Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene with David Gura. Daily we bring you insight from the best of economics, finance, investment, and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, Bloomberg dot Com, and of course on the Bloomberg Good Morning are you. When David Gurr and Tom came is to grow off off. We are honored to have near a change with us from London.
We'll get to her, you know moment. Thrilled to have name a church with us, to uh distill some of the debates. Wonderful to have you and of course it was really something to see Prime Minister Mainnaire speaking on the Queen Elizabeth the second. I guess that's what you call that ginormous aircraft carrier. It's Portsmith. Am I pronouncing
it right? Pronouncing you absolutely on pronouncing right, Tom. And over here in the UK, I mean, focus is turning to these position papers that the UK government is putting forward in terms of what it wants from Breggsit. Of course, what it wants and what it gets two very different things. I know that because I read my Patrick O'Brien long time ago he is my most important guest of the morning in the news. Slow has been extraordinary. Greg Valier
joined us earlier, I should say from Europe. Mr Valier looks for resignations before Thanksgiving, including General Kelly greg Valier looking for the President to possibly pall undert Mike Allen and axios on Gary Cohnes standing behind the President in that marble Atrium yesterday quote we're told Cone was somewhere between appaulled in furious. He is not appalled in furious. When you grow up in Pattison, New Jersey, you've seen it all. Bill Pascal joins us. He is the ninth
Congressional District congressman. But that's not accurate. There's been a redisc green in that it was at your grandparents that came through Ellis Island. That is correct. It's a spiritual place. My my, my grandparents eight generations back, came in handcuffs from a place called Scotland. This was a few years ago. The synthesis that you have is original here because let us explain to our global audience that Patterson, New Jersey
is everything white supremacists and nationals are afraid of. Why should they not be afraid of the ethnic mix of the ninth Congressional District because I believe that this is the very soul of America. Each group has had a difficult time, as I've said before, to get into the dining room table. Uh, and difficulties are one thing, but they've always been able to reach it. I don't care
what the group is. I think this is important. I'm When I was mayor of Patterson a few moons ago, I enjoyed getting up a morning and not only thinking about the agenda for the day, but I thought about how am I going to get people to work with each other with sixty two different ethnic groups and major problems. And city mayors will tell you this problems within those groups because there are diversity within each group. This is what makes a man. You can't stomp this. You can't
put up a wall to stop it. You can't put a a weapon out in front of you to stomp it. This is America. I put out a photo of nineteen twenties Ku Klux Klan and thank you Joshua Rothman of University of Alabama for being with us on Monday. UH and true expert on this, someone with fact based knowledge of these these American hatreds intentions. And I put that photo out and it was about Italians. When did the Italians not become the hated ones? When we got someone
else to hate? And that's the way it works, Tom, And that's the way it works. And now I get after my attack you because I'm very very deep involved in Italian history and the Italian immigrants that came to this country. And I tell the Italians, you know, you're turning your nose sometimes at certain people. Do you remember what happened when we first got here. Do you know what happened to your grandparents, your uncle's and your aunts, how they were turned away they weren't good enough. We
can't accept that to anybody. Everybody's welcome. They come in here in an orderly, lawful fashion, we should greet them. This is what the basis, the nucleus of the nation is. If you're joining us now worldwide and across this nation. Bill Pastcrow with us. He is the ninth UH Congressional dist Congressman. And let me just cut it short. He is the congressman from Patterson, New Jersey. Let me bring a nera in London nearra Tom and Congressman Pascal, really
honored to speak to you. I just to let you know where I'm coming from as we're talking about immigration here. I did come to the UK back in ninety two, not just as an immigrant, but a refugee from Sarajevo in Bosnia. So I'm very familiar with, um you know, that that side of things. But also I spent a year actually in Virginia after school and before starting university, at a university there, so I'm somewhat familiar with how
things felt in that state. I do remember well in the canteen of the university at the time that even though there was never sort of any sense of threat in terms of um you know, the sort of racial integration, the African Americans would sit separately in the canteen. Now, obviously the district where you are very different to that. But we are talking here about Charlottesville in a state like Virginia, how easy is it going to be to actually reverse what we've seen over there? And it was
so elegantly said by Narra. Let me cut to the American directness, how do we make parts of this nation like New Jersey or we can't back off. We can't we must insist that this is a land of opportunity for all, and we're not saying that we open up our borders. And you know, eups having problems with immigrants coming in the refugees. We understand that, but we're not going to stop being who we are. And because of non facts, and we blame immigrants for loss of jobs
that is absolutely not proven by anybody. Uh, we blame anybody for any of our problems, crime problems. You know what, when people were dying in the streets of Patterson in nineteen fifties and sixties on heroin, you know, those people don't know what they're doing anyway. Now that suburban kids are dying on opiates, it's a whole different story. Now we got hope, We got programs to everybody. I support those programs. I want to run point on those programs.
We are all equal, period. I want to talk about Elaine Chow standing behind the President yesterday. Full disclosure, folks, Secretary Chow and I know each other fairly. Well, she's been very kind. Who I was watching You were watching her like I was watching her and you were watching her for a reason. Well, no, but she come on, she came off the boat. Let's from Taiwan. She grew
up outside l A very basic, very simple. What do you need to see from the Republicans the public servants like Secretary Chow As Greg Villiers says, when do they start resigning? Is that what moderates need to see. Yeah, and your torn between loyalty to your president, which you should have, but there's a point beyond which the president goes. You got to make decisions for yourself. You gotta stand up, resign or speak out privately to him. If he continued
to do this, I'm out of here. You're gonna get somebody else to take my place. He's got to understand that this is not his business. His his his work is being president of the United States. He never made that transition from his job beforehand to the presidency of the United States. He is, you know, he's almost like Cornelius Vanderbilt. Cornelius Vanderbilt said, very specifically, Uh, you know the law, I'm I have the power. We could go for hours with you this morning, correct, So we're gonna
run out of time here. I'm so sorry for that. Where's the Barbara be Connable Barbara be Connable of Western New York sat Richard Nixon down and said, enough, we're just not to that stage yet. We're not and that we're not to that stage yet, and most Republicans are still afraid. On Sunday if I go to mass hopefully try to do that every week. You here are the folks saying, be not afraid. What are they afraid of? This is America. If he can't do it here, go
to Russia, go to China, then why wouldn't you do that? Well, because you know you have a limited amount of freedom here, or because we can express ourselves. This is what makes us the greatest country in the world. And yet we diminish ourselves when we try to categorize and say no, these people can't be allowed. And I was very angry, uh when the President said there'll be no uh refugees from X amount of countries, no Muslims allowed. Are we
kidding ourselves? That's that's something from the eighteenth century. We're living in the twenty one century. Now. Do we have any problems? Of course, we have problems, and they'll always be problems. We need to stand up to it. We're never gonna have a seamless system. Thank you so much.
Bill Pescrow with us an important conversation after emotion that we saw yesterday, a particular thank you, and she will continue with this neighbor change in London, talking there about her first days in UH, the United Kingdom, march in London. I'm tom Keene uh Ian. Where am i am in New York? My had is spinning folks. After the last six seven days, We're gonna try to digress for a moment. We will return to UH the emotion and the debate
of what we're seeing in our political economics. But right now, someone that writes incredibly thoughtful notes synthesizing our macro view on investment, on finance and economic Sebastian Gali is at Deutsche Bank. Sebastian, you have an optimistic view on the American economy and you've just written a thoughtful piece on this overused, dreaded word innovation. What is innovation? Innovation is
the ability to create new products. It's either because you're reacting to your competitors or simply because you are innovating yourself. And there are two types of innovations. One which is what we call breakthrough, which is very rare. Break them ald in a sense and the most of the innovation, though,
is more incremental. So you change small stuff, you change the coffee cup, you change the way people behave a little bit, but you don't change them on the so near If I change my bow tie, that's incremental innovation. Sebastian Um this all as well, you arguing your piece depends on where we are in the cycle. Are American companies innovating enough given where we are in the business cycle? The answer is probably no. They It looks like the funding simply for people who actually take a lot of
risk is not that available. So you have the Elon Musk of the world, which are a bit the exception in the system. It looks like the broad set of people who would take more risk and try to push new products which are completely new, are unfortunately not getting through and getting enough funding. At this point in time. The market is very risk of appetite fool it loves to take risk, but actually if you go down to private equities, it probably is actually far more risk averse
than you show you at this point in time. Right, And how is this then feeding through to the productivity issue? Well, you have two things. You have to look at. The people who actually provide productivity through innovations are mature sectors. You can think of a company like heind sketch Up, for example, without knowing exactly what they do, um they would basically try to innovate, try to reduce their costs, and try to create demand for new products that they do,
and that ends up basically feeding productivity. Then you have companies which are high added value products that they basically create a new Apple or a new iPhone, which is not necessarily a breakthrough in any way shape or form might be, but in terms of productivity, is not necessarily helping you a lot because they want to gain market share,
gain more demand rather than use their costs. The President with his tweet this morning on the innovation and the Amazon makes the presidents sure it was wildly non economic, I would say in its In its you explain to people that agree with the President that Amazon has stolen jobs from towns cities. In the Borders bookstore at the corner of Park Avenue in fifty seven Street, it has
it has to produce basically the amount of bookstores. And then Amazon has opened its own bookstore somewhere in New York, so it is also opening its own bookstores because it's that good. Jeff, I know, Jeff listens, they gotta make a better bookstore. Continue the I have in the view on it whatever, but they are it's it's creative destruction.
If you if you live in New Jersey, you can see that you're living in X factories, whether it's lipped and tea, whether it's in the coffee producers of the time. And we change the adapt and they they're part of that process of adaptation. The question is whether it goes too slowly or too fast, and the should answer it doesn't go very fast whatsoever? Yeah, I would I would editorialize here that we've innovated the coffee some days at Bloomberg Surveillance down to a thin soup. Oh, I'm very
innovative when it when it comes to coffee, certainly. But just a brief question to you, Sebastian. On FX, we've got the euro a little weaker on a report that Mario Draggy actually won't deliver a fresh policy message at Jackson Hole. Why is Draggy not pushing back on the stronger euro because we're not in a crisis situation than
the euro Zone. Things are going pretty darn well, now, if you look at it from the Italian point of view, or it used to be in the Spanish point of view, of a Greek point of view, then that you might be a bit more concerned. But the demand internally in in the Arizone is is going pretty well. It's not a crisis situation. Therefore, they're not targeting the currency. They used to target the currency, they did it deliberately. It's no longer the case. Do you agree with your colleague
dominic constom of a larger real growth in America? I think it's a structial thing. I mean in the sense that real interest rates are not relatively high, but inflation remains subduced potential growth, and the actual growth is decent enough. And one of the reasons is there are a structural reason why the CPI is going to stay sticky and on the low side for a significant amount of signed and one of it is because labor market is say, it's a global one. Sebastian Golly, thank you so much.
Thank you for for being with us for a lengthy time today. Within all the news slow he is with that Deutsche Bank. This is joy. We're gonna speak in our next section about all that's going on with our president, the emotions of this nation. But now we celebrate his book, and it will always be his book. Michael Baron joins us, joining us on our phone line. Michael, I've already ordered the two thousand and eighty pages for myself and my
colleague David Gura. I'm fascinated by the piecing together of your new almanac of American Politics. What was the Trump effect on writing this edition of your Street? Well, it obviously it means that you're writing something that you gotta thinks. You're writing something that's rather different from what you expected to be writing about, because I, like most of the people,
did not think Donald Trump would be elected president. I mean I I think he had towards the end of the campaign that he had about one on a three chance of winning. That's similar to what needs silver strife. There a website calculated um and what the result teaches this is that one out of three actually happens one out of three times. This was the one out of
the one out of three and and so forth. So it would be on something I think, you know, historical perspective, the number of votes that changed the percentage of the electorate, that change was actually not huge. Uh. If you take a look at comparing say the nineteen seventy two election was seventy six or in the nineteen seventy six with nine eight n nine, A lot more votes shifted between those two elections within those four years than between two thousands,
thousand and sixteen. You know, your pieces together, the Richard Cohen, James Barne, and of course the legendary Charlie Cook. What is the vignette out of the two thousand eighty pages, what is the one essay or article that really stuck
out to Michael Barrowne. Well, then the article and sort of struck out to me was when that I wrote and in which I, as I recall, I started off, UM with the fact that Donald Trump was a person that most people have told was not a political person before he stepped down that escalator in June fifteen, two years ago. UM. Donald Trump was present at the UM ceremony dedicating the various non Narrows Bridge in November nineteen
sixty four. UM. And that's you know, a small crowd of dignitaries, UM people led by mar Wagner, by Governor Rockefeller, by the Robert Moses, the legendary builder of New York bridges and parks and so forth. Um, he was eighteen years old. He was a student for him. Um what was he doing in that crowd? And the answer, obviously is that his father, who had made many political connections, particularly the Brooklyn Democratic machine, had gotten him a ticket.
And there he is watching the dedication of the largest bridge in the world and the greatest city in the world, in the greatest country in the world. You know you're getting the picture. He's part taking of this event in uh eat and he notes if he notices later that the name of the British designer wasn't mentioned, And he told interviewers when I built something, they're going to mention
my name. Interesting that. Now let's do this, Michael. Let's come back and we want to talk to you near a change and I want to really dive into your thoughts as you're right for the Washington Examiner about what we've seen since Charlotte's Ville. We are thrilled to bring you this warning Michael Baron, folks, I can't say enough about the acquisition. It's expensive price. Warning. Barron's gotta you know,
pay for the Trump Tower. Cocktails. It's eighty dollars. It's the best eighty dollars you will spend on the Almanac of American Politics two thousand eighteen near a church in London. I'm Tom Keaton, New York, and we are honored to have with us Michael Barone. In two he put out a small book that I guess most people ignored. You should see what it goes for on e Bay right now. It's like a treasured It's I got a Game of Thrones, one of those books in the Citadel. He's out with
his American Almanac of American Politics. Look for that in the next few days. I've already bought my copy. Michael bronachros Riding in the Washington Examiner. Michael, Republicans now and modern Republicans have to figure out what to do with their president with all of your district by district experience. For example, how will the Bucks County, Pennsylvania Republican eighth district, How will that congressman respond? I mean, just to give an example of one Mr Phizpadrick down there, what a
mainline Republicans do well? The uh the eighth Congressional district, which is roughly coincident with Bucks County, Pennsylvania, suburban county. What will the Republican in lower Box down by Bristol, the Delaware where were the industrial area? Uh, he will have some good things to say about Donald Trump, and he will emphasize that he positive things that he thinks
Mr Trump has done. When he gets into upper Bucks County, the kind of leafier area with a much higher percentage of college graduates and hiring income people, he will lament Mr Trump's tendency to tweet off the top of his head and some of the mistakes that the President Trump has made or some of the things that may not be mistakes from his point of view, but they are
unpopular among the college educated group. That's a classic district that's divided between um non college graduate whitees lower Bucks who moved towards Donald Trump is compared with two thousand twelve and other recent elections in between college grad voters who who moved away from Donald Trump. And that's a kind of Yeah, that's a kind of vignette, folks, you can get in Rowan's American Almanac of American Politics. Let me bringing my colleague in London with Michael Barron Nera.
Thank you, Tom, Michael Burrone. Great to speak to you. So, while we've been talking through all the media about ceo is abandoning the president all morning, I've been thinking to myself, what does Gary Cone make of all this? And as if it read my mind, the New York Times headline Gary Cone is said to be deeply upset by the last few days. What will be more damaging to this administration in your view? More abandonment from CEOs of the
businessman president or abandonment by his closest political aids. Uh well, I think the lad it would be more dangerous or problematic for him. You know, we've had a number of accounts from let's conservatives called mainstream media of people leaving with Trump administration. Some of those accounts have been accurate, is have not. So I'm old enough to remember lots of administrations where we were told somebody was leaving and
they ended up not doing so. As for the CEOs of companies, um, I kind of sniff a certain amount of political correctness. They're similar to what we saw from the CEO of public Google when he fired and when after proclaiming that Google believes in free speech and open airing of discussion from its employees, then fired an employee who said something that the CEO and uh, certain people within the corporation. It said, you know, some of the
upset some of the employees. He mischaracterized what they said. I don't think it's right. As American voters are concerned that most of them think that CEOs really provide the kind of guidance they necessarily want. You can get a certain number of voters to think a lot of ceo should be in jail. Um, they don't usually specify what offense they think they should be in jail from there. Rather, uh,
you know, you hear politicians of both parties. No bankers went to jail as a result of the two thousand and eight so forth. So I don't think that's as damaging to Mr Trump as the as as major departures in his administration might be. Right, Well, you you talked about political correctness. I mean, everybody is asking why the President has responded the way he has to what happened
in Charlottesville. We had a great piece on the Bloomberg by one of our columnists, Timothy L. O'Brien, who said, it's not about politics, it's his long history of race baiting. Should we in fact be surprised by any of this, well, you know, there's always seen to be surprised by what Donald Trump does. I think to characterize what he what
he said is race baiting, UH is somewhat unfair. You know, as far as I'm concerned, Mr Trump, it was a couple of days late and saying many of the things about this pro Nazi group that was UH staging the initial UH meeting there He's gonna attacked in the press conference, but for the press statements in the press conference yesterday, for saying that there was violence on both sides, that is among the so called white supremacy groups or whatever you want to call them, and by the groups of
h they call themselves anti fat that they're talking about anti fascism, and they and they proclaim that they have a right to use physical violence against people who make statements they disagree with. That's uh American, Michael, Like, I get the idea that there is an imbalance here or polarity and you're gonna get violence on both sides. No one just agree reason with that. But in the time that we've got left with you, what with all of
your encyclopedic knowledge of the Republican Party. What does the Party of Lincoln do with this president? That's the money question. I mean as I speak, MSNBC showing a picture of a younger George Herbert Walker Bush when Michael Barone launched out your classic book, what does George Bush Senior's party
do with Donald Trump? Uh? Well, one of the things that Jurch H. W. Bush did when he was president was after David Duke, the yeah so self appointed klu klux Klan leader in Louisiana emerged as the one Republican running in front run off into Louisiana schristopergotten Louisiana, Jared J. W. Bush came out against him, said the was your vote for the Democratic Do you need to see that just but within your heritage and the important place that you
are in conservative American politics? Do you do you need to see statements by our former presidents to bring this president president to task or is that asking too much of them? Well? I think, uh, I don't, I don't know.
I suppose former former President Bush is uh is over an eighty years old now, so I think asking him to make public statements maybe uh a little much for the more recent President Bush And has made a policy of saying very little UH condemned President Obama, I mean his eight years of presidency, even though the President Obama had some really harsh things from times time to say about him. Uh. And has employed the same thing for Mr Trump, although he obviously was not a Trump supporter.
So you know, I think that a lot of Republicans have come in and said that they don't you know, they condemn uh this uh, you know, Nazi race, white nationalism, racism which so far as I can determine as a few shared by a microscopic percentage of the American public that you can always find some not somewhere to believe that it has made of green cheese. But um, it's
a small group. But when it's pursuing violence, and when one of its members committed what looks to me to be like a murder, a horrible crime, UH, condemnation is an order and has been forthcoming from many people. And I regret that Mr Trump didn't start off with a southemnation, a specific condemnation of this group. And if you wanted to add that these left winging a typis are committing violent s across the nation in the ways that are also repugnant. Um, he might have made that, Michael, the
first one. We gotta leave it there, Michael Brown, thank you so much. Congratulations on our two thousand eighteen edition, two thousand pages, folks, the Almanac of American Politics. This is Bloomberg. This is my interview of the day on NAFTA. Brad de Long has not only been a leader in our economics, someone that conservatives have to read is someone I hate the word Brad progressive, so I'll go with liberal, but also someone with an acute understanding of our economic history.
He is, of course at Berkeley, Brad, wonderful to speak to you today. Is the NAFTA today that we're amending is it anything like the NAFTA of or um? The NaSTA today is little like NaSTA nineteen because of the twenty two years that have happened since I'm a huge amount of water has flowed under the bridge since then.
NAFTA back in nineteen ninety four and nineteen ninety five was largely a bet for Mexico that if Mexico could get the United States to promise that it would not raise tariffs or quotas, on Mexico that Mexico could develop more rapidly, become richer, and so be a better neighbor for the United States. That promise kind of paid off
about a third UM. Some good things happened, but Mexico got a huge hanking financial crisis out of it, and Mexican growth overall has been very disappointing over the past generation.
What NAFTA has done is it's been a much bigger than expected boon for the United States UM lots more UM, cheap and relatively high quality goods coming in from Mexico and the ability of United States firms to significantly improve their competitive position with respect to competitors in Europe and Japan by creating an integrated, integrated North American value chains.
Can we get a dialogue from President Trump from the Secretary of Commerce Wilbur Ross that dovetails their political pressures into a successful amendment of NAFTA because they don't agree with the statement you just made, do they? Well, it's
hard to know what they agree with. UM that the story coming from I think Jared Kushner or Jared Kushner's people on their direct line to the New York Times is that Wilbert Ross ran at O'donald Trump's office with a map showing that trump Land was the part of the country that the most hurt by NaSTA aggregation, and that's what led Trump to back off his initial kind of campaign claimed that he was going to get rid of NaSTA very early, and instead shift to this, well,
g we have to renegotiate it. Um. So it's very una what the Trump administration thinks about this eventually, since if you look, if you look at what they're asking for right now, um, one of the major things seems to be that they're asking that Mexico and Canada agree as part of the renegotiation of Naska agreed to the things that Mexico and Canada agreed for the Trans Pacific Partnerships, which Trump bitched on the very first day. I look bread at the agel and you're you're truly one of
our authorities on economic history. One of the great things is to take whatever you defeated in the election, rename it, and put your brand on it. Are we going to do that with t p P. Everybody's shot down t p P. And now that whoever's won, Clinton or Trump, they both were against it. They're gonna essentially do TPP but not call it t p P. Is that where
we're heading. Well, that's what seems to be the Trump administration's negotiating position, or at least the negotiating position of the Trump staff and the Trump Cabinet members who are running this thing. It's not at all clear that's what the President wants to do. Um. The President seems to have this idea that each country's trade should be balanced with every other country's trade every year, and that if your country ever has a trade deficit with another country,
that means you're a lous. We have seen, we've seen so we've seen, Brad, going back to Chumpeter and Thomas mccraw's Outstanding Profit of Innovation, my book of the Year ages ago, Brad, we've seen creative destruction. The President today went after Amazon. Now that's in retail. I get it. But you are one of our authorities on the creative destruction of industry in America. Is there any grain of truth to what the President said that Jeff Bezos has
failed cities, towns, and states across this nation. Um, will I say that the thing that's failed, the things that's failed, the downtowns of kind of small city America. UM is not Amazon nearly so much as Walmart. UM. Amazon has gotten a lot of people, a lot of very good stuff cheap um shipped through UM, you know, through information
and then through shipping dissemination. Amazon is an update version of what Sears Roebuck on Montgomery Ward did a century a century and a half ago in terms of getting the goods of America's high productivity factory out to people who didn't live right next door to a huge store. And so he had fifty years during which Spears and Montgomery Ward were dominant. But then with the coming of the automobile, you no longer had to wait for the post office to bring your kind of large refrigerator from
Montgomery Wards. You could go drive, and it shifted back to retail. Now it's shifting back again to distribution. This is very normal. UM. What's not normal is that Trump is met at Visos because Visos owns the Washington Post and he doesn't think the Washington Post is being nice enough there. Didn't view this as economic policy. This is
you said, mediapol. Let's come back with Professor DeLine. Lots of talk about I really want to address a labor economy in his important work on labor share in UH NAFTA as well. We've got to get to that in our next UH section. I should point out that Professor DeLong and Professor Davidovitz seemed to agree about the Walmart effect versus the Amazon effect. That's something that UH we have as well. Folks. There are a certain number of essays a year which stopped the economic profession. They can
sometimes be in fancy magazines that only academics read. They can be out on the internet. They can be something as simple as a Bloomberg View essay. One of them, on January this year, was written by Jay Bradford DeLong. Let me read the entire title off the vox website. NAFTA and other trade deals have not gutted American manufacturing period. It was hugely controversial at the time and led to what every good academic wants, which is massive follow up
in positive and negative reviewing critique. Brad DeLong of the University of California at Berkeley is with us now, Brad, eight months on from your important essay, what has been the summed criticism are our our academics in agreement with you that NAFTA and other trade deals did not gut American manufacturing. UM. I think there's a distinction people like to draw between trade policy on the one hand, UM
trade effects on the second, and globalization on the third. UM. Trade policy I think almost everyone agrees has had little effect UM in terms that if we hadn't done NAFTA, if we hadn't let China allowed China to join the World Trade Organization, that America today would look very much like it does. That whatever problems America has UM are not at all due to making quote bad trade deals, and on the flip side, whatever advantages America has are
not at all due to quote bad trade deals. Then you get into the question of the effects of international trade on the US economy given the other policy mistakes we're making, And there there's a real debate about how, given our other policy mistakes, given large deficits at the wrong time under Reagan and George W. Bush, given insufficient deficits at the right time when the economy was deeply depressed, how much trade has been a net plus or net minus.
And that debate is serious and ongoing very quickly. Here what's the and the third one is globalization as a whole. That because of globalization, we no longer have a lock on making the high value manufactured and a lot of America's prosperity for fifty years was based on the fact that we had the old about the only efficient factories in the world, and that meant we could buy lots of good stuff cheap from abroad. We no longer have
that advantage. We have to completely no longer have a manu effect amount not playing high high value bread factory. And that's natural, that's that wasn't an advantage we could sustain forever what happened. And you have been good on this, Feel Burger and others have been very good on this, really across party politics. The people that lost their jobs low wage textile manufacturing is one example. They were supposed to get help, slash subsidy, slash a life forward given
these effects. Am I right that the lackey and individualistic society of America failed those people? And can we learn from that in these new negotiations? Well, I think CATAF. Actually it wouldn't have failed. Those quotes those people unquote had Newt Gingrich not becomes speak of the House in January.
You know that is all the labor market stuff that Bob Reich as Labor Secretary was quick, and it was supposed to be kind of round two of the Clinton administration, after the kind of Round one of get economic growth, going round two of making sure the growth was equitable. Um that second part collapsed when the Republican the Democratic Congressional majority built it a way in the election of
and was never has never been revived. UM. So I'm not sure if it's a failure of America as a system or the result of one bad election that produced people not willing to follow through on the policy promises that Clinton had made and that George H. W. Bush had made before him. That said, virtually nobody was unhappy with NaSTA in the late nineteen nineties. You wander around America in the late nineteen nineties, and the last thing people are worried about, um, his NAPTA. People are excited
about the Internet. People are seeing large real wage growth all over the economy for the first time ever. People are upset because California's housing prices are blooming and it's expensive to move to Silicon Valley. But you kind of NaSTA killing the American economy was simply not a thing
um from a professor. We've got to leave it there because of time, but thank you so much and congratulations on the impact of your January essay on NAFTA bred that DeLong is at the University of Californi when you Berkeley really appreciate his time. UH today, thanks for listening to the Bloomberg Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. I'm on Twitter at Tom Keene. David Gura is at
David Gura. Before the podcast, you can always catch us worldwide. I'm Bloomberg Radio.