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Trump Says Gas Price Pain Short-Term · Balance of Power

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  Speaker 1: Bloomberg Audio Studios.
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  Speaker 2: Podcasts.
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  Speaker 1: Radio.
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  Speaker 3: News.
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  Speaker 4: You're listening to the Bloomberg Balance of Power podcast. Catch
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  Speaker 4: Listen on demand wherever you get your podcasts or watch
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  Speaker 4: us live on YouTube.
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  Speaker 5: Watching the markets before the Fed decision, we'll see what
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  Speaker 5: happens at 2 or maybe more specifically 2.30 p.m. Eastern
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  Speaker 5: when Kevin Warsh takes the podium and how he talks
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  Speaker 5: about the economy and the inflationary pressures in it which
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  Speaker 5: we know are fueling an affordability crisis that voters say
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  Speaker 5: is top of mind as they make their decisions in
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  Speaker 5: this midterm election which as we've told you is just
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  Speaker 5: six days away And President Trump is going to spend
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  Speaker 5: the bulk of the last six days, as he's spent
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  Speaker 5: the bulk of the last several weeks, traveling the country
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  Speaker 5: trying to rally support of his base on behalf of
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  Speaker 5: Republican candidates. It's to Ohio he goes today to boost
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  Speaker 5: the prospects for Republican incumbent Senator John Husted there. where,
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  Speaker 5: of course, it's looking like he is facing tough competition
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  Speaker 5: from former Senator Sherrod Brown. It's just one of a
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  Speaker 5: number of toss-up races where it could come down to
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  Speaker 5: the wire. These could be very close margins, ultimately, that
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  Speaker 5: we're dealing with, which does leave room for the question
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  Speaker 5: of whether the results will be questioned, perhaps by the
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  Speaker 5: president himself. That's actually something our colleague Jeff Mason asked
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  Speaker 5: the president about as he was en route to travels
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  Speaker 5: in Texas yesterday. Here was their exchange.
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  Speaker 6: Mr.
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  Speaker 2: President, if you do not prevail in this election, despite
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  Speaker 2: having worked as hard as you have, how do you
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  Speaker 2: intend to work with Democrats if they have control of
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  Speaker 2: the House or the Senate?
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  Speaker 3: We'll figure a way.
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  Speaker 1: Look, I have strong veto. I hope that that won't
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  Speaker 1: be the case.
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  Speaker 7: But if it is, that's happened before with many presidents.
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  Speaker 1: You have strong veto and you end up working out deals.
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  Speaker 2: And you'll respect the results, whatever happens?
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  Speaker 1: I will if they're honest elections. Okay, a lot there,
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  Speaker 1: and we start with the man who was asking those questions,
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  Speaker 1: Jeff Mason, Bloomberg News White House correspondent, is with us
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  Speaker 1: in studio today here in Washington. It's great to see you.
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  Speaker 8: You too.
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  Speaker 1: Jeff, happy Fed Day. As we count down to the announcement,
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  Speaker 1: we're talking politics as well, and an interesting posture for
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  Speaker 1: the president there. If it's honest, I guess we've heard
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  Speaker 1: that before, but I have a very powerful veto. If,
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  Speaker 1: in fact, we see a power shift on Capitol Hill—
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  Speaker 1: Gridlock is back in Washington.
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  Speaker 8: Oh, for sure.
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  Speaker 2: I mean, if the Democrats win one or both chambers,
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  Speaker 2: it will give them an opportunity to put up curbs
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  Speaker 2: against the president's agenda that.
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  Speaker 8: He has not faced over the last two years.
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  Speaker 2: But in the same way, let's say they win both
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  Speaker 2: chambers and want to show with their own legislative agenda
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  Speaker 2: that what their priorities are and maybe give a runway
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  Speaker 2: to the presidential candidates coming on their side of the aisle,
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  Speaker 2: then he's got that veto pen that he mentioned that
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  Speaker 2: will prevent those types of bits of legislation from turning
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  Speaker 2: into law.
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  Speaker 5: Of course, he's hoping that that is not what he
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  Speaker 5: ultimately has to do. He would like to see, at
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  Speaker 5: the very least, Republicans hold on to the Senate, which
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  Speaker 5: is why he is spending so much time in Senate
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  Speaker 5: contest areas in particular. How high is the bar in
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  Speaker 5: Ohio specifically, especially as the president has come out in
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  Speaker 5: full defense of the gubernatorial candidate on the Republican side,
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  Speaker 5: Vivek Ramaswamy, in that controversial ad featuring Amy Acton, his
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  Speaker 5: rival's estranged mother? Does Trump feel like they have a
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  Speaker 5: problem in Ohio?
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  Speaker 2: Well, I think the answer to that question is every
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  Speaker 2: single state that he's going to is a state where
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  Speaker 2: they think they have a problem. And so certainly Ohio
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  Speaker 2: is one of them. Texas yesterday was one of them.
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  Speaker 2: It is amazing from a political reporter's perspective slash longtime
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  Speaker 2: political watcher's perspective that he's having to go to all
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  Speaker 2: of these red states. But he is because his popularity
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  Speaker 2: is low, and that is dragging down some of his
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  Speaker 2: colleagues in the Republican Party. Specifically to the Ohio issue,
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  Speaker 2: I spoke to a GOP source last week who said, in.
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  Speaker 8: This person's view, that Vivek.
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  Speaker 2: Ramaswamy's ad in that race is was going to take
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  Speaker 2: his campaign as well as the Senator's campaign.
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  Speaker 8: So take Houston down with him. Bingo.
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  Speaker 1: How about that? President said last name is talks about
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  Speaker 1: John Houston, no matter what state he was in. I
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  Speaker 1: believe it was Texas last evening and we did talk
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  Speaker 1: a lot about him, Joe anatomy of the, uh, the
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  Speaker 1: former football player. He didn't want to go there with
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  Speaker 1: Ken Paxton, which is duly noted. But he said when
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  Speaker 1: he started talking about John Houston, yes, about his body parts,
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  Speaker 1: that his polling went up 12 points. we don't see
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  Speaker 1: public polls that support that, do we?
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  Speaker 8: Well, the public polls in that particular race do not
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  Speaker 8: have him up 12 points.
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  Speaker 7: Right.
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  Speaker 3: No.
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  Speaker 8: Otherwise, he also would not be needing to go to
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  Speaker 8: that state right now.
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  Speaker 2: So I, you know, sometimes you have to take the
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  Speaker 2: comments that the president makes with a grain of salt.
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  Speaker 2: I think probably this one with regard to polling, you can.
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  Speaker 2: What I'm curious to see tonight is how their interaction
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  Speaker 2: goes on the stage. I mean, clearly he wants the
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  Speaker 2: president there or he wouldn't be coming. But, you know,
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  Speaker 2: this is a conservative man who is maybe not delighted
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  Speaker 2: to hear the president of the United States talking about
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  Speaker 2: his physique.
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  Speaker 5: Trump is going to spend any time on the stage
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  Speaker 5: tonight talking perhaps about the Federal Reserve decision today. He's
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  Speaker 5: not shy about the fact that he wants to see
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  Speaker 5: lower rates, the lowest in the world, he repeatedly argues,
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  Speaker 5: because he views the United States is so creditworthy. If
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  Speaker 5: it's a pause today, how do you expect that sits
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  Speaker 5: with the president?
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  Speaker 8: Because if it's a hike.
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  Speaker 5: I would imagine that that probably would be received more
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  Speaker 5: poorly than just status quo.
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  Speaker 8: I think that's probably true.
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  Speaker 2: I think that anything that's not a reduction will not.
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  Speaker 8: Be what he wants to see.
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  Speaker 2: But I also think he's realistic about the prospects of that.
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  Speaker 2: So yeah, he'll surely be asked about it. I mean,
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  Speaker 2: he did take a lot of questions. We saw mine
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  Speaker 2: earlier yesterday. Maybe he'll take some more today on the
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  Speaker 2: tarmac on the way to Ohio. And no doubt he'll
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  Speaker 2: be asked about that. I don't know if he'll talk
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  Speaker 2: about it at the at the rally. But I do
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  Speaker 2: know just sort of broadly that having covered President Trump
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  Speaker 2: for a long time, the politics of grievance are key
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  Speaker 2: to who he is and how he defines himself as
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  Speaker 2: a leader and as a politician. And he has grievance
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  Speaker 2: against the Fed. The problem with his grievance there now
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  Speaker 2: is that his guy is leading the Fed. his guy
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  Speaker 2: was leading the fed for the previous two terms as well,
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  Speaker 2: to be clear.
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  Speaker 8: Um, he turned on him and.
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  Speaker 2: He turns on people and he might turn on Kevin Warsh,
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  Speaker 2: but at least for the last, you know, little bit
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  Speaker 2: of time since he's taken over, uh, the president has
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  Speaker 2: turned his criticism to the board without turning it at
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  Speaker 2: Kevin Warsh.
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  Speaker 8: We'll see if that changes.
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  Speaker 1: Really interesting. Jeff, thank you so much. Jeff Mason, Bloomberg news,
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  Speaker 1: white house correspondent headed back to the white house now
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  Speaker 1: by way of the cheesecake factory, uh, downtown Washington. Um,
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  Speaker 1: Affordability is a big one. We talked about the $ 23
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  Speaker 1: glam burger at the Cheesecake Factory yesterday, but it's oil
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  Speaker 1: that's in our view today. $ 116 a barrel for Brent,
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  Speaker 1: triple digits for WTI above $ 102 a barrel today. That's
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  Speaker 1: partly why interest rates are rising. And it was the
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  Speaker 1: foundation of our conversation earlier today with the Secretary of Energy,
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  Speaker 1: Chris Wright, who we caught up with at the Wisconsin
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  Speaker 1: Power and Light Plant in Beloit, Wisconsin, just above the
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  Speaker 1: Illinois border, talking about the DOE's more than $ 5 billion
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  Speaker 1: loan to Alliant that he was announcing today to try
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  Speaker 1: to strengthen grid reliability in Wisconsin and in Iowa. This
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  Speaker 1: follows his announcement with Constellation Energy yesterday, which was another
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  Speaker 1: $ 5 billion deal. And I started by asking him at
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  Speaker 1: what point, the timeline here, energy will in fact be
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  Speaker 1: surging into these states.
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  Speaker 3: Yeah, of course, this is capital infrastructure that's being built. So,
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  Speaker 3: you know, it'll take one, two, three years for this
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  Speaker 3: work to get done. But this is exactly what's needed.
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  Speaker 3: You've got to grow the available electricity and you've got
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  Speaker 3: to make it robust and reliable in the freezing cold
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  Speaker 3: of winter and the summer heats peaks in the summertime.
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  Speaker 1: Yeah, understood. I was reading your announcement on this. The
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  Speaker 1: subsidies here that we're talking about and that you're announcing
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  Speaker 1: today follow on the president strengthening the reliability and security
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  Speaker 1: of the electric grid, which we've talked about before here
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  Speaker 1: on Bloomberg. That EO was signed in April of 2025.
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  Speaker 1: So more than a year ago, yet this is being
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  Speaker 1: announced essentially on the eve of the midterm elections. Why
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  Speaker 1: not do this at the start of the energy crisis
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  Speaker 1: at the beginning of the Iran war?
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  Speaker 3: Oh, we've been working every day since I was sworn
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  Speaker 3: into the administration to deploy capital from the Energy Dominance
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  Speaker 3: Financing Office.
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  Speaker 8: It's our loan office.
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  Speaker 3: We're underwriting all kinds of loans that are low risk.
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  Speaker 3: so that taxpayers will get their money back, but that
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  Speaker 3: deliver cost advantages for energy across our country in all
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  Speaker 3: different sectors. This is utility sector, as you mentioned, but
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  Speaker 3: this is about math and humans. It'll lower the price
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  Speaker 3: spikes that come when it gets very cold in the
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  Speaker 3: winter or very hot in the summertime. It's a radical
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  Speaker 3: change from the DOE under the previous Democratic administration, where
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  Speaker 3: it was all about greenhouse gases, and they didn't even
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  Speaker 3: evaluate impacts on affordability. So we'll go all four years
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  Speaker 3: deploying capital that are going to deliver reliable, affordable energy
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  Speaker 3: for Americans to lower their costs and increase their job opportunities.
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  Speaker 4: I see.
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  Speaker 1: We're looking at higher prices for crude again today, Mr. Secretary.
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  Speaker 1: As you well know, we've got WTI above $ 102 and
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  Speaker 1: Brent approaching $ 116 a barrel here. And there's an expectation,
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  Speaker 1: at least in the market, that we'll be back to
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  Speaker 1: some level of kinetic activity in Iran or with Iran
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  Speaker 1: following the midterm elections. When you consider everything that's happened
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  Speaker 1: since the outset of this war, and recalling the Secretary
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  Speaker 1: of Defense in the second day of the operation saying,
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  Speaker 1: we have a plan for the strait. Was it the
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  Speaker 1: planning of the war or the management of the fallout
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  Speaker 1: by the energy Department that left us with such high
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  Speaker 1: prices for so long?
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  Speaker 3: Well, look, to go into a major energy-producing region of
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  Speaker 3: the world that the Middle East is and initiate kinetic conflict,
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  Speaker 3: of course, that's going to have an impact on energy supplies.
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  Speaker 3: But a nuclear-armed Iran would have enormous consequences, not just
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  Speaker 3: for long-term energy prices, but for peace and stability in
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  Speaker 3: the region. President Trump was simply not willing to hand
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  Speaker 3: his successor.
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  Speaker 8: A nuclear-armed Iran.
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  Speaker 1: I'm proud of his courage in doing that.
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  Speaker 3: But our energy policies every day are about addition of energy,
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  Speaker 3: about mitigating impacts from events like this, where the Democrats
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  Speaker 3: for 17 years have been about energy subtraction, closing coal plants,
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  Speaker 3: closing refineries, preventing the movement of energy around the world.
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  Speaker 3: So this is a short-term interruption in affordable energy, but
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  Speaker 3: it's for.
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  Speaker 1: A strategic reason.
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  Speaker 3: It's a structural problem with energy prices with Democrat energy
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  Speaker 3: subtraction policies.
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  Speaker 1: They're very different. Well, it's been a while since we've
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  Speaker 1: had Democrats in the White House, but I'm curious if
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  Speaker 1: you expect crude to retest highs if strikes resume in Iran.
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  Speaker 1: Should the market brace for that?
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  Speaker 3: I don't know what will come in the future, but
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  Speaker 3: I'll tell you, the United States military has done a
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  Speaker 3: tremendous job in keeping oil flowing out of that region
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  Speaker 3: despite the conflict. The high prices we see today are
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  Speaker 3: really about a shortage of refining around the planet, and
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  Speaker 3: we're doing a lot to expand refining capacity in the
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  Speaker 3: United States and to work with friends and allies abroad
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  Speaker 3: to increase the flow of refined products.
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  Speaker 1: You mentioned flows through the Strait.
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  Speaker 8: Mr.
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  Speaker 1: Secretary, it's been remarkable to see flows, at least on
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  Speaker 1: some days, return to pre-war levels. How much is the
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  Speaker 1: United States spending on a daily basis, on a nightly basis,
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  Speaker 1: for safe passage through the Strait?
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  Speaker 3: Look, I don't have specific numbers on that, but we've
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  Speaker 3: got large military forces deployed in the region. We're using
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  Speaker 3: forces that were already there in the region to escort
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  Speaker 3: those convoys out in the evening time. But there's no
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  Speaker 3: doubt that removing Iran's ability to develop a nuclear weapon,
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  Speaker 3: that comes at a cost. It's come at an economic cost.
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  Speaker 3: It's come at the cost of 18 brave American soldiers
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  Speaker 3: that have lost their lives in this conflict. But I
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  Speaker 3: think these costs are still modest when you compare what
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  Speaker 3: would this regime in Iran armed with nuclear weapons, what
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  Speaker 3: havoc would that bring?
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  Speaker 1: Well, it's been a boon for our oil companies. Of course,
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  Speaker 1: the president of the United States himself said that the U.S., is, quote,
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  Speaker 1: making a freaking fortune, unquote. We're seeing Exxon Chevron trading
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  Speaker 1: near all-time highs. The XLE, it's incredible. It just keeps rising, Mr. Secretary.
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  Speaker 1: The president said when he dropped that line, and he
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  Speaker 1: got some laughs when he said it, but his advisors
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  Speaker 1: told him not to say that in public. Were you
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  Speaker 1: one of them?
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  Speaker 3: No, I did not speak with the president about that.
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  Speaker 3: But this is a guy who's worked his whole career
• 13:02
  Speaker 3: to grow American energy production, to reduce energy prices.
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  Speaker 1: And look, it's the profit system.
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  Speaker 3: Capitalism, that's what grows energy production, not top-down government control
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  Speaker 3: of things. But of course, the goal of energy policy
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  Speaker 3: is to have low-cost, affordable energy. 100% of Americans consume
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  Speaker 3: oil and gas. Only about 1% of Americans work in
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  Speaker 3: the production of them.
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  Speaker 1: Mm-hmm. Understood. You know, the president was talking about solar
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  Speaker 1: last night, and it just— I recall conversations we had, Secretary,
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  Speaker 1: at the outset of the administration, and it was an
• 13:34
  Speaker 1: all-of-the-above approach, along with drill, baby, drill. But I think
• 13:38
  Speaker 1: you embraced an all-of-the-above approach for the most part. I
• 13:41
  Speaker 1: know the president is done with wind. He's essentially called
• 13:44
  Speaker 1: for the death of that industry. But last night, when
• 13:46
  Speaker 1: it comes to solar— He said the solar panels kill
• 13:50
  Speaker 1: all the animals, quote, the animals jump on them and
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  Speaker 1: they fry, unquote. If you look at shares of Enphase
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  Speaker 1: or First Solar, they've been left for dead, Mr. Secretary.
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  Speaker 1: Has the administration succeeded in killing both of these industries?
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  Speaker 3: What we killed was the subsidies for those industries and
• 14:08
  Speaker 3: the mandates that forced them onto grids driving up electricity prices.
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  Speaker 3: We want free market competition to decide the best way
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  Speaker 3: to deliver low-cost, affordable, reliable, secure energy. Where I am
• 14:22
  Speaker 3: here in Wisconsin, the previous Department of Energy wanted to
• 14:25
  Speaker 3: lend money up here about solar panels. Well, solar panels,
• 14:29
  Speaker 3: in the summertime, you get a lot of energy out
• 14:31
  Speaker 3: of them. In the wintertime, when it's cold and dark,
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  Speaker 3: they're completely worthless. They're just cost centers. So it's different
• 14:38
  Speaker 3: math in different places. But for us, it's not about politics.
• 14:42
  Speaker 3: It's not about this technology or that technology. It's about
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  Speaker 3: the American people. How can we deliver affordable, reliable, secure energy?
• 14:49
  Speaker 3: And subsidizing and forcing wind and solar onto electricity grids
• 14:54
  Speaker 3: around the.
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  Speaker 1: Country has been a disaster.
• 14:56
  Speaker 3: You can see it in the states with renewable portfolio
• 14:59
  Speaker 3: standards that have forced wind and solar. They have 50%
• 15:03
  Speaker 3: higher electricity prices than the states that don't have those.
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  Speaker 3: I haven't met anyone that wants their electrical bill to
• 15:08
  Speaker 3: go up 50%. People want their bills to go down.
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  Speaker 3: And that's what the Republicans and the Trump administration work
• 15:14
  Speaker 3: on every day.
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  Speaker 9: We're just doing the math.
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  Speaker 1: Well, you are the energy expert here. You actually worked
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  Speaker 1: in the industry before you became energy secretary. So I
• 15:22
  Speaker 1: just wonder, how do you look at solar, particularly when
• 15:24
  Speaker 1: it comes to data center? You know, we've heard a
• 15:26
  Speaker 1: lot of executives say that while they're lining up gas
• 15:29
  Speaker 1: turbines for now, solar to battery to prevent outages and
• 15:34
  Speaker 1: maintain consistency is going to be a really important part
• 15:36
  Speaker 1: of that energy chain. Is there a place in the
• 15:38
  Speaker 1: world for that technology from your view? Oh, absolutely.
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  Speaker 3: Oh, solar energy will continue to grow. It'll grow in
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  Speaker 3: a more sensible way now. It won't be subsidized. It
• 15:49
  Speaker 3: won't be some states will still force it onto the grid.
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  Speaker 3: But if it's in a competing in a marketplace, is
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  Speaker 3: there a role for solar energy?
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  Speaker 8: Absolutely.
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  Speaker 3: Is there a role for energy storage? Absolutely. In fact,
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  Speaker 3: this project we're on right up here, a lot of
• 16:04
  Speaker 3: it is energy storage, battery energy storage. and also liquefied
• 16:09
  Speaker 3: natural gas storage inland in our country. So very unique
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  Speaker 3: way of solving these peak demand times that really drive
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  Speaker 3: price and energy. So yes, there's a role for solar,
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  Speaker 3: there's a role for batteries, there's a role for all
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  Speaker 3: different kinds of energy technologies. But America's electrical grid today
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  Speaker 3: runs on natural gas, nuclear and coal, and that'll be
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  Speaker 3: true decades in the future as well. But do we
• 16:33
  Speaker 3: want to see fusion energy arrive? Absolutely.
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  Speaker 8: Do we want geothermal?
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  Speaker 1: Do we want solar where it makes sense?
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  Speaker 3: Absolutely.
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  Speaker 1: Fusion Energy. I look forward to that interview someday, Secretary.
• 16:44
  Speaker 1: I have to ask you before you leave us. I
• 16:47
  Speaker 1: know you're traveling, but you might have seen this report
• 16:49
  Speaker 1: in the Financial Times that the U.S. and Russia are
• 16:52
  Speaker 1: in active talks around energy companies collaborating, resuming some of
• 16:57
  Speaker 1: the joint ventures that ended with Russia's invasion of Ukraine.
• 17:01
  Speaker 1: Is the U.S. in active talks with Russian energy companies
• 17:05
  Speaker 1: to start working together again?
• 17:06
  Speaker 3: Look, I will say President Trump, since he arrived in office,
• 17:10
  Speaker 3: has looked at how do we end the Russia-Ukraine war.
• 17:13
  Speaker 3: You know, that was well along the way when this
• 17:15
  Speaker 3: administration was inaugurated. And it's just a brutal war that's
• 17:19
  Speaker 3: savaging the people of Ukraine. It's destroying the Russian economy.
• 17:23
  Speaker 3: He's looking for any creative way to create the right
• 17:27
  Speaker 3: incentives to end that war. That was the idea of
• 17:30
  Speaker 3: this for six months, just temporarily suspending the sanctions on
• 17:35
  Speaker 3: the export of diesel. not on oil, not on any
• 17:38
  Speaker 3: other Russian products, only on diesel.
• 17:40
  Speaker 8: And why diesel?
• 17:42
  Speaker 1: Two reasons.
• 17:43
  Speaker 3: One, the world is giantly short of diesel today. And two,
• 17:48
  Speaker 3: Russia cannot export diesel today because the war effort has
• 17:52
  Speaker 3: taken so much of their consumption of diesel and the
• 17:55
  Speaker 3: Ukrainians have knocked their refineries out so they can't even
• 17:58
  Speaker 3: produce enough diesel for their own demand. So the only
• 18:01
  Speaker 3: way Russia can benefit meaningfully from exporting diesel is to
• 18:04
  Speaker 3: turn down the war effort deliver a ceasefire on energy
• 18:08
  Speaker 3: or deliver a ceasefire.
• 18:09
  Speaker 1: On the war.
• 18:10
  Speaker 3: And in any of these efforts, if they lead to
• 18:12
  Speaker 3: an end of the.
• 18:13
  Speaker 1: War, there'll be home runs. Well, unfortunately, diesel's gone up
• 18:17
  Speaker 1: from 631 a week ago to 635 today. Was that
• 18:21
  Speaker 1: a yes on the U.S. talking with Russian oil companies?
• 18:25
  Speaker 8: That's a no comment on that.
• 18:26
  Speaker 3: But, of course, we're looking always for creative ways to
• 18:30
  Speaker 3: deliver this war and end this war. And diesel's still
• 18:33
  Speaker 3: down 20 cents a gallon from its.
• 18:35
  Speaker 1: Peak last month.
• 18:36
  Speaker 3: We will see it drop significantly, but to get there,
• 18:39
  Speaker 3: we need more refined diesel onto the global marketplace. That'll
• 18:43
  Speaker 3: likely come from increased exports out of the Arabian Gulf region.
• 18:48
  Speaker 3: We'll probably see China re-enter the diesel supply to the world,
• 18:52
  Speaker 3: but that's a challenge we're working on every day.
• 18:54
  Speaker 1: That's the Energy Secretary, Chris Wright, speaking with us from
• 18:57
  Speaker 1: Wisconsin a little bit earlier. Stay with us on Balance
• 19:00
  Speaker 1: of Power. We'll have much more coming up after this.
• 19:06
  Speaker 4: You're listening to the Bloomberg Balance of Power podcast. Catch
• 19:09
  Speaker 4: us live weekdays at noon and 5 p.m. Eastern on
• 19:13
  Speaker 4: Apple CarPlay and Android Auto with the Bloomberg Business app.
• 19:16
  Speaker 4: You can also listen live on Amazon Alexa from our
• 19:19
  Speaker 4: flagship New York station. Just say Alexa, play Bloomberg 1130.
• 19:25
  Speaker 1: We get a nice running start here at Bloomberg. And
• 19:27
  Speaker 1: I can tell you that Michael McKee and the rest
• 19:29
  Speaker 1: of the crew from Bloomberg News, they've made their way over.
• 19:32
  Speaker 1: to the Fed for this whole conversation that we will
• 19:36
  Speaker 1: be bringing to you live on Bloomberg. The announcement, the statement,
• 19:41
  Speaker 1: 2.30 will be the news conference. And of course, just
• 19:45
  Speaker 1: trains our attention back on prices. This is all we
• 19:47
  Speaker 1: talk about around here. I mean, I know it's Bloomberg,
• 19:49
  Speaker 1: but if you turn on any of the other three-letter
• 19:51
  Speaker 1: networks or cable news, they're talking about prices too. Affordability
• 19:56
  Speaker 1: is one word for it. The president hates that word.
• 19:58
  Speaker 1: He says it's a hoax, but we can talk about
• 20:00
  Speaker 1: it in terms of inflation or be more direct when
• 20:02
  Speaker 1: it comes to actual prices of gas and diesel. This
• 20:08
  Speaker 1: is Almost more important than a political poll at this point,
• 20:11
  Speaker 1: which is why we talk about it just about every day.
• 20:14
  Speaker 1: $ 4. 24 AAA has for national average gasoline. Diesel is at 635.
• 20:19
  Speaker 1: Getting back up from a week ago, 631, but still
• 20:24
  Speaker 1: below where we were a month ago. Crude oil is
• 20:27
  Speaker 1: the culprit today, and it's a big reason why we're
• 20:30
  Speaker 1: chewing our way through this here. $ 117 a barrel for Brent.
• 20:31
  Speaker 1: WTI is at 103. So Democrats think they have the
• 20:41
  Speaker 1: winning issue here. Many Republicans are worried that the president's
• 20:45
  Speaker 1: closing message is not meeting the moment. And that's why
• 20:50
  Speaker 1: guys like Jim Kessler are calling for a blue, not wave,
• 20:53
  Speaker 1: but tidal wave. The Democratic strategist from Third Way joined
• 20:58
  Speaker 1: us in studio earlier this week to make the case.
• 21:00
  Speaker 1: Here's what he said.
• 21:01
  Speaker 6: What I found striking about this poll, our last one
• 21:04
  Speaker 6: was in April. Everything has moved five or six points
• 21:08
  Speaker 6: towards Democrats in every single issue. Democrats are doing better
• 21:11
  Speaker 6: in that way. Trump is going down in that way.
• 21:14
  Speaker 6: It just feels not like a blue wave, but like
• 21:17
  Speaker 6: a blue tidal wave could be developing, in my view.
• 21:22
  Speaker 1: A blue tidal wave. That's not to be confused with
• 21:25
  Speaker 1: the blue tsunami. I don't know. Sometimes it gets to
• 21:28
  Speaker 1: be a little silly because it's hard to quantify these things.
• 21:31
  Speaker 1: So we like to talk numbers. How many seats do
• 21:33
  Speaker 1: we mean? In the House, were you really serious about
• 21:36
  Speaker 1: the Senate flipping? Looking at you, Texas. We're also looking
• 21:40
  Speaker 1: at you, Maine and New Hampshire. We never spend enough
• 21:44
  Speaker 1: time on New England. Maybe I'm biased because I'm from there.
• 21:46
  Speaker 1: But sometimes you need to go back up north to
• 21:50
  Speaker 1: get an honest take on things. And I've been looking
• 21:53
  Speaker 1: forward to spending some time with Colin Reade. a Republican
• 21:56
  Speaker 1: strategist you've met before here on Bloomberg, but it's been
• 21:59
  Speaker 1: too long. He's partners with the great Lizzie Guyton at
• 22:01
  Speaker 1: the firm South & Hill Strategies and with us here
• 22:04
  Speaker 1: in our studios. Colin, great to see you. Welcome back.
• 22:07
  Speaker 9: What a treat.
• 22:07
  Speaker 1: Yeah, well, thank you. We've got a lot to talk
• 22:10
  Speaker 1: about here, and I really want to get a sense
• 22:12
  Speaker 1: of where your head is broadly when you hear someone
• 22:14
  Speaker 1: like Jim Kessler speak. Do you want to pull him
• 22:16
  Speaker 1: in off the ledge? What's your view?
• 22:18
  Speaker 10: Well, look, through a Republican lens, I've heard the blue
• 22:20
  Speaker 10: wave perspective, and I've also heard the red undertow.
• 22:23
  Speaker 1: Okay, yeah.
• 22:24
  Speaker 10: And the red undertow could be Republican voters or Republican-leaning voters.
• 22:27
  Speaker 9: Who decide to sit it out next week.
• 22:29
  Speaker 10: And sitting it out is not as bad as voting
• 22:30
  Speaker 10: for the blue team if you're a Republican, but it's
• 22:32
  Speaker 10: not good either. So through a macro lens, let's look
• 22:35
  Speaker 10: at it in the good, the bad, the ugly for Republicans.
• 22:37
  Speaker 4: The good?
• 22:39
  Speaker 9: The Senate map runs through red states. The bad?
• 22:42
  Speaker 10: The Senate map runs through red States and the ugly
• 22:46
  Speaker 10: is the public's perception of the economic stewardship of Donald
• 22:49
  Speaker 10: Trump and how they feel about their economic issues. And frankly,
• 22:53
  Speaker 10: because of that, it makes it really challenging for Republican
• 22:56
  Speaker 10: candidates to talk about the things that they want to
• 22:58
  Speaker 10: talk about, which is drawing that sharp contrast on issues
• 23:01
  Speaker 10: like socialism and the rise of the DSA and the
• 23:03
  Speaker 10: democratic party, what that could portend for the makeup of
• 23:06
  Speaker 10: Congress next year, the presidential race thereafter. There's too much
• 23:09
  Speaker 10: noise to really drive that message. And that's making it
• 23:11
  Speaker 10: really tough for Republican candidates to separate and draw that contrast.
• 23:15
  Speaker 1: So when we add up the good, the bad, and
• 23:16
  Speaker 1: the ugly, do you believe that the Senate will flip?
• 23:20
  Speaker 1: Or are you holding out hope that it's just the House?
• 23:23
  Speaker 10: I think from a Republican perspective, the conditions have gotten
• 23:26
  Speaker 10: better since a month ago. A month ago, it did
• 23:27
  Speaker 10: look like that blue tsunami was going to hit the shore.
• 23:29
  Speaker 1: What's changed?
• 23:30
  Speaker 10: I think what's changed is Republican voters tend to lock
• 23:32
  Speaker 10: in a little bit later, and they tend to focus
• 23:35
  Speaker 10: in later in the election cycle, especially when there's a Republican.
• 23:38
  Speaker 9: President at the Democratic base. We know they're mad. They're angry.
• 23:40
  Speaker 10: We've seen this in 2018 for President Trump's other midterms.
• 23:43
  Speaker 10: The other thing that I think has happened over the
• 23:44
  Speaker 10: last four weeks or so is this president has worked
• 23:47
  Speaker 10: tirelessly in red states.
• 23:49
  Speaker 1: Yes, right.
• 23:49
  Speaker 10: And that majority goes to places where he's won by 14, 13, 11, 10.
• 23:52
  Speaker 10: These were not close places. And those candidates in those
• 23:56
  Speaker 10: states don't need to win by those two touchdown margins.
• 23:59
  Speaker 10: They just need to win by a field goal or
• 24:01
  Speaker 10: even less, 50 plus one.
• 24:03
  Speaker 1: So the travel's helping because a lot of the narrative was,
• 24:06
  Speaker 1: oh boy, nobody wants Trump in their backyard because he's
• 24:08
  Speaker 1: going to take points away. But if you're in a
• 24:10
  Speaker 1: state like Kansas or Texas- This is a good thing.
• 24:13
  Speaker 9: Sure does.
• 24:13
  Speaker 10: And there's a reason you haven't seen him in New
• 24:15
  Speaker 10: England for John Sununu or Susan Collins because his numbers
• 24:18
  Speaker 10: up there are not helpful. They are a strong headwind
• 24:21
  Speaker 10: to those candidates. Those are two battle-tested, seasoned incumbents or
• 24:26
  Speaker 10: former senator in John Sununu's case who know that, who
• 24:29
  Speaker 10: also know how to run and compete and win apart
• 24:32
  Speaker 10: from a really toxic national brand right now.
• 24:35
  Speaker 1: Fascinated by it. Let's just get into New Hampshire. You
• 24:38
  Speaker 1: saw the closing ad. I've never met the man. Really
• 24:43
  Speaker 1: fascinating because Chris Pappas, who was the Democratic opponent in
• 24:47
  Speaker 1: this case, congressman, is trying to do the, you know,
• 24:51
  Speaker 1: the Trump Sununu message. And he says, actually, you know,
• 24:57
  Speaker 1: despite the fact that I've never met the man is
• 25:00
  Speaker 1: the closing message for the Republican nominee in New Hampshire.
• 25:06
  Speaker 1: Forget distancing yourself. Have you ever seen anything like this?
• 25:09
  Speaker 9: Well, it's a blue state.
• 25:10
  Speaker 10: New Hampshire hasn't voted Republican at the presidential level in.
• 25:12
  Speaker 9: A quarter level.
• 25:13
  Speaker 1: To have to say it, though, is pretty remarkable.
• 25:15
  Speaker 9: Well, but look at the polls. Look at the president's
• 25:16
  Speaker 9: numbers up there. He's not popular.
• 25:18
  Speaker 10: And if this becomes a referendum on President Trump, John
• 25:20
  Speaker 10: Sununu will not win.
• 25:21
  Speaker 9: John Sununu knows that. John Sununu also.
• 25:23
  Speaker 10: Knows he has a brand that's durable and rises above
• 25:26
  Speaker 10: the partisan politics. And he knows he's running against a
• 25:28
  Speaker 10: guy in Chris Pappas who... The New Hampshire Democrats, to
• 25:31
  Speaker 10: their credit, frankly, they do a very good job as
• 25:33
  Speaker 10: presenting themselves as these ideological, middle-of-the-road, milquetoast, inoffensive Democrats.
• 25:39
  Speaker 9: Chris Pappas is a young guy.
• 25:41
  Speaker 10: If he wins that seat next year, he'll be a
• 25:42
  Speaker 10: member of the Senate for the next half a century,
• 25:44
  Speaker 10: and he'll be voting down the line for all those
• 25:46
  Speaker 10: DSA policies that we talked about. So that's not in
• 25:50
  Speaker 10: line with the New Hampshire way of perspective right now
• 25:52
  Speaker 10: as well, but it's just so challenging in this Trump
• 25:54
  Speaker 10: environment to drive a message like that because everything else
• 25:57
  Speaker 10: drowns it out.
• 25:58
  Speaker 7: Wow, yeah.
• 25:59
  Speaker 1: Well, and he wants— uh, everyone to know Sununu wants
• 26:02
  Speaker 1: everyone to know that Chris Pappas just wants to be
• 26:04
  Speaker 1: a millionaire. I was up in new England a couple
• 26:05
  Speaker 1: of weekends ago, inundated by, and I'm in mass because
• 26:08
  Speaker 1: you have to buy Boston to get on the air
• 26:09
  Speaker 1: in Southern New Hampshire, right? Oh my God. I mean,
• 26:12
  Speaker 1: every break had at least one from both candidates and
• 26:15
  Speaker 1: some had multiple ads from the same campaign. So people
• 26:19
  Speaker 1: are pulling their hair out, but I have to admit
• 26:21
  Speaker 1: this one did kind of make me chuckle. Watch and listen.
• 26:24
  Speaker 7: Chris Pappas wanted to be a millionaire, but it was
• 26:28
  Speaker 7: Congress that made him rich. His bank account soared. His
• 26:33
  Speaker 7: lobbyist spouse's career, a success. And Pappas helped his employer
• 26:37
  Speaker 7: get favorable treatment.
• 26:41
  Speaker 1: So he was actually on who wants to be a
• 26:43
  Speaker 1: millionaire and they turned this into a commercial. Is that
• 26:46
  Speaker 1: message sticking in New Hampshire?
• 26:49
  Speaker 10: Well, it's the kind of message that disqualifies your opponent,
• 26:51
  Speaker 10: not on ideological grounds where you're not going to win
• 26:54
  Speaker 10: in a blue state as Republican and not on economic
• 26:56
  Speaker 10: grounds where you're not.
• 26:57
  Speaker 9: Going to win as Republican anywhere right now.
• 26:59
  Speaker 10: But what you're doing is you're disqualifying your opponent as
• 27:02
  Speaker 10: somebody who's unfit for the office for their own personal reasons.
• 27:05
  Speaker 10: Chris Pappas hasn't been around a whole long time, so
• 27:08
  Speaker 10: he's got a very thin resume.
• 27:09
  Speaker 8: Interesting.
• 27:10
  Speaker 9: There's not a lot to pull from, so that's the
• 27:11
  Speaker 9: kind of thing.
• 27:12
  Speaker 10: This idea that members of Congress, they get elected in
• 27:14
  Speaker 10: their states, they come down here, they enrich themselves, it's
• 27:16
  Speaker 10: disgusting everywhere, but especially in a place like New Hampshire,
• 27:19
  Speaker 10: that flinty New England.
• 27:20
  Speaker 7: That message works.
• 27:21
  Speaker 9: Correct.
• 27:21
  Speaker 1: Yeah. Some of the other ads are referring to his husband.
• 27:25
  Speaker 1: There's definitely trying to identify Chris Pappas as someone who
• 27:30
  Speaker 1: is not like the average voter in New Hampshire.
• 27:33
  Speaker 10: And it speaks to kind of the populist themes coursing
• 27:35
  Speaker 10: through both parties right now. This idea that politicians come
• 27:38
  Speaker 10: down here not to do the public bidding but to
• 27:40
  Speaker 10: enrich themselves, that's something that can turn off not only
• 27:43
  Speaker 10: Republican voters but also independent voters who, as you know,
• 27:45
  Speaker 10: the largest voting bloc by far in the state of
• 27:48
  Speaker 10: New Hampshire.
• 27:48
  Speaker 9: So you can't just pull out your own party. You've
• 27:50
  Speaker 9: got to win that sector in the middle.
• 27:51
  Speaker 1: So what's the Sununu brand worth? Because a couple of
• 27:53
  Speaker 1: weeks ago, to your point, when things felt like they
• 27:55
  Speaker 1: were kind of bottoming for Republicans, they thought, boy, you know,
• 27:58
  Speaker 1: Red Undertow, which was, I believe, the Charlie Cook line,
• 28:01
  Speaker 1: could even claim a guy like Sununu with a name
• 28:03
  Speaker 1: like that at Dynasty in New Hampshire. How about you?
• 28:07
  Speaker 10: Well, John Sununu– first of all, John Sununu has no
• 28:09
  Speaker 10: business competing in an environment like this, in a state
• 28:11
  Speaker 10: like this.
• 28:12
  Speaker 9: It's a blue state. It hasn't voted Republican in forever.
• 28:15
  Speaker 10: And with a national environment this bad, the fact that
• 28:18
  Speaker 10: we're even talking about this race six days from Election
• 28:20
  Speaker 10: Day speaks to the strength of the Sununu name.
• 28:22
  Speaker 1: He's actually had the job though. I mean that's worth something,
• 28:25
  Speaker 1: isn't it?
• 28:25
  Speaker 9: He has had the job.
• 28:26
  Speaker 10: But in an anti-incumbent mood, it's not always necessarily the
• 28:28
  Speaker 10: most valuable thing. So look– I think this will be
• 28:31
  Speaker 10: the interesting thing when this cycle, six, seven days from now,
• 28:33
  Speaker 10: we can have this discussion more fully.
• 28:35
  Speaker 1: Let's do that.
• 28:35
  Speaker 10: The Republicans who are actually running really well right now
• 28:38
  Speaker 10: are in blue states, whether it's Michelle Tafoya in Minnesota,
• 28:40
  Speaker 10: whether it's Johnson in New Hampshire, Susan Collins and.
• 28:43
  Speaker 9: Mike Rogers in Michigan. Those are all blue states by
• 28:45
  Speaker 9: and large.
• 28:46
  Speaker 10: And these Republican candidates who are lagging so far behind
• 28:48
  Speaker 10: and draining precious resources, they're the ones who are more
• 28:51
  Speaker 10: likely to get across the finish line, do only, not
• 28:54
  Speaker 10: to their own credit, not to their own strengths, but
• 28:55
  Speaker 10: only by the fact that their states are so red.
• 28:58
  Speaker 10: But not for some, take the quarter billion dollars that's
• 29:00
  Speaker 10: going to be spent in outside ads in Texas. Had
• 29:02
  Speaker 10: some of that been diverted to some of those blue states,
• 29:04
  Speaker 10: we might be looking at a whole lot different map.
• 29:06
  Speaker 1: Of course, Maine is kind of a unicorn. And I
• 29:07
  Speaker 1: want to ask you about that race. Susan Collins, I'm
• 29:11
  Speaker 1: told every day, you never count out Susan Collins, right?
• 29:15
  Speaker 1: More or back-to-back votes than anyone in the history of
• 29:18
  Speaker 1: the Senate, I think, constantly undervalued by pollsters. But you
• 29:22
  Speaker 1: just said there's an anti-incumbent mood in the country. How
• 29:26
  Speaker 1: do those collide in Maine?
• 29:27
  Speaker 9: Well, in Maine, we could be having this conversation six
• 29:30
  Speaker 9: years ago. Maybe we were.
• 29:31
  Speaker 10: It's a tale as old as time. Democrats always insist
• 29:34
  Speaker 10: this is the year. Susan Collins is not going to
• 29:36
  Speaker 10: be able to outrun her party. We're going to get her.
• 29:38
  Speaker 10: You remember in 2020, she was down by eight, nine points.
• 29:41
  Speaker 10: She won by a huge margin in the end.
• 29:43
  Speaker 1: You see that again.
• 29:44
  Speaker 9: She's durable. She's an institution. She's a force unto herself.
• 29:47
  Speaker 9: She's been there for so long. People know her.
• 29:49
  Speaker 10: They like her. They understand what she's delivered for the state.
• 29:51
  Speaker 10: And by the way, that is, so that's going in
• 29:54
  Speaker 10: Susan Collins's favor. The national environment is not going in
• 29:56
  Speaker 10: her favor, but then there's the car wreck that has
• 29:59
  Speaker 10: been the democratic process and the other side. And what
• 30:01
  Speaker 10: happened with Graham Plattner was a huge national scandal and embarrassment.
• 30:04
  Speaker 10: And then this, this guy they've managed to replace him
• 30:06
  Speaker 10: with has hardly acquitted himself well during his time.
• 30:09
  Speaker 1: Well, it's going to say a heck of a lot
• 30:10
  Speaker 1: with heating oil prices at record highs in, Republicans winning
• 30:14
  Speaker 1: Senate seats in New Hampshire and Maine. If this does
• 30:18
  Speaker 1: happen the way Colin Reid sees it. It's great to
• 30:21
  Speaker 1: have you. Thank you. Are we due next week? Maybe
• 30:23
  Speaker 1: we can do that. Producer James, talk in a week
• 30:25
  Speaker 1: about how we did. South and Hill Strategy. Say hi
• 30:28
  Speaker 1: to Lizzie for us. Bring her with you too. This
• 30:31
  Speaker 1: is Bloomberg. Stay with us on Balance of Power. We'll
• 30:33
  Speaker 1: have much more coming up after this.
• 30:38
  Speaker 4: You're listening to the Bloomberg Balance of Power podcast. Catch
• 30:42
  Speaker 4: us live weekdays at noon and 5 p.m. Eastern on
• 30:45
  Speaker 4: Apple CarPlay and Android Auto with the Bloomberg Business app.
• 30:48
  Speaker 4: You can also listen live on Amazon Alexa from our
• 30:51
  Speaker 4: flagship New York station. Just say Alexa, play Bloomberg 1130.
• 30:57
  Speaker 1: Six days out to the elections. Boy, we are packing
• 31:00
  Speaker 1: it in this week, right? It's Fed Day, six days
• 31:02
  Speaker 1: to the elections. And of course, we've got the big
• 31:05
  Speaker 1: old tech earnings that start pouring out here in earnest
• 31:08
  Speaker 1: this evening with our eyes on the likes of Microsoft,
• 31:11
  Speaker 1: Amazon haven't reported yet. So, you know, fasten the chin strap,
• 31:16
  Speaker 1: especially if you're in the state of Ohio. That's where
• 31:18
  Speaker 1: the president's going today. He's back to Ohio. to see
• 31:22
  Speaker 1: his favorite football player turn senator, John Husted, and maybe
• 31:26
  Speaker 1: Vivek Ramaswamy. Is he going to be at the event,
• 31:28
  Speaker 1: maybe pick up the child at the podium once again?
• 31:32
  Speaker 1: I bring it up because everybody's still talking about the ad.
• 31:35
  Speaker 1: Last time we talked to Gotham was like the day
• 31:37
  Speaker 1: that the ad came out, right? This is the ad
• 31:40
  Speaker 1: about Amy Acton featuring her estranged mother. I have to
• 31:43
  Speaker 1: go through this every time, even though you know what
• 31:45
  Speaker 1: I'm talking about. Called her daughter a liar. And the
• 31:48
  Speaker 1: president has been backing Vivek Ramaswamy, who put $ 4 million
• 31:52
  Speaker 1: behind this ad that seems to have offended everybody with
• 31:54
  Speaker 1: a D or an R next to their name, with
• 31:56
  Speaker 1: the exception of Donald Trump. Call it a gift from above.
• 31:59
  Speaker 1: He said, you don't not use a gift like that.
• 32:04
  Speaker 1: The thing is, it appears to have not been, well,
• 32:07
  Speaker 1: a very good gift. We have new numbers out from
• 32:10
  Speaker 1: Suffolk University. Look at this poll. Taking a look at
• 32:13
  Speaker 1: the race itself, Ramaswamy 44, Acton 48, hmm, undecided 3%.
• 32:21
  Speaker 1: But specific to the ad, the folks at Suffolk, David
• 32:27
  Speaker 1: Paliologos is the force behind this shop. You've heard him
• 32:30
  Speaker 1: and seen him on this show before. 72% of likely
• 32:34
  Speaker 1: voters statewide say they have seen or heard about the
• 32:37
  Speaker 1: Ramaswamy ad featuring Acton's estranged mother. But fewer than 1%
• 32:44
  Speaker 1: say it shifted them from Acton to Ramaswami. In fact, 2%
• 32:51
  Speaker 1: of those who have seen or heard about the ad
• 32:55
  Speaker 1: say they went from Ramaswami to Acton. And we asked
• 32:58
  Speaker 1: about this last week. Could this potentially splash back on
• 33:03
  Speaker 1: Vivek Ramaswami and help his opponent? The researchers at Suffolk said, yeah,
• 33:09
  Speaker 1: that's exactly what we found. He's writing for us at
• 33:13
  Speaker 1: Bloomberg Opinion. He's also a lecturer at Yale Law School
• 33:15
  Speaker 1: of Management. Gautam Mukunda, aforementioned, is back in studio here
• 33:19
  Speaker 1: in Washington. I think you called that, didn't you?
• 33:22
  Speaker 8: Yeah, it's not even that surprising.
• 33:24
  Speaker 11: It's so transparently an awful ad, even by the degraded
• 33:28
  Speaker 11: standards of our current politics.
• 33:30
  Speaker 1: That's saying a lot.
• 33:30
  Speaker 11: So reprehensible that you have to be so internet-based. Your
• 33:37
  Speaker 11: brain has to be so stewed in the bowels of
• 33:39
  Speaker 11: the internet to think this was a good idea that
• 33:42
  Speaker 11: it wasn't just that it was going to be bad.
• 33:44
  Speaker 11: It tells you something about how dysfunctional this campaign is.
• 33:48
  Speaker 11: That the people, that no one around Vivek went to
• 33:50
  Speaker 11: him and said, are you out of your mind?
• 33:52
  Speaker 1: Yeah.
• 33:53
  Speaker 11: Well, and what's more, as the details come out about
• 33:55
  Speaker 11: this ad, every piece of detail gets worse, right? So
• 33:57
  Speaker 11: now we find out that the mother who's in this
• 34:00
  Speaker 11: ad is living in her car in a parking lot,
• 34:03
  Speaker 11: has cognitive, like psychological problem. So basically you add onto
• 34:07
  Speaker 11: this disgusting thing that they add elder abuse of this person.
• 34:10
  Speaker 1: And yeah, every part of it is, they haven't spoken
• 34:13
  Speaker 1: since Amy Acton was 12 or something.
• 34:14
  Speaker 6: Right.
• 34:15
  Speaker 1: Um, so her judgment upon, Amy Acton being a liar
• 34:20
  Speaker 1: is based on her life up to being a 12
• 34:22
  Speaker 1: year old.
• 34:23
  Speaker 8: Yes.
• 34:23
  Speaker 11: And it's based on, you know, this is the, this
• 34:26
  Speaker 11: is the sort of paradox they've caught themselves in.
• 34:28
  Speaker 10: Right.
• 34:29
  Speaker 11: So she's saying that Acton is a liar because of
• 34:31
  Speaker 11: the abuse allegations, which of course have now been verified
• 34:34
  Speaker 11: by multiple people. So even there, but it is all,
• 34:37
  Speaker 11: it's all, then they're saying, well, no, it's about the
• 34:39
  Speaker 11: fact that she lied in her public life. Nothing that
• 34:42
  Speaker 11: they're doing about this makes sense. And it's a pure spiral.
• 34:44
  Speaker 11: And I, I mean, if this was like, it's almost
• 34:49
  Speaker 11: like taking some combination of malice and incompetence and making
• 34:53
  Speaker 11: it performance art. Because after they put this out and
• 34:57
  Speaker 11: they took all of the hits for doing this and
• 35:00
  Speaker 11: said they were going to do the $ 4 million, they
• 35:02
  Speaker 11: yanked it back. So at every step on the way,
• 35:05
  Speaker 11: they managed to do both the morally reprehensible thing and
• 35:09
  Speaker 11: the ineffective thing.
• 35:11
  Speaker 8: At some level, you have to admire it.
• 35:12
  Speaker 1: The headline at Cleveland.com, Amy Acton's mother was convicted of
• 35:17
  Speaker 1: animal neglect, bad check offense records show. Could have vetted that.
• 35:23
  Speaker 1: A little bit. Maybe they knew that. The idea, though,
• 35:26
  Speaker 1: that it's a gift, as the president suggested, if this
• 35:29
  Speaker 1: falls in your lap, how do you not use it?
• 35:30
  Speaker 1: The person's mother is calling them a liar. That, in
• 35:33
  Speaker 1: a vacuum, might make sense.
• 35:35
  Speaker 8: It did.
• 35:36
  Speaker 11: And when it first came out, you saw the conservative
• 35:39
  Speaker 11: influencers on Twitter posting about it and being like, this
• 35:41
  Speaker 11: is the end of the Acton campaign.
• 35:42
  Speaker 10: Right.
• 35:43
  Speaker 11: And if you spent like 30 seconds digging into it,
• 35:45
  Speaker 11: it was really clear. I think that some of this is,
• 35:48
  Speaker 11: you know, Donald Trump has an ability to do stunts
• 35:52
  Speaker 11: like this. that no one else can do. And it's really,
• 35:58
  Speaker 11: whatever else you say about him, he has this, you know,
• 36:00
  Speaker 11: whether it's comic timing, charisma, whatever it.
• 36:03
  Speaker 8: Is, he can do it.
• 36:04
  Speaker 1: But don't try to do it yourself.
• 36:06
  Speaker 11: So back when I was teaching at HBS, one of
• 36:09
  Speaker 11: my colleagues was, was, you know, just widely acknowledged as
• 36:11
  Speaker 11: the best teacher in the school, maybe in the world,
• 36:13
  Speaker 11: like super nice.
• 36:15
  Speaker 8: And I would sit in his classroom and watch him.
• 36:17
  Speaker 10: Hmm.
• 36:18
  Speaker 8: And I'd see the things that he would do.
• 36:19
  Speaker 3: Yeah.
• 36:20
  Speaker 8: And then I would try to do them. The students
• 36:21
  Speaker 8: would be like, it works for him, but it doesn't
• 36:26
  Speaker 8: work for you.
• 36:27
  Speaker 1: There's a lesson there. So let's, let's pull up the
• 36:29
  Speaker 1: jet and do some 30,000 foot views here because it
• 36:34
  Speaker 1: seems like we're learning a couple of lessons in this campaign.
• 36:39
  Speaker 1: Advertising hundreds of millions spent on these races that are
• 36:44
  Speaker 1: too close to call Texas and You can go up
• 36:47
  Speaker 1: to Michigan, pick your race. Suggesting money isn't just not everything,
• 36:55
  Speaker 1: but maybe just doesn't work that well in politics, particularly
• 36:58
  Speaker 1: if you have a bad candidate. Ad like this actually
• 37:01
  Speaker 1: favors the other candidate. So ads aren't necessarily working all
• 37:06
  Speaker 1: that much as well. Is this campaign going to rewrite
• 37:09
  Speaker 1: the rules going forward?
• 37:11
  Speaker 8: So, no.
• 37:12
  Speaker 1: I don't mean Ohio. I mean this whole midterm cycle.
• 37:15
  Speaker 11: I don't think so because what this really is telling
• 37:16
  Speaker 11: us is a few things that we already knew. One
• 37:18
  Speaker 11: is this late in the game, it's baked. Come on.
• 37:21
  Speaker 8: Who's going to change their mind.
• 37:23
  Speaker 1: Between now and Tuesday? You can't spend enough money though
• 37:24
  Speaker 1: right now.
• 37:25
  Speaker 11: So the second is we've always known that there was
• 37:28
  Speaker 11: a diminishing returns to campaign spending. And in fact, a
• 37:31
  Speaker 11: lot of the evidence in the political science literature says
• 37:33
  Speaker 11: that it wasn't that like candidates won because they had
• 37:36
  Speaker 11: lots of money. It's that the money flowed to strong candidates.
• 37:39
  Speaker 11: And so the causation went the other way. And now
• 37:42
  Speaker 11: it's not to say.
• 37:42
  Speaker 8: That it doesn't matter. Like if you can't raise money,
• 37:44
  Speaker 8: you can't run. It has an impact.
• 37:45
  Speaker 11: And where it really has an impact is less, I think,
• 37:48
  Speaker 11: electing candidates than on specific policy issues where there are
• 37:51
  Speaker 11: candidates who just, I don't want to fight crypto. There
• 37:54
  Speaker 11: is no world where crypto regulation in the United States
• 37:57
  Speaker 11: looks like it does today without the absolute tidal waves
• 38:00
  Speaker 11: of crypto money that flowed into races and probably knocked
• 38:03
  Speaker 11: out Sherrod Brown two years ago.
• 38:04
  Speaker 8: And everybody took the object lesson from that. They're like, okay,
• 38:07
  Speaker 8: let's not do this.
• 38:08
  Speaker 11: But what we're really seeing is that 20 years ago,
• 38:12
  Speaker 11: we used to tell people that the highest ROI investment
• 38:15
  Speaker 11: any company would make was lobbying spending and campaign spending
• 38:17
  Speaker 11: because the returns were so high compared to the amount
• 38:19
  Speaker 11: of money.
• 38:20
  Speaker 8: That's just not true anymore.
• 38:21
  Speaker 11: We've crossed the diminishing returns point where Elon Musk can
• 38:24
  Speaker 11: write $ 500 million in checks.
• 38:27
  Speaker 8: It's not clear it's helping anybody.
• 38:29
  Speaker 6: Right.
• 38:29
  Speaker 1: So maybe we rewrite the rules depending on the campaign?
• 38:33
  Speaker 1: I mean, Donald Trump is the king of earned media,
• 38:36
  Speaker 1: yet we're spending more than ever on this cycle.
• 38:40
  Speaker 11: So partly Donald Trump is the greatest earned media genius.
• 38:43
  Speaker 11: It's the same thing. What he can do, you can't do, right?
• 38:46
  Speaker 11: So that's part of it. But the second part I
• 38:49
  Speaker 11: think is also that you've started to see– it used
• 38:51
  Speaker 11: to be that there were people who had essentially unlimited
• 38:54
  Speaker 11: financial resources. And there was this idea that you didn't
• 38:57
  Speaker 11: want to be out there in the lead spending huge
• 39:00
  Speaker 11: amounts of money.
• 39:00
  Speaker 8: Like John D. Rockefeller had more money than the rest
• 39:02
  Speaker 8: of the country put together.
• 39:03
  Speaker 6: Right.
• 39:04
  Speaker 8: But he didn't use it this way.
• 39:06
  Speaker 11: That norm has collapsed, probably with Citizens United, but for
• 39:10
  Speaker 11: whatever reason, a lot of reasons, I think, where it
• 39:12
  Speaker 11: is just normal for people of unimaginable wealth to spend
• 39:17
  Speaker 11: $ 100 million on a political campaign.
• 39:18
  Speaker 8: And once you break that barrier, you're off to the races.
• 39:22
  Speaker 1: Yeah. There could be something else that we do differently
• 39:26
  Speaker 1: from now on, which is lawyer up. The president has
• 39:29
  Speaker 1: already filed one lawsuit, Department of Justice has, in Alaska.
• 39:33
  Speaker 1: There's some reporting on that, by the way, that's going
• 39:34
  Speaker 1: to make that a little more complicated. But lawyers, guns
• 39:39
  Speaker 1: and money are being reserved for some big cases maybe
• 39:43
  Speaker 1: as soon as next Tuesday. Is that just the new
• 39:46
  Speaker 1: normal for our elections?
• 39:48
  Speaker 8: It is, and it's always been in the background.
• 39:49
  Speaker 1: It will continue to be?
• 39:51
  Speaker 8: I hope not.
• 39:51
  Speaker 1: It gets worse?
• 39:53
  Speaker 8: It's been in the background.
• 39:54
  Speaker 11: I remember in 2000 talking with a lawyer for the
• 39:56
  Speaker 11: Bush campaign who was basically saying, we have lawsuits in
• 40:01
  Speaker 11: court that are prepared if it goes where Al Gore
• 40:04
  Speaker 11: wins the popular vote, and they were ready. I think
• 40:10
  Speaker 11: what's really frightening about this, and it is frightening because
• 40:13
  Speaker 11: I don't know where we go from here, is that
• 40:17
  Speaker 11: The thing that political scientists have said for a long
• 40:19
  Speaker 11: time about the American government that never percolated out of
• 40:21
  Speaker 11: political science world, this was like a theme of my
• 40:23
  Speaker 11: second book, is the American government really ran by mutual consent.
• 40:28
  Speaker 11: It had a lot of structures that were designed with
• 40:31
  Speaker 11: the idea that the people with power would say, I
• 40:34
  Speaker 11: would rather lose an election than break the system. And,
• 40:37
  Speaker 11: you know, at the most obvious level, right, we prosecute,
• 40:41
  Speaker 11: the Justice Department has to prosecute if you violate election laws.
• 40:46
  Speaker 11: And if the Justice Department is taking orders from the president,
• 40:48
  Speaker 11: it won't do that. We just had rules that we
• 40:50
  Speaker 11: weren't going to do that. And it wasn't that they
• 40:52
  Speaker 11: weren't people, you know, like people fudge with the edges.
• 40:54
  Speaker 11: I'm not saying there was perfect obedience here. But on
• 40:56
  Speaker 11: both sides of the aisle, people just said, I would
• 41:00
  Speaker 11: rather protect the system than lose an election. And that
• 41:02
  Speaker 11: is why the United States was the world's oldest democracy
• 41:05
  Speaker 11: and the most successful democracy. Donald Trump doesn't obey that norm, right?
• 41:10
  Speaker 11: And if you, you know, a lot of us were
• 41:12
  Speaker 11: worried about that in 2016 and 2020. I wrote many,
• 41:14
  Speaker 11: many things saying that. But after January 6th, you just
• 41:16
  Speaker 11: have to say, like, he doesn't obey that norm. Once
• 41:20
  Speaker 11: you break it, we do not have a system that's
• 41:23
  Speaker 11: designed to enforce, right?
• 41:25
  Speaker 8: You have to hand over. It just wasn't created with.
• 41:27
  Speaker 1: That in mind. I don't know where we go from here.
• 41:30
  Speaker 1: What does the market do in our remaining moment if
• 41:33
  Speaker 1: we don't know, if we don't have a full read
• 41:35
  Speaker 1: on the balance of power for days or weeks?
• 41:38
  Speaker 11: My guess is just from having watched the market sort
• 41:41
  Speaker 11: of constantly sort of shrug these things off.
• 41:43
  Speaker 1: Yes.
• 41:43
  Speaker 8: My guess is the market says.
• 41:44
  Speaker 1: We see through it.
• 41:45
  Speaker 8: They'll figure it out.
• 41:45
  Speaker 10: Wow.
• 41:46
  Speaker 1: All right.
• 41:47
  Speaker 8: But that will be true as with also, right?
• 41:50
  Speaker 11: The things that blow you up are when the assumptions
• 41:52
  Speaker 11: you've had about the world that you just never questioned
• 41:55
  Speaker 11: find turn out not to be true. I think the
• 41:57
  Speaker 11: market will do that right up until the time it isn't.
• 42:01
  Speaker 11: Eventually that assumption will– well, I hope not. But eventually
• 42:04
  Speaker 11: it will break, and that's when we'll all be off
• 42:06
  Speaker 11: to the races.
• 42:07
  Speaker 1: Great conversation, as always. We shouldn't even talk before we
• 42:09
  Speaker 1: go on the air. I just like throwing this stuff
• 42:11
  Speaker 1: at you because I never know what you're going to say.
• 42:13
  Speaker 1: Gautam Mukundi is one of the best. Stay in touch
• 42:16
  Speaker 1: around the election. We'll be very curious to hear your
• 42:18
  Speaker 1: thoughts as a Bloomberg opinion contributor and lecturer at Yale
• 42:21
  Speaker 1: School of Management. The toast of Boston. Gotham with us
• 42:26
  Speaker 1: live in Washington. Thanks for listening to the Balance of
• 42:31
  Speaker 1: Power podcast. Make sure to subscribe if you haven't already
• 42:35
  Speaker 1: at Apple, Spotify, or wherever you get your podcasts. And
• 42:38
  Speaker 1: you can find us live every weekday from Washington, D.C.
• 42:41
  Speaker 1: at noontime Eastern at Bloomberg.com.