Donald Trump and Republicans who are trying to use that as some of their greatest leverage against Democrats.
Yeah, it is still, Kaylie. Good to see in Joe you as well, So yeah, it is still a very strong argument for President Trump and Republicans as a whole. Look, you know, the forty year high in inflation has not gone away. People are reminded of this almost daily. I think it's difficult for the vice president to take credit for a very good jobs report this month but then not take blame for the inflation, crime, the border crisis,
everything else. That is a very unpopular administration, so politically it's hard to do those gymnastics. I think many Americans are eager to see that Trump economy return, mainly because they saw wages in the first three years after tax reform grow faster in those three years than and then since we began recording that data, new job opportunities very
low poverty, income, inequality beginning to shrink. So I still think the President has a strong lead there, but he's got to make the case of what he'll do going forward.
Sounds to me, Congressman, that while the markets may be celebrating all of this, nobody's talking about the R word after this report today, that you might still be worried about a hard landing and whether we see a recession next year. Where's your head on that.
Yeah, So you know, when you get a report like this, you know you were encouraged that perhaps the FED can manage a soft landing, which I thought seemed very difficult to do a year ago or more. I thought it was almost inevitable. I still think with inflation, you know,
still it's lower, but it is still very real. And I've noticed that in the last two economic stretches where we had very high inflation, it took the US six and eight years, respectively to really work themselves out of it, in part because you know, the FED needed to make really those consistent decisions to pour water on that inflation fire. So this is one of those things you just can't
take for granted. It will go down, and look, I look at the numbers on this port strike and what the unions are getting ten percent pay raises per year, plus perhaps blocking productivity and innovation that helps lower costs. I worry about these agreements either costing jobs or being a factor for future inflation.
Well, so all of that is going to weigh on the minds of monetary policy makers, I'm sure, Congressman. There's also the question of what fiscal policy is going to look like in tax policy is a component we want to talk to you about here. As I mentioned the polling and how Harris is doing on the economy. In our most recent swing state pole with Morning Consult, it found that across the battleground she had an eleven point
advantage on who likely voters trust to help the middle class. She, of course, has argued that what she wants to do with tax policy would create more tax briefs for the middle class and charge the wealthy and big business their fair share. How do you, now, sir, given your role with the Alliance for Competitive Taxation, make the case that what Trump is proposing would indeed be good for the middle class.
Yeah, so I will tell you this. I think President Trump focused on extending the tax cuts and Jobs Act that was proven to be remarkably strong in paycheck growth, in job growth, certainly in growth the US economy and our competitiveness overseas. You know, if Vice Harris raised the corporate to twenty eight percent, we will fall to second worst among our foreign competitors, certainly at a huge disadvantage
to China, and more importantly back home here. You know, a new report by the Lanes for Competitive Taxation shows that if she's able to raise the corporate rate back up to twenty eight percent, the Americans on average will lose over six hundred dollars in wages. In some of the swing steat swing states like Ohio and Pennsylvania, you will see lost wages total between two and a half and three trillion dollars billion dollars, major increases for working families.
So I still think President Trump has a stronger economic plan, and he's got to make sure he's clear about is he using terrorists for leverage to gain fair trade practices or is he going to go across the board, which I'm growing each day a little more skeptical about.
Congressman, how nuanced is this debate going to be? You know, a couple of months ago, we were talking about simply extending what everyone has come to call the Trump era tax cuts. But since then, any number of exceptions have been put forth by the former president. No taxes on tips, no taxes on overtime, no taxes on Social Security. He
even wants to restore salt. And I wonder, having been actually in charge of the Ways and Means Committee when all of this stuff took place, Congressman, if that changes the debate now that you're making all of these exceptions, what does that mean for the final product? Does salt need to be paid for? Does tips and overtime need to be paid for?
Yeah? I will tell you.
I think both campaigns are writing checks that I'm not sure Congress can cash. Whether it's new spending on or Vice President hair or child tax credit for housing, for extending the very generous Affordable Care Act premium subsidies or assault, or as you mentioned with President Trump, with tips, over time, social Security and salt. These are huge ticket items on top of simply extending the current very pro growth tax code, that too is about a four trillion dollar cost as well.
So Congress is not going to have the space, fiscal space or political space to do all of that, and so I think it makes the policy debate, you know, even more intense in Congress next year. I still think at the end of the day, in a divided government, both parties are going to have to find a way for it. I think it starts with the middle class tax cuts in a big way, the small business tax cuts, and items like the child tax credit or both support
at least keeping the current level. But at the end of the day, both parties are going to have to find their way through the promises and huge expenses to get this sort of back into the right place.
He knows about this Share of the Ways and Means Committee in the House. Former Congressman Kevin Brady. Great to see you, sir, Houston. Looking nice today with the climate of Calcutta, not a cloud in the sky. Come see us when you're back here in the nation's capital. We'd love to see you, Congressman and Kayley. That really gets to the heart of what we're talking about here when it comes to debt and deficits.
Absolutely, and we'll continue those conversations right here on Bloomberg TV and radio.
You're listening to the Bloomberg Balance of Power podcast. Can just Live weekdays at noon Eastern on Applecarplay and enroun Oto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa Play Bloomberg eleven.
Thirty Welcome, indeed to the Friday edition of Balance of Power. You made it to the threshold of the weekend, and we're glad to have you here on Bloomberg Radio, on the satellite, and on YouTube, where you can always find us by searching Bloomberg Business News Live. Simple as that you'll find our live feed there with yes, a lot of talk about jobs today, a White House that seems to be very pleased with the last twenty four hours in the news cycle, and by extension, a Harris campaign.
As we just heard from Charlie, non farm payrolls up two hundred and fifty four thousand. The estimate was one hundred and fifty k, unless, of course, you follow Anna Wong on the terminal, you know this was an ipoper yesterday. Anna Wong, of course, Bloomberg Economics chief US economist out yesterday with a number at two hundred and seventy k. The preliminary estimate for a September jobs gain with the headline again this was yesterday. Why September payrolls may print
surprisingly high. She's sitting here right now on this job's day. Good to see you, Anna, Thanks for coming in. So how come you knew something nobody else did?
Well?
You know, I think the NFP report is very it's very tricky to interpret because pays non farm pay payrolls, because it's driven a lot by statistical.
Things.
For example, it's driven by whether you can forecast the birth and death factor that BILS uses, whether you can count how much multiple jobs holders are there, how many part time jobs holder are there. So our forecast was driven by the observation that these statistical errors and would be boosting the month headline numbers, although I personally think that the truth is a much lower number. Really help come because that's not the reality you see on the ground.
And also, as I said, we forecast the statistical error right, and the statistical error in these reports are huge. We estimate that we should be mentally adjusting down these non farm PAYIL numbers by about ninety thousand, So that would mean that in fact, job growth for is really hanging around more like below one hundred and fifty thousand.
Does that mean we're in for some revisions again.
For some So I think the revisions would come very late, so in twenty twenty six. Actually, yes, we do expect that the downward revisions for this year would be for the entire year. This year would be about one million by the time it's over. So yeah, we just need to mentally adjust down the monthly number.
Well, but again, you know, the Labor Department has a couple of smart people around there, right, They put their green visors on and they come up with this number every month. How come Bloomberg Economics can see so much further beyond what the Labor Department is seeing right now?
Well, Joe, I think a lot of traders on Wall Street can also see this. I mean, I think the idea is that it's important to forecast anomalies and statistical properties. And I mean our job is to forecast what's printed, not what's the reality.
Yeah, okay, yeah, so the market's smarter than labor. Is it a matter of updating our models here? Can the government do a better job?
Well, I think the people working at BLS are very smart and very conscientious. They're just following statistical procedure which they have been using for decades, right, And these statistical procedure tends to create a lag in real time when you have a turning point in that business cycle. I still think that currently the labor market overall is pretty soft and overall is cooling, and you know, once you adjust for those legging factors, that's that's the trend that we should be observing.
You're talking this morning about a rising unemployment rate as well, at least by the end of next year, five percent, that's in the cards for this economy, right, What would that tell us about the state of the job market at that point? Are we still talking about a soft landing?
Yeah?
So I think five percent would be a gray area where economists would tend to argue that maybe it's not a recession because the Saw rule would suggest that after the unemployment rate breach the point five percentage point increase over a twelve month period, it should rise for another or two percent, and that would be more consistent with five point five percent unemployment rate. But I think at five percent, most Americans would feel terrible about.
This job market. We get one more job support before the election, don't we?
Yes, this is going to be and that one I think would be weak. Really, yes, that one of the election on the eve of it, on Friday, right before election, but there's a question of whether the voters would have a lot of voters would have voted by that. It's really this pairal report that would influence a lot of.
Is the one that tells Yes, you'll hear people talking about how it was politically motivated. I'm sure at the LS at.
Some point here.
But that's why we talked to Anna Wong, because she knows more than just about anybody here in the Capitol. Anna, great to see you, Thank you, congrats on the number. She might not have won the prices right, but she would have come a lot closer than most people. Two seventy Anna Wong, Bloomberg Economics Chief US Economist. It's one of the top stories that we're following today, coinciding, of course, with the end of this doc workers strike. I shouldn't
say the the suspension of the dock workers strike. That was forty five thousand workers, and there was a lot of concern about how that would show up in the October payroll numbers. Maybe have skirted that one as well, that they still have to work out the issue of automation now having handled the pay issue. One of the other stories, as I mentioned that, we've been following quite a lot here at Bloomberg, and not certainly on the political programs as much is the need the thirst for power.
You know, Microsoft turn a lot of heads last month when it announced this deal with Constellation Energy. Remember this, we talked about it to restart part of the three Mile Island nuclear power plant in Pennsylvania to power its data centers. That's the whole game right now. If we're going to have generative AI, you need a lot of data centers and they need a lot of power, and the grid at the moment doesn't have all the power that is needed. And there's more where this came from.
Oracle is designing a data center that would be powered by three small all modular nuclear reactors. We heard about that from Larry Ellison in the earnings call just two weeks ago. And Google is now working on large scale data centers. They say we'll suck up more than one gigawatt of power, and so again they use these small modular nuclear reactors remember this, they're called SMRs to provide
the juice. How quickly though these companies can get these new sources up and running as a question, regulations are a question, and we wanted to talk with an expert. Glad to say. We're joined by Catherine Hamilton, chair at thirty eight North Solutions, which is a clean energy and technology consulting firm. She is an expert on the grid and his host of the Energy Gang podcast. Catherine, I've been looking forward to talking with you because this story
just seems to get louder every day. Is just broadly to start off, is nuclear the answer?
Oh?
I wish I could tell you there was only one answer to this issue, but no, Luckily we have a lot of different solutions. The grid is a complex beast that needs a lot of updates. And yet yes we can use nuclear, but it's not the only solution. Luckily, we have a lot of other things that can bring to the four to deploy. And I will tell you this also, in addition to AI, we have increased manufacturing, we have increased electrification. So demand is growing and load
is growing everywhere. And I want to tell you this is not the first time this has ever happened. You probably before your time in the nineteen seventies, we got air conditioning and the utilities had to build new power plants. In the eighties, when I started working at a utility, we had increased demand and we had to be really innovative with ice storage, with new ways of thinking about rate structures, the time of use, with demand response, and
we were able to get that done. But for the last couple of decades, demand has not grown and so now we're in a position where the utility muscle for innovation it's gone a little slack. But luckily we have innovation that's been greatly democratized, and we can talk about what all those innovations are on the grid because I think we do have the tools to be able to handle this well.
It's kind of the point where we're talking about high tech companies wanting to build data centers on the site of a nuclear power plant because it checks a couple of boxes. It's not just this uninterrupted supply. It's also clean, so to speak. And many of these companies have made climate pledges and it allows them to fulfill all of these goals. What else do you see?
Yeah?
Absolutely, Plus, if you build where there was an old manufacturer, another nuclear plant, that that was originally there. You also have all the interconnection, so that's a huge issue too, is making sure you can actually connect to the power plant. So let's take a look at a few other technologies,
so geothermal, geothermal, next generation technologies. There are hundreds of gigawatts of ability to install geothermal and with these new technologies closed loop that can produce both heat and power. We have other kinds technologies that can go anywhere, so you don't have to find a resource anymore. You can really install geothermal anywhere. So let's look at geothermal. Let's look at hydropower. Right now, only three percent of our
dams are producing electricity. That doesn't mean we need ninety seven percent of the dams to be producing, but we can. We can build another fifty gigawatts of plants with facilities that are already installed. And then there are all these new transmission technologies, grid enhancing technologies, there are advanced conductoring technologies. And then what we don't want to forget is the demand side. So a lot of people think you build a power plant, you take it the electrons through the line,
and you serve a load. And this is just a load. You know what customers are no longer just load and AI centers are the same. AI centers can also serve as a resource so distributed energy resources so behind the meter assets, whether it's solar or storage microgrids, can all be helpful in feeding the grid as well. So we have to look at solutions all the way from the supply side to the demand side, and AI centers are starting
to do that too. A lot of companies that are developing AI centers are looking at how do we build plants that can take one hundred percent renewable energy, that can do liquid cooling, heat recovery, batch some of these operations so that we can really get not only get every electron we can off of the grid, but also provide resources back.
To the grid on the meter. There'll be another great name for a grid podcast. These things just hit me as you say them. You've talked about hydro producer Matt is asking why don't we just put all of these data centers along the Mississippi River. We'll have an AI corridor that runs right through the middle of the country. I see it. You seem to like that idea.
That's a great idea. You'll also find a lot of new manufacturing plants for energy storage technologies and other new manufacturing that the Inflation Reduction Act and the Infrastructure Bill kind of promoted. Those are all going up and down the Ohio and other rivers. And yes, we have resources right there, old Army Corps facilities that can be repowered and reuse and made fish friendly to ensure that we get the electrons we need to those facilities.
Yeah, all right, Matt, you hear that your million dollar idea has been approved. So I guess you know, when we step back from this, there's everybody's talking about nuclear and Catherine, you keep telling me that this is all of the above. Is that the conversation we're supposed to be.
Having, we are supposed to be having that, and the key is we need some policy support on that. So, for example, for geothermal, we have had zero demonstration dollars put towards geothermal. It's been a bit of a step child in all of the funding that came out of the last the Infrastructure Bill. For example, hydropower didn't get much love in the Inflation Reduction Act either, and on the demand transmission, the Transmission Investment Tax Credit fell out
of the Inflation Reduction Act. So there's some things we still need in policy, and we need state regulators to also say, all right, let's figure out how we can get the demand side to be part of the equation. So we don't just model and plan our utilities based on I'm going to build a big power plant. I'm going to mortgage it and have the consumers pay for it instead, like, let's have the consumers participate so their costs don't go up too well.
So, Catherine, what about the utilities? What about the next terras and the dominions? Because I see a story here. Texas's top electricity regulator has a message for big tech. If you want to build AI data centers next to power plants, you may also need to build the power plant too. What does the future grid or the future utility look like with that in mind?
Yeah, it's super interesting because Texas is its own market as it is in a lot of ways. They have resource adequacy. There's this much more real time market than it is in a lot of other places and a lot of other planning processes. So yes, they look at resource adequacy. Do we have enough to meet the demand? And if we don't, let's figure out who's going to build it. A lot of other states, utilities are incentivized to build big things and then get cost allocation and
a guaranteed rate of recovery for their customers. But I think some of the best models are, for example, cooperative utility in rural settings. And I will tell you I live in Virginia and our data center is being built everywhere, and I'm served by an electrical co op, and the co op says, all right, in order to serve all these data centers, we have to be creative, and we can because our number one issue is.
Cost to our customers.
We're a cooperative, we don't have to give a rate to return to a shareholder. So instead we're going to look at how do we aggregate all of these behind the meter, you know, energy storage facilities. How do we aggregate all this? How do we use this to help support our data centers so we don't have to put a lot of money into building something. You know, maybe we're going to end up building a natural gas plant, which would be maybe the worst option, right because it's
producing more fossil fuels. So I think in more greenhouse gases, I think you will see a lot of changes in the way the utilities hopefully are incentivized. And the good news is corporates want this, they want zero carbon energy.
See this is why you talk to an expert. I've been really looking forward to this conversation. Catherine Hamilton, thirty eight North Solutions. Keep this in mind next time you hear about the SMRs Catherine, thank you. I'm Joe Matthew. This is Bloomberg.
You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon Eastern on Eppo, CarPlay and then Rounto with the Bloomberg Business app. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
Just across the river in northern Virginia, I was getting a lot of reports this week of lines at Costco doing this, no paper goods.
Paper goods, water bottles being.
Loaded up onto cars. I was getting photos of this. It's not members of my family. It's not just the toilet, paper, paper towels, water bottles. Apparently this was a concern because there was a strike that was affecting every port along the East Coast and the Gulf Coast as well. Tens of thousands of workers walking off the job with the potential to snarl supply chains, got a lot of people freaked out given the experience everyone had just a few
years ago during the height of the pandemic. None to worry though, at least until January fifteenth, because there is a wage agreement.
Joe, there's going back worry about to begin with ninety percent of the toilet papers made here. I heard that from Tyler Kendall. Okay, still still sorry, I had to digress.
The longshoremen have reached an agreement with the Maritime Alliance for a sixty one and a half percent raise over the course of the next six years, less than they were looking for originally, but of course also above the offer that the Alliance had made right before the workers went on straight.
Yeah, that's a monster payhike for the highest rate, certainly, But the question about automation remains right, workers want to have language. They guarantees no automation. You might have heard Kevin Ready refer to that actually banning innovation, I think is how he put it. So this remains controversial. It's going to be maybe even a tougher component to hammer out here, but it's smooth sailing until November fifth, and that's the point in this conversation, isn't it.
Yeah, by the time this is once again a concern in midja January will be just a few days out from the next president imagine being inaugurated. The question is how does this potentially impact or not who that next president.
Is likely to be.
See what the panel thinks. They're back with us for the Friday edition. Rick Davis and Jeanie Shanzy no Bloomberg Politics contributors. She is, of course political science professor Iona University. Rick Davis partner at Stone Court Capital. Thanks to both of you for being here. Genie, I'll start with you as our Democrat. This is being framed as a big win for Kamala Harris, the benefits of incumbency no strike,
at least for now. But we've got a lot of things going on here as well, including rising oil prices based on what's happening in the Middle East. Would it be smart for Kamala Harris to celebrate this today?
First of all, you guys are making me very nervous. I feel like I too must run the costco. And then you reminded me the strike is over, so I really can't go back to that, you know, coupled with the jobs report, what happened with the strike is very very good news for the Kamala Harris's campaign and of course for the US economy.
More importantly, you.
Know that said I would not go out and celebrate that as we look at the voters that she needs to appeal to.
The undecided voters.
These are people who are deeply concerned about being able to put food on their table, gas in their cars.
These are people concerned about inflation.
So as much as there is good news, I think the message from Harris has got to be we continue to understand and feel the pain you have felt for a long time. Now things are getting better and by the way, the poll numbers suggest that, and we are still working hard on your behalf.
So no celebrations quite yet. She's got to wait for something like that.
Well, especially Rick, when you consider one of the things Genie just mentioned that people are worried about being able to fill their car with gas. Pump prices potentially could be on their way higher if oil futures are to be believed, which of course have spiked this week given the ongoing conflict in the Middle East. Is that actually the worst headache of them all for Kamala Harris and the administration that she's affiliated with.
Yeah, it just depends upon how much. I mean, there have been moderate increases and decreases all year long. This has not really been a year where the economy has been framed on gas prices. Frankly, I think families are more concerned about what are egg costs than a gallon of gas. But the reality is that any bad news in the economy is a notch against this current administration and obviously that flows down to Kamala Harris. So what she wants is more news like today, you know, great
jobs report, low unemployment. You know, she wants to see those interest rates coming down. I mean that the macro economic drivers that families will experience between now and election day will be influential at the end of the day with how they vote. But the mood is still pretty sour, so they see it take up in a couple of cents on their gas price and they might like start thinking about what it was like a couple of years ago, and that would be bad news for the Kamala Harris campaign.
Well, I wonder what we think is good news here? Rick, Yes, the jobs report. I get that, but in terms of the dock workers strike, the administration's fingerprints are all over this. The Chief of Staff, Jeff Science, was on the phone yesterday morning at five point thirty in the morning with the shippers. Julie Sue, the acting Labor Secretary, actually went up to New Jersey to try to close the deal.
Does that rub off on Kamala Harris in this situation or did we simply dodge a bullet that most of the country didn't even know about.
Yeah, I don't see how this administration thinks being the most pro union presidency is somehow anuring benefit to them, especially with white working class voters outside the cities. I mean, those folks are going for Trump, and so the more they talk about this, you know, we've just gotten them a huge increase and.
You know, their pay.
Most of these places are not where they are located or not competitive their East coast West coast sites where a lot of these dock workers are are doing in their trade, and so they're not going to affect themselves the election. But the message is kind of in reverse to Republicans, Hey, we're doing this for union members and you're on your own. You know, we didn't do a thing for you to try and increase your pay, and so I think it has a chance of backfiring on them.
I don't think it's helped them to date. The more they talk about union jobs, the less they're talking about, you know, Middle America and what they're doing. And I think it's counterintuitive to think that that is somehow helping them amongst working class voters.
Well, I've certainly seen a lot of as Rick raised the price of eggs earlier advertisements here in the DC area about prices being higher. In the voice that is vocalizing a lot of that is the Democratic candidate for Senate in Maryland, Angela Alsobrooks. We, of course in this area have been inundated by commercials from Larry Hogan, her opponent, and from Ulster Brooks herself.
We got.
It's constant, and I don't think that will change in the next step four and a half weeks. But Genie, we did get news in the also break also Brooks race today former President Barack Obama endorsing her. I don't think this is a surprise to anyone, but he noted in the ad control of the Senate could come down to Maryland, So vote for Angela also Brooks as we consider the control of the Senate and how that race could be influential, as are the others that we're watching.
How are you feeling now, given everything we just talked about about the trajectory of the economy, things that we may be working a bit more in favor of a Democratic administration. What does that mean for other Democratic incumbents down the ballot.
Yeah, and of course we feel the pain when we are inundated with the commercials of all the people in the swing states who have been feeling, you know, inundated with campaign ads after campaign ads. You know, I think Barack Obama's endorsement of Alsal Brooks was not unexpected. They are hoping that it drums up enthusiasm for her and get out the vote.
She's in a tough race.
Larry Hogan remains a particularly powerful voice in Maryland and a particularly tractive candidate. But of course Democrats are deeply concerned that they may lose Montana, and so also Brooks would be very important in that case. They are also spending big, as you've talked a lot about in Texas, to try to see if they can push that even
further towards the Democrats. That still is an uphill battle, but the numbers look a little better there, and they're also spending in Florida, so they feel like they've got the money to do that. And you know, this is critically important because whoever takes the House, we're talking about the Senate, but the House in particular is really up
for grabs this time. And if Donald Trump wins and he is facing a Democratic led House under Hakeem Jeffries, it is going to be very hard for him to do what he wants to do on everything from taxes to immigration and likewise Kamala Harris if Republicans retain it. So these down ballot races are critical, and of course for those in particular we've been watching New York and California. We don't get a lot of the ten usually in New York and California on the national stage because loose states.
But in the case of the House, these races down ballot matter an awful lot this time around.
I just wonder when the ads start to cancel each other out here. Rick, you live around the Capitol, and picking up on what Kaylee just mentioned, you know, you sit down with Missus Davis to watch The Wheel of Fortunate at night, you're going to see in every commercial break and add from also Brooks and then immediately following an opposition ad, an opo ad from Larry Hogan. It gets to the point where it's just noise for people who want to get back to their TV program? Is
it a turnoff? Does it work?
You know?
I think it does impact. I'm a firm believer in broadcast advertising. Still, obviously that doesn't even account for all the digital advertising we're inundated with for those of us who get a lot of our news on the web. And so yeah, well, first of all, you don't want to go naked, right, So the only thing worse than that is if your opponent is running an enormous out of advertising and you're not up. So part of it is prescriptive in that regard, But the bottom line is
voters do glean information from that. There's not that much reporting on these kinds of like senate and house races, as Genie mentioned, and so you got to get it sometimes from the advertising. And this is where creative advertising really matters. I mean, some of these ads are actually pretty good and you go, oh, Gee, that was interesting. I'd say the vast majority I've seen, at least in
this area put me to sleep. So every now and then I get to go to New York and I get to see all these little load ads and stuff like that, and I think, oh, these are much better than when I get home.
Well in New York, Genie, I do want to mention the reporting we got yesterday in regard to one Congressman who is in one of these areas that could make or break the majority. Mike Lawler, the incumbent Republican in photos from college in blackface when he was dressing up as Michael Jackson. Just given the competitive nature of New York and his district in particular, what does that do.
You know?
He was twenty years old.
I am not sure that this is going to make a huge difference. It is of course negative press for Mike Lawler. We know him well up here in the Hudson Valley. He also, by the way, has expressed interest and potentially running for governor, and he's been in a very attractive candidate for Republicans. Mandre Jones likewise, who is opposing him. I am not sure how it will play. I don't think it's going to play big. He's not the only Republican in New York who's you know, facing
ethics challenges. We've also got d Esposito and because we don't want to leave the Democrats aside, of course, Eric Adams in New York City, so you know, as usual in New York has to be the home of ethical, ethically challenged polls, and here we have it in this race almost up and down the ballot, unfortunately, and by partisan, I should add.
That's a very fair point. Genie Shanzano and Rick Davis, our signature political panel, thank you so much for joining us here on the early edition a Balance of Power.
You're listening to the Bloomberg Balance of Power podcast ken just live weekdays at noon Eastern on Applecarplay and Enrounoo with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa play Bloomberg eleven thirty.
It's the Friday edition of Balance of Power. I'm Joe Matthew indeed, alongside Kaylee Lines here in the Nation's Capital with our eyes of course on Israel. There are so many questions about what might happen over this weekend as Israel calculates a potential and expected promised frankly, a response to Iran. But Kaylei, it's not just Iran we're talking about. Israel continues air strikes now in southern leven on the fact they are urging civilians in more than twenty towns
and villages across the border to evacuate. We talked about cross border incursions limited groups of troops, but the air strikes are really what's been doing the damage.
And we've gotten reporting from the New York Times and a number of other media outlets about the strike, specifically that we saw overnight targeting the potential successor of Hassan Estralla, of course, the assassinated leader of HESBLA, as well as other figures. At the same time, though, as we're still seeing this activity in southern Lebanon outside of Beirut, Aron's foreign minister visiting Beirut and saying we will back a ceasefire.
The question is.
Whether Israel is going to get on board with that after it resoundedly rejected the ceasefire proposal put forward by the US and other allies just last week.
Yeah, and of course we talk about the idea of a ceasefire in Gaza. Wants to see these basically take place at once, and I cannot imagine that's something that Benjamin Etna who is looking for.
Yeah, well, so that's what we want to get into now. As we turn to the voice of Michael O'Hanlon, he is Brookings Institution Senior Fellow and director of Research in the Foreign Policy Program. Welcome to Balance of Power. Michael. Great to have you here on Bloomberg TV and Radio. What is your expectation as to what happens next here? Knowing Joe Biden yesterday admitted that it is up for
discussion that Israel hit Iran energy infrastructure. Now Iran seems to be the one signaling that they would like to see de escalation here. Is that de escalation likely to happen?
Readings Not very likely, although you could imagine off ramps, but it probably would take a different personality than Benjamin Netan Yahoo, given where he is in his thinking and
where this whole war is. As we near the one year anniversary of the terrible tragedy of last October seventh, it's pretty clear Israel will respond about as you just said, I think the most minimal kind of response you could envision would be a beefed up version of what Israel did back in April, when Iran launched three hundred plus missiles and drones at Israel.
Again, like this time, almost all were intercepted, and.
Israel sent back some limited strikes against air defense capabilities around the Iranian nuclear enrichment facility, partly as a message to Iran to say, you know, we could have hit the enrichment facilities if we had wanted to, and maybe we will next time. So I still think there's a
chance that Israel will go after the underground facilities. It would require some of the same kind of successive bomb jackhammering that we saw kill Nasrala in Lebanon, because Israel doesn't have a weapon powerful enough to just get down to those facilities in one fell swoop. But there's a good chance that Israel could take out the Iranian air defense network and then go ahead and do that. It's a long flight for any of the aircraft involved, but
I wouldn't rule that out. But it's more likely, as again you said a few minutes ago, that Israel will do something that's big but different than that, and probably targeting oil and energy and money the Iranian regime's ability to keep itself afloat, especially at a time when sanctions evasion has become more rampant and Iran's earning more money than we really wanted them to under the Joint Comprehensive
Plan of Action. Of course, the US hasn't really even responded or returned to that framework, but it's still there with other countries. And Israel could say, listen, if sanctions won't work, how about bomb and we can do the same sort of thing. But then that invites a response by Iran to shut down the Strait of horror, moves to shipping in general, and or at least to complicate
shipping through the Persian Gulf. And so I think Israel would actually be wise to look for an off ramp, but I don't think they will.
Why then, Michael used brute force in the form of bunker busting, bombs or whatever would get the Israeli military down to that level underground where the nuclear facilities are. Why not use a cyber attack as we saw with stucks Net. That is something that Iran might not even acknowledge publicly.
Well, if you could do it, sure, but as you'll recall, stucks Net was based partly on good luck. I think somebody left a thumb drive in a parking lot and that allowed us to or took a thumb drive maybe that we had deposited in a parking lot, and put it into a machine, and then sucks Net was unleashed, and then the whole world found out because it spread
further than intended. Also only took down their centrifuges for a few months, and you could say, well, maybe that's good enough, except that Iran is now so close to a nuclear weapon that I think slowing them down for a few months in something they can probably recover from
after that would not be seen as ample. And moreover, I doubt very much Israel has the access to those machines that we managed to buy, you know, trick and buy guy find our way to according to public reports, you know, a dozen years ago.
So I don't think we have a stuck in that option. I don't think Israel does either.
Well.
Well, of course we've had Joe and I have had a lot of conversations in recent days as we've considered this question around Iran's nuclear facilities. Of whether that would mean they rush to actually make a weapon, not just develop the components of that. What the consequence could be
that Iran does in response to that. There's also the question, Michael, and that's especially relevant to our audience here at Bloomberg, about the straight of horror moves and whether Iran could be, if attack severely enough, on the cusp of making a decision to choke off the export of energy from the golf. We've certainly seen oil prices with their biggest weekly spike since October of twenty twenty two this week, potentially out
of concern for that. Do you think that is actually a warranted concern?
Yes, I think it's certainly one that has double digit probabilities associated with it. Whether it's ten percent, twenty or fifty, I don't know, but I think there is a decided chance that Israel will attack Iran's oil economy, and that Iran will respond not by attacking Israel again, which it's proven itself relatively incapable of doing, at least with this missile approach, but instead by trying to hurt the whole
world economy and hurt the United States and the process. Now, they might you know Benjaminyal, who probably would like to see Donald Trump elected. I'm not sure the Iranian leadership wants that, and so to throw the world economy into a tizzy a few weeks before at US election, you have to think through the effects on American politics if you're in Iran shoes. But I think there's a decided chance that yes, they would in fact take that approach.
Would it be permanent, No, The Saudis could build more pipelines over their territory and go by land.
We could go in and.
Try to clear out whatever Iran was doing in the Persian Gulf by way of laying minds and using fast attack boats against ships and whatever else. I don't know that we would succeed perfectly, but you know we've escorted ships in the Persian Gulf before, so you could imagine ways to recover from this, But it would probably take a few weeks or maybe longer, and even after that point you might have a state of low grade ongoing hostilities with some chance of oil tankers still being hit
even once we've reopened things. So I think Iran might very well consider that approach. You know, it works against their interests as well, so part of it depends on how hard Israel strikes them. If Israel really shuts down the Iranian oil economy, then Iran has no reason to tolerate the rest of the world using the strait of
horror moves. But if Israel takes out five percent, leaving ninety five percent still effectively as hostage, then maybe Iran doesn't go that route and maybe does continue with the call for a ceasefire.
Spending time with Michael o'halen from Brookings, I was really struck by a piece of reporting in the Washington Post. I wanted to ask you about here, Michael. Maybe we haven't fully understood the amount of damage that Iran brought to Israel in this most recent attack. Turns out, based on videos that have been verified by the Post, at least two dozen long range Iranian ballistic missiles broke through Israeli and Allied air defenses on Tuesday night, striking or
landing near at least three military and intelligence installations. Did Iran do a better job than they were first given credit for.
That's an excellent question, and you're right that the Post has done good reporting and that the Israelis have understandably been quiet about this. They don't want Iran to think that they've been successful. Clearly, if if there was enough damage, don there'd be no doubting it because all sorts of commercial satellites would have the damage by now, and so I have to suspect that the damage was not that severe.
But you're right, there's a big difference between a dozen getting through and zero, and back in April, by all reports, basically zero got through. It does seem that very few people were hurt, regardless of whether some buildings were damaged. But you're right to raise that distinct possibility. And we really don't have firm understanding of whether the intercept probability was nine ninety nine percent.
It's still an open question.
Michael. There is a new Big Take piece out on the Bloomberg terminal that can be found on the terminal or online, and the headline reads as follows, Widening Midi's conflict shows limit of US leverage with Israel. The essential thesis of the piece here, Michael, is that the US can only do so much to actually influence the outcomes, and what the Israeli government does is the US desire
to see things ease in the region. Anything that they're frankly telling the net Yahoo government consequential at this point or does it not matter?
It's an excellent question.
I don't know if the United States has had major leverage in any crisis over Israel since nineteen fifty six, the sus crisis. It's the last one where I can really feel or to say that the United States essentially carried the day, maybe in the seventy three Middle East War, but Israel wanted our help in a sense, at least initially, and then we needed We put pressure on them to agree to a ceasefire sooner than they wanted, but we still had their back, and their overall goals were not
fundamentally different from what they achieved. And so in that regard, I think it's been a half century at least, maybe longer since we've really been able to coerce Israel into a plan of action that we preferred. And the last time it was really even tried by the United States except through browbeating and persuasion, was the first Bush administration suspending loan guarantees when the Israelis continued with occupation development no excuse me, you know, with housing development in the
occupying territories, especially in the West Bank. And so it's been thirty plus years since anybody really even tried to use more than just nice words to persuade Israel to do something that we wanted them to do. You know,
I can go through other cases. George W. Bush shut down a Rocky air space according to public accounts, when the Israelis wanted to think about bombing Iran back in two thousand and four or five six, when we control the Rocky air space, and at that time we told them no, and they had to take that for an answer because we were essentially the occupying power formally in that zone. We don't have control over a Rocky air
space anymore. My whole point, you can see is that I don't know how often we have been able to tell Israel what to do as a sovereign nation, and we usually haven't even tried that.
I do think we should try harder.
I would withhold some of the two thousand pound bombs they've been using in Gaza, for example. But for the most part, this is not news. This is not something that just happened with Biden and net and Yahoo.
Michael Rasashana ends tonight. What does that mean for this weekend.
Well, one more reason why your earlier prediction that something might be brewing is probably correct, and I wouldn't be surprised at all, but this would happen sooner rather than later. But Israel also can take its time, you know, and I would rate the odds of something happening in the next week as more than fifty to fifty, but maybe not ninety ten.
All right, Michael O'Hanlon, great to have you on this Friday. He, of course is Brookings Institution Senior Fellow and director of
Research in the Foreign Policy Program. Really appreciate and of course Joe on a day in which we're talking about potentially an economic victory for Kamala Harris and this administration in the form of a stronger jobs report, we do also have to consider inflationary pressures that could readgnite as we talk about this conflict in the Middle East and oil prices that are now seven dollars a barrel higher on this Friday than they were when this week start.
Another two percent today West Texas above seventy five dollars a barrel. What does that mean for gas prices at the end of October? If this hasn't been resolved yet.
You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon Eastern on Apocarplay and then Froudoto with the Bloomberg Business app. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
It says we dig deeper into the world of politics here on the Friday edition of Balance of Power, with a political cycle that has been so ridiculous it calls for a psychologist. And I'm not just trying to make jokes here. Is this campaign the death of truth? There's a question that a lot of people have been asking, got fake news from Russian bots, misinformation from Iran getting on to our social media AI bots are making videos
that we can't tell are real or not. And then of course the candidates themselves saying things that, well, I wouldn't be up to me to call them lies, but maybe embellishments, maybe challenging the truth. Think about this whole conversation about Springfield, Ohio. They're eating cats and dogs and routing up the geese. Until you talk to the people in Springfield, it turns out that's not happening. And I'm reaching for this one example. Don't worry, We'll get to
both sides here. Remember jd Vance called out on this when he did a bunch of Sunday morning shows, in this case on CNN, when he talked about creating stories to make a point. Let's go back to listen.
Can you affirmatively say now that that is a rumor that has no base basis with evidence, Dana.
The evidence is the first hand account of my constituents who are telling me that this happened. And by the way, I've been trying to talk about the problems in Springfield for months and the American media ignored it. If I have to create stories so that the American media actually pays attention to the suffering of the American people, then that's what I'm gonna do, Dana, because you guys are completely letting Kamala Harris coast.
If I have to create stories, It's been echoing ever since he said it. Daniel Efron specializes in the psychology behind the way we interpret these messages because a lot of times, hey, let's be honest, voters like to be lied to, and other times voters can justify I won't call it a lie, but maybe an embellishment or a mistruth if it seems to codify something that they already believe.
That's where Daniel's work comes in. He's Professor of organization will Behavior at the London Business School, social psychologist and with us now live on Bloomberg. Daniel, I'm so happy that you could join us. I have a lot of questions about your work, and I know that you've done very specific research on this. You've been writing about it for years as a matter of fact. But let me start with the big question. Is this campaign the death of truths?
Thanks so much for having me on the program, Joe. You know people are often concerned about is everyone just believing all these falsehoods, misinformation, fake news? Why do people sometimes believe this stuff? Yeah, that's an interesting, important and important question. In my work, I look at something a little different, as you've alluded to. I'm interested in why people would tolerate falsehoods even when they.
Get they're false.
And the issue is, I see, it is not so much that people don't care about the truth anymore. It's that people are capable of thinking about the truth in different ways. We're all capable this, regardless of what side of the isle we're on, and the issue is that we define truth differently depending on who's telling the falsehoods.
Well, you've actually done some real research in this area, which is it's great that you're with us to talk about this. And I'm referring back to a piece you wrote in The New York Times in twenty eighteen, how little Things have changed? And you write, wittingly or not, mister Trump's representatives have used a subtle psychological strategy to defend his falsehoods. They encourage people to reflect on how
the falsehoods could have been true. And so Daniel sat down with more than twenty seven hundred Americans and asked them throughout by the way, from both sides of the political spectrum, to read a series of claims that they were told were false. They were false. What did you learn from these interviews?
Daniel?
That's great.
So yeah, I do experiments where I randomly assign people to read about alsehoods in different conditions. The experiment you're alluding to was inspired by Trump's inauguration in twenty sixteen. You remember Sean Spicer went on TV and claimed it was the largest inauguration ever.
In person or remotely right, And.
Then the next day newspapers published side by side photographs showing that at the same time of day, Obama's inauguration a few years earlier had been bigger. Now it was instructive to see how members of the Trump administration respond
to this. At some point they stopped defending the literal truth of that claim that the inauguration was the biggest, and they started saying or implying things like, well, the inauguration would have been bigger if the weather had been nicer, or it would have been bigger if security hadn't been so tight. Psychologists refer to these as counter factuals, where you kind of mentally undo reality and you think about
how things could have turned out differently. Now, logically, these counterfactuals don't bring falls any closer to the truth, but psychologically they can make the falsehoods feel a little bit truthier, let's say. And we find in this and many other experiments that when you invite people to imagine that a falsehood could have been true if circumstances had been different, they think the falsehood is a little less unethical to tell. They're less inclined to want to punish the person who
tells it. And this is particularly true if you like the person who's telling the falsehood, like if it's a politician that you.
Support, isn't that right? Virtually everyone you talk to recognize the claims as being false. But as you just said and wrote quite well in The New York Times in this piece, a little imagination can apparently make a lie feel truthy enough to give the liar a bit of a pass. Now we've got lies, and of course the lying liars who tell them, forgive me, Daniel, but we also have sometimes embellishments.
Right.
Politicians love telling stories. They've been around the world and back. And in the case of Tim Walls, this came to a head during the debate just a couple of nights ago here, and I'd love to bring you back to that moment. This, of course, is Kamala Harris's running mate, and he had claimed to be in Hong Kong at the time of Tieneman. Turns out he was not, and he was called out on this during the debate. Here's how he handled it.
Just to follow up on that, the question was can you explain the noterepancy?
All I said on this was is I got there that summer and misspoke on this, so I will just that's what I've said. So I was in Hong Kong and China during the democracy protest went in and from that I learned a lot of what needed to be in governance.
Okay, awkward at best, but I wonder, Daniel, if you can dig into the psychology behind this politicians who want to embellish their record that might make a supporter feel better about them, maybe codify feeling that they already have. Is there some parallel here?
Sure?
So in my recent studies, my colleagues and I find that when you support a political candidate, you start caring more about whether what they're saying speaks to a larger truth, is making a general point that you think is true, as opposed to caring about whether what they say is literally and precisely true. So another thing that Tim Walls has said is that he's been to China thirty times. His campaign later walked that back and said that it's something.
Closer to fifteen.
So I haven't studied this exact example in my lab, but the prediction I would make from our research is that if you're a Wall's opponent, you would say he said it was thirty, but it's actually fifteen.
That's a lie, that's very dishonest. That's wrong.
And if you're a Wall supporter, you might say something like, look, is it thirty, is it fifteen? Is it two? I mean, let's not get pedantic here. The sheets to China, bind shed it's informed his policy and.
Of the Aisle.
An example that I have studied in my lab. If you think back to Senator Katie Britt's response to Joe Biden State of the Union address some months ago. She was criticizing Biden's immigration policies, and she told a very upsetting story about a woman she had met who had been sex trafficked, ostensibly by Mexican drug cartels. And Britt said, you know, he wouldn't be okay with this. You remember this, She said, we wouldn't be okay with this happening in a third world country.
This is the United States of America.
Okay.
So I had a Democrat and Republican participants watch a video clip of Brit making these remarks, and then they were shown actual fact chats from Fox News, PolitiFact, other sources saying, well, it's true that Britt met someone who had been sex traffic, but some of the details were wrong. This didn't happen at the border, It didn't happen because of Mexican drug cartels. Cartels were not involved, and it
actually happened during the George W. Bush administration. So then I asked Democrats and Republicans how dishonest are BRIT's remarks and why. Democrats say it's very dishonest because she's making up facts. This none of this stuff isn't true. Republicans say it's not so dishonest because, look, she may have chosen the wrong story, but this stuff happens all the time.
The issue she's talking about is true. So again, whether you're a Democrat or a Republican, if you support someone that's telling you falsehoods, you might not care so much if you think the falsehoods speak to a broader truth. And this is what I meant earlier when I said that it's not that people don't care about truth, it's that they may just define truth differently depending on who's lying to them.
Ah, the alternate facts. I've got less than a minute, Daniel. I don't mean to set you up to cut you off, but don't we love to be lied to voters love to be lied to. Is that not part of the story.
Well again, I don't.
Know that people are seeing all of these falsehoods as as lies.
That is what I want you to tell me, what I want to hear. That's the point, Daniel, Make me happy.
Yeah, I look.
I think when voters want to hear falsehoods, they define dishonesty in different ways. And you know whether it's reasonable to care about details or whether it's reasonable to care about the gist, the broader picture of what someone's saying. We're all capable about caring about both. The problem is we're just maybe a little hypocritical and how we apply those standards.
Love talking to you, Daniel Fron. I do this in person sometimes. He's the professor of organizational behavior at London Business School. Maybe I'll come over there and see a social psychologist. How about James, let's get a residence psychologist for Balance of Power for the next four weeks. I need one today. Thanks for listening to the Balance. It's
a power podcast. 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 Noontimeeastern at Bloomberg dot com.