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Welcome to this live edition of voter Nomics, the Bloomberg podcast where politics and markets collide. This year, we noticed voters around the world we're going to have the ability to turn markets, countries, and economies like never before. So we created this series to help you make sense of it all. And we're kind of in the final stretch now, not many more elections to go, but quite a big one.
Come.
I'm Stephanie Flanders, head of Economics and Government at Bloomberg.
I'm Adrian Woodridge, an opinion columnist for Bloomberg Opinion, and.
I'm alegra Stratton and I write the readout newsletter that goes out every day at five o'clock.
And we have with us for this whole episode. John mcilthwaite, Editor in chief of Bloomberg, Thank you delighted to be here. We've allowed John in as an interloper for this morning's proceedings,
which we are holding in Bloomberg's wonderful headquarters in London. Well, as I mentioned, we're looking at the final stretch the last two months of this pivotal US presidential race, and we're also sitting here at the end of the first two months of the new UK Labor government, which has its critical first budget coming up in just seven weeks time I was thinking on the tube here. One common theme on the both sides of the Atlantic the last few days has been that the honeymoon is over, so
over for Kamala Harris. If you believe the latest polls from the New York Times this week, and in fact, to some extent our own swing State pole that we've been running every month since November, her momentum as a new candidate appears to have stalled. That could all change if she knocks it out of the park in the tonight. We're going to talk about all of that plenty in the second half of this show, But first I think
we should talk about the UK and John. Ever since it came in, the government's not stop talking about tough choices, hard times to come. Is it overdoing it? Is it making the right tough choices?
It look like I think it's possibly overdoing the hard times because the British economy is growing quite quickly. I think, on the other hand, it does seem to run into sort of problems at both ends on them. You've got the winter fuel vote tonight, which obviously doesn't look as
if it's going to go particularly well. Even if they'll win it quite sort of easily, it'll still it's still caused a lot of sound and the other end, perhaps more represented in this room, that there is everything to do with the budget and fears of an exodus of entrepreneurs and all those people. And I think it's interesting the way that if you wander around places like the city or you spend time with entrepreneurs, there has suddenly, i think been over the past month roughly a fantastic
rethink about Starma. It's not quite sure exactly what it's based on, but a whole series of people who voted very casually for Starma or didn't really care when he
came in. I think we had a conversation about this here and now deeply frightened, and people are talking about the number of people just before he are going to the United Arab Emirates, going to Italy, going to other places in Europe latest i've now heard today with Cyprus anyway, all these places have suddenly come up, and the idea that Starmer's government is going to hit the growth part of the British economy is something that I think has suddenly become a new part of the debate.
Adrian, Do you think that? I mean, I guess the big thing that's changed is he's now Prime Minister, and people tend to like people less once they're actually in power doing things.
No, I think the big thing that's changed is that an illusion has disappeared. The illusion was that the Labor Party in power would basically be like the tour is only sane and they're not like the Tory. He's actually a socialist, by which I mean that he doesn't want to nationalize the means of production, but he does want to introduce a quite a significant redistribution of wealth in society.
He's significantly to the left of Tony Blair. He thinks that the rich have made out a bit like bandits over the last couple of decades and that the poor have been squeezed, and he is systematically or will be systematically redistributing wealth away from the rich towards poorer people. You can see that in the pay deal for train drivers. You can see it in the pay deal for doctors. We'll see it's in significant raises in taxes for people
with disposable income. And you can see it most dramatically in the eighty on private schools. He basically thinks these are not hard working people trying to do the best for their children. He thinks they're basically que jumpers, and they should be charged a decent whack for for jumping the que if they're allowed to do it at all. So I think he's he's a left wing figure and will continue to be a left wing figure throughout the
next five years. This is not just a bit of pain that we'll get through and when we reached and then reached the sunny uplands, this is his belief.
Allegra, Do you think he's revealing himself to be a rabbit socialist?
Oh?
Rabbit, I didn't use the word.
So I think to a certain extent, we are all being played as someone who was.
No well.
I had to do the strategic comms for the Treasury during some of Rishie's time as Chancellor, and you definitely approach these big fiscal events by putting out the very worst of what you were going to do, and then in the end what you ended up doing was vanilla or vanilla with a little bit of spice on top. So that's classic playbook staff and I suspect don't know, but I mean some of the things I'm hearing are that, of course it won't be CGT going up to the
top rate of income tax. There's some kind of confusion as that, you know, they perhaps they've got in to the treasury in number ten and things aren't quite as easy as they would like it to be, which we'll get on too later about house building and the like and what they're going to deliver in five years, but certainly in this early period they have to manage expectations.
That is what they're doing that, and they're doing it well because all of us are having this conversation now about how willflick could end up being And then you know, if they end up doing three percent on CGT, the commentariats say, oh, you know, it wasn't too bad in the end. I think there are some nonetheless some bits that I think discern kind of unwise choices. I think, you know, on the vat point on school fees, yes, they were very clearly were going to do it. Yes,
they don't care that people don't like it. Where I think they sort of reveal a weakness is around this idea, it's vindictive to do it. In January, I think around the union settlements. Again, they were quite clear, we're going to settle this. Why haven't people settled it? Why has ri she not settled it? It's so easy, why not stick some reform in there? They didn't stick reform in there,
and then linked to that with winter fuel payment. You're saying times are tough, but you've done these big and these are choices that they are revealing that I think, even in their own terms of kind of wanting to redistribute and so on, are revealing, you know, a kind of callousness, slash perhaps kind of disregard for their own MPs that might in the end be a problem.
And just because of your experience, do you think the winter fuel payment, at least the timing of it, if not the decision itself, possibly both, is just a mistake to allow that to be the one thing we could focus on before the budget. I think air with the public sector pay deals rather than have it all.
Be part of a big budget.
Yeah, and giving and you know this, this this argument they're making now, which just let the triple locks inflating your income. Pensioners chill out, you know you're going to be met up. Is the wrong way around to make it, make that argument. It should have been by the way, we're going to need to take this away. But you've done quite well if that's an argument you're going to make. I mean, it's something you know, you've got the leader of the Welsh Stories coming out and saying it's cruel
and unnecessary. You know, it's it's it's a bit topsy turvy. And there are other things you know, this room doesn't need mean to tell. You know, there are other aspects of revenue raising they could have gone for.
First.
I mean, the government was going to do another expensive cut on national insurance. You know, did they necessarily have to do that? Would that have been something given the last government? The Conservative government are probably going to find that difficult. Could they have found something creative there?
John, I'm interested. I sometimes think that a government can't win on these things because there's a particular criticism around the amount of uncertainty around the capital gains tax changes, potential inheritance tax changes, even the details of some of the non dom changes which they might they might build on what the previous governments did. Because on the one hand,
we tend to say, well, that uncertainty is terrible. All these people are going to leave, and then they might find out it's better than they thought, but they will have already left. But on the other hand, we usually say, if these changes are rushed, they come in quickly with no consultation and no discussion. You know that that's foolish as well, because they'll have lots of hidden coment quinsies.
Given that they have, there's a presumption that then there is going to be some increase in wealth and asset taxation, which many economists would have said was justified given the balance of taxes. How could they possibly have struck this balance right for the kind of people in the city.
That we hear about.
A useful comparison is to go and look at Blair human when Blair came in again, another sort of left center guy who came in with the reputation for being having moderated a party. He came in, He did the bank, he did big sort of signature things. He's still you know, he still did he did some stuff which people would regard as.
Being on the left.
What Starmer's problem is is that just at the moment when when Britain.
Is absolutely desperate for growth, he's.
Definitely opened up some possibility of growth in terms of what he's doing on on planning, what he's doing on environmental stuff. I think that, you know, there's definitely growth there. You could argue that if he really wanted growth, the obvious place to do it is to come up with kind of deal with Europe, which I suppose would be the area which I would I would have gone for. And I think if he'd done that, I think that would be that that would give him a little bit
more room with playing around with capital gains tags. I think the problem is that he's suddenly hitting if you're looking for growth, the one thing you don't want to do as a left wing government. You don't want to be Francoislon. You don't want to be the people who come in and make us one big left wing thing which scares away capital. That strikes me as mad. There
are other ways. I think the school fees thing will make a little bit of difference to that that it's not going to scare away exactly the most mobile people. So I think there is I think there is a genuine worry that just at a time when there was quite a good story to tell the British economies growing.
You've got a moderate, as Adrian pointed out, sane government, and we shouldn't forget that a lot of these things were were set up or traps were set up by the less sane members of the Tory Party, including definitely the Europe stuff. But now coming in at this precise moment, you don't want to send a message to international capital that actually or not this nice pragmatic person, you're this person who doesn't.
Like we're also closing down one particular post Brexit option. One particular post Brexit option was that we would go for the Singapore or the old Hong Kong model of being a deregulated free markets haven for mobile capital, for entrepreneurship, of all of those things off the shore of Europe. Now we're definitely going through it. I think that was a real option. I think if let me.
Just you said that years ago, that we've got rid of that option. I mean, would you really think the last few government, the last few conservative governments the Singapore option.
I don't think they were I don't think they knew what they were doing. They were partly pursuing the Singapore option. They're partly pursuing a different sort of option. They're partly pursuing a leveling up option. But if we go for the set of policies that start arm is putting into place, we're definitely not going to go for that option, or blairized.
You're referring to the regulation on workers' rights and so on.
Referring to that, I'm referring to heavier taxes on capital. Now I did something terrible for my sin jest. I actually read the Dragi report, and the Drugi Report is quite an interesting document, all five hundred pages of it, because it makes it clear that Europe, if DRUGI gets his way, is going to go for a very focused industrial strategy version of Europe with consolidation of industries, with a degree of self protectionism, with a degree of coherence
of policy. So it's going to double down on Europe as it were. Now, that creates a strategic opportunity for Britain, but it also creates threat for Britain. The strategic threat is we're not part of that big block. So you've got a world divided into the United States as a big block, China as a big block, and Europe is a big block and Britain offshore there.
That's that's the threat.
The opportunity is that we we go for a different model, for a more flexible model, but we're going to be trapped in this middle position of a highly regulated, redistributed economy, shut out from the European market, or large junction of the European market. So we lose on all fronts.
So we need to have a bit of a reality check here. I mean, I'm just listening. Firstly, they have five years and they've only been in office for two months actually done anything yet that would sort of figure in any history.
First impression, and these impressions are very bad.
First impressions may maup, but when we talk about doing big things, that suggest that you're on a path to a very socialist future and you're going to scare away all of all of business. You know, in the last fourteen years, we had Brexit, which did more clear economic damage to the economy but also to the city's basic position and with regard to Europe, than any single action of any government. We had corporation tax, the key signal to corporate to businesses around the world go down, but
then dramatically up. In the course a few years, we had consistent instability and actually higher taxes on rich people consistently. So it seems odd to me. We talked in the campaign a lot about the importance above all of stability, of sort of a basic commitment to a strategic economic model. It seems a bit on. It may be that they're going to screw up, but they really haven't done very much yet on a drastically different.
First of all, the fact that the previous government did a bunch of stupid things is not an excuse for this government.
They haven't done that many stupid things.
But secondly, I think that it's not creating stability. They're not creating stability, they're actually beginning to create instability. We heard just before we came in this room from a distinguished figure who said that twenty percent of his friends were thinking of moving out of the country. You don't think of moving out of the country because it's a stable, welcoming blaze.
Just just as a pole in this room, anyone put their hand up who has met someone who's just who is thinking about going. I think just for those people who are listening on the radio, I would say, virtually everybody has their hand up.
That's not what.
Are they leaving because they actually think that the UK is going to grow more slowly and have a less stable future, or because they are concerned about their personal tax situation, which is not a bad reason to leave. What I'm saying that is the main three reason people are leaving. It's not because they actually think the UK is going to the dogs.
Well, that's wealth creation. These are a bunch of wealth creators leaving the country and leaving the country with your opportunities.
Can I can I?
Can I move it on to talk about your five year point that we're two months into five years, which is if you look back at the Boris Johnson government that had a similar mandate and it had didn't have as thumping a majority as Kistarma has, but it had you know, there was a similar vibe when he came in of wow, we can you know we have we have an ability to do what we want and he was going to do leveling up and in Kissed Armer's case,
it is build, build, build. I think inside number ten and eleven they will be aware that it isn't just two months into five years that you have to start to have an idea of how you break down these systemic reasons why we haven't done this historically. So I suppose I just want to be a corrective to the
yes they have five years. And one of our reporters, who was talking about the Build Build, Build a gender on the in the City podcast the other day, was saying, you know, he suspects that that one point five million of housing being built, well, probably a lot of it will be at the back end because the systemic problems that have stopped us building hitherto are real. Probably Rachel Reeves and Kissed Armor are looking at them and getting advice, which is it is not going to be that easy
to shift this. Otherwise other people would have done And I think if you look back at the Johnson government, there was a sense of like crumbs, how we're going to do leveling, How we actually going to do this? Is it going to take two terms? How we're going to build these forty hospitals and so on? COVID came along, so we actually didn't see that. The pandemic quite early into his turn meant that there was a number of other things he was judged by, but had it not
come along. I think you would have seen it sort of how do we level up the country? Can we break down these vested interests? And I think that that is now true for Starma and I think the one question I would ask over and above can you take on Nimbi's and so on, is do we have the workforce to do what you want to do?
A llego.
I love that you've taken us to that because we are going to have to move on to the US. And I think you're absolutely right. I mean, it's a brilliant to have a good argument about it. Rare that we can summon up such disagreement and voter nomics. But I think my concern is that the government we end up focusing on quite small things instead of the very big challenges that they highlighted themselves in the campaign and allegory,
you're quite right. I mean six months time, if we're still talking about all the things that we've just been talking about, not talking about how they are tackling that supply side agenda, and particularly things like housing supply planning, unlocking in in the grass roots, not just what's going on here in the city and with high paid accountants. I think that will be a real indictment of the government if we're still looking at these symbolic things, and
then I will start to side more with Adrian. But we do have there are five years to go. Set your clocks. People come back here in January. But we do have. We have five years. And in the meantime, of course, all those very smart labor strategists that got labor aware of all of this, we have been quickly getting out of Dodge to go and help somebody else,
and we have. We had a story this weekend that was talking about how the labor strategists are going over migrating to the US at least temporarily to lend their help to the to the Kamala Harris campaign, to join us to talk about the US election. In this kind of final straight we have the head of Bloomberg Opinion, Tim O'Brien, who's also the author of Trump Nation, The Art of Being the Donald. Tim, happy to have you here.
That you've set yourself up this week. You're going to have to stay up really late to watch the debate.
It'll be an all nighter.
Just just let's all talk about the debate briefly, and then maybe then talk about this sort of last stretch of the broader campaign out of being the Donald. Which Donald do you think we'll see tonight?
Oh?
I think nasty Donald. I think you know, at the RNC and Milwaukee, they wanted unifier Donald, and he had every reason to do that. You know, he went into the RNC in Milwaukee with incredible momentum. Biden had belly flopped the convention eight in June, and there been the failed assassination attempt, and he had a very good convention. I was there at that convention. There was great energy
on the ground for the Republicans. And then he got up on the stage and he spent about fifteen minutes talking about being shot and sort of retold the tale and then immediately went into division. And all of his advisors were saying, talk about unity, bring the country together. You have this advantage, you have all this momentum behind you, and he couldn't do it because that's not who he is. And I think his advisors are recommending tonight that the
kind Donald be on the debate stage. But I think, like his speech of the RNC, you may get about five minutes of kind Donald, and you'll get eighty five minutes of nasty Donald.
But it's kind. And remember that It's worth remembering that speech because it was while it was while Joe Biden was still in the race, he was absolutely looked like he was going to be sailing to November. I think tonight. I mean, along with being kind, I think his advisers are telling him to sort of stick on message, talk about if he talks about policy, there's plenty that he
can take on about Karmala Harris. But I did hear someone joke that was like asking him to stick on messages, like asking your cat to do string theory.
He also doesn't believe it works. Just at his core, he believes that when you're on the attack, you're winning.
Will not be nervous that he's taking on a woman who is younger than him.
Well, I think what he's nervous about is she has authentic charisma and star power. And Biden was a catatomic zombie, and I think that he I think he wasn't he wasn't worried yet, but you know, cool. And I think the Trump campaign had positioned itself as even though Donald Trump is seventy eight years old, he was the young man in the race. And he was the vital player, and he compared favorably to Biden in that regard, And so they were campaigning at like a thirty five thousand
foot level. It really was this cult of personality a on Trump. They were going to do it through social media. They have a horrible ground game. We can get to that. I think that might catch up to them. But they really didn't care in Milwaukee in July because everything was in their favor. And then the Democrats pulled off this amazing reversal of fortunes and put a new candidate in play who is younger, is dynamic, has star power. And Trump is a student of very little, but he is
a student of celebrity. And I think he recognizes this in her, and he's afraid of it. You know, he's already raised whether or actually's really a black woman a number of times. I think if he says that on a debate stage tonight, independent voters in Swaying States, which is where the twenty twenty four election is going to be won, they don't want to hear that. They want to hear about the economy.
John, I mean, I was tending expectations too low. I mean, if you go back to that debate with Joe Biden. You could argue that Donald Trump was actually very disciplined in that in the debate.
He was disciplined. I was there with Tim and Milwaukee, and it was extraordinary. The whole thing was around being nice. It was already soft focused. There were lots of people coming in and degree of celebrities, everything like that, and then every time a Trump came on stage, but particularly Donald, it just went veering off. You know, there was a teleprompter and it was like watching one which he was
meant to be following. And to begin with it was going around quite calm, but in the then it hit it hits.
With the debate with Biden, he wore the debate with Biden, he was the same setup he was, actually he did so that the convention he went slightly crazy, but actually the same circumstances and with the mics again going to be silenced at least some degree. Are we as setting expectations too low? I mean, if he's as disciplined as he was against Biden.
I also wanted to watch.
We've just had two disastrous months for Trump in which the nasty Trump has been totally and completely dominant, which the media has been ecstatic about Camilla, in which she has actually done much better than any of us expected. And there's still level pegging in the polls.
Well, remember, though there's been a swing States, there was a huge gap between Trump and Biden right prior to Harris coming into the race, five to six points beyond the margin of aeron most poles. So she's closed that gap, but she hasn't bridged it and gone beyond him. But you know, she's within two points of him in Florida. If Donald Trump loses Florida, the race is over. I think the other dynamic that's going on is that the Poles don't really capture voters who are still turning out.
Democrats have had thirteen offices open in North Carolina since January. The Republicans just opened their first, and they did it with emergency funding from Elon Musk, And they're panicked about North Carolina, and ground games are where elections are won. You know, vibes reflect momentum, vibes reflect people's political biases
and affinities. But at the end of the day, the really tough work of campaigns is door knocking, direct mail advertising, and phone banks and the Democrats and all the swing states have more robust operations than the Republicans right now, and polls don't capture those voters. It's sort of hockey sticks. You don't see them in like the last three to
five weeks of a campaign. They suddenly appear. You know that surprise Mitt Romney in twenty twelve when the Obama people were in Florida and they were door knocking, and the Romney people were surprised at the end that they lost Florida. But the Obama people knew it all along.
But Trump, but Hillary Clinton had a much better gown game than eventually.
I would argue that she did. I think she was absent in Michigan and Wisconsin, for example, and that cart through the race, and they actually thought they were going to flip Georgia and Florida and that's where she was, and they needed to actually shore up the blue wall in the Upper Midwest. So I don't actually think her ground game was top drawer.
That is very true. And it was interesting that the director of the battleground campaign for the Democrats actually came to one of our Bloomberg ground tables in Chicago at the Democrat convention, and I asked him what what the other side had of all the kind of apparatus that had or the infrastructure on their side that he would like to have.
He said nothing.
He said there was no there was nothing that he'd like to have on their side. But it is true that the polls in twenty twenty turned out to be much closer in those swing states than expected. So although Joe Biden won, he won by much smaller margins in some of those states, and I think that has got people spooked, even with the ground game that they have.
I think you're facing a very basic thing. If you ask people, when you get away from media bubbles, conventions things, you ask people what they care about. You've got the economy, the US Trump on that, immigration they trust Trump on that, and stuff to do with how America is strong in the world. So if what you said at the beginning I think is right is if he can stop being nasty, stop being weird, and just focus on the policies, then he's actually better or worse and not a bad position.
Bin Alega, do you think she has done or what more do you think she needs to do on the economy, because it is absolutely true it came through an our swing Staatephole by a wide margin. The most important issue for people is the economy, and they do still favor Donald Trump by a wide margin on the economy. The only substantive speech with a generous use of the word substantive, that she's made has been on the economy.
But she's done enough.
It's tricky because it's quite like it was for Richie Sunak, where you are trying to evaluate how you talk about the economy. On the one hand, you're coming out of, you know, in the broad sweep of things, the pandemic and then the inflation and cost of living crisis, so you have done a job objectively if you look at sort of the last you know, medium term period. But people are still feeling it. People are still feeling the
effect of everything being exceeded in expensive. So it's very tricky for It was very tricky for Sunak to talk about. I promise you'll get onto to Kamala Harris, but it's very tricky for him to talk about. You know, do I say, look at me pat on the back, have done really well or do I feel their pain and talk about that? And you can see that she is struggling with how to talk about On the one hand, I've done a good job, Pat me on the back
and tell me if I'm wrong. But then she's also talking about cost of living, price gouging with grocery shopping and so on, So it's trying to connect while also say hey, we didn't do such a bad job.
It's really tricky.
I covered as a TV reporter, I covered the Democratic primaries in twenty nineteen.
I wasn't that impressed with her.
She was in the TV debates then she was the worst performer most of the time. So you know, I'm interested to see this evening the extent to which she you know, we know Talsea Gabbard is advising Trump. Tulsi Gabbard was in those TV debates and she absolutely and died a couple of blows. So it'd be interesting to see any effect that she has as an advisor in that kind of question that the Trump's team must surely be having, which is, to what extent do you go in for the jugular or do you let her as
he did with Biden? Do you let her kind of on some of these flip flops, do you let her sort of reveal her own problems.
I also wonder, contrary to what Tim's saying, whether nasty is necessarily a bad thing with him, because you Richard Nixon. Richard Nixon once said, never underestimate the amount of evil there is in people. Yeah, and you know, he won two elections.
Tim, people, I wonder, I'm sure he won one election. And he's last every he's last every when people look.
Back at the Trump Hillary Clinton debates, TV debates, there's a New York Times report Trump Sorry, who went through all of them this weekend? She watched all of them, and she said he comes across this free wheeling, chaotic and crazy. But actually actually he probably had the last laugh in a number of fronts. So she's meticulous. She lands blows, And I just wonder whether you know.
Well, but remember the polling after all three of those debates, she was perceived by a large margins and one and all three, and she went on to lose the election. So I think that debates ultimately don't turn elections, but they do they do clarify and solidify people's sense of the person pain.
Yeah, the economy in the grassroots is figuring very prominently because there's the legacy of inflation, which just is is still there in people's minds. But on the big picture macro policies, feels like remarkably little concern about the macroeconomic mix that Donald Trump, you know, still probably the most likely winner of this election, is promising for the next
few years. And I was particularly struck he gave this speech to the economic worst speech just had a discussion that involved just him at the Economic Club of New York last week to a pretty luminous, you know, almost as important audience as the one we have here at Bloomberg and barely sort of turning ahead as he talked about policies that would explode the deficit and potentially also
push up inflation quite dramatically. I mean, we know that the increase in tariffs alone would push inflation back well over a target next year. So I mean, Timm, are you surprised by how little focused there is on that in the business community, which actually seems to be quite sort of resigned to a potential Trump presidency.
Well, I mean, I think for good reason, the business community wants less regulation. I think the business community also wants lower to tax taxes, and often I think the business community can look through those narrow prisms as the foundations for good macroeconomic growth without thinking long term about other things like the availability of labor or investment capital. I don't think Donald Trump talked about policy in New York.
It was gibberish.
I mean, calling it policy is a polite a polite word. He explained what he well, he hasn't thought through any of this stuff. And I think he was taken by surprise about a question about childcare and how do you fund childcare? And rather than talk about, you know, a child tax care credit or an earned income tax credit or direct subsidies, he grabbed for the tariff straw, which you know, Donald Trump's not a conservative, He's an anarchist.
And when you say you're going to impose twenty percent across the board tariffs and fifty percent tariffs on China, it's inflationary, it's bad for global trade. And what he believes then is he gets several trillion dollars of money come into the White House in a bag, and then he gets to spend that on various programs, one of which is childcare. So it's sort of like painting with numbers.
He hasn't thought it through, and I think he was somewhat panicked by the question, so he went into word salad and spun it along and then said, yes, I'll use tariffs to play for childcare.
I think I think it's interesting though, that I think Trump sorted through. There are two extraordinary things to me. One, there's this group of people who do genuinely think that's slamming on tariffs at this level, it's doing a million people back across the border will actually it's the right thing to do, and not just the right thing to do economically, will cause growth. They are very much at the fringe of Stephanie would regard as economics.
But Milwaukee, you met these people.
They are it's a pattern of thought which is tied together and which they think makes sense. So even if he and I think he is a bit like the kind of child who's been sitting in sitting around the dining table, hearing a few things, but he does tend you know, the earliest things he ever did was to back Tariff's opos N after all that sort of stuff, so it does chime with him. The second thing, which in this case, I'm more like Stephanie feels about rich
people in Britain. I'm generally staggered by the number of kind of capitalists in America who sort of think that's okay for exactly the reasons that Tim said. They just tend to think of it's lower taxes were sought out of the rest with Trump, but this time it could be a lot more difficult.
Are they're worried about vendettas as well if he becomes I mean.
His Tim is a target of many familiar with.
I think that John, you know your point about this time around, they're evangelical about it is important because they they went to school in his first administration and now they know how the lots on the doors work. And he's bringing in people. He's not going to have the gym Mattises of the world, you know, or the tailor Sins of the world. It's going to be people who are more movement Trumpists. And I think he wants to
pull the US out of NATO for example. We're going to see some of these sort of things happen on the foreign policy front. They want mass migrations of migrants. I don't think they've thought about.
How to do that, mass deportation.
Deportation. Yes of immigrants. It's all very trumpst without being economically, democratically or rationally sensible.
Well, wait a minute, in terms of being sensible or not being sensible, between about nineteen twenty four and the early seventies, America pursued many of these policies in terms of very restrictive policies on immigration, in terms of a very nationalist set of policies with high tariff protectionism in the rest of it, particularly in the nineteen twenties and nineteen thirties, which wait a minute, which which was very
bad for the world economy. For a while, it was quite good for the American economy, as nineteen twenties America had the biggest boom that he's ever had. So I'm not sure that Trump's policies and the businessmen who support Trump's policies would in the short term be catastrophic for America. I think it'd be bad for the world. I think in the longer term it would be bad for America.
But I think you could follow a Trump reelection with some of the policies that he's talking about with a Trump boom.
So are you disappointed with the rapid GDP growth, wage growth, and job growth that's already happened over the last four years.
I would say that a lot of what Biden was doing was consolidating big changes that Trump had been put into place. I think we're moving from a world in which prosperity obviously flows from free trade policies to one in which certain countries, powerful countries, America being one of them, can you used industrial strategy, industrial policy, tariffs actually to
boost its domestic economy. So I would say that Trump is the break, Biden is the continuation of Trump, and that a further Trump presidency I think disastrous in the long term, but might in the short term be very good for American business, which is one of the reasons why American business likes it. It doesn't like it because it's stupid. It likes it because it sees real benefits for the US economy.
You heard it here. First, we should be partying like it's nineteen twenty seven, nineteen twenty eight. That's what we're going for.
As I said it, long term disaster.
Long term, it's like three years. I think it's very good to have a range of perspectives, but I think we probably all agree that there does seem to be a slightly short term perspective of many of these businesses looking at the mix of policies, and I can't As an economist, I find it very painful, just precisely what Tim was identifying, this idea that you can raise an enormous amount from tariffs and also create enormous numbers of import competing manufacturing jobs in the US, because if you
raise a lot of money, that means you've completely failed to reduce imports because you're making lots of money on the tariff. Just to say, I wish I could just tell him, okay, questions, you get to have your say. And I think that actually the hand here was the first one to go up.
So absolutely fascinating, just picking up what Tim and Adriam we're talking about, and picking up on what the head of the CIA and m I six was saying last week about this being the most dangerous point since the end of the Cold War. Will a Trump presidency, how serious will it be globally? We've heard a lot, but not so much about the global picture.
We might take one other one, just take them in in pairs.
Thank you very much. I was slightly surprised. I mean, I know you can't cover everything, but no mention was made of climate action and changes that are needed for economy in the positions of the different players, and also the potential social unrest that we've seen in the UK and how that might play out after the election in the States, and obviously all these things are absolutely crucial to the economy. That's what you want to focus on, thank you.
Okay, So the rest of the world, dangerous for the rest of the world, and climate, which of course are too related, But allegra, do you want.
To And clearly Trump is concerning for the climate agenda. I think he's more likely to unwind the regulations in the US around environmental protection than necessarily. You know, Ira was very cleverly, brilliantly constructed by the Biden administration to see a lot of Republican areas benefit in terms of jobs and investments. So hopefully he gets that and leaves that alone. But on the sort of points about coal and so and spewing forth lots of pollution, I think
that's the sort of REGs that will go. And then more broadly the international agenda, the cops and so on. People are telling me to not worry too much that there's still sort of logic he's not going to copy this year is of course, straight after his election, a lot of people forgive me if he wins, a lot of people saying if he wins, he's unlikely to do pyrotechnics, immediately pull out, not go, because of course he pulled out of the Paris Agreement back in his last term.
Wait and see.
I think Ira protects the agenda somewhat because it's been so focused on Republican areas.
I think very quickly on the going to Milwaukee that the two things you could say if you're a Republican speaking, no matter how boring, to encourage things was one talk about transgender stuff and people girls and boys, teams and things like that. And the other thing was just to mention the word energy, and the whole room would burst into drill baby drills.
Been quite a lot of that as well. So yes, but it's.
Still that SA on that side, I would be worried. Notwithstanding what Legra said on the on Anthony's point about the wider world, I think there is the transactional. I mean, is Trump going to cause as problems? Yes, I'm nati. I'm not as sure as Tim but I'm worried about that. I think you have to admit though with Trump he's very transactional, so I think, and he's transactional and he
doesn't want to be seen to be a wimp. So if you take a problem like Ukraine, for instance, I think it's possible to imagine Trump quite quickly trying to come to some kind of deal with Putin that we might all disapprove of, but might vaguely set the borders where they are at the moment and sort of let Ukraine come into a NATO version of NATO. But that sounds why the Ukrainians know. Would that satisfy people who support them? No, but it's pay Putin? Probably not, but
it might be a way out of it. So I think there's on China. I think it's the same kind of dynamic. Trump is so blown up with his own sense of ability to be able to talk to people, but again, he would be looking to try and do deals at the end of it. He is an American firster. Well, that's been his entire strategy. That has terrible consequences sometimes for based like Europe. But it does mean that he doesn't want to give in to things He doesn't want
to look too weak. Again, Tim knows more about it.
And I think that the sort of pivot away from Europe, although it would be more extreme under Trump, I think you'd have to expect it that at some level that is a structural shift. Yes, absolutely, A couple more questions. Okay, So for this side, maybe we take these two.
On this side, Adrian's written brilliantly on meritocracy. One threat is that inequality of income and wealth feeds through into inequality of opportunity. What are the redistributionist policies in Britain therefore that you would support me? Yes, you, it must be something you would support on redistribution if it's going to enhance equality of opportunity and support the meritocracy that you've defended.
I'd be much more concerned with broadening opportunity. Has happened under Blair, and I would say that the ways to do that would be to extend access to private schools by making it easier to pay, by increasing the number of scholarships available, by having a substantial investment. Again, has happened under Blair in early opportunities for deprived children. So I would focus more on opportunity more on creating avenues
of upward educational mobility. On the issue of transferring wealth down the generations, I'm in two minds, but I think at the moment, given what's happening in the rest of the world in terms of a sort of the consolidation of big trading economic blocks, I don't think Britain's interest lies in being less welcoming to wealthy people.
I think in the US campaign at some point Kamala Harris talked about rent controls. I think in the UK, previous Conservative government tried to regulate football clubs and debate whether we have a right to have a local football club. The reaction to the Oasis tickets was to regulate ticket Master. Even the winter fuel allowance. You know, there's actually no meta debate about whether it's the role of government to be sort of create little pots of money we hand
out for winter fuel. Is there anyone, in part from maybe Kemy Badenoch, who actually thinks in both these countries that government perhaps should do less but do it better.
That's a good question. I mean, I do think it's very striking. In the US, you've had this sort of much discussion around the polarization of the electorate and the dramatic sort of moved to the right of the Republican Party and the move to the left of the Democrats, but they've almost never been so close on many of the sort of key elements of the key instincts of
economic policy. You know, we both sides have moved a long way from the sort of new Democrats slash free market era that many of us kind of started our careers in. I think that's less obvious in the UK, but I do think, you know, to our further discussion, I think we're probably exaggerating how dramatic some of these socialist tendencies are in the Labor Party.
Just to respond to your question, people say, you know, it's a good strap line in a TV hustings, and I'm sure Kenny, you know, says it to a great effect and indeed probably lives.
Trust would be the other one who thinks it.
But the problem is that once they are in government, possibly she's in government, or whoever wins it is in government in five years time, possibly when there is then something that is on the front pages and it runs and runs and runs. In reality, the prime minister's official spokesman because person gets asked about this, They get asked about it at PMQ's just the nature of our political
system demands that people are on the hook. And until you have a political class that is happy to say nothing to do with me, take the selsewhere, which we don't have. We don't have a media class that is prepared to think that that's an acceptable response either.
Slightly on us too, but a lot of this is just performative, isn't it. We didn't end up regulating the football market. We're not going to regulate the price of a rated tickets. We just say a few things and then everybody forgets about it.
I mean, you know, I think to Sebastian's question too about redistribution, when we start to talk about the tax structure, you know, we sometimes just frame this solely where our income taxes. Obviously this is of great interest in the UK right now, but I think in the UK only about ten percent of government revenue comes from corporate income taxes and about twenty percent comes from personal income taxes.
In the US, about fifty percent of government revenue is from personal income taxes and only ten percent from corporate taxes. And I think there's this sort of veil around this discussion in which we don't really just get it's sort of the core basic foundations of how the government creates and draws in revenue, Whether there's an equitable balance between
a corporate tax and a personal income tax. I would say that the personal income taxes as a percentage of the pie in both countries is wildly out of skew
relative to the corporate tax rates. And then what's the proper role for the government with that pot of money and a well run government, and it helps create economic opportunity, I think first and foremost, and there's a strong role for that, and I think that's where public policy should be geared towards, and it should be geared towards opportunity.
To go back, the inflation debate in.
The US is a small facet of a larger affordability debate.
Just to go quickly back to, I think we do have a very interesting model in Europe which we could in this country be moving closer to, which is the model that they have in Sweden, whereby you're allowed to use state money to send your children to private schools. You have a market, you have a vouch, your system,
you have no inheritance tax whatsoever. You actually, I think to Sweden has twice the number per capita of billionaires that the United States has, and yet there is a great sense that this country has lots of upward mobility. So I think it is possible to combine these two things. It's just that we in Britain are determined to go down exactly the wrong road.
And also, to answer Sebastian's point, I don't know how many of you here at watching Freddie Flinn toss Field of Dreams, but certainly I recommend it.
You recommend it.
It's amazing and he goes to press them where he grew up, and he actually acts like he teach them cricket and a lot. But he is a youth worker and we cut them that service to smithereens during the last ten to fifteen years of the last Conservative government. And I think that's something that a lot of Conservatives
would look back on and regret. And if you talk about social mobility, you know, it's one thing to talk about it in London and the southeast, but think about it in those incredibly poor towns and cities, towns mostly in the north, where kids don't have an adult.
Figure to look up to. How on earth you're.
Going to get any meritocracy going in those areas if you don't have a figure. I mean, they can't all have Freddie Flintoff, who is an electric character, but.
They can have and they did have.
And I think that's possibly because we had the pandemic and then the cost of living song. We haven't reflected on deficit reduction and whether it was done in the right way if you agree with it, A lot of people don't agree with it. But if you do agree with it, did they do the right cuts? And they cut youth services, they cut drug services, they cut social care. A lot of things became the crises of the last five years.
I think that is one of the great challenges, is whether you can shift from not just the focus on when we think about investment, not just physical infrastructure, but social infrastructure. I think social infrastructure has been so neglected on both sides of the Atlantic, and I think Allegria,
you're quite right, we're coming to an in now. I think to take us back to the success of the labor government is going to be partly about how it manages to narrow some of those gaps with the broader country. Whatever we might be thinking in the city, and certainly the result in November will have a lot to do with what those parts of America that we don't spend very much time are thinking about the future.