Surveillance: Age of America First With Haass

and all of that. Hearkens back to a Midwest isolationism personified by Colonel McCormick at the Chicago Tribune a zillion years ago. Here is Hass writing in foreign affairs, and he is absolutely blistering. No other way to put it. There is a paradigm shift in the United States approach to the world. The new paradigm dismisses the court tenant of our twentieth century approach that the United States has a vital stake in a broader global system. Ambassador has

are we all reading the Chicago Tribune? Are we going back to my grandfather's age. I wouldn't call it quite that extreme. The United States under the last two administrations both Mr Trump and Mr Biden has a fairly muscular policy towards China. So I wouldn't call it isolationism, but it's a narrowism. It's a domestic first. It doesn't particularly concern itself with building or even joining many international arrangements or or or institutions. There really is a domestic first

approach to the world. How do we minimize what we do in the world? Are for instant Laquix interviewed Secretary B. Lincoln in Paris in the last I think forty eight hours are you Are you conflating Anthony B. Lincoln with Rex Tillerson? Yea no, But this administration has been surprisingly maladroid and its diplomacy. You've got all these people who

speak French fluently. You would have thought they could have picked up the phone several months ago and told the French, look, it doesn't make sense to sell these diesel submarines to Australia. They don't have the range, they're not sufficiently quiet. But we want to get you involved in Asia. We want to find a way to compensate you for the lost submarine cell. This ought to have been within the realm of doable diplomacy. That's what the Brits frenchying would call

an own goal. Richard, How significant is it that we're talking this morning about the fairy tale a lot of your Putin coming to the rescue for the energy situation in the United Kingdom in Europe? More broadly, is this

signify the changing world regime? But what this signifies is that Vladimir Putin has played his his limited cards very well, whether it's his nuclear, his conventional military, his cyber obviously, his his his energy, and he's he's got outsize influence in Europe, and the Europeans have it into it, whether it's here with nord Stream to the Germans and the Brits, they've not been strategic and they've allowed themselves to become dependent.

So today Putin Gibbeth, but tomorrow he could take it away. Well. But it's interesting that the likes of Germany, the biggest, most robust economy in the euroregion, is facing increasing dependency not only on Vladimir Putin, but also on j and Ping at the time when the United States is actually having a serious issue with both nations. I'm wondering how much the reason for this is because of the increasing

isolationism of the United States. I don't think so. I think it's more European commercialism, a lack of a serious strategic culture, putting economics UH first, and almost not taking a serious role in the world. It's particularly true of Germany under under Merkel. I know she's getting lots of, you know, positive things said about her, but the lack of a strategic approach to the world I think was remarkable. No, you're seeing similar things. What you're seeing in Germany many

parts of Europe. What you're seeing in the United States is a domestic first as we may change the label here, and they used to call it here America first. Now we've got foreign policy for the middle class. But the myopi is pretty similar Richard, as I want to go back to foreign policy begins at home. And of course the movie was great, A World in Disarray. When you wrote a world in disarray, you could not imagine the fiscal cast. John Farrell was just describing the debt ceiling,

the kiketh of the can down the road. How do we prosecute whatever foreign policy with our domestic front in such disarray? Look, the short answers, we can't do it. Well, the disarray means we're no longer a model that others respect or want to emulate. We're not predictable, we're not reliable to raises fundamental questions for those Tom, who are dependent upon us, were security for their security. They look at us and they wonder is that a wife's choice.

Let me give you mentioned some of my previous books. The book I'm writing out, Tom is on you're talking about. It's on America's domestic turmoil, on the threats to American democracy. I actually think the greatest threat to our standing in the world, to our standing at home, is not China or North Korea, or Ran or Russia. It's ourselves. It's farign policy, farn policies that does begin at home. It doesn't end there. It begins here, and right now our

base is extraordinarily weak. Well, then how does the moderate take the high ground? I mean, we're advantage here, Richard auson that John Farrell looks at the zaneing nous of what we're dealing with your every day you know, we we look like we're on another planet. How do we rediscover the middle ground of American politics? If I'd be answered to that, Tom I'd put it out there, and you know, I try to bring it about. I think there's things we can do over time. A lot of

talk about renewing civics education. Americans don't understand why democracy is valuable, what they have to do to make it. But we're also going to need some profiles encourage. Kennedy's book needs to find some new people to live in. The Republican performance the debt ceiling was really disappointing. The Romneys, the raw Apportman's why are these serious centrist Republicans following

an irresponsible path? I do not understand that, Richard. How do you talk about the idea of globalization as being a positive thing at a time when they're increasing supply chain disruptions, when you have some of the consequences of globalization still impeding a labor market, or at least that is the perception here in the United States. I mainly see globalization as a thing. It's both positive and negative, and the challenges to push back against the negatives and

take advantage of the positives. I think trade is blamed for all sorts of problems which were really about productivity increases, about technology innovation. People haven't done a good job of explaining it. But but that accounts for the fact that we don't have a trade policy the ahead of the US. The U S. Trade representative gave a speech the other day. It was essentially it could have been given by a

Trump administration official. Meanwhile, the United States is not doing anything to reform the w t O. We're not participating in the principal trade agreement in the Asia Pacific region. We are hurting American workers across the board. We're hurting ourselves strategically, so we pay it across an incredible price for this rejection of globalization quote unquote Richard, thank you, sir, as always great to have you with us on the program.

Richard House, the Council on Foreign Relations Presidents an important interview. Now to summarize and really we could spend an hour on this discussion with no bar Afian of Modenner. It is Mode M O. D E. R n A. He is co founder and chairman and front and center worldwide with where we are with his terrific horrific I should say pandemic as well. Dr Fan, thank you so much

for joining us. I want to go back to Harold Edgerton in M I T. You have two degrees from M I T. You personify the excellence of biochemistry and bio engineering. What is next for you? Harold Edgerton? Always move forward in optics? How do you move forward after the two thousand twenty you've had? Uh? Well, thanks for having me and thanks for their kind words to say flattering comparison to Dr Edgerton. And perhaps when I'm done doing what I'm doing, it might be more apt than now,

or I've got a long way to go. But basically, as you may know, through my company Collection Pioneering, we have a platform through which we've able to make innovations that might otherwise exist years from now bring them forward. And it's a process that we've followed for a number

of years. We have a team of over a hundred scientists engineers to do this and out of that have come multiple straight through platforms, Maderna being an important one, but several dozen others which are working on some important problems in in from batting disease as well as allowing for more sustainable development in agriculture, et cetera. So a lot of problems left unsolved, and so that's all the people working on Dr Effie, and you need to expand

to the frontier economies of this world. It's easy to bring mode RNA to America, to Europe, etcetera. Do you have to bring the fanciness of the present vaccines to Africa or do you have to find a different process, a different technology. I don't think you needed as a technology. And as you may be aware, we just announced today the commitment environment Arena to establish the first ever mrn A manufacturing plants of drug substance as well as the

faux finished product UM. We will we will select the location in the content of Africa over the coming months through discussions that are ongoing. But we announced today that we had planned to half production capacity up to five a million doses of vaccines, multiple different vaccines that we have under development as well as of course I've needed for COVID, and that will involve an investment up the potom million dollars. Is certainly sourcing right now. So that's

one approach. But I should say the technology there work. Sensy of course, could also mean substificated US to be pretty simple, it's an information molecule. Everything else has been used for vaccines before. I've been dramatically more complex than this. This is a pure information molecule, and if you get it safely administered, ourselves know what to do with it, and they make the emergine that's needed to cause the immune system to attack any kind of threat, including the

respiratory viruses that we're going after. So so I think the technology is actually lends itself to deployment globally. Doctor, I'm looking at your shares. MODERNA shares up more than eight hundred nine percent since the end of March last year. There's been a huge surge of money into the pharmaceutical industry on the heels of the m R and A advancements, and also because there does seem to suddenly be more

money for vaccines. How much is this going to be consistent that more money will continually be deployed to vaccine development at a time when traditionally this has really seen

a dearth of investment. Well, you're making a good observation in that remarkably the most effective pharmaceutical company, which is actually our own and use system that we carry around with this every single day's saying more lized, it's spots back more viruses, and it's within US, and yet historically we have no real access to being able to use it on our behalf, and so occasionally people of their own vaccines over decades of work, and that's why it's

been the back waters of the farmer industry. I'm very pleased to see the people have seen a proof concept of what vaccines can do. They're in neatly powerful if you know how to control them, and so I think that that money is not just kind of following a short term opportunity that recognizes a real shift in what's

civil and our effective new system can be. I should also say, though, that another phenomenon is driving I think the capital that has to do with a shift in this industry from being a rather probabilistic shocks on goal. We call it in the industry kind of almost lottery, where you've been on a lot of different drugs and maybe one or two out of a fifty naked versus a gradually more deterministic activity. But that I don't mean that everything we do will work, but that we should

expect many things, if not most two works. It's a question of iterating and learning and making better and better products. That has not been the investment pieces of the pharmaceutical industry, and so I think, well, the beginning stages of where this begins to look more like tech and less like this complicated speculative activity the Bifectors went for the fully clive years I've been in it interesting. Mr Affian is

great to catch up. Let's continue this conversation another time there went in on how much that industry is set to change. She is absolutely exquisite at the microeconomics and micro dynamics, the price theory of hydrocarbons em and joins us some energy aspects we've tried for three days, I think, to get around the show. We're thrilled she could join

us at this morning, Emerita. When you look at the martial Ian cross of demand and supply, what's the single thing our listeners are viewers need to know what's the dynamics of oil price and supply demand right now? Well, you flattered me Tom firstly, but I'll say this much that look, infantries around the world are extremely low everywhere, and that is ultimately the reason because supply just isn't

keeping up with demand. Yes, open aspect capacity, but it is choosing to bring back production slowly because there are a lot of uncertainties going into the northern hemisphere winter. We don't know whether there's going to be COVID flare ups, so fair enough they're being cautious, but infantry, every crude particularly,

but even products very very low. When you look at inventory dynamics and your guestimates, your forecast, how far out does a pro like you look given what you just said, are you trying to guess out a week or a month, a quarter? How what's the length of the guests right now given these growing demand, Well, we do it all the way through to the end of next year, so we try and at least have a twelve to eighteen

month period for the short am outlook. But of course, you know, it does become less and less certain the further out you go. For the next three months, we can be a lot more certain given all the kind of high frequency data that we are looking at. And Richa, we had two pieces of verbal intervention yesterday, one from the Russian president and another from the Energy secretary here in the United States, Secretary Grand Home. Out of those two,

which one or both are actually credible statements? What if I said neither, But honestly, I think jokes are part of the reality. Is what we've seen from the White House in particular is that they're not talking about an SPR release as an imminent policy tool. This was a question asked and the answer was that, yes, of course, all options are on the table. Apec says that to us all the time, all options are on the table.

The key to remember is that the Biden administration is very very keen to have low gas line prices for consumers, so we should always keep that in mind. And if prices continue to go up and overheat, then yes, they will be putting more pressure on OPEC, and yes, then SPR can become a tool with regards to gas. And what Prutin said, you know, the reality is that Russian gas infantries are low. Even if they wanted to increase exports, they have to refill infantries themselves, and that's why europe.

European gas prices are so so high. Again, stocks are very very low in Europe. So frame winter for me and RATEA. I'm trying to understand how it's headed. The oil story is to what happens with gas. Given we're having a bigger conversation about substitution. Now, what does that look like for you through a cult winter in Europe. I think if it's a cold winter, um, we just have to be prepared for very very high gas and

oil prices. To your point, I mean, yes, the substitution in Europe, it's actually very small because there are a lot of environmental restrictions. The place to look out for will be actually in the US and particularly on the East Coast. You can get more heating oil burn even in Asia, Japan can burn more fuel oil, so that will again push up prices. So gas and oil kind

of pull each other up. But ultimately, you know, this is a fallout of energy transition, the policies of Western policymakers where you've retired coal file plans before demand has come off. So we are going to be in this era of kind of high fossil fuel or high energy prices till demand for fossil fuel comes off, and that's going to be that's still years away. Well and read that, that's exactly what I wanted to go. What is the correct broader narrative to view the recent increases in oil prices?

Is it what you're just talking about the idea of the fallout from the mismatches here in energy policy and a stiflationary like tige trend or is it recovery the fact that demand is increasing at a time that seems to be faster than supplies can come back online. I mean, of course, it's a combination of both. In the latter

point that you're making, I mean, you can't ignore that. Yes, there's a lot of pent up demand after COVID and if anything, in a way, COVID's kind of brought more demand to the market because people just want to go get on and you know, whether it be driving or flying. But the underlying narrative is absolutely about energy transition and the choices policy makers will have to make, because these are very stark choices that potentially need to be make as soon as this winter. Are you going to have

rolling blackouts? Are you going to sacrifice economic growth? And this is something you know, we have been talking about for a while. There is no investment in oil. That's why this is a structural move higher in oil prices. This is a structural move higher in gas prices. Not saying gas will stay here, it will come off, but it will still remain much higher than it has been for the last ten years and rata. Thank you for

waynkin and great to catch up. As always, they close somewody to send that of energy aspects right now, Sarah House. It helps us with the jobs report wells fargal securities and of course all of this back to the tradition of the Great John Sylvia. They go deeper. Sarah House, you and your team have looked at this pandemic, our labor dynamics and women. How are women doing within the

pandemic and within the jobs reports we see tomorrow. So women are still lagging behind in terms of the labor market recovery, so particularly when it comes to mothers, just given the childcare considerations that women and parents generally have had to contend with. But you know, we've seen it disproportionately on on women. So for example, the labor force participation rate of mothers has declined about five times the

amount as as we've seen for men. So I think as we head into the fall, though, we have seen some of those burdens and begin to ease, and so I think when we look ahead we are expecting to see some improvements in the labor supply. I think there's been a lot of hype around September and just the calendar turning there between schools being back and the unemployment insurance benefits ending in all states, and I think you'll see some incremental improvement. That these are dynamics and issues

that are going to take months to play out. Let's go back to your work at London School of Economics on development. Let's look at national development within three point five trillion, whatever the number is going to be of social programs forward, is some form of US European like childcare the most productive way to get more women employed. I think it could certainly help. So we've seen labor

force participation among women in the US. We used to lead the pack back in the late nineties early two thousands, and we've just continued to follow behind. It's because we

haven't made a lot of those investments in childcare. So if you look at the labor force participation rate among women with if children under under the age of six, it's about ten percentage points lower than school age children, which I think really speaks to the importance of a more robust childcare system in allowing women and you know, basically a large share of your population to to work

and contribute to the overall economy. In the meantime, Sarah, we've seen that participation rate is broadly continue to remain far below where it was pre pandemic. How do you look at this rate to determine the tightness of the labor market, considering that some of these people may never come back to the labor market. Well, I think it's still a big question in terms of what extent workers do come back. So you I think some of the issues that are keeping workers on the sideline are more

temporary in nature. I think, you know, some of the childcare issues related to at least those parents of school aged children where they were having to guide their children through remote learning. Perhaps not fully sure how consistently they'll be back in the classroom this fall. But I think there's questions over Okay, to what extent is this permanent.

You know, we've seen substantial retirements. If you look at labor force participation across age, it's you recovered about half its loss for for prime age workers, but it hasn't gone anywhere for your your older workers. So those sixty five are older, and so I think we've seen um some permanent loss of labor of labor supply, although I still think there's there's still a decent amount of latent supply on the sidelines that can can come into the

labor market over the next year. John, this is one of the most confusing aspects to me out there, the idea that we don't have a sense of how many people are going to return, how many people have retired, who has found a new job, what these frictions are. I mean, some of the mysteries underputting the labor mark. How much slack is that? How tig is this labor market? How loose is I've got no idea. Let's make it very simple, Sarah, big question for this market into tomorrow.

How low is the bar for the Fed to execute in any November. How low is it? I think Palace at the bar fairly low. So in his press conference coming out of the last Fence meeting, all he said they only need to see a reasonably good report. It does not need to be a knockout. So what could be reasonably good? I think probably anywhere around three fifty

or higher would tick that box. So that's still well above even the best year that we saw over the last cycle, where the run rate um in that best year was about two hundred sixty thousand, and so I think given that you have seen directionally some improvement when it comes to the health situation again, some of these supply constraints easing. I think we should see the payroll report tomorrow clear that bar Sarah, Thank you Sarah House. Then have last found our securities whanking on the laper

market report on what it makes for they fed. This is the Bloomberg Surveillance Podcast. Thanks for listening. Join us live weekdays from seven to ten am Eastern on Bloomberg Radio and on Bloomberg Television each day from six to nine am for insight from the best in economics, finance, investment, and international relations. And subscribe to the Surveillance podcast on Apple podcast, SoundCloud, Bloomberg dot com, and of course on the terminal. I'm Tom keene In. This is Bloomberg m