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Jason Furman has committed himself to policy. There are a few others equivalent to him, both Republican and Democrat. He's associated with democratic politics, but he's I think been ecumenical to use the word that Professor Furman uses a lot, Paul. One of the key things with Jason Furman is he was voted most handsome freshman on his dorm at Harvard. He made out his roommate just by a little bit. That would have been Matt Damon from a few years ago. Jason,
thank you so much for joining us this morning. You're an ten and you have to teach ambiguity, microeconomic ambiguity, and it can go this way and that. What I didn't hear from the Secretary of Treasury is a risk of a real or nominal GDP slowdown. With all the policy upset the nation faces right now, do you see that we could have a lessening of real GDP or the animal spirit of nominal GDP.
Yeah, well, right now, the level of uncertainty is just incredibly high. That is definitely a minus for the economy. I don't know how big a minus it is, and a lot of it depends on how the uncertainty ends up getting resolved around things like tariffs, or whether it gets resolved. It may be that every month there's a new threat, it gets withdrawn, a new threat that gets made. That makes it hard to do planning on a global basis.
And that's the success of American corporations is their global reach.
Well, help us with the equation then, because everybody focuses on consumption, we do the FED parlor game. I was amazed we did you know the independence of the fedure. We'll talk about that in a moment with Professor Firman, but ignore Jason. As you know, is the I and the equation business investment as you look at CPI and analyze it. How do you analyze business investment right now in America?
Yeah, so consumer spending is the majority of GDP, but investment is the majority of fluctuations in GDP because it's much more volatile and right now investors. Business investment is grappling with continued high interest rates, which are likely to stay that way, with an appreciated dollar which is likely to stay that way, with uncertainty about global trade, which
is likely to stay that way. On the other side of the ledger, there may be some reductions and investment in regulations that will matter more in targeted sectors like energy than it does generically across the board. So a lot of cross currents right now, but from policy they're a little bit more minus than plus on that part of GDP that is most critical to business cycle fluctuations.
Professor of the Federal Reserve is obviously focusing on inflation, and inflation was a big, big issue in the recent presidential elections. Certainly, are you concerned that inflation in some of the policies that Trump administration is talking about, whether it's tariffs or changes in immigration policy, could fuel another round of inflation.
I think it's certainly possible, but let's define what we mean by another round of inflation. Right now, I believe underlying inflation is around two and a half percent, and the tariffs that have been done to date on China and steel will probably add about a tenth of a percentage point to that. If you do another big set of tariffs, maybe it adds three four tenths of a percent to that. Now you might be at three percent inflation. That's a big deal for the FED. That means they're
not cutting rates. It might mean, depending on their theory, but whether or not to look through the price level change, that rate increases are back on the table.
But that isn't.
Necessarily a huge thing that consumers take note of. I don't know how much humans notice the difference between two and a half and three percent inflation, but the FED certainly does.
Professor you and I and I think much of our audience grew up with this whole concept of internationalism globalization. Is that still a thing these days or is kind of everybody just kind of trying to enshore friendshore everything these days.
Look, I'm unapologetic in my enthusiasm for globalization. Enormous things for American consumers, American producers, the strength of the United States. There's no question that politically it's on its back heel right now. But it is such an incredibly powerful force that to me, it's much more like a dandelion that will grow no matter what the conditions are than it is like a fragile orchid that needs to be watered in just the right way. And look, there's been some
feedback in the system. If we had tried to put twenty five percent tariffs on Canada and Mexico, it would have been horrible for the US auto industry. I think that might be part of why it didn't happen, and part of why I hope it doesn't happen.
Jason Furman, with US folks on your community across the nation, good morning, I'm Bloomberg Surveillance and on YouTube. Thank you for letting us be in your living rooms, your offices as well, even some people in their cars watching. Sure, I don't know. I'm not sure about that, Jason. I got to go back to where we are. I want you to take a bigger picture here, like look at the Washington Post, look at the cacophony of Bloomberg Opinion, etc. I got Treasury secretaries. I mean, I know, you go
back to Albert Gallaton, forget about that. I got Robert Rubin and a guy named Summers who used to sign your paycheck. I got Jack lou I got James Baker, and Company. I mean, the Treasury Secretary is at the fulcrum of our executive, legislative, and frankly judicial branch of making it work within our financial system. Are we at risk now that that financial system is run out of the Oval Office. Do we have a Treasury secretary who's so diminished that he really can't affect Furman like policy?
I hope not. Scott the sentis a smart guy. He's a talented guy. If this policy making were delegated to him, I wouldn't agree with all of it, but I wouldn't worry fundamentally about being in deeply unsafe hands. But yeah, the tariff calls are being made out of the Oval Office, The calls about the FED are being made out of the Oval offices. He'scott Descent one moment saying, you know, we're comfortable with the FED because we're focused on getting down the tenure, which is a great thing to say,
absolutely makes sense. And then the next moment you see Donald Trump commenting on the FED funds.
Right, Okay, Olivia, we're going to rip up the script right now. We can do this with the future vice chairman or chairman of the FED. Could you see Governor Furman. Come on, let's cut to the chase, Jason. Right now, we're beginning to see the percolation. I don't want to
make editorialize your folks of FED independence. We go back to McChesney Martin, We go back to LBJ where he took He took McChesney Merrin's years and picked him up like the dog back then, Jason Ferban, is this FED at risk of its independence?
Look, I'm nervous so far. I'm a little bit reassured. They had a sweeping executive order about independent agencies and presidential control, and they explicitly included an exception for monetary policy and for the FOMC. It's also hard for them to do anything about it because he only gets two appointments over the next four years. I hope the courts would not let him fire to powel with no reason. But you know, but I'm nervous. To me, it's a
it's a tailorant. It's not the most likely scenario. But this is the best economic institution we have, So you know, a two percent chance something happens to it, we should be we should we should be concerned.
In your ute, you had to carry water from the executive branch over to Capitol Hill. How do you frame in your head that the legislative branch, when they choose to rebuts a unilateral Trump policy, do you see this as given committees like I think of arm services in Putin. I'm making this up, Folks, stay with me. But Jason, the basic idea is, what's the Firman mechanism about a legislative branch responds to this moment in our history.
Look, when your party's in power, you're frustrated by checks and balances, You're like, why can't we do everything we want to do? Then when the other parties in power, you're like, hey, I appreciate these a bit. I don't want them to be able to do every single radical idea that they want to do. And you know, I think you're going to see maybe less checks and balances that I might like coming from Congress, but still a decent amount of them. And some of that inertia is bad.
It means we're not going to get done things we should get done. But a lot of that inertia is the inherent conservatism of the American system, where you don't make large, radical, dramatic changes because conservatives themselves since Burke, have understood that that's a recipe for all sorts of problems.
Jason, as you sit back here and you look at some of the economic trends, economic data points coming out here, what is the biggest economic concern.
For you for this US economy.
I just have the conventional one, which is this stubborn, persistent inflation and two and a half percent underlying inflation. If it's down three tenths, we're golden. If it's up three tenths, we're in a certain amount of hurt. And everything else is humming along, basically just fine, assuming we don't have very disruptive policies.
Thank you so much for your interest acrassination. Today on YouTube, we are commercial free in this hour a conversation with the Treasury Secretary with their Anne Marie Horden. We're honored to bring you Jason Furman from Harvard University. Wendy Schiller will join us from Bown University. In a moment, never in the history of media has there been a joint conversation Harvard than Brown. We're not asking either of them about the hockey game.
The hot Exams.
Furman has tickets you should see where they are. One more question please to Professor Furman, Paul.
Sweeney, Professor uh X ten Principles of economics. How do you frame out in the tariff's units? What do you talk about in the about terroriffs?
How do you teach that? What's your thoughts there?
Look, I'm nervous about that. I'm doing that in about a month. I'm going to do it the same way that i've tom and I will come up the same way that I learned it decades ago. But it's going
to sound like a rebuttal to Donald Trump. Every single sentence is going to sound like the only reason I'm saying it is because I want to contradict him, when the only reason I'm saying it is that's what's been in the textbooks for a long time, and it's been in textbooks for a long time for very very good reasons, some of which were even a grounded in things like accounting identities, which I'm one hundred percent sure or true, and not every comment President Trump makes respects them.
Do you have a magnitude tip point one percent of terroriffs? Just ad hoc. I'm talking Krugman Furman here, bring over like Glenn Hubbard, even in Columbia, Jason Furman, is there a percentage tip point where a blended eight of two three percent comes up and it's oops, where's that number? Matters? A lot?
Who they're on.
Canada and Mexico matter are just so much more than any other country. You do ten percent tariffs even on the two of them, and an awful lot of the way US business is conducted, US employment happens, it gets disrupted, frankly to the benefit of a number of other countries.
Jason, thank you so much for your generous time this morning.
Jason Furman, you're listening to the Bloomberg Surveillance Podcast. Catch us Live weekday afternoons from seven to ten am Eastern. Listen on Applecarplay and Android Auto with the Bloomberg Business app, or watch us live on YouTube.
With the single best research note I've seen of this moment, Libby Cantrell. Is it Pimco get her research note? Is it at the website? And it's titled I Love this. I mean this is a cynicism of Cantrell. But but but everybody's going but but but but but to find the butt on Capitol Hill right now between Republicans and Democrats.
Between Republicans and Democrats, I mean, even between Hill Republicans and the administration. I mean, I think a lot of what the administration is doing showing that there's a lot of bias towards action. But at the end of the day, much of what they're talking about really does fall within the remit of Congress. This is where you don't you're not seeing a lot of Republicans necessarily push back on
the president. But as you know, Article one at the Constitution pretty clear about who has the power of the purse, and ultimately, to really achieve significant savings, for instance, you'll need Congress. And so this is where the butt but buck comes in in terms of the flurry of executive actions we've seen and actually the really the move the market.
You're gonna need Congress, so you have a faith.
We talked to Wendy Schiller. It's a college up in Providence. Bran Well, yes, familiar with there. Let me cantrol. I mean, where are the checks and balances? You're expert the legislative process, to the committees, hold forth? Is it leadership? Who's gonna do?
But but Well, Tom, I think, and this is where we're we're just waiting. I think it is a question of when and not if the Congress starts asserting themselves. But they, you know, Republicans understandably, are trying to give the president a wide berth. He has a very high approval rating, at least relative to them, and so I think they're trying to sort of give him the flexibility
to do what he can. But again, we're on a collision course with either Congress or the Supreme Court, because at the end of the day, there are both the Constitution and then a law called the Empowerment and Control Act that limits what the President can do in terms of rescinding or holding back money that's already been appropriated by Congress. This is going to make everybody's eyes glaze over. Well, we're actually really talking about doges, you know, cost savings.
At the end of the day, there are going to be limits to that. And again, I think this will probably be litigated in the courts. And I think the broader macro picture for investors from a deficit perspective is really to get again these real cost reductions that all has to go through Congress. And that's why this the tax bill that Reconciliation bill that we're seeing headlines is going to be really quite inciting.
That's kind of I want.
If I'm just imagining, if I were a portfolio manager at PIMCO, I think I'd be calling you and emailing.
You like five or six times a day. Do I pay attention to this? Do I pay attention to that?
What are you telling your pms to really focus on? In terms of the news flow that's coming out of Washing, I.
Mean, there's honestly so much noise, and I do think it's been challenging for everyday Americans, but also for investors to really pay attention to the signals. I think, you know what we're we're obviously, you know, bond investors dead investors. So what's going to move the bond market is going to be either fiscal stimulus, it is going to be these cost reductions. Again, that's really in the purview of
Congress in terms of the things that move markets. As it relates to executive authority, I mean tariffs, the president has a lot of as we know and as I think has been demonstrated, he has a lot of unbridled authorities around around tariffs, and then also moves for deregulation. So there are absolutely things that the president can do that you know, are really going to be impactful for markets. But on the fiscal side, that really does rest with Congress.
And this is where the butt butt butt comes from. Like a lot of noise, but again kind of pay attention to the signal, and the signal really on fiscal policy is through Congress.
You know.
One of the I guess one of the first issues that President Trump took up was just immigration policy large here, and a lot of people are saying that could have some some serious economic impacts as it relates to the labor force as to economic growth, that perhaps some of these migrants from the last four or five six years have in fact gone into the workforce, are contributing our.
Paying taxes, and that could be an economic headwind.
How do you guess?
Yet, I was remiss not to say, because that he does actually have a lot of ult authorities around immigration too. I mean, it's interesting because we were already penciling in somewhat of a headwind to growth just from President Biden's policies on immigration. Back to June twenty twenty four, when President Biden, I think acknowledged this was a political issue, so he started doing things to really slow the migration.
So we were already penciling in some slow down. But to your point, particularly if you get and again these sort of massive portations or what have you, are I think going to have to go through Congress and get some funding for it. But it could be a headwind. And this is where I think that the administration might not want to reconcile. I mean, some of the stuff that they're going to do could be actually could actually
slow growth. And you know, tariffs and immigration could actually be headwinds to growth.
And I want to get this in quickly here. I think it's too important. I've been picking on a Senate Armed Services Committee, particularly with what's going on in Europe. Mister Putin, I got three members in each party. Fisher of Nevada, Cotton of Arkansas, Rounds of South Dakota has been very supportive of this show. Shaheena Newhan, I'm sure
jillibrand New York and Bloomenthal of Connecticut. What are the powers of the committees now after the complete zoo we've had for ten years, fifteen years, do the committees have power like say, houseways of means add thirty forty years ago on form policy issues, not sorry for policy, but on Libby Cantrell issues. Does the legislative branch have the ability to legislate anymore? I think is what our listening And I.
Think that's such a great question, Tom, because.
What we do to go with it.
What we're seeing is the president of Republicans and Democratic presidents have taken executive authority and they keep pushing the boundaries. We saw this under George W. Bush and then under This is not new, It is not new, and honestly, this has just been an evolution of something that really started at the turn of the centry. And I think what happened then you just saw Congress sort of slowly seed its authorities as you had very tight height divided Congress.
I think this is also the issue is that like no real party has had a significant majority. I mean, there's been like you know, right, a bottom in the first year, what have you. But really in terms of either a filibuster proof majority or large majority in the House, it's just hasn't happened. And so I think as a result, executive branch has gotten you know, frustrated with Congress and they have moved forward.
Paul, I were talking about you before he came in going to be with this. I saw a chart that showed Kansas City and everybody else in America rooting for the Eagles. You lead the Committee of Hate the Chiefs. What was it like to see the Eagles?
It was And just to be clear, I'm not necessarily an Eagles fan, but I am a very staunched Denver Broncos fan, and Denver Broncos we've always we've.
Never liked the Chiefs. You know. It's like we've never liked the Raiders.
We've always been Raiders haters and we've always we've always just liked.
You get past a third momosa.
It was fantastic.
I have to say.
It was just total vindication.
You know, we were all wearing green and a little bit more in just for you know, the head nod to the Broncos.
But it was a great It was a great thanky.
Thank you so much. Don't thank peace that more off.
This is the Bloomberg Surveillance Podcast. Listen live each weekday starting at seven am Eastern on Apple, Corplay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa, play Bloomberg eleven thirty.
This is a tree. We really try to stake out a good amount of time here with David Saurby. He has a really interesting history working with the City of Detroit, among others, the iconic Loomis sales years ago, and now with NCORA looking at not only industrial America. You know, it's like Canadian National. They got the train across Canada and there they go north south, north south down the Mississippi River. But just a twisted and different look with
a tilted mid cap and small cap. David, can you explain to me how Walmart makes five six seven cents of the dollar and they're trading in a forty multiple? Please? Is that in the Wayne State textbook?
No, it's not an evaluation textbook, Tom, And in a way, it's reminiscent, reminiscent of what we saw in Walmart in the late nineties early two thousands when its valuation got very stretched to the retail group and then it went through an extended period of underperformance. So we'll see what happens out of this number today.
Does this end ugly? I mean. What all our listeners want to know from David Sowerby is okay, we're all fat and happy in our five oh one ks. David Sowerby, does this end ugly?
No, it doesn't at all.
Companies are still generating above average free cash flow margins. Fourth quarter earnings report, I'd give them up solid BB plus for earnings cash flow and revenue growth this year is the metric you and I like to talk about.
Tom.
Free cash flow for the S and P five hundred will grow post to fifteen percent. That's not a backdrop where it ends ugly. It just simply means some tempered expectations, but still bet on the ability of US companies to generate shareholder value.
David, As we think about you know, twenty twenty five, and you look back the twenty three twenty four where yet north of twenty percent growth in the S and P five hundred or gains in the S ANDP of five hundred, We think about twenty twenty five, what can drive this market? Hired because it doesn't seem like the FED is going to do a whole lot for so do we really really have to focus on earnings?
You do?
Valuations will have a difficult, if not impossible, ability to increase higher valuations. So now it comes down to earnings, dividend growth, and free cash growth. That will be the drive, and then the other I like that this market is broadening out. We can all pick our favorite date. I'm going to go back to July eleventh of last year when the market started to broaden out. And it's been a little bit of two steps forward one step back. But small caps have outperformed large caps by about three
percentage points in that seven month time period. And then when you find the alpha producer within smaller smid cap the ability of good managers to outperform. You've seen returns that have doubled. The S and P five hundred for good small cap managers VERSUSS ANDP index.
July eleven of last year. Sorry, the day is no clue. I mean Red Sox seven, Oakland a zero, the Red Sox for ten games above five hundred. What happened.
And the Tigers made the playoffs?
Exactly there you are? Thank you, Hey, David.
What what screens well for you guys? These days?
Sit the big growth stocks that have been the darlings over the last few years.
Is it some value names. Is it different market capitalization?
What screenswall for you guys these days.
On d often asked mag seven. I don't think it's a binary event all or none, so I think, but on a margin, those weights have to come down. While their free cash flow margins are still quite impressive, their valuation is priced for perfection, if not sainthood. So I think you want to be trimming them, and you want to be moving your portfolio, not just talking my book
to small MidCap, but also to the value side. And that's where I think there's still opportunity recognizing we're in this seven month inflection point rotation that's still going.
On YouTube across the nation. On your commute as well. David Sarby with this with a great sense of the Midwest. He Michael bars out here. So I'm glad somebody mentioned the Detroit Tigers. No one else cares, but David Sarby with us here and think, thank you for subscribing to youtubeer is I'm going to steal that line the markets price the sainthood very I like that. It's just like.
It's like, you know, it sounds like the seven are Hey, So David, talk to me about a name that.
I'm not sure. Even Tom and I have not spoken about. I'm not sure.
When ware Heiser we're talking lumber here, we'll talk to us about that name.
Three percent dividend yield. Lumber prices are up fifteen percent since December. That's giving them a tailwind. You don't own it just because maybe tariffs will be beneficial the US lumber and timber, But that's an indirect benefit. They're going to double their free cash in twenty twenty five. So for a stock that's been sitting around thirty dollars a share for too long, now there's this I think more macro backdrop with a company that's very well run.
And think about it.
Trees are an asset that grow unlike other assets that don't have mother nature on their side.
That can be a beneficiary to.
A lumber timber company like Wirehauser out in Washington, USA.
Yeah, it's just a name. You don't think about it at all. Another one that's.
My job is My job is not to bring you Microsoft, but bring you something a little bit.
I love it.
I love it, I mean again based out in Seattle.
You think about this, Atlanta Braves, this is the name near and dear to my heart, because I've basically been followed John Malone since you know, the earliest days of his cable career, and he's been such a phenomenal allocator of capital. And wherever John Malone goes, I tend to follow a lot of smart money tends to follow.
I think, talk to us about the Atlanta Braves. That's a publican.
Traded company, it is, and John Malone has recently bought twenty four thousand, five hundred shares. So if you follow the money and you believe in John Malone, as Tom knows, he's one of the chapters in Thorndyke's.
Out Outsider's book.
So plus you have the franchise, the stadium broadcast rights, they owned some mixed use retail around the stadium.
They were one of the first teams.
Back in the Dale Murphy Atlanta Braves days to go on national TV with with TBS. So when you and and then you look at sports valuations going higher and hire billionaires buying sports franchises, there's the backdrop to the Atlanta Braves and only only four analysts follow it. That's right in a wheelhouse for an under followed stock.
Okay, does a sports franchise. I guess the New York Giants public that was that was a joke. Good morning to the Tish family. Thank you for your support. David Sowerby, as simple as I can, does something like the Atlanta Braves trade on how the baseball team does, like if they win seven in a row, does a stock go.
Up if they're if they're destined for the playoffs? And then you get that moves money. Yeah, that move that moves the needle and the brace in the last several years has been better than not right, and that's helped evaluation on the stock.
Right. You and I lived this, and I think Paul did tangentially, which is boltons and the basic idea that a company like in specialty chemical chemicals out in the Midwest would say, Okay, we're going to jettison this hunk of our company, and there'd be people out there that would see this smaller company that was jettison than maybe they would bolt it on. Are we going to get a lot of m and a action around industrial companies right sizing, downsizing, and aggregating.
It's already taking place in more small cap value You're seeing more and more buyouts We're seeing more and more buyouts in our successful small and smid cap strategies.
It's reminiscent of two thousand.
In two thousand and one, when valuations were more attractive, and as companies want to grow, you're.
Going to see more buyout in that sector.
Give us another name, right now, come on, just like this is like drug Cassidy and banks up in David. Sorry, give us a small cap name, you say, shut up and buy it.
Lakeland Industries symbol lak E, Huntsville, Alabama. Only two analysts follow this company.
What do they do? They do fire apparel and equipment.
So you're seeing fire departments up their budgets sadly out of the out of the tragedy in southern California. So here's a here's a play on that for apparel and equipment in the safety and fire space.
Lakeland Industries made twelve percent over the last ten years.
Had a huge moonshot up to a couple of years ago. It came down, it's bounced back nicely. I can go to the BQ screen because Paul Screening taught me how to do this. I mean, I look at eighteen eight. This is like Kelvacina stock eighteen hundred employees ready, it's trading at one time sales YEP one point two times sales. How does it get discovered if only two people on the cell side buy it? So I buy it? But do I own it forever?
David Sowerby, Perhaps not, but you can own it at least a year. It's up four And how it gets discovered is the formula. They've got a good story, They get out on the road, they tell their story, they go to more investment conferences. Sell side analysts are a little bit like sheep. When the stock starts moving up here,
they come to pick up coverage on it. That's how a company with two analysts turns into a company with five analysts following it because they're delivering on capital allocation and cash flow.
Shahoulder Value, Michael Dartis shop rough capital. They follow it.
I look at the robins are very good on small caps. They're one of the few that are very good.
You know, in addition to ancre advisors asatch advisors.
How do you pronounce? I never known they're out.
In Salt Lake. They own a million shares. So, David, how do you guys find these six.
How do you screen for a company Lake Lakeland Industries.
There's there's really two formulas here. One is you know with some degree of certainty what stocks are likely to be going into the Russell two thousand on a jewelry balancing. You want to turn over those stones and find them the right companies before they go in. That's the formula. The second formula is you buy the spinouts big small company spins out of us of a larger company. Since that July eleventh inflection point, the Bloomberg Spinoff Index is
up more than forty percent. Those are the two formulas, spinoffs and unfollowed stocks that are going into the index, buy and buy them before.
David, Can we do this every six weeks? Absolutely? The huge spots. David Saarvey, thank you so much. Folks. For the rest of the week, all we're going to talk about is Amazon, Meta and Apple. We got our dose, said mister Sarby. David Sarvey, thank you so much.
This is the Bloomberg Surveillance Podcast. Listen live each weekday starting at seven am Eastern on Applecarplay and Android Auto with the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal.
There is a door stop out there. It's a kind of paperback book, paperback novel, paperback rider that you hold a window open in a Rhode Island, beautiful summer afternoon. It's seven hundred and twenty pages, and it's called Gateway to Democracy Gateway to Democracy. One of the authors of Gateways to Democracy and Introduction to American Government is Wendy Schiller of Brown University. She's been very Wendy. First of all, thank you for your patience with the best an interview.
Greatly thrilled that you're with us today, Wendy, You and I, Lisa Matteo and all of our listeners and viewers have never seen this. Where are the checks and balances that you write about in your classic Gateways to Democracy.
Well, we're not seeing them yet. Good morning, Tom and Paul, but we're seeing some simmers, right So, Governor Kathie Hochel, I think some of you might have caught that very viral clip now and just to see that the Democrats are now the party of states rights and the Republicans are the party of federal overreach. Now, when I say overreach, you know you're cutting the federal employees. Maybe you're cutting
federal spending. We haven't quite seen that yet materialize. But this is an extraordinary flip from what we've seen in the last couple of decades. And it's a an earthquake in American politics to see this slip where democratic governors will be saying, we are defending our state prerogatives.
Somebody said to me yesterday, stopped me, and they said, who are you watching more than anyone? And I said, the minority member of the Senator and Services Committee, with his military credibility, Senator read of your Rhode Island. Can the committees come to the rescue both Republicans and Democrats? Is there a committee coherence and strength, Professor Schiller that can bring checks and balances?
Well, the issue of saying rescue this is the whole point.
I mean, people are saying, oh, you know, this is getting very shaky and scary when you know the president's tweeting that he's the king. But on the other hand, Trump is excellent political theater. So you know, what is
actually a threat to civil liberties? What is the threat to the breedom of the press, your freedom to have financial independence, What are those actual federal threats right now versus what the appearances are with the rhetoric is and until they catch up to each other and the American voter feels concerned or feels threatened by the Trump federal government.
I don't think you're gonna have a lot of legs to stand on.
I don't think you're gonna have a lot of leverage to generate public opposition.
And without public opposition in.
Those red states and those red districts, I don't see the House or the Senate standing up and opposing this president, except they will use the debt ceiling I.
Think as leverage.
Maybe not in the House, but I think in the Senate they'll say, listen, we don't want to crash the economy, but there's got to be a limit. And you're seeing grumblings already in the House GOP on the extent of cuts that they're proposing for this budget deal. Remember, the government has to get funded again at the end of March, so really the fundamental congressional tool to fund the government, even if the President changes how he's spending the money, is still their leverage.
And you know, six weeks from now, things could look quite different.
In terms of the pressure on them to stop some of these Trump initiatives.
Wendy, are you surprised that we haven't seen a democratic vue rise up to challenge President Trump on some of policies, maybe some of the rhetoric. It doesn't seem like there is a democratic voice.
Well, again, there's two things, Paul.
You know, what Kaviokle did was in direct result to an action that affects New York City. A lot of people live in New York City, so you know, she got a big state, a big megaphone, a big media market. So when there's that opportunity, I think you're going to start to see a more Democrats get out of the gate. Remember, you know, twenty six is lum meek reelection. Twenty eight is the presidential race.
So they're going to get out.
Of the gate when there's something Trump does that they can latch onto that won't be popular with their state, and if it's a big state, that's going to get a lot of attention.
Otherwise it's like it's like whack a mole.
You know, you start you plain of one thing, and then they'll just move in and focus on something else.
So I think I think the Russia Ukraine.
Let's watch to see what the Republicans do in the House and the Senate. You know, if Trump shows real signs of abandoning Ukraine and just giving it away to Russia, I think you will start to see some noise, not only from Democrats but also Republicans.
Well, let's go to that issue, because that's certainly been in the news over the last several days. Here are you surprised at the way President Trump's approachingess seemingly pro Russia, perhaps abandoning Ukraine to some extent, It seems like in some of the reporting.
How do you view that?
I view it in the very macro sence that Trump does not have the allegiance to an ideology like George W. Bush, somewhat Barack Obama, but really Bush and maybe Biden of what the role of the United States is.
Supposed to be in the world.
He doesn't believe that it's worth it to the United States to go protect other countries around the world.
I've quoted John Quincy Adams a number of times. Tom right, you know, don't go in search of monsters to destroy. So this is his position.
He doesn't have this ideology and he doesn't think the United States should do it.
I don't know if it's Russia per se. You can say he's in.
Love with Putin, but he's like this around the whole world. Why are we paying? Why are we sending our troops? They're about to propose cuts to the defense budget. I haven't seen Republicans cut the defense budget ever.
So this is the real.
Sea change in how he views what the United States is responsible to do. Does it make us more dangerous? You can argue yes, But has it made us more threatened yet?
No? This is what we invented, folks, Bloomberg surveillance. We go beyond the standard conversation, a conversation with a Secretary of Treasury and this hour. Thank you Anne Marie Horden for that. And then Jason Furman of Harvard University and now from Brown University, Wendy Schiller with this, Professor Schiller, I was reading of Dean Rusk the other day. Of course,
from another time in place. Many of our listeners won't understand the quiet and the cadence, the pace that Dean Rusk brought to JFK into LBJ is well, do you look at the coophony now? Is one off of a specific president or do you look at it is this is a continuance, a new form of dialogue. Is President Trump here a one and unique president or is there a follows through here for a new Republican Party?
Well, I mean, I think given the loyalty that the Republicans have shown in the House and the Senate to President Trump already, whether that holds, we'll have to see.
I think it's a new Republican party.
It's a get on this bus, be with us, or get out, and that's what And they're counting on this to resonate with the American people. So far, his approval ratings are holding. I've always said when they start to drop, he'll change course. But it's a fundamental shift in how they view the United States power and what to do
with that power. And they still have responsibility of delivering to the people who vote for Donald Trump when he said he would make things better for them, and you know, not supporting Ukraine doesn't actually make anything better in the United States. So how is he going to deliver on that? And we've got months to go before we see the results of that. If he falters and he doesn't make things better and his approval ratings drop. You'll see the same splinter in the Republican Party you seem for.
The last decade in Paul Sweedey this David Gerr brought this up, and you know, let's be direct here, Mister Trump got let's just round it up. Folks. Don't give me grave fifty percent of the vote, But what percentage of that drifts away from the core Trump for supporters. That's a mystery. Yeah, into Q two of this year.
Yeah, absolutely so, Wendy, what do you think is the next major challenge or opportunity for President Trump's min administration? Is it the funding of the government, some domestic legislation, or is it maybe Ukraine? What are you looking at as a next big issue for this administration?
Well, well, the one thing I'm saying about Trump that we've seen is that his attention span is pretty short. But that also makes him a multitiasker, right, He'll go from one to the next, to the next to the next. He wants to be busy doing things, So I don't think it's exclusive.
I don't think it's mutually exclusive.
I think about the budget and Ukraine, but I do think that we haven't seen any major impacts except for the people who are losing their jobs on a daily basis from the federal government.
We haven't seen the impacts.
When the impacts come, when the cuts hit this summer, maybe this fall, when the education department cuts hit for people going back to school next year, that's going to affect people's daily lives. How they respond is and then how Trump responds. Does he think he wants to run again, even though constitutionally he cannot be elected, doesn't say he can't run, can't be elected to serve more.
Than two terms?
Then that changes the ballgame also, So it's a time of great uncertainty, and I think does that affect investment in the United States? Do they think that it's still a safe economic bet with such a chaotic president.
We're about to see that the next couple of months.
I was thinking to Jonathan Fenbe and all that he's written about France, Professor Schiller, and I guess, as a general a political statement folks across the nation, Europe's got to get its act together. Wendy Schuller, do you see any ability in your study of our history, our modern Western civilization, that Europe can quote unquote get its act together.
Europe rebuilt after World War Two, is most people know, with a tremendous amount of help from the United States.
We know that.
But here's the thing to remember about this Trump Republican unity and the swiftness of all these changes. Europe has parliamentary democracies. The prime minister when they r in control on the party that he controls mostly, he not always controls all party policy, all government policy. They change everything when they win the government and they see if it works, and people say they like it or they don't, and
then they get thrown out. We are now verging into that kind of single party dominance in our federal level.
We're not used to it. So to say that Europe has to get us act.
Together, we're veering towards a political system that looks just like Europe in the way the policy changes so swiftly. So it's going to be us that has to adapt, us that has to get our act together to the kind of government that we're about.
You know that we're seeing right now.
That is the single smartest thing ever, whatever your politics, folks, what Professor Schuller just said about the wars and the roses in the parliamentary system of Europe versus. Here is more Kojit than all the babble you're hearing, including on this show. Professor Sheller, thank you so much, really really appreciate that.
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