Surveillance: Inflation Concerns with Deese

with the White House. And what's so important here, John and Lisa is we all know they're people that finessed their way into sixteen under Pennsylvania Avenue, and there's others that lean over the desk and just grind out work. That's been the path of Brian Deese, director of National Economic Council and most importantly of Middlebury and Yale. And then he went to work John and actually went from task to task to task as he went up a Democratic Party food chain. It's very place to say that.

Brant Days of the National Economic Council joins us right now. Brian, you've seen the polls. You know where the focus is. The CPS poll in the last week say the administration is not focused enough on inflation. Brian so let's start there. The degree to which you think you can do anything about it, well, I think we've got a pretty straightforward

and clear I plan to do so. It starts with the context, as you were just noting historic economic growth strongest in forty years, historic job growth more than six million jobs last year, and the unemployment rate the biggest dropping unemployment on record in this country, down to three point So we have a lot of strength in the economic recovery and the uniquely strong economic recovery that positions

us to go at the issue of price increases. And you heard the Present yesterday with a pretty straightforward plan. Number one, the FED needs to operate with the independence that it has. He's nominated five very quality individuals to the FED. They need to be confirmed without delay. And from his pers active his approaches about expanding the productive capacity the economy, making it easier for us to make more goods, provide more services. That's about unsticking supply chains.

It's about make a boosting competition, making our economy more competitive, and it's about lowering kitchen table costs, going right at those costs that most directly impact families. So he's got a straightforward plan here, it's the right plan for the country and we're gonna stick at it. Brian just standing

with the Federal Reserve. So let's go there briefly. Muhammad al Arian of bloom Bug Opinion and of course the president of Queen's College, Cambridge said in the last few weeks on our network, this was one of the worst FED calls in the history of the Federal Reserve. Yet Chairman pal got a second term. And you were part of that interview process. What did you hear in that interview process that convinced you that this is the right

person to lead this FED through this current environment. President was pretty clear about his criteria for nominees to the Federals or Board of Governors expertise, judgment and independence, and he saw in Chairman Powell, but also Layo Brainerd incredible expertise and judgment as well as experience, and he thinks these are the right people to lead are the Fed's effort and has now added on with three additional nominees.

If you look at this group of five, you see ideological diversity, You see differences in academic style and temperament, but overall you see extraordinary breadth of experience, across the board. This is a very solid group of five people to get get to work on this effort. So we're confident that these are the right individuals, and importantly, what you heard from the President yesterday, we're confident in putting our

faith in the institution. Unlike our predecessor, the President is trying to reinforce that having the independence of the Federal Reserve to make difficult decisions in this environment is incredibly important. It's important for the economy, it's important for our democracy. You got to make some difficult decisions now to break up build my bat to the President implied that that was the direction of travel. Now, the things that you can do after we fold into the trap of just

talking about numbers, let's talk about substance. What are the pieces of that that you think you can pass and can alleviate some of the price pressure in the medium term. We'll start with the biggest costs that a typical family

faces on a monthly basis, healthcare, prescription drugs, childcare. Those are the biggest costs, and this bill has elements that would go directly at it and provide relief in very practical ways, meaning no American family middle class family pays more than seven percent of their income and childcare that prides economic security. It also will help get more people back to work because parents, particularly women, will have more

support healthcare. We have seen five million more Americans this year get healthcare because we made it cheaper and easier for them to get access. Continuing that support, extending that support common sense lowers costs for families. Same with prescription drugs as well. Those are the kinds of things that I think speak to the economic challenges that family as they're facing, and are also practical and have broad support,

broad support among economists but also the American people. But Brian, last night, President Biden conceded that some of those exact programs are going to be very hard to pass, in particular the child tax credit. So given the fact that renewable energy is basically one of the most important areas, that seems like there is bipartisan support for what are some of the provisions that are passible right now that

could lower prices? Well, I just be very clear, the clean energy provisions in this bill will not only make it easier and cheaper to deploy cheen clean energy and address the climate crisis, it will reduce energy costs. The child care provisions in this package will not only reduce child care costs for families, but help people get to work. The healthcare provisions will make improve health for our families

but also lower costs. Those are all things that I think are practical, would address costs and are doable in this content. Brian earlier in the inflation are out look, we saw a lot of outsized gains for the lowest income earners that they actually were seeing some of the biggest wage gains. We've seen that shift recently, and the latest bank earning show a increase for bank or pay over the past year. The expectation is it will continue to increase from here. At what point do you start

to get concerned about a wage price spiral. One of the things that's remarkable about is the fact that the wage increases were skewed to the bottom end of the distribution, so the bottom of earners, and in fact earners in we in sectors like leisure and hospitality saw historic record wage gains. That's the kind of progress that we want to see. And also not only because those are people that need wage increases the most, but also it is that it creates the least concern about wages and prices

interacting with each other. I think that what you heard from Joe Biden yesterday is people seeing their wages go up. That's a good thing. That's part of an economy that is progressing and growing in a different way than it has in the past. And so what we want to do is we want to keep that economic momentum going while taking steps to have prices normalized. That's what most projections suggest will happen. But we need to stay on target.

And that's why the President is being very clear about the plan that he's got moving forward, and also clear about where he needs Congress to confirm uh qualified nominees for the Federals or to work on practical elements of build back better that would speak to the cost of families. And this is where the hope is right now, and I think we all agree. We all hope you'll be successful. We will want the best for this country. At the moment, though people don't feel this. You say way it's growth.

People say seven percent inflation. You say things are getting better. They say things are getting more expensive at the pump. The President yesterday said you could see what we did when we came out and worked with other countries to do something about crude supplies. We saw what happened. Crude came down and straight back cup. Right now it's eight six just sath of eighty seven dollars of Battle Brian.

Within the address yesterday, the President said we can do more to increase oil supplies brand specifically, specifically, what can he do to increase crude supplies? Well, we can. We can work to accelerate the release of strategic reserves that is currently underway in the United States, and we can working with other oil consuming nations accelerate supplies onto the market. We can work with oil producing countries around the world so that the OPEC plus countries are actually meeting the

targets that they have set for themselves. Some of the tightness and oil markets right now is a function of the fact that those target those supply targets have not been hit because there's been events in certain countries. We can work and engage with those countries and look to your broader point these This is work not yet finished, and the American people are frustrated, understandably, so this has been a tough couple of years. COVID and the uncertainty

that it creates, and prices create uncertainty. But that's why it's important that we have a clear plan and action that we can communicate in practical ways too. That will impact people's lives. And there's a big publement. What you just said, let me to jump in. It's the plus in OPEC plus if you don't one hundred opaque right now you're dialing Russia. This is where I need some input from you. The foreign policy goes of the administration

now at odds with your economic objectives. Well, we are meeting the UH the Russian government and making clear to President Putin the stakes and the costs associated with his action. That is about that is about making clear to him the stakes for him to make the decision. Those are decisions that ultimately he has to make. That's not on

the United States. But we have been very clear that we will be prepared for any contingency, not only in terms of imposing signalifigate economic costs on the Russians, but also working with our partners to mitigate the impact, including in energy markets. That's not easy. It requires steady, consistent diplomacy with our allies, with other oil producing countries, and

it is work yet to be completed. But that's the focus of this administration in trying to make sure that whatever international and geopolitical events we have to manage through, we are keeping front and center what we can do to help protect and support American consumers and middle class families here. And that sounds great, So let's go there.

Let's get some real detail on this. The President said that maybe we can look into alleviating some of the precious some of the dependence of Europeans on Russian energy, Brian, when you try and work to get crude output up higher. As you know, a conflict right now is what's happening with Russia. Europe's in the middle of that, Germany's in the middle of that. United States to some degrees in the middle of that right now, to Brian, so what

on earth can you do? Can you just run me through the very specific part of the policy effort that you could do to alleviate some of the dependence of the Europeans on Russian gas. Well, in the very immediate term, the focus is on how we can make sure that European countries have sufficient access to natural gas to get through the winter months, but also to alleviate pressures in

the spring. And very specifically, what that means is working with our allies and partners, particularly gas producing countries, to understand what additional capacity exists and how we could move and extend their capacity into the region. That is country by country. It's very specific and technical, but we're working those plans that we have them in place for any contingents.

Do we have capacity here at home in the U s. Bryan to do more these of course a private companies, it's not like the Saudis who can just dial it in and increase output. Do we have capacity here and what could the administration do to advise them, to encourage them, incentivize them to increase that capacity. Well, with respect to natural gas, our export capacity is we are at at close to maximum export capacity. So what we can principally do is work with allies and try to identify and

arrange ways to move more product in other ways. But bigger picture, oil trades as a global commodity on a global market, and it is a function of supply and demand, and ultimately the most powerful issue right now is working to get the stated supply commitments to actually be delivered on and that's going to be the most impactful, as well as working with allies to put reserves on the table. Those are the steps that we're focused on. Bran, I

know you've got to run. I just wanted to squeeze one important question in the president for a lot of people yesterday in that news conference really took one for the team. He stuck up for all of you when people question the leadership around him, specifically on the economy, he talked about he underestimated, overestimated. He talked about what he needs to do better personally. Brian, I said on air last week that we haven't heard enough from you, and I want to hear more from you, and it's

great we're hearing from you today. What do you personally need to do more of well? I think that the President was very clear eyed, as he always is, about both the progress we've made and the challenges that we've faced. I think that one of the perennial challenges in these jobs is making sure that we are hearing from all corners, getting outside of Washington in terms of the perspective and the input, and trying to hear from everyone we can

in terms including constructive criticism. That's gonna be a goal for all of us in this White House, starting with the President for two and I think that that that helps. It's a you know, working here in this environment is seven it's NonStop. That can be difficult to do, but we are resolved to make sure that we are hearing

from everybody. We're listening to everyone and also getting out outside of Washington and trying to explain the ways in which the steps we are taking are actually impacting people and meeting them where they are. Yeah, that's gonna be That's gonna be work that we'll try to do more of, even as we continue to manage the day to day and all the issues we've just discussed. Brian, can I

say thank you on behalf of the team. Is great to catch up and we all hope that we can have more exchanges like this one in the nefew Chip Bryant taste that the director of the nextional economic cancel right now and this is really well time. Peter Cheer joins us, head of macro Strategy and Academy UH Securities and what's important here is the acuity of his note and what's great about Peter Cheer Folks is the immediacy

of his note. He writes about the zeitgeist. Peter, I love, love, love how you're talking about the bet of inflation stasis or inflation even rolling over, and how the federal shift its rhetoric. How close as Chairman Powell to shock king the markets with a dovish tone. I think we're probably a few weeks away from that. I think we need to see a little bit more bad data or a week data. We're starting to see inventory builds. I think some of the supply chain issues are going away. We're

seeing slower retail sales. I think we're gonna get this realization that the economy isn't quite as good as we thought. And unfortunately, I think the first part of that, if that, is going to continue to talk hockey. And that's why I see a little bit more downside to this market. Let's not do the econo babble, Peter cheer. Let's stay within the fixed income market and maybe look at the

fan distribution of yield. What will yield do if Powell yields to a slowing economy and moves from the forest parlor game to three rate hikes or even dare I say, two rate hikes, how does your world change. I actually think we're gonna see lower yields, So I'm actually very bullish right now on treasuries seems slightly awkward, and I think what we're going to see as a big risk off movie. Saw a little bit of it yesterday, Right, that was one of the first times in a while

we've seen yields go lower and stocks down. So give us a sense of what the trajectory has to be in the data to lead to this sort of devish surprise and the idea that perhaps if that is just job owning, I think it's gonna be a little bit gradual. Right, We're gonna see little signs at the supply chains opening up. We're gonna see signs that inventories, buildings, signs that retails spending is slowing. So it's going to take a few weeks, maybe a month. And part of the issue is going

to be the politicians keep putting this pressure on. We need the politicians to take a step back, look at jobs, look at those things. I think we're gonna run to a much bigger problem at the end of the year where we're headed, and it's not gonna be inflation. That's going to be about jobs. And if the administration thinks people care about inflation, wait till they see how much they care if we don't have jobs because they cut

growth too quick. Okay, So you think that we're actually closer to a looser labor market than a tighter one that we're seeing in the wage increases. Is that correct? Yes, I think we're gonna start seeing some pressure from all this hiking that we're gonna see the economy slow down a little bit and the job growth slow down. Okay, so going forward, I'm curious if you're going into big tech right now. No, I'm still shedding that one thing.

So I've been very nervous about big tech. I think when we start our year outlooks we are very nervous about big tech. That's worked out very well. I'm starting to get a little bit nervous that we're seeing this creep. It went from the archetype stocks to the Nazac one hundred to the Nazac composite, and I think if we get another lake lower, it's actually gonna be led by

the SEP five d is. People start selling the socks that haven't gone down as much so That's where I think the next lake comes down, is this further shift to the SEP. I'm not quite ready to buy yet, but I am starting to look at that and I probably will start buying with some of the most needed upsectors. First, good to catch up set as always paid a chief of Academy Securities. We are thrilled now to bringing Nila Richardson.

She is a different chief economist. She is at the automatic data processing Company a d P. Yes, they do unemployment report of some note, but far more they have massive granularity on the American labor economy. Nila, You've got a quote on jobs of fifty employees or under and it's exploded out from a hundred thirty two thousand out to two hundred something thousand. Is well, I want you to discuss what your shop knows about the competition of Amazon,

Target and those warehouses with small business America. Well, first of all, small businesses are holding their own UH. They were the first to recover from the pandemic UH and to start adding headcount even though they were the hardest hit by those widespread closures in early But they've had some challenges in competition with these larger firms, they're not able to recruit in the same way. They can't pay and retain in their compensation packages in the same way

as the bigger companies. So we've seen them continue to power head but the competition has gotten stronger and more active at the same time, and when you talk about granularity, it's really showing up in the wage games. And we can talk about at but we're seeing some wage pressures at the end of the year. Uh, they're stronger than they were in earlier parts of NEILA. Let's build on that, especially in light of the software than expected jobless claims.

Some people might say, as John was indicating earlier, this is an indication of a softening and perhaps a less tight labor market than many people have thought based on the granularity that you've just been talking about. Is that consistent with your observations? Now? You know, when we ask our our clients at a DP, what is the biggest challenge that you're facing, and especially for small firms, it's

finding people. It's the number one challenge from businesses from one employee to five hundred, it's the number one challenge and that has been consistent through It is consistent as we turn the page on a new year, but we are seeing that show up in wage pressures. We're seeing that uh industries that had a talent shortage before the pandemic or where we're seeing the job gains. It's not the industries that have been hardest hit, like leisure and hospitality.

It's professional business services, finance, information tech. That's where you're seeing some double digit wage gains from a year ago as of December. And what's also notable, we're we're also seeing wage pressure is not for older workers, but for younger Gen V We're seeing them those who have kept their jobs for a year or more are seeing the strongest gains of anybody. So this is a lop sided market with some industries outperforming and some sectors out performing.

And that's all creating a lot of noise in terms of wages. And we've seen the shift also where initially it was the lowest income earners who are seeing the biggest wage pop and now we're seeing it shift to a broader number of sectors. Can you gauge out, can you game out based on your experience how sticky some

of these gains are? I mean, is is a one time kind of payment or are we going to see commensurate types of increases next year the year after, You're not going to see ages be the push to inflation if it continues. Uh. If you look at some of these firms, especially those in the service sector, the margins are thin. And I know you all talk about corporate profits and margins all the time. There is only so

much wiggle room on wages. So yes, you might see an increase or a pop to get workers in into the door for these service sector firms, especially in leisure, in hospitality and restaurants and bars. But the continuation of year over year wage bins at the case that we're seeing them is not likely and not likely to drive inflation. We've got a dispersion here, we always have that. That's not news. Nebraska under two percent unemployment rate, Ohio four statistic,

even Texas four or five is statistic as well. When you calibrate a fully employed America, what's the unemployment rate you have in your head? Obviously below four percent, but dare I say, can we be fully employed? It's three point two percent, three percent or even a stunning two point nine unemployment rate by a traditional definition, yes, but by a definition that recognizes that the workforce is smaller

now than it was two years ago. No, there are three point six million jobs that we had in the economy two years ago we don't have now. We haven't created jobs on top of that. Twenty nineteen a number. And so yes, if you look at just a rate, a rate that includes a denominator which shows a smaller level of a workforce, and you can get you can get there. You can give the math. The math works, and if you really look at all those jobs on the sideline, I don't think you remind us any guests

that mentions numerator denominator. We don't talk to Nila. Okay, that's enough math. I want to talk Nila about the idea of a fully employed America and the granularita that a d PC's who leads the way. Large corporations, mids size or mom and pop. Right now, large companies are leading away. They're the ones that are showing that they can hire and hire strongly in this market. This is a market where everybody's trying to add head count at

the same time. It's not a traditional market. Um and so when everybody's running the race at the same time, the bigger and the stronger you are, the faster you can go. And that's what we're seeing with large companies. They're really outpacing in terms of gains. Will that continue? I don't think so, because if history is any guide, it's really smaller firms that contribute the most to worker gains. In fact, in the previous expansion, small companies produced two

thirds of the net job gains. So yes, in this time of transition, bigger companies are leading and winning. That wasn't true through the whole recovery. It's true now, But I suspect that small firms gain brown once the economy completely normalizes. NATA, thank you a really good point finish on NATO Richards in that of the I d P, I d P Chief Economist, as we talked to Craig Moffatt about five G of Moffatt Nathanson and his expertise on our worries and fears of five G. It's the

surveillance pop process. We look at experts. We try to go to experts to give you perspective. On radio, on television, Lisa brand Wintson, Time Key Now with Daniel Tannembob Dan Tannembomb partner in ahead of America's in a financial crime at Oliver Wyman and actually knowledgeable more than politicians on sanctions, Dancer the Tannembomb prism. What did you hear yesterday in the press conference that will change the behavior of Mr Putin? Well,

thanks for the intro tongue. I didn't hear anything in the press conference yesterday that it is likely to change the behavior um of Mr Putin. I think you've heard since December this White House UM and al eyes talk about the threat of sanctions should Russia move its forces across the border as a reminder again, uh into Ukraine. UM. I think hearing that emphasized again, I mean it did sound actually a little trumpy at some points talking about kind of you know, these are are kind of the

mother of all sanctions, so to speak. UM. I think continuing to hold the line on what will happen UM was pretty consistent from what we've heard out of the administration over the last month or so. Okay, the last month or so. But you know, let's try to get over let's try to do the Oliver Wyman thing and actually look in advance. So for Apple computer, Apple iPhones, what does sanctions mean do they pull out of Russia?

So I mean this. The threats of sanctions have taken on a variety of form, everything from sanctions on North Stream to impacting energy, cutting off Russia from global payments networks, sanctioning large Russian banks, and potentially restricting the importation of

you US origin goods. When I talk to clients, I'm already hearing institutions, not necessarily in the consumer product space, but in the financial services industry begin to work on asset repatriation plans to begin to look at everything up to a potential market exit of Russia, and that could

happen in advance of any further incursion into Ukraine. I think the market concerns are really sparking a lot of noise and jitters where some businesses are calculating that the risk might not be worth the reward in the market going forward. Just to give you some sense, Anthony Blinkin, who's over in Europe meeting with Germany's old Off Schultz, speaking right now, and he's talking about the negotiations with Russia and the alliance with Europe, saying that the Allies

aim is to seek diplomatic resolution with Russia. This really speaks to this feeling that we increasingly get that perhaps their hands are tied. You point out that sanctions have not worked in the past. Can you give us some details about how clients are preparing for the escalation that feels increasingly inevitable. I think, as we've seen from going forward, sanctions between the US, EU and Russia certainly had a

material impact on the Russian economy. You've certainly seen what was a growing economy in kind of the global scale in Russia shrink and look more insular as it became fortress Russia trying to insulate itself from sanctions. I'm not seeing anyone do this yet, but I'm certainly seeing more and more clients in the financial services sector really begin to weigh is this a market that we want to be in anymore? Given the uncertainty and all of the risk that exists to our business. I think it's a

lot of planning. I'm not necessarily seeing anyone sell off or pull the trigger quite yet, but there's a lot of watching and waiting, and I think there's a lot of companies that are really beginning to be concerned that

this might not be worth it being in the market anymore. So, where will we see this when you look at a market impact is simply because as we were talking about, the announcement about bitcoin restrictions in Russia is having an effect as Toomas talking about earlier on the price of bitcoin. Are there certain asset classes that are going to have disproportionate and correlated blowouts one way or another in response to some sort of action by the US on Russia.

I think, looking across a variety of sectors, I'm seeing potential impact not necessarily isolated to one. I think when I look at correspondent banking businesses that have operated in Russia for some time, those seem like trime ones that might be looking to cut themselves out of the market pretty quickly. But I can't necessarily isolate it to one specific segment. The institutions I'm talking to really cut across a variety of different sectors, so this could be broader

than just a specific element of the market. Jan I want to go back here to Apple, but then I want to take it to a different company that's maybe more appropriate to the negotiations and your expertise and sanctions. You have CRIMEA two thousand fourteen maybe of Ukraine two thousand twenty two. You've got Mr Putin, He's going nowhere. And then you have the law against Apple, which has to do with what Apple has to do to get

business done in Russia. What's the law against Caterpillar? I mean, Caterpillar is machinery that's our number one export to Russia. Do we have to assume that with any form of moving into Ukraine that Russia is not going to be able to buy Caterpillar products. So I think it's to be made very clear. And President Biden tried to articulate this yesterday and kind of walk back elements of this. This sanctions and the responsive sanctions will be kind of

proportional to the actions that Russia takes. There's a variety of different levels that the US has begun to package with its EU allies in terms of what sanctions could look like. That include things like import bands of American origin agricultural products. Um, that's not to say that is the lever they'll pull. I think you have to keep some powder drying the situation. So I'd be surprised if

sanctions are levied all at once. Uh, there's certainly a lot of concern around whether sanctions are levied preemptively which could give Russia just a occation to further move into Ukraine, or they're levied after they move into Ukraine, which didn't really help the last time, and they haven't given up crime need Mr Tanneb'm thank you so much for joining us today, Daniel tanneb Oliver Wyman. They're expert on sanctions.

I learned a lot there that was great. We speak the best and brightest, and that would be Craig Mafat, founding partner, Senior research analyst at MafA. Nathanson and Craig. I don't want to turn this into a consumer interview about like am I going to be safe on my

playing with my five G phone? Forget about that. What I want to talk about here is how the people you are experts on how they adjust to what is clearly a dysfunctional US government transportation and that what a Verizon and the rest of them do with the US government hit over the head by Emirates Air. Yeah, I tell you Tom that first. Well, thank you for having me on and good to see you again. Good to see Jonathan and Lisa. I've got to say you hit

the nail on the head. This is a highly dysfunctional government. Uh and and it really goes back quite a few years. I saw in the tea I heard in the teaser you were you know, there was the comment snuck up on everybody. It's hard for a calendar year to sneak up on people if you can kind of find it in your in your calendar if you look. And yet,

and by the way, this is not a story. We started talking about this spectrum band being used for five g back in so the f a A has had five years to prepare, and the auction for these for this spectrum band happened in the end of closed in early one and a year later, the FCC suddenly says, oh my goodness, wait a second, it is unbelievable to me that that it took five years before the FCC before or the f a A seriously engaged on this issue. So correct, you nailed Brown physics. I mean I heard

you were Suma Comelaoudy in Brown physics long ago. Let's bring up the formula here that matters, which is the area definition of an antenna Alpha New Jersey gave me this, thanks sale for that. A equals landed squared, divide divide four pie g. The MafA translation is, folks, is this is going to get solved by rotating the antennas at JFK so they don't approach the runways. Is it that's simple a fix? Dr? Moffatt, Well, it's actually a little

simpler than that. Even so, look the radial propagation. So think of a circle I R squared of the the area covered right now, they're talking about turning down power levels for two miles around an airport. Two miles around an airport in some some airports are far enough outside of downtown areas that doesn't matter. Some like LaGuardia or Hobby or love or or or Reagan, it actually matters

quite a bit. Um. My suspicion is the solution will be remember that that sector that antennas are sectorized, that is, they serve in an arc of about twenty degrees um. You won't turn down power on the entire antenna. You'll turn down power on single sectors that face runways. And remember what's that what's that issue here is the altimeter that is measuring the height of the airplane only when

you're quite close to the runway. So you will turn down the power level on antenna's that face runways for that sector. It's not a terribly hard problem to think of how you get to the solution. And by the way, the ultimate solution is actually fixed the damn altimeters um that that are subject to interference outside of the band

they're supposed to be operating in. So, Craig, if it's a simple if it's a relatively simple face X And frankly, this whole episode has exposed, as you said, the profound dysfunctionality of the government on a broader level. How do you then factor in some of the infrastructure spending that you were pointing to that could actually help the telecom sector, that could help some of these five G rollouts at a time when the government doesn't seem to be that

on top of things. Yeah. Look, I think the infrastructure that goes down a completely different path the the infrastructure built for the broadband, for example, pushes the responsibility for broadband construction out to the states. So you're going to have fifty individual states coming up with their own proposals for how they think about uh cost justifying individual projects

where they want to target um. That's that's its tone level of dysfunctional, I think, and the reason that Congress chose that path was that they were frustrated with the f c C in part because of the fccs handling of UH the so called art off auctions were other rural broadband UM. I actually think the FEC did a pretty good job in that case, but there was frustration over that, and so they chose an alternative that I

think is also likely to be dysfunctional. I think in this case, though, to go back to the the the issue of of the f A A and the f CC, I don't think there's any ambiguity this time who's at fault. This is a problem of the f A A, not the FCC. The FEC was very clear, had a very measured process throughout this entire episode, and it was the f A A that simply refused to engage. So I think this time you have to point the finger at the FAA and you can understand why Verizon and A,

T and T are so incredibly frustrated. UM that at the not even the eleven hour, it's it's well passed midnight, and suddenly to raise these concerns about yesterday's news is incredibly frustrating for the carriers. The Y S N coupon us, didn't it some twenty two? Feel still feel like I'm into a twenty So chill this morning. Craig on his sofa, Craig Moffett, that of Moffett Nathanson. Thank you, Craig. Send up West to Michael Sagred. This is the Bloomberg Surveillance Podcast.

Thanks for listening. Join us live weekdays from seven to ten am Eastern. I'm 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 and this is Bloomberg