I want to welcome in now. Our audience is across our Bloomberg television, radio, and YouTube platforms as one of finance's most notable names is running for a US Senate seat. That is, combat veteran and former Bridgewater CEO Dave McCormick is a Republican Senate candidate in Pennsylvania and joins me
with Bloomberg's Joe Matthew and Dave. There are a number of things we want to get to with you, but we were reconnected after you wrote an op ed entitled America Must Lead on crypto currency, and you know, it was somewhat interesting to see the former CEO of the world's largest head fund take a pro crypto view given how reticent the financial industry has been an adopting crypto. Why is this a platform that's important to you?
Well, thanks for having me. Nice to see both of you. You know, the reason that I advocated this is I think it's good economic policy, but it's also good national security policy. And I've obviously been following a crypto for a while now and the developments around blockchain, and I always thought it had appeal as around the principles of individual freedom and privacy. Data security and data privacy is something that is incredibly important and increasingly so. But I
was always worried about the national security implications. And I think what's become clear is that we are in the next great wave of innovation with crypto and blockchain, and if America doesn't embrace it, we're going to be left behind. And by embracing it, we can create great jobs, a great source of innovation. I've lived through a number of waves of innovation, whether it was the PC and the Internet, or whether it's some of the new developments around AI.
This is one such wave that we need to embrace. And the national security implications of this are clear, which is that blockchain has very limited and crypto very limited ELLSTED activity something like zero point three four five percent of the transactions. But it gives a roadmap for national security officials and prosecutors to zero in on the listed activity. So the national security and legal experts I talked to think that it offers a real source of eliminating, not
increasing a listed activity. And so for all those reasons and important to Pennsylvania, a job creation engine for Pennsylvania, I've embraced this and encouraged lawmakers to lay out a regulatory framework that will allow innovation to continue.
Well, it's interesting, Dave. Welcome, it's Joe Matthew in Washington and great to see you as we consider this. You point out in your op ed that this is also a matter of staying competitive with, if not beating, China when it comes to crypto and I wonder if we could get to the matter of China right off the top, because we have a lot of questions for you on
the economy, on taxes and tariffs. Your opponent in your Senate race, Bob Casey, has pointed out repeatedly the role that you had at Bridgewater and directing investments toward companies based in China. Can you tell our listeners and viewers the extent to which you were personally involved and the effort behind those investments, how you see them now?
Sure? Well, I've been very involved with China for more than twenty years as a policymaker in the Bush administration. I was one of the folks that was very involved in making sure that China didn't either steal or get
access to some of our key technologies. And the global economy has evolved in is China's evolved, it's become more and more of a national security threat, particularly with the rise of President Sheep, who has a very very aggressive view of China's role in the world visa the United States. With regard to Bridgewater, Bridgewater is a global investment firm.
We serve global clients. While I was there and still and in Bridgewater's portfolio, there was something like two percent of its allocation that wasted to China, and that was mostly in portfolio types of investments. And so this is one of the challenges as we think about national security
going forward. One of the things I've advocated is we need to make sure that investors are not investing of any kind, are not investing in companies that support the Chinese military, support the PLA, support the Communist Party, and the government should take a much more active role. And I've said this in testimony and so forth, to identify which companies we do not want American investors or American
companies to invest in. And that's one of the things I'd be advocating as a senator, as well as decoupling in key industries that are going to be absolutely critical
to America's economic and national security. Going forward. So that's the vision that I've laid out, and I think what's going to be required, and I honestly think I've experienced with China, both as a national security official but also as a global CEO is going to help me be much more sophisticated in how we deal with the Chinese because I actually know what I'm.
Talking about, Dave. To that end, I want to get your view here on the talent tariff policies put forth during Donald Trump and his pet presidential run. There are a lot of mainstream economists, including Larry Summers, concerned about the inflationary impact that such policies could have. Do you share those concerns?
Well, Listen, I was someone who has been generally skeptical of tariffs, but when President Trump came into office, I thought that selective use of tariffs to ensure a fair playing field, ensure reciprocity, ensure negotiating leverage made sense, and so I supported the tariffs that President Trump put in place under the last administration. And I do think that there's the risk of inflationary impact, and frankly, I think
there's two dimensions of Biden. President Biden's policies which are relevant to this one is the enormous spending is the primary driver of inflation. That and the policies that are directed on reducing oil and gas consumption, those are the primary drivers of inflation, and economists like Larry Summers have
said as much. The second problem with those policies of the Biden administration, particularly as it relates to evs and solar panels and so forth, the policies that have been in place have made us ironically highly dependent on China, because seventy percent of the lithium batteries and eighty percent of the solar panels are manufactured in China, so in one fell swoon. In my opinion, the Biden administration's economic agenda has driven up inflation and made us more dependent
on our primary adversary. And that's why as I've run for the Senate, I've advocated set of policies that take us in the opposite direction.
Let's put a finer point on this day of the idea of tariffs here against China. Will put aside for a second, because Donald Trump is also proposing and across the board, a global ten percent tariff that he says would help to pay for tax cuts if he's reelected. This has been a big DEBATEUS. I'm sure you well known Washington over the past week or so, and it's about to get a lot louder. Making permanent the twenty seventeen tax cuts that are set to expire next year.
We saw a new analysis from the Committee for a Responsible Federal Budget says that would cost in excess of four trillion dollars, that it could add that much to our deficit. So if it's not tariffs that offset the cost here, how do you pay for it?
Well, first of all, you you got to pay for it with a growing economy that's generating tax proceeds. The best way to do this. And in the Bush, or rather the Trump tax cuts, if President Biden's reelected and those tax cuts are allowed to expire, that's going to hurt all Americans. So if you look at someone who's making seventy thousand dollars a year, the impact on them is something like two thousand dollars of tax reduction benefit that they lose.
And this is the impact of inflation is pretty great on a household as well. Right, how do you find four point six million dollars? I think is the number that they put down your to pay for that without stoking inflation even further.
The well, the inflation has already been stoked by six trillion dollars of incremental spending under President Biden.
Here, so you'd add another four.
No, no, no. The a primary driver of the inflation we had has been the spending policies of Biden and Republicans and Democrats have been spending too much. I'm not saying this is solely Democrats, but what's happened under Biden is six trillion dollars of spending. And if you think about the types of spending, you can talk about one hundred and seventy billion dollars of loan forgiveness, which is absolutely,
in my opinion, un American and unfair. Or you can talk about tax cuts that are going to benefit all Americans and all Pennsylvanians, and absolutely inflation is the most regressive tax at all. So we've got to get inflation under control. But the drivers of inflation are bad energy policy. They've driven up the prices of fuel, and too much spending.
And so I would say reversing certainly some of those Biden spending bills and rolling back the war on natural gas and fossil fuels is the key to getting our economy back in check, and I wouldn't, particularly now, when so many families are burdened by this inflation, I wouldn't burden them further by rolling back the tax cuts at President trump place.
Speaking of burdens on families, you know, when you think about the deficit issue largely in the US, doesn't mean that you've also ruled out the idea of more spending or slow and spending rather on Medicare and Social Security to be part of the solution in closing that gap.
Well, I think the primary thing we need to do now is roll back some of the spending that President Biden has put in place. Again, I keep pointing to it because it's such an obvious one. Is the one hundred and sixty eight billion dollars of most recent a student loan forgiveness. I mean, look at that. It's extraorin that's the size of the Army's budget. That kind of spending doesn't make sense to most Americans. So we got to roll back that spending. We've got to attack a
number of sources of discretionary spending. And certainly when you look down the road. There's questions around entitlements, but the basic premise that you have to start with is we have to live up to the obligations that we promise people. So it's you know, it's a balancing act for sure, but a pro growth economic agenda that deregulates that allows businesses to grow is going to be the primary driver of driving tax receipts. We've got to drive back or
pull back on spending. I certainly agree with that, but the starting point has to be the war on oil and gas, which has hindered as dramatically, and some of the Biden priorities, which I honestly think are indefensive. One the most notable one is the student loan forgiveness.
Well, we should note I realized that you're speaking in some cases you're about the moratorium on new LNG permits, but the United States is pumping more oil than it has ever in history right now, Dave, I want to ask you about your policy or your proposals speak if you're elected on Israel? Can I just I'd like to get to Israel if we can here, to try to get to as many topics as we can, Dave, there are a lot of questions about whether we're going to
see a cease fire at any point soon. And I wonder if you think that Israel should declare war on Hesbelah, if that is in fact the mission here for Israel to combat the influence of Iran proxies. Iranian proxies that have brought so much terror to Israel and a very difficult quagmire that we find ourselves in now.
My wife and I went to Israel right after Christmas and saw firsthand the horrible barbarism that happened on October seventh, and are fully supportive of Israel doing what it must do to eradicate Hamas and destroy that threat. I'm not going to comment on what Israel should do in terms of dealing with Hesbel. I much more confidence in their ability to decide what's best for Israel as a democracy.
What I will say is that they are absolutely being attacked from all sides by these proxy that are underwritten by Iran and the original sin. The thing that put us in this position was President Obama's deal in twenty fifteen to give back one hundred million dollars of sanctioned money, and the deciding vote on that was Bob Casey, and that my opponent in the Senate race, and that money
is being used to underwrite terrorist groups. The hootis has Blaslami Ji Hutt and of course Hamas, and we're gonna have to deal with That's gonna deal with that. And a final point, this is not just a war against Israel. This is very much directed at the West, and sadly, it's raising the risk for Americans around the world and in the Middle East.
Yeah, let me guys ask you this from another angle though, Davis. We wait for a possible cease fire, and you look at the destruction that has been wrought in Gaza, more than thirty thousand civilians killed according to the Gaza Health Ministry. At what point is the response disproportionate?
Yeah, well, listen, I obviously watched the same clips you do. When you see human suffering and innocent people injured or killed, it's heartbreaking. You know. The source of this pain is Hamas that has integrated itself into the civilian population. Their
explicit strategy is to increase civilian casualties. And Israel certainly has every right to eradicate the risks that destroyed the lives of twelve hundred Israelis, and you know, hopefully we're going to be able to find resolution on that soon. I think it's very difficult to imagine Israel letting a military capability continue with Hamas, and so I'll leave it to them to figure out the best timing and path
for that. But obviously I was very gratified to see all the efforts that are being put in place to allow humanitarian corridors to allow as much humanitarian support as possible into Gaza. And it's absolutely heartbreaking to see not only what happened on October seventh, but to see innocence killed in Gaza. But make no mistake, the root of this, the root caused, the source of this evil, and the culpable party is Hamas.
Dave. Before we let you go here, I do want to get your on the US election this cycle here, especially because you and yourself are also on the campaign trail and going around the country looking for fresh donors, new fundraising. What is it about Donald Trump that Wall Street finds attractive at this point because we know that even those who have shied away after January sixth, some of them have come back in the fundraising circuit. What is it that they're latching onto.
Well, I think the primary thing is that the country's just going in a really bad direction, and most Americans see it. So the economy I talked about, there's certainly positive economic factors, but for sixty percent of Americans, they're living paycheck to paycheck and compounded inflation is really driven and higher prices have really made it much harder for them to make ends meet. You see it with the border crisis, ten million illegal migrants coming into the country,
a huge national security risk, a huge fannel risk. You see this in the which we just talked about, the war on oil and gas, which is a particular a big deal for Pennsylvania and many states across our great countries. So I think the policies of President Biden are taking us in a terrible direction. And I think that people compare the policies of President Trump with the policies of President Biden and say, you know what, we were better off and our future was much brighter under the leadership
of President Trump. I think that's what's happening. That's certainly what's happening on the ground in Pennsylvania. And I'm running as someone who's an independent voice is someone who will fight for the fight for the interest of Pennsylvanian someone who's led in the military, led in created jobs in Pennsylvania, led companies, and someone who can get in the Senate and make a real difference and be a real advocate for policies that help Pennsylvanians.
We have to leave it there. Dave McCormick, Republican candidate for Senate in Pennsylvania. We thank you for your time today