Summers Says Trump Rejects Modern Science

and of course, on the Bloomberg. How about this, David gurl great new world. I'm reading it. I don't have time to read all the books we get in. I'm up through chapter three. This is where Queen Victoria's show is up. It's a beautiful international relations overlaid with history, history, history, history. It's in English, bonus round, there's no math. Grave New World, Stephen King seeming him. Great to have you with us here in New York in our Bloombriger eleven three studios.

Let me start with the news of the day, the news of the weekend, this terrorist attack in London. You've write a good deal here in this book about technology and the dark side. Of technology overlay that if you would on on globalization, A lot of people tell us that we have a globalized world principally because of technological development. There is a dark side to it that you outline in this book. There are a lot of dark side

to the technology story. The first dark side actually a social media the way in which you get the herding of ideas, and the old days people thought the internet would be a kind of bastion of truth, whereas it allows you increasingly to find people who agree with you, regardless of whether your views are right or wrong. So you get this kind of herding which makes it more difficult to form you feel like a kind of sovereign

view in anyone nation about what should be going on. Obviously, when it comes to terror is m we know that terrorists in part get their information from social media in one form or another, sometimes in the dark web, but nevertheless it's a way of of connecting people in to do dastardly and unpleasant things rather than things that could be in any way significantly positive. I think it's also worth noting that technology may also have a kind of

negative long run impact on globalization itself. We think about outsourcing about global supply chains and so on. But robotics probably will lead eventually to a lot of these jobs being coming back home in one since, but coming back home to robots rather than to workers, say in China or in your or whatever. Then the big questions, well, who owns the robots? Who makes the money from that in years to come? But I think it's it's worth stressing that technology is not something which, if you like,

guarantees that globalization advances. It can both be positive for globalizations, people have argued over the course of the last twenty or thirty years, But equally it can be significantly negative, And globalization depends ultimately on ideas, institutions, political beliefs, what humanity does with technology rather than the technology itself. We saw back last year against globalization many corners of this country during the last presidential election. It seems like there's

still a definitional problem with globalization. I think a lot of people don't know how to define it. As Tom was saying, you trace this back to Christopher Columbus globalist. Why do we still have so much trouble defining it and highlighting what is in fact beneficial about globalization? Well, some people would say it's just a story about multinationals becoming ever more powerful and reducing the voice of the common person in some way. Others would point to globalization

being associated with my great reflows. But I would say that the broad definition is the idea that the borders inhibit human connections come down. And these connections are obviously through trade and goods, trading services, movements of capital across borders, movements of people across borders. You think about the the European Union and it's so called for freedoms that the freedom of movements of good services, capital and people. It once sense, it's a kind of regionalized version of of

globalization um. And of course within the EU there are those who who very much support that idea, but there are those who feel that they've been left behind and it's not working for them. Do we need new stimulus as a general statement. I mean, I showed you that chart earlier, folks. I'll put it out on Twitter. It's a killer chart. Thanks zero Hedge for pushing me on it. Back to a comparison of the last decades growth back to the nine thirties, I went back to modern economic

data nine seven. Boy, it's unusual hustle of this growth is yes, what do we just simply are we too timid in our fiscal stimulus. Well, it's possible that we are, although it is worth stressing that countries that have used fiscal stimulus in the past to try to kick start their economies have often found that the effects have been

more short lived than they originally expected. In Japan, for example, had lots of examples of fiscal stimulus in the nies and beyond, and it ended up building sort of bridges to nowhere and so much didn't really help with very much. Do you think about Spain Before the Global financial crisis, Spain had huge amounts of infrastructure spending, which certainly helped transforming economy, but also left it with a huge amount

of debt, which then led to significant struggles thereafter. So I think part of the puzzle, one sense, is that it's a productivity puzzle. Really, that we've got lots of technology coming out all the time. We can observe it in our day to day lives, but it isn't having the kind of productivity impact in lifting output per our output per head and that you might have seen back in the fifties. Sixties and seventies. So the danger with your chart is that perhaps we're seeing a kind of

structural slowdown of economic growth. Is not a cyclical story, it is a structural story in once it's akin to the Japanese experience in the es and beyond. And one possible reason for this, and it's only one possible reason amongst money, is that Western populations are aging, and as they age, they become increasingly risk averse. They want to make sure that they have money upfront rather money investing for the long run because long ones becoming shorter and

shorter as the population becomes older. And the consequence is that companies are increasingly under pressure to pay out dividends or offer share by max than actually to invest for the long term in their businesses. So you end up with low rates of capital spending, which of course then the crates to low rates of GDP growth. Stephen King, great to see you. Thank you again for coming in here in New York. Steven King got the author of Grave New World Way Too Much, Return, Too Much and

the Return of History. Saw you in London a few months back. Right to see you here uh in New York to check out the book and Tom, you're gonna finish it. Yeah, I know, it's really really What's I mean? Lord Stern happens to like the book, and a guy named Summers who's going to join us, and a bit happens to like. It's an important book is Larry Summers says? And it's good again, folks over late where it else? Can you hear Thomas Hobbs, then Stephen king Grave New

World now joining us? A former Secretary of Treasury, Elliott Professor Harvard University, Laurence Summers, Larry, wonderful to catch up with you again. I featured at the day the essay came out. David Frum wrote it up in The Atlantic. David Brooks wrote it up in The New York Times. And now you crush the concept of global community and arena. You take the arena back to Versailles? How is the President's arena like? The horror and the bad decisions made

it Versailles a lifetime ago. He's abandoned the effort of creating a stable, prosperous global system in favor of a farm policy based on individual war off deals. That's not an approach that's been taken since Versailles. And when it was taken in Versailles, it was hardly successful. What followed was depression and ultimately the Second World War. Now I'm not saying that that's the consequence of his pulling out of the Paris Agreement, but I was. I've been troubled

all along by this administration. But I've been able to understand the argument that the bark has been worse than the bite, the argument that cong this is going to prevent some of the most radical proposals from being enacted, and the argument that he has a set of very rational and experienced devises in the in the international arena.

I'm prepared to take those arguments very seriously. When two of the advisors, Garry Cohne and General McMaster, who were held out as the ones who were experienced and did the idea of an international system, take to the Wall Street Journal to proclaim that such thing as a community of nations, I mean that idea of a community of nations. It's not some progressive google saying it was a staple of the rhetoric of Ronald Reagan and Henry Gisson's jambaker

uh Bush. And when they say that's not part of our farm policy anymore. I don't see how the rest of the world can react other than to change their approach to America. This is miracle. Might or might not have been prudent to say what she said about other nations, not about not being able to rely on other nations the way they had in the past, but I think she would have been highly irrational. She hadn't had the thought, and that's why I'm worried. Couple that with growing evidence

that we're in the first UH post rational presidency. Denying the evidence on crowd sizes after his aliguration comes from clear photographs is kind of a trivial example. A budget with a two trillion dollar arithmatic error is a more consequentially able, and an unwillingness to acknowledge the preponderance of evidence in favor of global climate change is an extraordinarily consequential example. So I think these two things have to

leave one to be extremely worried. And it would be worrisome with leadership of that kind of any nation, but when it's the United States, it's that much more worry generating Professor summaries, how much confidence do you have in the business community at this point after the US pulled out of the Paris Accord last week. A number of executives said they'd continue with the programs they had in

place to address climate change. Clearly there's a vacuum here when it comes to climate, when it comes to the global order. Do you have much confidence in businesses to to pick up the mantle. I think what all of us outside of government do is going to be very important. If we take the position that patriotism means supporting and standing with our president, I think others will worry much

more about the United States if we take them. If we take the position to patriotism lies in standing with enduring American values, they think others will come to this is the aberrant period that I hope it will be. The submissions Secretary, one more question. You have been a Secretary of Treasury, You've had a lot of other positions. At six Pennsylvania, a lot of the known world is waiting for the quote unquote adults in the room to guide the president to a better outcome. You've been in

those meetings. Do you anticipate that will occur? Look, the thing that was most surprising to me in the last week was two of the people who are normally again to fight, as those adults said, the petulant, petty and dangerous thing by condemning the idea of community of nations. Whether they did that out of conviction or whether they did that because they felt they had to out of loyalty,

we got the answer to the question. The atavistic, ravantist approach manifest in the President's tweets is for now in control of your NUE. That's got to be alarming, just because because the time, Mr Secretary gonna leave it there. Lauren Summers, thank you so much, and of course he

drives forward the dialect. Whether you agree or disagree. I really commend Laurence Summers the f T and in the Washington Post today on the global community in the arena David Gura, I mean, you know, we we identified this the day that the essay came out, and then David Frum wrote it up in The Atlantic, then David Brooks owed it up and The Times, and now we see Secretary of Summer's writing up this, this search for what the arena actually means. Yeah. Absolutely powerful words there about

the community of Nations. Also worth reviewing the piece that he wrote about the Anderson Bridge and Cambridge on this day, so we get a week focused on infrastructure. Least so the White House says, of course, he makes the pilgrimage from led Our Hall to the Anderson Bridge in Cambridge's reading. Then I'll put it out on Twitter. Okay, put it. I missed that, David Cura on the Anderson Bridge. Good morning,

Bloomberg Talbot in Boston. Don't fall into the river. This is Bloomberg Runch you by Bank of America Mary Lynch with virtual reality, virtually everything will change. Discover opportunities in a transforming world VI of a mL dot Com slash VR,

Mary Lynch, Pierced Fenner and Smith Incorporated. Let's get a little insight here and what's going on in Washington this week at some congressional recess coming to an end here As we push ahead to Thursday again, when the former FBI Director James Comby is expected to testify before in the Senate Intelligence Committee, Terry Haynes joins us. Now he's a senior political strategist, head of political analysis at ever Corps. I s I. He joins us on our phone lines. Terry,

great to have you with us here. We're talking with Larry Summers just a few moments ago, the former US Treasury secretary about the U s s role in the world. We could have talked with him about infrastructure as well. The White House trying doggedly here uh to shift focus at least members of the administration artist shift focus to

infrastructure the present. Interceding a bit this morning with some tweets about the attacks in London and his travel ban, how much traction do you expect this administration to make on fiscal spending on infrastructure going forward? Well, fundamentally, And David, thank you for having me this morning. You aspire to

be the guy with the beer. Uh. They're undoubtedly as a political aspect to the infrastructure roll out this week, But I don't want minimize the need and desire of this administration to actually have such an event and the and the role is out in a meaningful sense. The President talked to Congress at the end of February about

having a trillion dollar infrastructure plan. Uh. You know, our view for some time, for longer than that, has been that, uh, there's about three billion dollars over three years available in direct federal spending, and that the bulk of this is going to have to come therefore from some sort of public private partnerships, uh, incentives for private spending. That appears to be the direction of the way. That generally the way the administration is going. But they need to get

moving on this. Uh. They need uh not just political accomplishments, but the infrastructure idea and spending big on infrastructure was at the core of the president's message during the campaign and been one of the cores of his appeal, I think, and this is something so as a result, this is something that they're really going to have to push on hard. And I know the markets have been waiting for this for quite a while, and so a lot of political people.

When you talk to clients, I imagine one thing they really want to know is what the agenda is shaping up to be on Capitol Hill. We're familiar with how compressed this congressional calendar is speeding ahead to September thirty. There on a whole lot of working days between now and then. From the House leadership, from the Senate leadership, do you have a clear sense of what they're going

to prioritize. Uh? Well, I think I do. The The marching order here is is pretty much that and you know something that Congress and the President have agreed upon UH in public, by the way, is that they want to finish the fiscal reconciliation instructions on the Affordable Care Act. In English, that means getting rid of the UH the

c A tax structure. That that will then allow Congress to roll those savings, which many things could be as much as a trillion dollars as the less probably, But then you know, think of it that way into the CIST reconciliation where where you get a tax for a tax reform UH program, and what that ends up doing is lowering the budget baseline by about a trillion dollars, thereby making tax reform much more aggressive than possible. That

has to happen. Are my view today is that they've got to finish the A c A probably by the August recess UH to keep everything on track, and then they can turn to tax reform and the fall That seems to be the way it's going do. Seems to be the priorities. Then you get to your first question, which is infrastructure. I mean, infrastructure is a practical matter.

Then doesn't doesn't really come come until the those two things I mentioned plus spending bills in the fall, and the debt ceiling, whether it comes before the August recess or afterwards, take up much of the rest of the congressional calendar this year. So infrastructure, UH, the facto it becomes item today epitomizes for me is that you can have the best laid plans right now with his administration whish Washington, and they can be up ended rather quickly.

You have Gary Cohen in the newspapers in the media over the weekend outlining his expectations for the week, again with a focus on infrastructure. Then you get a number of tweets from the present this morning, UH, casting light in a different direction, looking at this travel ban. He's embracing the term travel ban. He's encouraging his Attorney General, the Justice Department to defend a water down version of it before the Supreme Court. How do you deal with that?

How do you advise clients to deal with that? The fact that you could have what you think is a clear sense of what's going to happen in Washington and then all of a sudden that changes with just a hundred forty characters. I think I urged context David and UH. The past few years. I mean this is believing, not casting as persions on the the prior administration at all, uh, not making this a value judgment. But you had a relatively uh stable Washington over the past few years. People

understood what was going to happen. People understood prayer or he's all arrest. Now you get, for the first time in eight years, a brand new administration with new priorities. So there's you know, things all over the map happened. UH. And you know, this is of course a concern demandent's because they need to understand what's going on, and there's more activities simultaneously than there has been in a lot

of years. My urging is to essentially, you know, keep your focus on the basics, what is actually going on? What is what what is you know, what are the priorities? Uh? And this administration, of course, I say, we'll have priorities across the board, but focus on what's actually happening in the timetable and uh, and that will tell you what's actually going to happen. Terry, thank you so much. Terry Haynes with side this morning with a briefing to David. Really,

Thursday is the big day. I mean we get the UK election, but that's a testimony, right, yeah, absolutely, and it's going to be open session in the morning, there'll be a close session testimony in the afternoon. And obviously a lot of this was hammered out in conversations with Robert Mueller, who's now heading up how does an investigation what James Commy said he wouldn't testify before consulting with him,

so you have these dual track investigations. And Mr Commy said he wanted to be clear that what he was going to say an open session wouldn't be stepping on the toast of one Mr Mueller's and investigating. Yes, all eyes will be on Washington. Think it's fair to say. On on Thursday, I had an email come in which which was where's the photo from the president's new Twitter page? He changes his photo a lot often. I believe it's Denver. I've been going back and forth with Kevin Si really

trying to figure it out. But he did rally him Denver with a humongous number of people. You know, airplane hang Yeah, familiar image here with with a pat air plane hanger, and there is of course one on the outside. The plan has changed but the scene very much the same, does he Well, that's that great, Just a moment to go to talk to the National Association for Business Economics. You gon to talk to somebody else, Tomas membership dues too.

That's Richard Hass, the president of the Council Right for Relations, the author of the book A World in Disarray, American Foreign Policy and the Crisis of the Old Order, joining us on our phone lines. Richard Hoss, great to speak with you once again. Let me start with what the Prime Minister said yesterday quote. Our society should continue to function in accordance with our values, but when it comes to taking on extremism and terrorism, things need to change.

What what needs to change in London in the West in light of what happened over the weekend in London. Yeah, it's all about the balances and in a democratic society, how much surveillance versus how much privacy, how much police presence, how well are they how are they to be armed? Access to information and free use of the internet versus greater degrees of control over certain types of content. And that's what Teresa They the Prime Minister, is getting at.

What I think she suggests thing is that the pendulum needs to shift somewhat in the direction of protecting collective security and a little bit less of an emphasis on individual freedom or privacy. Something else that the Prime Minister suggested is the tech companies need to do more. We've heard this now time and time again after these attacks. How much responsibility does the private sector bear? Do these tech companies bear? What should governments be doing to to

encourage tech companies to do more? Well, again, it's it's going to be very difficult because of the balances, and it's also just simply hard to keep up. It's quite easy for people to innovate with new sites on Twitter or Facebook or or some of the fancier UH Telegraph and some other sites like that. So sure, the companies can do more if they wish to do more, but they're also worried that to to intimate a relationship with law enforcement and intelligence will lose the trust of their users.

So this is there's some tough calls for them as well. Here wonder woman got a huge box office switched in eighteen years ago, the bureaucratic entrepreneur got just as large a box office. Confused the bureaucratic entrepreneur, how to be effective in an unruly organization, Ambassador, if you were writing your Brookings book there of ages ago about this Trump administration administration, how would you be effective in an unruly organization? Well,

I'm not sure you really can be. Uh. There was a story in Politico in the last few hours that when the President gave a speech to europe TOMP that the final draft had him specifically endorsing Article five, the attack on one as an attack on all a statement. And then somehow between that and when the President gave the speech, gremlin's got into the Oval Office, probably in the form of Steve Mannon, and took it out. That's

a degree of unruly nous that is downright dangerous. And if you're the if you're the National secret Advisor or the Secretary of State of Events, I would say it's untenable. So I would basically tell the President, if you want us to serve here, there have got to be certain commitments and guidelines, or we cannot serve you. And now, folks, we get another opinion on the the most important issue at the moment. David Frum wrote it up in The Atlantic,

David Brooks in the New York Times. We just had the honor of Secretary Summers being with us on the arena. Ambassador Hasson and McMaster cone. Essay, there was President Trump and an arena. What's the arena? Your guess is as good as mine. But I think what they're getting at is this kind of hobbsy and view of the world on which the United States has no relationships worth preserving. There's no institutions worth buttressing. Everything is a one off,

Everything is uh in isolation. And that is simply an untenable way to do foreign policy and ignores the extraordinary inheritance that has been painstakingly developed over the last sixty or seventy years. And that is our second homes reference of the morning here. It's very happy that Richard had let me. Let me have you look ahead to Hamburg to the G twenty this summer. We saw the report in Spiegel over the weekend about the tension at the

G seven meeting just over a week ago. What's your outlook for that meeting as we see the US backing out of this traditional transatlantic relationship. What what do you expect is going to transpire at that meeting in Hamburg? Well, what we saw at the G seven holds where effectively it became a G six, and the G twenty becomes something of a G nineteen, and you can't deal effectively, say with issues like trade. You can't deal effectively with

issues like climate. United States all one an emphasis on terrorism, possibly on dealing with North Korean proliferation. So what what this group will be in the formal collective sense now is increasingly how would I call it a group of narrow casting? And the idea that would do broadcasting and deal with global issues were at large, that that era is temporarily suspended, you know us. Thank you so much.

He's a president counsel on formulations and I should say, ambassador, what a joy to speak to Robert Kaplan at see if are here the other day, Dallas fed President. Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. I'm on Twitter at Tom Keene. David Gura is at David Gura. Before the podcast, you can always

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