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We have Monica Guerra here in studio with US policy analyst at Morgan Stanley, and so as we listen to this music in the back, we'll keep it going just for some flavor and feel as we go for Monica.
Great to have you with us. And I'm kind of curious how you, as someone who is following this from an investor perspectives or processed what we've seen so far in the first speech, the formal inaugural address, in the kind of second more loose inaugural address that we got after that, what's it telling you about how the policies of this president are going to be going to be rolled out?
Yeah, I think at first, if you're looking at the executive orders, right, he essentially went through his top line items immigration, right, immigrate, some strict immigration reforms, and that could have a longer term impact on the economy. So day one we have to see exactly what that looks like, how is it going to take shape, how are they going to implement. So one of the things we spend a lot of time thinking about and talking about is not just the magnitude of the policies, but the pacing
and sequencing. So if you're just focusing day one on immigration, you have to consider that that has the more of a five year lag to truly having a pull on the economy because you're looking at demographics, fertility rates going down, et cetera over time, and so that is a more gradual impact. Now, if you're looking at some of his more economically stimulative policies that are deregulatory, et cetera, that could have a more and a more immediate implication.
Well, would there be would it be possible to have more of an economic shock from immigration policy, whereas the effects would not be lagged If indeed he does follow through with essentially deporting you know, up to eleven million people from.
This country, That again is a very large number. So are you saying magnitude in pacing if it is at that magnitude, yes, of.
Course, is it realistic for us to think about it at that magnitude just because of logistical reasons.
That's essentially where my position today stands. Obviously, if you're going to engage the military and have other tactics that could change the perception, and I think a lot of us here are involved in the waiting game. But if you're looking at the five hundred thousand folks who are in the criminal justice system already that would be easily deported, that's about net two hundred thousand more than the annual three hundred thousand that are deported. So that has a
very different impact. Now, if you're going for that eleven million, I find that, you know, it's be a quite you know, a large number that would be difficult to quantify in a very swift period of time. You could get a significant shock. Obviously, the industries that are going to be
impacted the most. So if you get above that five hundred thousand number and you're starting to deport folks who are not in the criminal justice system and are already not participating in the economy and in labor, it's going to be agriculture, services, industry, etc. So we have to focus on those areas, especially as investors, as the policies actually roll out, all right.
We also want to bring into the conversation Jennifer Lawless. She is Professor of Politics and Public Policy at the University of Virginia, Professor at Lawas you've been listening to our conversation, are you getting a better feeling of the prioritization of policy within the Trump administration by the president of the things that we need to kind of keep a watch on that you think he initially is going to tackle. Is it clear to you yet?
It seems like this speech today, both the formal speech and the informal one, and everything that we've heard since the election, is consistent with the campaign trial priorities. So immigration will be one of the first things that are tackled, Tariffs and how that's going to affect the economy will be the second, and on the back burner will be things like abortion, where he's ready to act should Congress
manage to pass that kind of ban. We also saw during the speech today that there are symbolic things that he's going to be doing to speak to his base and to try and demonstrate that he's going to filfil campaign promises. So it's very unheard of in an inauguration address, for example, to state that gender is binary, and so things like that are going to be the kinds of things we're going to hear over the course of the next few weeks.
I would assume.
Jennifer help us out here navigating all of that, because I think that's going to be the thorniest part of this and the challenge at least in these coming days, how you decide what is symbolic and what has teeth, what's going to be something that you would be tantamount to to a major policy change. How are you going to navigate that as we kind of look at the rhetoric at these executive orders, at maybe more formal speeches and addresses from the president, how do you process all of that.
Well, it's symbolic if Congress ultimately has to act in order to change policy and hasn't done that yet, And so Donald Trump can say, for example, that we're going to become a country again where there are only two genders, but it's hard to know what that actually means except
alienating and isolating large portions of the population. We do know that it means that, and there are real ramifications, but in terms of policy at this point, his rhetoric doesn't change the way that states conduct the business they've been conducting when it comes to immigration, where the federal government does play a clear and active role, and Donald Trump or any president through executive order can shape policy that's certainly going to be more than symbolic.
Can I just say, I'm thinking about all of the HR teams in you know, global corporations or Corporate America who are like saying, okay, and how do we address this with our employee base in terms of you know, just two genders and you know, I'm assuming they're going to have to be addressing this. It's just something that I'm curious.
I don't know.
We'll see how.
This will play out over the next over this week.
I don't know if that it matters for companies. This might be something. My understanding is this is like the federal government and it's passports. It you know, a company can do whatever. I think a company can do whatever it wants.
I don't know.
I guess so, I guess so, I don't know. Like I'm curious, you know, Monica, like for your company, Morgan Stanley and some of these issues that are coming down, I don't mean to put you in the hot seat, but I do think about these issues will have to be addressed by companies.
And you know, it is something that Morgan Stanley has to deal with on a daily basis. I can't speak on behalf of them. I'm not on our legal team. That's not an area, right that I.
Focus on policies in general, right.
Policies in general, right, I keep an eye on all of that. I sometimes have conversations about what we think the administration might do. That said, when I'm thinking about messaging, I think another sort of pivoting away from the di discussion. I want to focus on Tariff's brow just to move move the conversation. Definitely done now happy, No with tariffs. I think it's important to note that we got a
lot of really big messaging. And that's why I like with the immigration comment, right with the eleven million number, I really want to highlight that. With tariff, say came in, they were saying they were going to do all of this significant action on day one. Now now they're going to do a study. So that's why we have to see things as they come out, right, you have to see the action's actions speak louder than words.
But when your kid comes to you, I want this toy. I want this toy. Right, let me think about it, and so we're going to study it.
So that's important right when we're when we're trying to suss through what this means for markets and the economy. Now, one of the things that we're really focused on and trying to hedge for is, you know, is all that enthusiasm around Trump priced in? Is this an opportunity right for Trump to disappoint if he doesn't go big on on I would say corporate tax cuts, for example, that's a really era I would say important area where investors
are focusing on. They're expecting a cut as deep as fifteen percent, But when you're thinking about the broader fiscal system, it's important to take into account what they can and cannot achieve and if they're trying to offset debt and deficits, if they're trying to find and cost savings, cutting a corporate tax may not be the first thing on the agenda.
So if that is not delivered on, do we see equity markets and the stock of companies react in a way.
That is negative?
Yeah, I say you would see multiples right, have a correction. I can't speak to you know how long that would last. I don't know what the messaging around.
In your view is, it is what's.
Pricing is the fifteen percent. Is the enthusiasm right around this pro growth, incredibly pro growth messaging. And so when I'm thinking through where are the risks and opportunity sets, one of the risks that I'm focused on is the corporate tax cut.
Jennifer Lawless, I want to bring you back in here. We were talking a little while ago just about how this presence sees himself in the context of history, and I'm curious what stood out to you about the remarks he made. And I think that that second speech he gave with so illuminating in that regard that there's still a lot of things that he's clearly ticked off about
that happened last time around. You know, when we talk about of his desires on Greenland and Panama and the like, that there's a sense to kind of put a stamp on this presidency in a very big and novel expansionary way. Talk about that if you would just sort of what you observed about the sort of way he sees himself in the larger context of American history visa VI that that speech that he gave this afternoon.
It seems to me that Donald Trump does not differentiate between being president and the institution of the presidency. Typically, what happens is that presidents feel like they're moving into a role. They talk about the importance of democracy and a smooth transition of power. They talk about the august nature of the institution that they'll be occupying, and they talk about the importance of bringing the country together and moving.
Forward to achieve greatness.
Donald Trump did not do that in twenty seventeen, and he did not do that today. In fact, today's speech in a lot of ways was even more negative and even darker than his first inaugural because it was also filled with attitude, an attitude that highlights the importance to Donald Trump of retribution and of doing all the things that people said that he couldn't do.
And I think that.
Nationally and globally, he sent a very clear signal that he is basically going to go out there and give it a shot to do whatever he wants, whether that's renaming the Gulf of Mexico, whether it's taking back Panama Canal, whether it's taking greenland, or whether it's just changing national policies that the American people have become accustomed to, or renaming mountains. And I think he's making this more about
himself than about moving forward. There was no attempt whatsoever to try and unify the country, or even to pay lip service to the idea that he would be a president for all Americans. I don't think Democrats are surprised by this, But this was his first opportunity to veer away from the campaign messaging, and he opted not.
To do it.
Professor, does he need to do that? He's won, He's not running again. Can't run again. Maybe he would like to run it again, he can't run again. Does he need to appeal to all Americans?
He doesn't need to appeal two years.
He doesn't need to appeal to them.
The question is does he want to actually move the country in a direction that most Americans and I don't mean just a tiny margin, you know, want him to move the country in. And typically in their second terms, presidents do have some flexibility to do that because they're not seeking reelection, and the new nominee won't be seeking election for two years. Donald Trump has definitely made this more about retribution than unification.
You know, I think you bring up a good point, Monica, come on back in, because I do think about you know, I want to say the two Americas, but I think there's more than just two. And we know that there are folks who are in the market that we know there are folks that are wealthy that have done very very well over the last couple of years. There are
a lot of Americans that have not. And so how do we really find you know, what do we need in terms of a president that can really appeal to the broader population that benefits more.
I think that Trump did that in this election cycle. I think that it speaks for.
Itself appealed, but does he actually follow through with policy that helps more Americans.
Well, that's the important thing about Congress, and people seem to forget about the role of Congress. He can do a lot with executive orders, one hundred percent, He's going to go big on day one. But when we think about what can Congress do, especially around the tax piece
that's really important. We do think that there's going to be a full extension of the individual tax components, which could be supportive of you know, multiple layers of wealth, but you know you're also going to see a continuation of support for things like the higher earners when you're thinking about no changes to capital gains tax I think is a really good example where the most wealthy will be able to continue to accruve that wealth. They don't
think that's a secret. That's something that you know, we are focused on and we do consider. But when we're looking through the broader agenda and sort of what's top of mind for folks, we want to see, you know, where can you actually benefit across the board, and one of those areas you could surprisingly be in the clean
energy sector as far as creating new jobs. And I really want to emphasize that now the IRA the Inflation Reduction Act, about eighty percent of the funding went to red states, and in red states where maybe they haven't had the same type of economy, the same sort of agglomeration that we experience here in New York. Right with all these jobs, these are opportunities for those that growth sector to continue to employ people in those states. So we think, for example, that clean energy might be a
sleeper agent. You have oil sort of at the when you're thinking about messaging oil Drill, baby, drill. All of that sounds really exciting because it's going to lower prices at the gas pump. Again, that's also would be a regressive tax and help lower income folks if they're able to lower the price of gas. But what's important about that is that if you're lowering the price of gas, you're lowering the cost of oil in the markets. Right, it will sell off. I think it has sold off
today if I was correct. And with that, comparatively, we think that clean energy could have a nice opportunity to outperform, not just on a relative basis, but also because it's sensitive to rates, and if we do get some rate cuts at the latter half of the year, we could see clean energy make a surprise upturn.
All Right, we're going to leave it on that note. Manica, thank you so much. Policy analyst at Morgan Stanley. Jennifer Our thanks out to you as well, politics professor at the University of Virginia for joining us at our roundtable.
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All right, folks, we're going to continue to monitor the comings and goings at the Capital Wan Arena and certainly bring you those incidents and activities that are certainly important to the Bloomberg audience in the meantime. Henrietta tre is important because she certainly passes through some of the business development's political developments and what it means for investors in
the Bloomberg community. She's co founder and director of economic policy at the investment advisory and consultancy firm VEDA Partners. Joining us on this inauguration day Monday, Henrietta, as we continue to watch the festivities at the Capitol One Arena, talk to us about this day and for you what has been maybe most important as Donald Trump has now begun his second term here.
Yeah, thanks you so much for having me.
The most exciting part for me is to watch all the staff go into the White House, which of course occurs behind the scenes, but starting to see the rollout of executive orders of the memos that were released earlier in the day, and now obviously President Trump, as expected, is going to hold very ceremonial signings of a lot of these executive orders that Congress is going to take a really long time to pass any legislation after this Lincoln Riley Bill, and so this is really going to
be some of the first one two punch stuff that Trump can do during his second term in office.
Henry had to ask you a question. I've asked a few other guests, and we're trying to see if anybody knows the answer to it. As we watch the Butler Fire Department parade in and of course President Trump was shot in Butler County and a member of that fire brigade was killed during that attack that took place over the course of the summer. We're curious about tariffs and trade policy timing. I know that's something you're monitoring very closely as well. Jamison Greer, the presidents picked to be
the next US trade representative. We gather there won't be an announcement about trade policy today. What's your sense of how that's coming together. Sequencing is a word we've heard a lot over the course of our broadcast today. What's your sense of the sequencing and we might get some more detail on that trade policy.
Yeah, interesting question, and some of it sort of answered or at least implied by the profits circumstances of today.
Some of the least.
Well received commentary from President Trump during the earlier ceremonies from Republicans in the Senate came around his announcements he was about to impose tariffs. And the first thing that really comes to my mind is that USCR Jamison Greer has not been confirmed yet and the Senators get to
vote on that. So I think from a sequencing perspective, it makes sense to hold his hearings and have his vote in the United States Senate before he implements additional tariffs, either under Phase one of.
The US China trade war or even against Canada with DAIPA.
Whatever happens on tariffs is going to land on Howard Lutnick and Commerce and Jamison Greer at USTR, Scott Bessett to an extent at Treasury, and those are Senate confirmed roles. So some of those are going to start tonight with Marco Rubio, we understand, and then throughout the rest of his week. So I would expect some initial trade action
right after those folks get confirmed. Otherwise, those Republican senators from farm states who are going to be hit the hardest in any retaliatory measures are going to have problems and maybe hold up some of his nominees.
So I think it makes sense to expect this to.
Date a couple of days before you see a major action, aside from just you know, signing some executive orders to study the issue of tariffs.
How do you read into the report that Bloomberg News in the Wall Street Journal had earlier today about the President not going through with tariffs on day one going through with tariffs immediately. Is that instead forming this sort of study, doing this sort of study of trade policy in order to come up with something that may be different than what he talked about on the campaign trail, Is that a win for people in the administration such as Scott Bessant or more traditional Wall Street folks.
How are you viewing that?
Yeah, I would separate Scott Besson from traditional Wall Street folks. Scott Besson, of course supports a gradual escalation of tariff's. I've heard him say directly five percent increases per month, So I wouldn't expect him to be the voice of opposing tarifs whole sale.
That's not in his agenda.
My expectation is that We have a lot of very serious campaign promises that Trump promised to deliver on the trail on day one, and most of the pertain to immigration, which we're seeing, transgender rights, energy policies. So I think there's going to be you know, one hundred different executive orders.
There's a lot there to chew on.
When it comes to the tariffs, one of the things that I've really wondered about is whether Jamison Greer at USTR would adhere to the enforcement mechanism of the Phase one trade agreement, which if he does, by my mouth map and calculations, if he suggested that he's going to pull out of Phase one today, that doesn't necessarily lead to tariffs today.
It leads to tariffs.
In May June period after you have a series of pre set negotiating times and interactions with the Vice Premier in China, with other trade officials, the deputy secretaries at USTR. So a lot of that is going to depend on depend on the specific enforcement mechanism in the trade Phase one deal with China where Canada and Mexico are concerned.
What we've seen in the past is announcements of AIPA tariffs, but then a ten day lag period, and then just before the lag period in Canada or Mexico have announced their retaliation, the tyroffs get pulled off. We saw that both with AIPA and with Section two thirty two with Canadis. So I think everything is very much on the same trajectory. I would caution against being optimistic. You know, five hours into Trump's term that we're not going to see tariffs.
That doesn't really stand a reason to me.
No, that's fair, that's fair. I will point on our live blog Brad Bechtel, head of FX over Jeffries sharing his views with our team and saying, well, there's some relief in the markets. Again, markets are closed, but we are watching futures trade and we did see them move a little bit higher, maybe on some relief that maybe the tariffs weren't forthcoming, at least not today, and we
did see the dollar slide. Many still feel tariffs will eventually come, so Monday's dollar decline may only be temporary. He weighing in on this, Henrietta, how do you your clients if they reach out to you and say, okay, but what are we supposed to take seriously? When Donald Trump Trump talks about President Trump talks about Greenland, or Gulf of Mexico becoming Gulf of America, talks about taking
back the Panama Canal. You know, what is the realistic conversation that you have with clients around this.
Well, when it comes to Greenland, I think a lot of the conversation when we talk about it revolves around some of the other components that we see from nations like Canada and Russia and China.
Where are we getting minerals from? What is the purpose of this Greenland conversation? There's an expectation or view on the street that this is more just for show. I'm not sure exactly what market moving event would come from designating the big the Gulf of Mexico and the Gulf of America.
You know, I'm not sure that.
You necessarily invest that way, So I don't.
Spend a lot of time talking about it with clients. But we do have some really poor.
Focus points on things like do you close the Fama Canal? Are we really putting tires on Mexico to close the immigration border? Things along those lines we focus on for sure.
Let me ask you lastly about taxes, and it's something that we heard from Scott Besson when he was at his confirmation hearing. He's saying this was the biggest priority for him and for this administration. When don't we see the conversation about that among lawmakers begin in earnest on extending those Trump era tax.
Cuts, that is very much well underway.
You have seen now a number of different sort of like working papers from small committee groups and then also the broader budget.
And Ways and Means committees.
So that conversation is advancing on the House side, because of course the House and Senate have two different ideas. The Senate wants to move forward with a two track reconciliation package that would get Trump a win in the first six months of his administration, where the tax bill is really more realistically not going to pass until December.
So I think those conversations are already well under way.
You can see it with the Salt Caucus going down to mar A Lango. That's all about these deficit numbers that are going to have to be incurred, how to proceed with the budget reconciliation strategy and passing a budget resolution. We're very much already seeing that in the works, and I think it's really gonna come to a head starting probably next week when they have to pick one or
two reconciliation bills. I'm biased towards the United States Senate as a former Senate staffer, so I have eighty percent on that we do the two reconciliation bill path. But that's really already underway, and I think we're going to have to see members move in that direction the next couple of days.
All Right, We're going to leave it on that note, Henrietta, thank you so much. Really appreciate you joining us and weighing in today. Henrietta Trees, she's co founder and director of Economic policy at Veda Partners. Joining us from New Orleans.
You are listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Applecarplay and the Android Auto with the Bloomberg Business app, or watch us live on YouTube.
In our studio is Stefan Seelig. He's back with us. He's managing partner at Bridge Park Advisors, the financing advisory firm. Joining us now. You might recall he's been a frequent guest for US Undersecretary former Undersecretary of Commerce for International Trade at the US Department of Commerce. That was during the Obama administration. He also headed the International Trade Administration,
spending all nearly three decades on Wall Street. As we like to say, Stephan, you're this great intersection of public private policy. How are you feeling on this inauguration Monday?
Look, I think Carol, we all have to feel optimistic because we're Americans and that's kind of our job, and we're all rooting for the president and the new administration. He's clearly entering the White House with a whole host of challenges, both economic challenges and foreign policy challenges that he didn't face in his first go around. And so as we say, godspeed.
What did you learn during the first rodeo that you're going to come and kind of refer to this time around when it comes to what he's saying, what he's telegraphing, How useful is it to you having lived through this before, as you think through the implications of his policy proposals.
You know, Look, and I think that's the question. Are they policy proposals? Are they bargaining chips? Is it bluster? Is it things he says for self amusement or to be vindictive to others, and so I think we have to take a fair amount of what the president says cum Grano salis.
As we used to stay in school.
That being said, you know, the fact is is the country is facing a whole raft of challenges that I think the American population has felt that political leadership on both sides of the aisle has not been effective and addressing.
Does it look to you like business leaders are getting too political? We had a Bloomberg analysis about one point three trillion dollars in wealth on stage during that inauguration, people like Mark Zuckerberg Elon Musk.
Well, the most amazing thing, Tim is probably in five companies.
Yeah exactly. I mean it's like three or four individuals. It's like the stock market.
And it keeps like the mag simon We're happy inaugirl.
Is that is that a relationship that, in your view as a leader, is risky at all to these companies?
You know, Look, I think companies have to do what is best for their companies, their constituents, and their shareholders. And I think basically what they are doing is, you know, getting behind the president. I think there is a general perception, not just in the technology sector that the last administration was not particularly pro business, and that was particularly the
case in the healthcare and pharmaceutical industries, amongst others. And I think they're all hopeful that in this administration there's going to be a much more business friendly environment. And I think, as I start off saying, they're Americans too, uh, they're and they're getting behind the president and the administration to put their particular companies in the best position that they can be in. And that's kind of their jobs.
You know, Stephan, I keep thinking about, you know, notes you shared and what you said when you kicked off the conversation about the world that Donald Trump is coming into in his second term. It is more complex, it seems, there is more volatility. It's not just something we see a play out actually in the financial markets to some extent. So what's his first test? Is it Russia? Ukraine? Is it continuation of the Middle East peace or cease fire?
Like?
What is his first test? Do you think on this front?
You know, I'm not sure.
You more domestic?
You know, you do it, Siriatum. I think they're going to all come together and he's going to address them. I think he's probably Carol going to focus on the things where he's likely to be able to be the most impactful. So, for example, he's probably learned from his North Korea experience that there are certain fights that are, you know, not necessarily worth getting into. But I think he is going to sense that he has a real opportunity. He's got a real opportunity in the Middle East. He's
got a real opportunity with Russia and the Ukraine. He's got a real opportunity to reset our relationship with Europe. So I think there's a whole host of both domestic, economic and foreign policy opportunities that the President's going to go after.
As a marching band from Middletown, Ohio, which I believe is a JD. Van's hometown, makes its way through Capital One Arena. Let me ask you about your former job at the Commerce Department. We were talking with Henrietta Trades a moment ago about waiting to announce trade policy until the US Trade Representative is in place. I've been thinking a lot about how this economic team works altogether. If it's going to be fractious, who's going to call the shots?
Can you just talk about the relationship between Commerce and the US Trade Representative and the White House when it comes to hatching and imposing trade policy. How does it all work together? How should it all work together?
Well?
It is, you know, the bifurcation historically has been that the United States Trade Representative was primarily focused on trade agreements and negotiating trade agreements, and with the exception maybe of the renegotiation of the USMCA, I think everybody expects that there'll be very few trade agreements that it's really not going to be part of the presidents in this
administration's trade arsenal. So I think, frankly, the Commerce Department will be much more central and central and driving two things, which is to create a leveling field for US companies to compete most effectively overseas, and to attract foreign direct investment into the United States.
The tariff issue.
You know, frankly, is not just will not just come from both of those departments, but will come from this new external external revenue service these taking about. I'm not sure how that I'm not sure how that will necessarily be different than the you know, customs, customs arrangements that already take place. But what I would say is that the tariff conversation is not particularly well understood. So the President today focused primarily on the revenue raising benefits of tariffs.
That for sure is true if in fact they're paid, because if they're paid, the Treasury then gets the money. But he also talked about creating opportunities to have the restoring and resourcing of American manufacturing. If because of those tariffs, foreign goods are not going to be coming into American chores because they're more expensive, then there's not going to be the revenue opportunity. It's not going to be collected. So it's kind of you can't have it both ways.
We had an earlier guests who suggested, I can't remember who it was that said, maybe he doesn't understand tariffs and how they work.
Well.
I'm not sure people on both sides of the aisle particularly understand it, because Carol, they're quite complex. The other complexity, of course, is with tariffs usually come a higher dollar, and the President's been very aggressive about not wanting a
higher dollar. The dollar is already overvalue because it's the world's reserve currency, and that will make exports more expensive for buyers, and that will further exacerbate the trade deficit as US goods exports become more expensive for foreign foreign buyers. So none of these things are actually simplistic. And most importantly, the benefits of tariffs are many, full, but they're often conflicting.
I think maybe if President Trump were sitting here listening to this, he would say, to you, the idea of tariffs is to get more of these goods made here in the United States so we don't have to import these things. I think an economist would say, well, we don't live in a world where that's necessarily efficient because of what we do here in the US versus specialties
outside of the world. Is there, though, a world that exists that's a happy medium between the two, where we do start to see nearshoring and onshoring from American companies that have outsourced manufacturing.
So I think tim that is exactly the point. So if you go back to the economist and the seventeen hundreds, David Ricardo, it was quite simplistic, which is, you know,
everybody should produce and have a comparative advantage. What I think we're learning around the world, and where I think this debate fundamentally comes down to, is the economic benefits of trade may have to be subordinated to some of the other important aspects of trade, and that includes primarily employment, domestic employment, which has been eviscerated in the United States in many rural areas, in manufacturing in particular, because of
the benefits of tradeational security where there are certain goods we don't want to have to rely on end and we saw that in the pandemic. So finding that perfect balance, I think is exactly what it's going to be the
nuance of this argument. And the fact is trade has, with all the benefits that we all understand for trade, it's left a lot of Americans behind, and it has left Americans behind in communities that did benefit from globalization, and that's exacerbated inequality, and it's created political division that I think everybody is recognizing as a real problem in this country and around the world.
Should we be worried about how disorienting it can be when major policy changes happen suddenly. So I think about trade policy and the opposition of these huge tariffs, which are not going to be as I gather, narrowly tailored but blunter. I look at immigration and the administration's promised to deport, not just hundreds of thousands of people, but millions of people. That happening very suddenly, and how that
might unsettle the labor market. We're talking about something that's not going to happen in certainly not a smooth way. It's going to be sudden, and I wonder what the consequences of making decisions like that are. Policy moves like that are yes to the economy, but to markets as well. It's going to be sudden and I imagine quite jarring.
You know, Look, it's one.
Of the costs of our political system, right, I mean other countries around the world. China has the benefit of the stability of an ongoing, long term, consistent leadership role, but it also has costs. Right, You don't you don't have the ability for their populations to elect new leaders on a regular basis. So I think, of course there's going to be some disruption. But with that disruption cause
creates the opportunity for change. And I think one of the things we're seeing in this election is the American people were quite clear is that we need a.
Change in Washington.
We need a change in direction, and hopefully that change will lead to some of the results that benefit Americans.
Is the US no longer a superpower or is it headed in that direction?
You know, we are the superpower, Carol at this moment, and I think we will continue to be. We have unrivaled benefits. So the President talked about our energy self sufficiency. We have the most powerful military in the world. We have the most innovative economy in the world. We have the broadest and deepest capital markets in the world. There are so many things that differentia ourselves from every other country.
That being said, I think the role of the superpower is going to change, and so countries are not going to be able to rely on us in a blank check way. One of the things I think you've heard from the President today there is going to be a cost associated with the benefits of relying on the United States as a superpower, and a lot of the people that have benefited from that umbrella are going to have to contribute in different ways.
Is that a good evolution.
I think it is a good evolution.
But most importantly, it's a realistic evolution because the world has changed since the Cold War, since the end of the World War II, and a lot of the world order, the liberal world order, which is called which it's often referred to, was put in place at the end of the Second World War, and the end of the Second World War is not the world of twenty twenty five. We had the Cold War. After that, the Cold War ended, and now we have a different world. We were competing
with China in a different way. We have various global disruptions and competitors who were forming this axis of resistance that didn't exist just a handful of years ago. And as a result, our systems and our policies are going to have to change and adopt to a changing world.
So you worked in a democratic administration, It was pretty remarkable to look up there today and see President Clinton, President Bush. You also have President Obama there as well as a lot of folks up there who had run
for president unsuccessfully. What should Democrats be doing right now to prepare to take back the White House or win more seats in Congress in the next two and four years, given that the world has undergone such a major shift, and that this country has undergone such a major shift.
Look, I think the Democrats are rightly licking their wounds at the moment, and I think the parts of the Democratic Party clearly pulled the last administration too far to the left, and there was a wholesale rejection of that, and that came across in both social issues and economic
issues and certain foreign policy issues. And hopefully, and I think built Clinton, you mentioned President Clinton on the stage, really understood the importance of centrism because we are a centrist country and the politics of this country has become, as I've said, much more divided. And it would be my personal preference for both parties, including the Democratic Party, we moved much more towards the center and governed from the sen You know.
I watched a number of these confirmation hearings last week, and you know what stood out to me, in part from Pete hegxsa's confirmation hearing, is how he'd met with no Democratic members of the Senate of that committee. And you know, stuff like that happens, It kind of rolls by you. But that's like a pretty extraordinary, pretty extraordinary thing,
and that wasn't the case for every nominee. But what does that tell you just about the stability of the center that you're talking about the willingness of both of these parties to find some common ground, some comedy among the two of them and to you know, return to a mode in which people get a fair hearing and you you listen to the other side and you kind of assess a person's biography and skills based on kind of a neutral understanding.
David, it's it's it's very unfortunate that the that that we have seen, we're seeing less civility in public discourse generally and certainly amongst our political leaders. I know when I was getting confirmed from my position by the Finance Committee of the United States Senate, would at the time was chaired by a Republican or an Hatch who's passed away,
the Senator from Utah. He went after me in all sorts of ways, and at the end of my hearing he said, mister Celik, you were more than qualified to be the under Secretary of Commerce for the United States of America. You will get this committee support and you
will get confirmed. And it was a very to me poignant moment where there was an opportunity to fight for him, to make his points in a very public setting, but at the end of the day do what he believed was the right thing to do and communicate it in a highly professional and constructive way. To me, and I just hope there are other senators and political leaders in the country that would take that as an example.
Can I ask you, is there too much money in politics at this point? And maybe that's why we're not necessarily getting policy that benefits more or most of America.
No, Carol has ever not been money in politics.
I mean, were you doing this show?
Is before Rome.
Socided change something? I mean it allowed these people like Elon Musk to go spend two hundred and fifty million dollars.
It's on a whole other level.
It's politics and time, right. I mean, you know that these processes take too long, but you know you could come up with a whole host of things. You can add that to the list. The electoral college at the moment, that jerry mandering, there's a whole host of things that I think in an ideal world we would change for sure. And if you look around most of the other major democracies in the world, they are not doing it the
way we're doing it. And so if they're not doing it the way we're doing it, you got to scratch your head and say, we're really doing.
It the right way.
I guess this gets so what we've been talking about, is this desire clearly for watching to be fixed or made different, And I think that the frustrations are widely are widely shared.
Well, I think it gets.
To the point too of just having you know, you've come on too, and we've talked about, you know, people doing really well and if you've been in the stock market, if you've been an investor, you've done really well. But there are you know, K shaped recovery, the K shaped economy. There's so many people who haven't benefited benefited, and so how do we get back there? I mean, is Donald Trump a step in that right direction?
Well?
I think I think certainly he is recognizing it. This goes back to your first question about you know, what's going to what's going to be the actual policies and what's going to be the outcome as opposed to the campaign rhetoric, and that we will have to see. But I think, you know, this gets back to the ten point, which is pure economic theory works in the classroom. We're
not in a classroom. And for for example, China you know, doesn't play really by the wto rules that everybody that is that everybody is is was trying to abide by
which broke the system. And as a result of that, you know, we really are going to have to be much more realistic about and commercial about how we adopt and implement policies and understand that whether it's tariff's trade the dollar, that there are consequences for a whole host, for a whole section of our population who've got to be quite sensitive to.
We certainly saw that portion of the population, and we also saw the message loud and clear during this last election that what a lot of people thought was working was not working and they wanted President Trump back. I'll ask you the same question I asked ed Price earlier. What happens if those people's lives do not improve over the next four years. What's sort of the next evolution of this boy.
I'm not a particular alarmist him, but what I would say is, you know, you have no other choice but to kind of go back to the drawing board, and then you have another election.
I think it's as simple. It's as simple as that.
Well, and I do wonder about the kind of back and forth that we've seen coming off of Barack Obama and then going to Donald Trump and then going to Joe Biden. Yeah, right, And it just speaks to you, right, the American dissatisfaction, at least some Americans saying, listen, this is not.
The way Foks carol that to me, and that, by the way, is not an American point, right. You're seeing that in the United Kingdom and elsewhere. And I think that, to me is the point, which is political leaders globally have failed their populations. And that is a global phenomenon.
And I think the single thing that I am most excited about as President Trump takes office is the potential benefits of a real disruptive force is going to do something different than traditional Democrats or Republicans might have done. And I think we really are ready for some disruption.
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