Surveillance: Remembering President George H.W. Bush

are thrilled to bring you this morning. Diana fritchgot Roth, former Office of Policy Planning for George Herbert Walker Bush and now working with the Trump administration and Treasure You're working with Secretary Minution right now, right, and it's on economic policy. You have a span across Republican politics. I would suggest as no one truly does. There's some that did it, then, there's some that did it along the way, and there's some that are doing it now. But I

would argue in Washington, nobody's spanned it like you. What's a difference between Treasury financial in the process of Republican politics and administration now versus under President Bush? Well. I started off with President Reagan in the Council of Economic Advisors, and it's been a great privilege to work under four administrations. President Reagan, President George H. W. Bush, President George W. Bush, and now President Trump. And we're here to talk about

President George H. W. Bush. And he was a very kind man, as many people have said, and he did his best to cut the deficit and keep the economy going. And what was really interesting is that in what we were saying is that the economy was growing, but the National Bureau of Economic Research didn't mark the end of the recession, the end of the recession being in March until December. So in December nWo when President Bush said the economy had been growing all year, turned out he

was right, it had been growing out right. Well, I'm not blaming what is so important here and this is in great and I say this is great spirit for the humor of the former president. We need a definition of voodoo economics, and you're the only one in the planet can really. I mean, Jim Baker can do it, and others can do it. But Diana first got Roth, what is voodoo economics? Just once and for all. Well,

I don't know what voodoo economics is. But right now we have cut taxes and the economy is growing very strongly. We had great GDP numbers last month. The economy is growing above three right now, take your point, debate about the vector there. But this is important and this goes back to something that Michael McKee said to me. Yes and again, folks, Mike McKee will join me on radio here on Bloomberg Surveillance through the morning. I've thrown with that.

And what's so interesting here is the lessons we learned about cutting taxes to spur growth and maintain fiscal integrity. That was something important to President Bush, important to President Reagan. There was an experiment then, and under President Trump's leadership, there's an experiment. Now. How's the experiment going? Can we really grow our way out of a fiscal challenge? The difference between twenty sixteen and the economy now in seventeen

and eighteen is remarkable. People thought that the economy could not grow at higher than two percent, and it's on track to grow at higher than three percent this year. Business investment sword consumer confidence. Business confidence are up, business investment increased. Okay, I'll take your point, Diana. But what is so important here is to understand that idea of

a twin deficit. My chart of the year is that linkage of trade deficits something dear to President Trump, and also the linkage of our fiscal deficit and the vector of that is getting back to the time of when you were very young of Reagan and Bush Senior. Do we have a risk here of twin deficits into or frankly beyond. It's up to Congress to put in place proposals to cut spending, to cut the spending. And President

Trump proposed cutting spending. President George H. W. Bush proposed cutting spending, and it's up to Congress to follow and make those spending cuts that presidents propose. Presidents propose, but Congress has to in the last uh, Congress is responsible

for how much you spent. No, this is interesting, Diana first got Roth, thank you so much joining us right now in Washington to begin a discussion on this is the right gentleman, and that as you know, since November on the death of George Bush, there's been all sorts of worthy speak he isn't worthy in the communications of the Republican Party. Run bun Jen has had a most interesting,

interesting career managing the message of Republicans. He's reached huge acclaim for that, frankly by Democrats as well, and we're thrilled at run bu Jeen can join us this morning, Ron,

What was your biggest challenge of communication for Republicans. Well, thanks, it's great to hear you know, I would say that, you know, the biggest challenges are getting the message out in a consistent way, and that that is very challenging when you have all kinds of elected officials in republic Looking party who want to communicate different things, Getting them unfocused on a single message to say the same things at the same time can be very very difficult, and

especially in today's age. Obviously you have the President Trump uh communicating via Twitter and really driving that driving that message the way he wants to. And I think there's a lot of Republicans that are are are figuring out the direction of the Republican Party after after the election, after the election, and the direction. Do you just assume that President Trump runs for a second term? Is that

just a given? Yes? I think he runs for a second term, and I think he's going to give Democrats a run for their money. You know, if Joe Biden runs, he's really the only relatable, I think candidate at this point to Americans that could really uh that could really give a good be a good sparring partner versus h versus President Trump. And he's just a master of message in terms of activating people and getting people riled up and getting you know, harnessing that anger that's out there.

And I feel like there are so many Democrats right now are running that they're going to dilute their own mess. You were directly involved in the process and processes of the last election. At the Rotunda today and and yesterday and at the National Cathedral today there will not only be the remains of the forty one president, his son,

the President with Mrs Bush yesterday. Some of those images were wonderful, but also Jeb Bush, which is maybe the more modern Bush and certainly the one that run Bungen has bounced off of the most in recent years. Can jet Bushes still run in the Republican Party? I think more along the lines of UM on the local level, potentially the state level. There are still opportunities out there, you know, for for those voices UM. You know, there is a polarization in politics, obviously on the left, and

the polarization and with even the Republican experiment. I would say it's you know, I I would agree with that, and I think that's going on in the Democratic party too. You have this polarization on both sides. Um, that's that's really pulling people to the left and right. There are still opportunities in those moderate suburbs. Um that Republicans lost um as a referendum on President Trump, UM to a

lack more moderate voices. I think in the future, and uh, you know, I think that the Republican Party still remain strong. We still have the White House, we still have the Senate. We grew our numbers in the Senate, but as you mentioned earlier to me, you've got to take back some of the losses. Where does that strategy come from? I'm fascinated within what I think all of our listeners, whatever their politics, they observe the president of the presidential tweets,

the conferences, the gaggle around the helicopters he dashes. Forget about that communication strategy. There's got to be a communication strategy for Republicans to get away from his core constituency. Does that strategy exist or where where's the colonel that's not in the lunch room at the Hey Adams Hotel. Is Well, no, it's not. I mean, it's core constituency

is though of voters right now? So you have to figure out where can you get the other the margin, where do you get the next that's your world, That's exactly that's our world, and we have to figure that out. I mean, I think that there is a number of things we should be doing. We need to be appealing much more to women, to white female voters, to to frankly, be much more inclusive um in in our messaging. And

that has to happen at a consistent basis. Right now, what we're doing and what the Democrats are doing is primary, is driving messages. It feels like we're both both sides are running primary elections right now instead of the general, and the general election feels like it doesn't really exist, meaning that we're driving messages and either side to motivate our voters to the polls to try to outprimary each other. Okay, I love that phrase. That's a round bonding original out

primary each other. Guess what after that? You got elected enough, for example, Ronald Reagan and I would suggest President Bush. Maybe they went right, but they moved to the center as they moved to the general election. I'm right, those days are over right, Well, we'll see. I mean, you know, every election is different. I mean, you know, when um,

uh President Bush lost to Bill Clinton. Uh, it was over the economy, um, and it was over whether or not President Bush could relate to relate to uh, relate to Americans. And you started feeling out of touch. And the President Clinton took advantage of that, and they called it it's it's what is it? It's the economy stupid?

Was the was the line. And so I think, you know, and within a year or two, I mean, within a year, we have to start a consistent message that is much more appealing or else it's going to be just another primary election. Well it's just another primary election and just another primary process. But the process is time is different from K Street and Ice Street and the other you know,

the secret dark corridors out by Reagan Airport. There's offices of Republicans trying to figure out the primary system inform our audience. How does that that ballet start and why is it different from the last time around? What I've learned as New Hampshire is not as important as it used to be. I think that this that's right. I think um that you know, we start out with with a slight advantage in Ohio and Florida because we have Republican governorships there. You know, we just won a very

divisive election in Florida. That means we have the infrastructure of that state party apparatus to help us with those primaries for that primary system. But the primary states are changing, Um, you know, we have we have states like North Carolina that's that feels like it's changing. Um, you know, other states like Arizona for instance. That's obviously okay if if North Carolina discovers Connor Lamb's plural the gentleman from northwest

north southwest rather of Pittsburgh, those kind of Democrats. Republicans have to be different, don't they. You know, I think of Austin Powers in that movie Behave. Republicans have to behave if they're up against a more traditional Scoop Jackson Democrats. I think it really depends on each district, in each message, you know, and and the candidates themselves, um, you know, and what what's going on in that state and district.

I mean that that's the thing now right now, it's a it's a referendum on President Trump, and it will be a presidential election. But on the local level, they're going to have to continue to to um to keep the Trump based enthusiastic while trying to reach out to other voters. And that's a difficult needle to thread. Run Bundie, Let's leave it there. Thank you so much, greatly appreciate the perspective here of a gentleman in communications for the

Republican Ron Bundin. Thank you, so thank you very much. Uh this morning I said to someone a few days ago, would you just find the admiral? And of course at Bloomberg surveillance there can be only one admiral, and that is James Travidez. Of course with a Fletcher School at Tufts University. Admiral, we are thrilled to have you with

us today. UM. I was reading about Admiral the Grumming torpedo bomber of World War Two and the basic aeronautics of what President Bush flew was It drove like a truck. I mean it was a little different back then, wasn't it It was? And this is all we say fly by wire. I mean this is nothing electronic obviously, just some basic hydraulics. Truck is a good example. It's like a truck made by the Soviet Union. I mean, this

thing just banged through the air. He was so proud of it and was such an extraordinary naval hero and we all miss him so deeply. I knew him reasonably well, wrote some speeches for him over the years, and Tom when I was the Supreme AI Commander of NATO, he was one of the biggest supporters of NATO. We're going to miss that, gentleman. Well, that is there. I mean, we got eight ways to go now, Michael mckeena jump in.

But but this is so important. We saw it with the Bloomberg interview with Mr Porschenko yesterday on Ukraine John Mersheimer Chicago talking about maybe we overreached? Did President Bush ever suggested his writings are directly to you, Admiral, that maybe we overreached too much in our expansion of NATO. Nope, he was someone who was rock solid on that. Of

course he lived those years. Uh. And also we need to mention still living the Secretary of State in those days, James Baker, who be featured prominently in the funeral today you'll see his face often. He was one of Bush His closest friends. The two of them really created this new world. And I think despite all the concern and claim that perhaps we pushed Russia into a corner. I just don't see it that way. Historically, no NATO tanks tom ever went rolling into Warsaw or Bucharest to force

those countries to join NATO. But there were plenty of Soviet tanks back in the day that rolled in there. Those nations wanted to be in NATO were lucky they're in NATO. One of the things that he is known for, if you are a nerd enough looking at these things, is the way he redesigned the National Security Council and

set up Brent Skokroft as a sort of honest broker. Uh. You remember in the Nixon years, before that happened, you had the big fights between the Henry kissing your faction and whoever was at State at the time, at George Schultz in the Reagan administration, UM, that really made a difference. He had a George H. W. Bush came to office with a specific idea of how foreign policy should be run.

He did and the way he did foreign policy and defense policy and international diplomacy were a direct reflection of his character, which focused on team building. Uh. You know, as he would say, there's no eye in the word team t E a M. And it was a reflection of his own athleticism coming and playing on great baseball teams, and his personality and the way he was raised. And he wanted a Lieutenant General Brent scot Croft to be the National Security Advisor because Brent, who's still alive in

his nineties, marvelous gentleman. UH was the embodiment of no one of us is as smart as all of us thinking together. That was the hard of the NSC under President Bush the first and it was well run. Did he leave it in as good as shape as he founded?

A President Bill Clinton's first term not particularly successful from a foreign policy standpoint, And then you had a lot of the former Bush one forty one alumni end up in Bush forty three's cabinet, and people are looking at, you know, the legacy of George W. Bush in the Middle East and wondering how did how do we go wrong? From father to son. Part of it can be explained by nine eleven and the extraordinary pressure that put on

that administration, UH, the Bush forty three administration. Part of it was personalities. Um I was at the time working directly for Secretary of Defense Don Rumsfeld strong personality, Vice President Dick Janey's strong personality, National Security Advisor Condi Rice, who I think tried very much to followed the sccroft model. But in those years, those were big personality. We were in a war, and I think it was a very different time for the nation. So if you want to

look for a model, it is definitely Bushart one. If you're just joining us. James Trevidus with us, he is, of course with a Fletcher School, former Admiral of the United States Navy on the special day for Bloomberg Surveillance. Our coverage from Washington and from New York, this day of memory and services at the National Cathedral for George Herbert Walker Bush. Mike, your questions are so good and so well informed. I want you to continue with the Admiral, Michael,

pick it up again. Please let me as long as we have you here and we have an admiral, let me just ask you something about what's going on today. The whole US China trade issue gets caught up in the larger U S. China relationship, and we saw and this didn't get a lot of publicity, but during the g twenty summit Argentina, the US sent a destroyer through the South China Sea into territory. China is claiming how dangerous is that situation? How how much of a conflict

do we really have with the Chinese over this? Because people are talking about, well, if if Trump fails whatever, we can have a new Cold War. Is that what we're facing the kind of thing we went through with the Soviet Union? Or is it a different kind of challenge. I think it'll end up ultimately being a different kind of challenge, Michael, but Um, we have tactical challenges with

China in tariffs, trade, intellectual property, cyber conflict. Those are things I think we can negotiate our way through, and I think we will. The one I worry about is the uber strategic challenge is in fact, the South China Sea enormous body of water size of the Caribbean and Gulf of Mexico combined, full of hydrocarbons. China claims it in its entirety as territorial sea. It's a posterous claim.

The United States and our allies are pushing back on it, not only in international courts where it's been rejected, but also operationally your point, driving our ships right through these claim territorial sees. I think that's gonna be a tough one to negotiate, but no, in the end, I think we'll find a way to avoid stumbling into a full

blown cold war. I've got about five more minutes of good questions on Robert Caplan's Asia Cauldron, but we'll have to leave it there with a good admiral at Mr Venus, we are thrilled that you are with us today. Thank you so much. He is a tough university and there Fletcher School as well. Michael McKee with me. This is Tom Keene and Washington, Michael McKee and New York on this most special day for the nation morning for the memory and services of George Herbert Walker Bush with us,

not William Hoagland. Bill Hoglan, who is truly one of the nation's experts on our debt and deficit with the Bipartisan at Council. Bill Hoagland. Um, we go back to Henry Clay in eighteen fifty two, and then with the finishing of the Capitol in eighteen sixty and eighteen sixty eight, Abraham Lincoln and Thaddya Stevens and on to President Reagan. President for John McCain on August thirty one of this year, and now another president lying in state in the rotunda.

You visited the rotunda two days ago, and you had the privilege of visiting in the quiet early morning. What was it like being in the rotunda? Very moving, calm. I. Of course, it's spent many years in the Capitol, I worked in the Senate, I spent many a day walking

through the rotunda. But to visit the rotunda with the president lying in state, uh and in the quiet of that early morning hour, um is was brought back a lot of memories in my affection for the for the president, overcome me peas honest John meetscham Will you eulogize today? Of course, his one volume is considered definitive tell Us of the Fiscal George H. W. Bush, I think it's a bit of a mystery and a bit of confusion over what is fiscal beliefs really were? Well, I do

think that clearly uh uh. The when he came into office to get the nomination, there was some concern that this was a liberal Republican, Eastern State Republican who was not to be trusted on some of the conservative issues

of control and not raising taxes. And so of course his big his statement down in New Orleans and on the getting the nomination read my lips came back to haunt him because when we went into the we had a number of issues facing as we had savings and loan meltdown, We had a number of problems that Congress is being controlled by Democrats, and we negotiated a budget agreement.

In it was a budget agreement that did required the negotiations and compromise, and in that compromise UH taxes were raised, but it was a five billion dollar deficit reduction. He did. He was concerned and his staff were concerned about the deficits. They would have preferred to have controlled it on the spending side, but we were working with a Democratic Congress

and so he had to negotiate. UM I had the privilege and honor of attending the twenty fifth anniversary of the President at his library and in college station back

in April. Um As I was getting ready to go onto the stage, the President and came up behind me and his wheelchair and pulled me on my UM shirt TI or my coach Kai and said to me something about how I was responsible for him being a one term president, because that negociated to how much of course he was kidding he was He was wonderful and working with the staff. And I will always remember that last

direct encounter I had with the president. It. Uh, it's quaint to remember now that Uh, in fiscal nineteen ninety, the year that you put together this agreement of the federal budget, deficit was two dollars and it's going to be this year at trillion dollars, and and everybody was panicked about two hundred and twenty one billion dollars. Uh. Things seemed to have changed. It was, I guess to

get back kind of at what Tom was saying. Uh. When he ran for president in nineteen eighty, he derided the idea of tax cuts paying for themselves as voodoo economics, and he said, you know, read my lips, no new taxes. But he agreed rather readily to revenue enhancers. As the statement that they put out at the time said, um, what what did he really think about deficit spending and taxes?

This was before the whole Republican tax pledge, and that's right. Thing. Well, one thing I would say was that like that he that that agreement was the beginning. Of course, yes he lost his loss that his term of office at one term office, but with but with Clinton coming in, there was a agreement which is trictly a partisan agreement on the Democratic side, which and then there was a nine agreement.

Uh and I would argue, and the agreement brought us to a balanced budget, which I had on our working on it. I do think that he did start at that, even though it was a cost him, cost him his job as a one term president, he did start the process of really focusing in the subsequent to the seven agreement. After we reached balanced budget, then things kind of went to went in the wrong direction. But I think I think he was pragmatic about deficits. I think he believed

deficits mattered. I believe that he thought that they should be controlled. I believe his focus was primarily on the spending side, but overall he was pragmatic and knowing that to reach that agreement, to try to reduce those deficits, we had to focus not just on the spending side, we had to focus on revenues. To excuse me, Bill Bill Hogdon with us with a bipartisan Council can't say enough about his abilities on the debt and the deficits bill. Can I ask the dumb question of the day, is

there any question? Is there any evidence we can actually quote unquote cut spending? UM? Well, I think there, I thought one pest to say, yes, there has to be some hope here that we can look at the UH four trillion dollars at the federal government spends and surely

we can find areas within that that we can control. UH. I do think we have to focus on those programs that are the most most difficult politically, and that are the entitlement programs, whether it be so SECAREDY or Medicare medic it those are not politically popular UH programs to address. In fact, our current president and said they were off the table. I don't know how we can control deficits long term on the spending if we don't realize that we have to focus on on those programs are manager

for the future. At the same time, I think that coming back to the President George Bush, George Bush, I do think that he felt that you had to have a compromise here in a democratic system with UH and that meant that you had to focus not just on the spending side. We had to focus on revenues. If you do both together, I think then you have more likelihood of getting agreement to do the spending side. Um, politicians,

if not smarter, more aware of euphemism. So the idea of campaigning for revenue enhancement is probably off the table. But I'm wondering. You know, you're we're gonna see if the deficit keeps going up. Uh, We're gonna see somebody trying to campaign on bringing down the deficit. But how do they do that? And I'm wondering in two thousand twenty, um, Donald Trump is going to want to campaign on the

idea of rolling back his tax cuts. So how how do you how do you make the case now because we're not seeing bond yells get out of control because of the deficite. Well, again, I think there are two things that hapnic Leon Panetta when he was leaving office, and there are two ways to control the deficit. One was through a crisis and the other was through leadership. And unfortunately I don't see the leadership in at either.

Into Pennsylvania Avenue. I said that with respect to vote, and so I'm afraid that at some point there that there might be a crisis, and then that crisis comes with that will force their attention to deal with this and a serious pamer that they're not dealing with now. William Holden, thank you so much for being with us today's senior Vice president the Bipartisan Policy Center in Washington.

Were just wonderful perspective there on the reach of the state of our fiscal economics from the time of President Bush two of the president as well. 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 Keane before the podcast. You can always catch us worldwide. I'm Bloomberg Radio.