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US-Iran Conflict Stuck With No End · Balance of Power

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  Speaker 5: Checking on trading on this 3rd of September. Thank you
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  Speaker 5: so much. That, of course, puts us just about exactly
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  Speaker 5: two months before the midterm elections looming in November. And
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  Speaker 5: as November approaches, oil prices are not necessarily going in
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  Speaker 5: the direction the president and Republicans may like to see
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  Speaker 5: to help boost their odds politically. As Charlie was mentioning,
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  Speaker 5: we're still north of $ 91 a barrel on WTI, $ 95
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  Speaker 5: a barrel on Brent. due to the reignited hostilities in
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  Speaker 5: the Middle East that, at the very least, didn't escalate
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  Speaker 5: further overnight, even as the president at the White House
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  Speaker 5: yesterday did suggest he might be willing to strike Iran again,
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  Speaker 5: this current bout of strikes he expected to be short-term. All,
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  Speaker 5: as he told reporters, in the pursuit of Iran not
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  Speaker 5: having a nuclear weapon. Midterm election timeline be damned.
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  Speaker 1: It's very simple.
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  Speaker 6: Iran cannot have a nuclear weapon as soon as it's over,
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  Speaker 6: which I don't think will be very much longer. I
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  Speaker 6: don't know how much more they can take, but, you know,
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  Speaker 6: whatever it is, it doesn't matter. And I'm not affected
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  Speaker 6: by the election. Number one, I'm not running. My party's
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  Speaker 6: running and I'm going to help my party. But I
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  Speaker 6: think my party respects the fact that we're not allowing
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  Speaker 6: Iran to have a nuclear weapon.
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  Speaker 7: Kate Sullivan reports for Bloomberg at the White House every
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  Speaker 7: day and joins us now as we anticipate the vice
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  Speaker 7: president at the podium in the briefing room. Kate, the
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  Speaker 7: reporting today is interesting, and I guess it's emblematic of
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  Speaker 7: a lot of the rhetoric that we've heard. On the
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  Speaker 7: one hand, Pete Hegseth, according to The Wall Street Journal,
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  Speaker 7: is quietly extending deployments into next year, while the president
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  Speaker 7: tells advisers that he prefers declaring the Iran war over.
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  Speaker 8: Could that be next?
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  Speaker 9: Yeah, the White House has been looking for an off-ramp
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  Speaker 9: to this war for quite some time. You know, this
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  Speaker 9: war has been very unpopular with the American people. It's
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  Speaker 9: definitely hurting, or it seems to be hurting Republicans' chances
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  Speaker 9: in the upcoming midterm elections. During all of this, Trump
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  Speaker 9: continues to project optimism. Regardless of the reality, he's projecting
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  Speaker 9: a lot of optimism and confidence when it comes.
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  Speaker 1: To how Iran is doing, how the U.S.
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  Speaker 9: Is faring in this war. We heard him also say yesterday,
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  Speaker 9: you know, talking about renaming the Strait of Hormuz to
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  Speaker 9: the Trump Strait. But all of this is happening as
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  Speaker 9: the U.S. and Iran— it' s very notable that the strikes that
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  Speaker 9: they exchanged earlier this week, it was the biggest escalation
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  Speaker 9: that we've seen in about a month. Talks have completely
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  Speaker 9: fallen apart. Negotiations are not ongoing right now. The president
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  Speaker 9: is also saying that even if they were and even
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  Speaker 9: if there was an agreement, that it would essentially be meaningless.
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  Speaker 1: So we're hearing a.
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  Speaker 9: Lot of mixed messaging when it comes to how this
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  Speaker 9: war is going to wrap up, if it's going to,
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  Speaker 9: and when exactly.
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  Speaker 5: Well, I would imagine that those questions, when this will
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  Speaker 5: wrap up, how will it end, are the kind of
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  Speaker 5: questions that J.D. Vance, the vice president, may be facing
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  Speaker 5: when he takes the podium any minute now. That briefing,
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  Speaker 5: of course, was scheduled for the top of this hour. Kate,
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  Speaker 5: he hasn't been the most vocal advocate for this war
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  Speaker 5: in this administration. How can we expect him to position
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  Speaker 5: himself in his answers?
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  Speaker 9: It's a very interesting position because you're absolutely right. There's
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  Speaker 9: been a lot of reporting that Vance was really against
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  Speaker 9: starting this war in Iran and was much more cautious
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  Speaker 9: and was voicing those opinions in the Situation Room shortly
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  Speaker 9: before this war started. And you're right, we're going to
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  Speaker 9: hear from the vice president any moment now in the
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  Speaker 9: White House press briefing room. This is, of course, after
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  Speaker 9: Caroline Leavitt had her last day as White House press
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  Speaker 9: secretary last week. So there is not actually currently a
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  Speaker 9: White House press secretary. There has been nobody named in
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  Speaker 9: that position. And what we saw on Levitt's maternity leave
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  Speaker 9: was Vance took the podium another time.
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  Speaker 1: We heard from Marco Rubio.
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  Speaker 9: We heard from Scott Besson. So there really was this
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  Speaker 9: rotating cast of characters briefing reporters. But Iran will definitely
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  Speaker 9: be top of mind and top of mind for a
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  Speaker 9: lot of reporters in that briefing room. Vance will definitely
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  Speaker 9: be fielding a lot of questions about Iran and what
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  Speaker 9: the war looks.
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  Speaker 1: Like at the moment.
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  Speaker 7: Hey, Kate, it looks like you're going to be spending
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  Speaker 7: a lot more time traveling with the president, at least, well,
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  Speaker 7: maybe not this month, but next month. We're going to
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  Speaker 7: take the final 30 days, he said yesterday in the
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  Speaker 7: Oval Office. You don't want to go too much more
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  Speaker 7: before that because people forget. Telling those who gathered in
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  Speaker 7: the Rose Garden that he plans to campaign for about
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  Speaker 7: 35 different lawmakers, some of the most at risk, including
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  Speaker 7: Dan Sullivan and Ken Paxton. Is this something that will
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  Speaker 7: finally turn the needle for Republicans?
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  Speaker 9: It'll be very interesting to see Trump's influence in these races. He's,
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  Speaker 9: of course, not on the ballot, but he says he's
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  Speaker 9: going to make a very concerted effort to campaign for
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  Speaker 9: vulnerable Republicans, Republicans in competitive races. He said last night
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  Speaker 9: he's going to travel to every single one of the
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  Speaker 9: 35 races that they've identified as ones that they need
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  Speaker 9: to get the president involved in. They need to have some—
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  Speaker 9: extra attention in. He mentioned specifically Alaska and campaigning for
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  Speaker 9: Dan Sullivan. But it looks like the 30 days leading
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  Speaker 9: up to the November midterm elections are going to be
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  Speaker 9: a hectic one, of course, for all the candidates running,
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  Speaker 9: but also here at the White House with the president
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  Speaker 9: on the road a lot, or so he says.
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  Speaker 6: All right.
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  Speaker 5: We'll see if that actually materializes. Kate Sullivan, live on
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  Speaker 5: the North Lawn of the White House for us. Thank
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  Speaker 5: you so much. From the domestic travel schedule to the
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  Speaker 5: ongoing conflict in the Middle East that, at least according
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  Speaker 5: to the Wall Street Journal, the president may be preparing
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  Speaker 5: to declare is over. For more on that, we turn
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  Speaker 5: now to Lieutenant General Karen Gibson, former Deputy Director of
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  Speaker 5: National Intelligence for National Security Partnerships at the Office of
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  Speaker 5: the Director of National Intelligence, also for me. former Army
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  Speaker 5: intelligence and former sergeant at arms in the United States Senate.
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  Speaker 5: Lieutenant General, welcome back to Bloomberg TV and radio. If
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  Speaker 5: the president were to decide to declare this war over now,
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  Speaker 5: where would that leave the United States strategic interests?
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  Speaker 10: Well, I would say if the president declared the war over,
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  Speaker 10: that he had abandoned the aims for which they began
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  Speaker 10: the war in the first place. Wars are never conducted
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  Speaker 10: or started simply to destroy an enemy's military forces, although
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  Speaker 10: that is often what happens. Wars are started for a
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  Speaker 10: political aim, for a strategic objective. And in this case,
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  Speaker 10: it was to put some enduring enforceable curbs on the
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  Speaker 10: Iranian nuclear program.
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  Speaker 1: And we're not there. We haven't even begun to talk
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  Speaker 1: about that.
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  Speaker 10: So if the president declares that the war is over,
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  Speaker 10: that would tell me that he had abandoned that aim.
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  Speaker 8: Interesting.
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  Speaker 7: Of course, this is a conversation that's happening as Pete
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  Speaker 7: Hegseth reportedly quietly extends deployments into next year, General. When
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  Speaker 7: you hear that, what does that tell you about the
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  Speaker 7: long run for this conflict?
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  Speaker 6: Yeah.
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  Speaker 1: So I think, you know, our U.S.
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  Speaker 10: Military forces that are deployed there now in the Middle
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  Speaker 10: East for these operations against Iran are performing another a
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  Speaker 10: number of important functions. You know, one of them is
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  Speaker 10: enforcing the blockade that is intended to continue to shrink
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  Speaker 10: and diminish Iran's economy.
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  Speaker 1: And I think that is occurring. It's effective.
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  Speaker 10: But any kind of economic measure is there is quite
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  Speaker 10: a lag and it can take a very long time
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  Speaker 10: to see the effects of that. So they're enforcing the blockade.
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  Speaker 10: The other really important one, the one we're hearing about
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  Speaker 10: more in the news lately, is providing a layered defensive
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  Speaker 10: umbrella for commercial shipping to transit in and out of
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  Speaker 10: the Gulf.
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  Speaker 1: And as long as Iran.
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  Speaker 10: Threatens to attack vessels, I think they'll need to continue
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  Speaker 10: to do that. Unfortunately, as we've talked about several times,
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  Speaker 10: I think the people who decide that they want to
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  Speaker 10: sail through the strait are commercial industry and the firms.
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  Speaker 1: That insure them.
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  Speaker 10: And they do that, weighing the potential for profit against
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  Speaker 10: a perception of risk. And I don't see that perception
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  Speaker 10: lowering anytime soon. And while I really applaud the efforts
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  Speaker 10: of the US military to get through, I think it was,
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  Speaker 10: I heard 40 ships in the last day or so,
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  Speaker 10: that's important, but the commercial industry needs to see that
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  Speaker 10: it is consistently safe, not episodically so. So I think
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  Speaker 10: that's a function they'll perform. And the last ones I'll
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  Speaker 10: mention is continuing to protect US interests, whether those are
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  Speaker 10: our bases and our service members that are deployed in Jordan.
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  Speaker 1: Kuwait and elsewhere.
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  Speaker 10: And to pose a credible deterrent threat, or in case
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  Speaker 10: that Iran chooses to do something that we're violently opposed to,
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  Speaker 10: that we would potentially return to those punishing airstrikes.
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  Speaker 1: I don't see any of.
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  Speaker 10: Those missions diminishing, even if the president does declare that
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  Speaker 10: the war is over, unless he's truly going to abandon
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  Speaker 10: the economic campaign, in which case perhaps the blockade would disappear.
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  Speaker 1: But I don't think that will happen.
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  Speaker 5: Well, if we could talk more about that economic campaign,
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  Speaker 5: the blockade is still in effect. CENTCOM, I believe, as
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  Speaker 5: of yesterday, said it has turned around more than 80
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  Speaker 5: vessels at this point. The Treasury Secretary just last week
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  Speaker 5: said an economic D-Day is coming for Iran, even if
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  Speaker 5: it has not arrived yet. And at the G20 finance ministerial,
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  Speaker 5: he was talking about how the Iranian bankruptcy is being
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  Speaker 5: accelerated as we speak. Are those things true, Lieutenant General?
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  Speaker 5: And even if they are, does that alone bring the
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  Speaker 5: regime to heel?
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  Speaker 10: So I'm not an economic expert, but certainly I am
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  Speaker 10: aware that their economy is very fragile. Incredibly high inflation rates,
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  Speaker 10: something over 60 percent, high unemployment, long gas lines. And
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  Speaker 10: it's an economy that's been in a very difficult position
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  Speaker 10: for a long time. That's what brought people to the
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  Speaker 10: streets back in January to protest, Iranian citizens. So certainly
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  Speaker 10: the war itself, the blockade, the additional sanctions are only
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  Speaker 10: diminishing the strength of their economy. But as we look
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  Speaker 10: at nations like North Korea or Cuba or even Iran,
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  Speaker 10: which has faced decades of sanctions, that is typically not
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  Speaker 10: alone enough in and of itself to bring the a
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  Speaker 10: regime to heal, to cause them to capitulate. And I
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  Speaker 10: think in terms of this economic D-Day, while some additional
• 10:21
  Speaker 10: sanctions have been imposed, if China is the purchaser of
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  Speaker 10: some 80% of Iranian goods and we're not going after China,
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  Speaker 10: then we're really just nibbling around the edges of that
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  Speaker 10: remaining 20%. And that's certainly not enough to asphyxiate them
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  Speaker 10: or to cause an economic D-Day.
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  Speaker 1: Without doing something.
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  Speaker 10: In concert with China, willingly or not, we're not going
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  Speaker 10: to have the kind of coercive economic shock that the
• 10:46
  Speaker 10: administration is looking for.
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  Speaker 8: Really interesting, General.
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  Speaker 7: I want to ask you about munitions in a post
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  Speaker 7: the president made on Truth Social, knowing that this has
• 10:54
  Speaker 7: been a big story, of course, specifically when it comes
• 10:58
  Speaker 7: to the exquisites as they're known. He writes for the
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  Speaker 7: treasonous scum that refuses to accurately report on our military
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  Speaker 7: operation in Iran. We have virtually unlimited amounts of mid
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  Speaker 7: to high grade ammunition. far more than we could ever
• 11:13
  Speaker 7: use for this or for any other war that could
• 11:16
  Speaker 7: improbably take place.
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  Speaker 8: Is that true?
• 11:19
  Speaker 1: Well, certainly there.
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  Speaker 10: Are vast inventories and stocks of the less sophisticated weapons,
• 11:24
  Speaker 10: you know, gravity bombs and other less precise munitions. Those
• 11:30
  Speaker 10: are not the materials that we're running out of. But,
• 11:33
  Speaker 10: you know, anytime you're expending ammunition faster than industry can
• 11:38
  Speaker 10: turn it out, you're Stocks will diminish.
• 11:40
  Speaker 1: And that's the situation we're facing with the very can.
• 11:43
  Speaker 7: We fight a war, though, as he's saying, another war
• 11:45
  Speaker 7: with the old fashioned stuff and not replenishing cruise missiles
• 11:50
  Speaker 7: and other guided weaponry.
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  Speaker 11: Sure.
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  Speaker 10: You can fight a war with the old fashioned stuff.
• 11:55
  Speaker 10: It's what most many nations do. Most nations do not
• 11:58
  Speaker 10: have the kind of sophisticated weaponry that we have. When
• 12:01
  Speaker 10: you do that, it increases risk of some kind. You know,
• 12:04
  Speaker 10: perhaps a plane has to get much closer to the
• 12:07
  Speaker 10: target than we would have wanted, you know, with the exquisite,
• 12:10
  Speaker 10: precise munitions. a plane can be quite distanced and in
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  Speaker 10: a very safe place when the pilot launches the munition.
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  Speaker 10: So to use less sophisticated weaponry is certainly a possibility,
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  Speaker 10: but it elevates the risk to our forces when we
• 12:24
  Speaker 10: do that.
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  Speaker 7: Wanted to get into artificial intelligence, General. I had some
• 12:30
  Speaker 7: time yesterday spent at the Innovation Summit as part of
• 12:33
  Speaker 7: the G20 down in North Carolina. Howard Lutnick, the Commerce Secretary,
• 12:37
  Speaker 7: pulled together the likes of Sam Altman, Jensen Wong, Alex Karp,
• 12:41
  Speaker 7: and others to talk about the AI race. And it
• 12:45
  Speaker 7: was basically a bit of a cheerleading, a motivational session
• 12:51
  Speaker 7: seeking to override some concerns about the technology, about data centers.
• 12:56
  Speaker 8: Here's what Lutnik told me when we sat down.
• 12:58
  Speaker 12: The smartest frontier models in the world are American.
• 13:02
  Speaker 11: They're the teacher.
• 13:03
  Speaker 12: And if the teacher is relentlessly studying to stay at
• 13:07
  Speaker 12: the frontier, the smartest, the greatest in the world, the
• 13:10
  Speaker 12: students are always going to be a little back. And
• 13:14
  Speaker 12: that's what you have right now with Chinese open source models.
• 13:20
  Speaker 5: Lieutenant General, to pick up here as he talks about
• 13:23
  Speaker 5: America being at the frontier, when we consider what is
• 13:25
  Speaker 5: actually happening at the frontier, if you listen to the
• 13:28
  Speaker 5: likes of Sam Altman and OpenAI or others who are
• 13:32
  Speaker 5: talking about what will happen if this is allowed to
• 13:35
  Speaker 5: go unfettered and unregulated, potentially these models themselves acting as
• 13:38
  Speaker 5: their own agents and committing crimes, with your former DNI
• 13:43
  Speaker 5: hat on and your cybersecurity expertise, how much does that
• 13:48
  Speaker 5: potential reality worry you?
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  Speaker 1: Well, if they were absolutely unfettered, yes, that should be
• 13:53
  Speaker 1: of some concern.
• 13:54
  Speaker 10: And as we talked about previously on your program, the
• 13:59
  Speaker 10: policy itself and the culture are driven by people, and
• 14:02
  Speaker 10: that doesn't move as quickly as artificial intelligence.
• 14:04
  Speaker 1: And so the challenge.
• 14:06
  Speaker 10: is to develop workable policy that not only allows this
• 14:10
  Speaker 10: tremendous innovation that keeps the United States at the front
• 14:13
  Speaker 10: of the race, but that does so safely. And how
• 14:16
  Speaker 10: do we, as humans, develop that policy swiftly enough to
• 14:20
  Speaker 10: keep up with the developments in AI? That is a
• 14:23
  Speaker 10: really tricky needle to thread.
• 14:26
  Speaker 8: It sure is.
• 14:26
  Speaker 7: In our remaining moment, General, when we talk about cyber,
• 14:31
  Speaker 7: we frequently are talking about our cyber defenses. Do we
• 14:34
  Speaker 7: have the offenses required to win that war?
• 14:38
  Speaker 1: Well, I think the U.S.
• 14:40
  Speaker 10: Offensive cyber capabilities, you know, as someone who worked a
• 14:42
  Speaker 10: number of years in NSA's cryptologic community at U.S. Cyber Command,
• 14:46
  Speaker 10: I think offensively.
• 14:48
  Speaker 1: We're world class. Defensively, it's very fragmented.
• 14:52
  Speaker 10: And the soft underbelly of America is that 85 percent
• 14:55
  Speaker 10: of our critical infrastructure is in private sector hands. And
• 14:59
  Speaker 10: some of it is very staunchly defended, but not all
• 15:02
  Speaker 10: of it, and vulnerable. And that's really where I think
• 15:06
  Speaker 10: we need to focus as a nation is on cyber defenses.
• 15:10
  Speaker 1: I have a lot of confidence in our offensive capabilities.
• 15:13
  Speaker 8: Really interesting.
• 15:14
  Speaker 7: We always learn something when we talk to the general.
• 15:16
  Speaker 7: Karen Gibson, thank you so much, as always, for the
• 15:19
  Speaker 7: insights today on Bloomberg. I'm Joe Matthew alongside Kayleigh Lyons
• 15:22
  Speaker 7: in Washington. We're going to assemble our political panel next.
• 15:26
  Speaker 7: Rick Davis and Jeannie Shanzano as President Trump prepares to
• 15:29
  Speaker 7: gas up Air Force One and campaign for at least
• 15:32
  Speaker 7: 35 candidates around the country.
• 15:34
  Speaker 8: Stay with us on Balance of Power. We'll have much
• 15:36
  Speaker 8: more coming up after this.
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• 16:00
  Speaker 5: We're keeping an eye on the White House and the
• 16:02
  Speaker 5: press briefing room in particular. As Vice President J.D. Vance
• 16:05
  Speaker 5: maybe is running a little bit behind schedule, he was
• 16:07
  Speaker 5: slated to brief the press at the top of this hour.
• 16:09
  Speaker 5: He still not has yet arrived at the podium, but
• 16:12
  Speaker 5: of course, we'll keep an eye on what he says
• 16:14
  Speaker 5: for you. Of course, as we consider what's going on
• 16:17
  Speaker 5: at the White House, apparently President Trump is getting ready
• 16:19
  Speaker 5: to spend a lot less time there, at least in
• 16:20
  Speaker 5: the month of October in the run-up to the midterm elections.
• 16:23
  Speaker 5: Those 30 days going to be very busy for the
• 16:26
  Speaker 5: president as he says he will be hitting the trail
• 16:28
  Speaker 5: for 35 different races to stump for Republican candidates. Of course,
• 16:33
  Speaker 5: going to campaign in person is one thing, actually spending
• 16:36
  Speaker 5: money on their behalf is another. And we know the
• 16:38
  Speaker 5: president is sitting on quite the war chest, $ 400 million
• 16:43
  Speaker 5: in his MAGA Inc.
• 16:44
  Speaker 1: Pack that has.
• 16:45
  Speaker 5: Yet to really be deployed this cycle. But the non-profit
• 16:49
  Speaker 5: arm that is affiliated with it, Securing American Greatness, did
• 16:51
  Speaker 5: decide to spend some money this week out with a
• 16:53
  Speaker 5: million dollar ad buy, a national ad, Not really about
• 16:58
  Speaker 5: Republicans or congressional achievements, though it does mention the one big,
• 17:01
  Speaker 5: beautiful bill. Instead, it's largely about President Trump, as voiced
• 17:05
  Speaker 5: by the UFC's Dana White.
• 17:08
  Speaker 2: He is the toughest, most resilient person that I've ever met,
• 17:12
  Speaker 2: and nothing was going to stop him from fighting so
• 17:15
  Speaker 2: hard for the country he loves.
• 17:19
  Speaker 6: When the world needs courage, vision, and inspiration, it is
• 17:23
  Speaker 6: still turning to America.
• 17:27
  Speaker 7: Remembering that Donald Trump is not on the ballot. Though,
• 17:30
  Speaker 7: as he said recently, pretend I'm on the ballot. And
• 17:34
  Speaker 7: he might just be coming to a town near you.
• 17:36
  Speaker 7: As Kayleigh mentioned, the president has travel plans, telling reporters
• 17:40
  Speaker 7: yesterday and those who attended a reception in the Rose
• 17:45
  Speaker 7: Garden Club. He plans to campaign for about $ 35 million. Candidates,
• 17:49
  Speaker 7: 35 Republicans, not this month, but in the month ahead
• 17:52
  Speaker 7: of the midterms. Let's assemble our political panel and get
• 17:54
  Speaker 7: their take on the strategy. Bloomberg Politics contributors Rick Davis
• 17:58
  Speaker 7: and Jeanne Shanzano join now. Rick is our Republican strategist
• 18:01
  Speaker 7: partner at Stonecourt Capital. And Jeanne is our Democratic analyst
• 18:04
  Speaker 7: and democracy visiting fellow at Harvard Kennedy School's Ash Center. Rick,
• 18:08
  Speaker 7: the president says we're going to take the final 30 days.
• 18:11
  Speaker 7: You don't want to go before that because people forget.
• 18:15
  Speaker 7: Will the president actually help these 35 lawmakers by showing
• 18:18
  Speaker 7: up in person?
• 18:21
  Speaker 2: Yeah, Joe, I think the easiest way to understand it
• 18:23
  Speaker 2: is to look at the math. Where the president needs
• 18:27
  Speaker 2: to campaign, where the candidates are in trouble are in basically,
• 18:31
  Speaker 2: like in the Senate, nine swing districts, maybe 25 House districts.
• 18:35
  Speaker 2: But in the eight of the nine swing Senate states—
• 18:41
  Speaker 2: president is vastly unpopular. In other words, he has approval
• 18:45
  Speaker 2: ratings below 45%. So the way to think about it
• 18:49
  Speaker 2: is you're a candidate in that state and you're running.
• 18:52
  Speaker 2: In order to get Donald Trump to come to your state,
• 18:55
  Speaker 2: you have to assume that you're only dealing with 45%
• 18:58
  Speaker 2: of the people who already approve of him.
• 19:01
  Speaker 8: Well, guess what?
• 19:02
  Speaker 2: You're getting those votes anyway.
• 19:04
  Speaker 8: But you have to.
• 19:05
  Speaker 2: Turn 5% to get to 50 who disapprove of Donald Trump.
• 19:10
  Speaker 2: So you're standing in front of Donald Trump saying, I
• 19:12
  Speaker 2: need 5% of this state. who already disapprove of you
• 19:16
  Speaker 2: to be for me. Now, the last thing you want
• 19:19
  Speaker 2: is to be standing in front of Donald Trump making
• 19:21
  Speaker 2: that case. So it's simple math, right? Only go to
• 19:25
  Speaker 2: states where your numbers don't matter. There are 35 senators
• 19:29
  Speaker 2: up for reelection and don't go to the 10 districts
• 19:32
  Speaker 2: we're actually trying to save.
• 19:36
  Speaker 5: Well, except, Jeannie, that apparently he does intend to go
• 19:39
  Speaker 5: to at least some of those. He said specifically last
• 19:42
  Speaker 5: night he wants to go campaign for Senator Dan Sullivan
• 19:44
  Speaker 5: in Alaska and for Ken Paxton in Texas, despite perhaps commonplace.
• 19:50
  Speaker 5: not by him, but by others about his appearance and
• 19:53
  Speaker 5: the way he dresses that the president repeated on multiple
• 19:56
  Speaker 5: occasions yesterday. Maybe that benefits Ken Paxton, but should Dan
• 20:01
  Speaker 5: Sullivan really want him to come around Alaska?
• 20:05
  Speaker 3: Yeah, he didn't specify, Kayleigh, which Dan Sullivan he was
• 20:08
  Speaker 3: going to be campaigning for. But I suspect I know
• 20:11
  Speaker 3: which one, right? You know, I think Donald Trump often
• 20:14
  Speaker 3: likes to say that some of us have Trump derangement syndrome.
• 20:18
  Speaker 3: I think he's got a little bit of presidential derangement syndrome.
• 20:22
  Speaker 3: It seems to come up every midterm cycle, regardless of
• 20:25
  Speaker 3: who the president is. We saw it with Joe Biden.
• 20:28
  Speaker 3: We saw it with Barack Obama.
• 20:30
  Speaker 1: They just assume.
• 20:31
  Speaker 3: That they are the ones who can get their party
• 20:34
  Speaker 3: over the line. And they put up their hand to
• 20:36
  Speaker 3: go out and they don't listen to those people who
• 20:39
  Speaker 3: are saying, well, you're underwater by double digits and maybe
• 20:44
  Speaker 3: we want your money, but we want you to sort
• 20:46
  Speaker 3: of fade into the good night or only go to
• 20:48
  Speaker 3: those districts. where you won't do any harm. Of course,
• 20:52
  Speaker 3: Donald Trump doesn't see it that way. He keeps saying
• 20:55
  Speaker 3: that the problem is not him. The problem is the
• 20:59
  Speaker 3: Republican Party as a whole. Like, in other words, everybody
• 21:02
  Speaker 3: loves him. It's just the Republican Party as a whole.
• 21:04
  Speaker 1: They don't like.
• 21:05
  Speaker 3: And of course, polling shows he's more underwater than the
• 21:08
  Speaker 3: Republican Party. But I do think Anybody who thinks they're
• 21:13
  Speaker 3: going to escape Donald Trump in this midterm has to
• 21:17
  Speaker 3: think again. He's going to be on the ballot. He's
• 21:20
  Speaker 3: already on the ballot. So they might just need to
• 21:24
  Speaker 3: embrace it. And I think we saw some of those
• 21:26
  Speaker 3: folks last night in the Rose Garden, like Mike Lawler
• 21:28
  Speaker 3: and others. They're in tough positions. But, hey, he's all
• 21:31
  Speaker 3: over the airwaves in the Democratic campaigns. So they might
• 21:34
  Speaker 3: as well just embrace it and see if they can
• 21:36
  Speaker 3: get the vote out and help themselves in that way,
• 21:39
  Speaker 3: because certainly on the issues, it's not going to help them.
• 21:43
  Speaker 6: All right.
• 21:44
  Speaker 7: I got to go back to what Kayleigh was saying
• 21:45
  Speaker 7: on the way that the president's been talking about Ken Paxton.
• 21:49
  Speaker 7: It's kind of hysterical, Rick, and I don't know your
• 21:51
  Speaker 7: thought on this. Imagine if this was your candidate. The
• 21:53
  Speaker 7: president's done this twice in the last two days. You know,
• 21:58
  Speaker 7: it's not complimentary. Basically, well, here, we'll let the president
• 22:02
  Speaker 7: speak in his own words about Ken Paxton, the Republican
• 22:06
  Speaker 7: nominee for Senate in Texas.
• 22:07
  Speaker 9: Listen.
• 22:08
  Speaker 6: Ken Paxton, you might not like the way he dresses.
• 22:11
  Speaker 6: And I say this, it's so insulting to him, but
• 22:13
  Speaker 6: I might as well say it. You might not like
• 22:15
  Speaker 6: the way he looks. You might not love his look.
• 22:18
  Speaker 6: You might not love his television interviews. But he was
• 22:21
  Speaker 6: the best attorney general in the country, perhaps. He was
• 22:24
  Speaker 6: one of the best in the entire country. And that
• 22:27
  Speaker 6: speaks a lot louder than the suit he's wearing that
• 22:30
  Speaker 6: doesn't look so great.
• 22:31
  Speaker 11: So.
• 22:34
  Speaker 7: Apparently the president shares the concern about the wardrobe.
• 22:39
  Speaker 8: Rick, I mean, is this, what kind of an endorsement
• 22:41
  Speaker 8: is this?
• 22:41
  Speaker 7: He's ugly, he has bad breath, and he has bad clothes,
• 22:44
  Speaker 7: but he's my guy for Senate.
• 22:45
  Speaker 8: Do people vote for him?
• 22:48
  Speaker 2: Well, first thing, I'm surprised he didn't go to the
• 22:50
  Speaker 2: shoes because the president, I hope, has already sent him
• 22:53
  Speaker 2: a pair of Trump shoes. All of his friends get
• 22:57
  Speaker 2: those no matter what. The reality is this. I mean,
• 23:01
  Speaker 2: like you never really know with Donald Trump and you
• 23:03
  Speaker 2: can't argue that he hasn't been vastly successful politically. And
• 23:07
  Speaker 2: maybe if he got people thinking, well, you know, if
• 23:09
  Speaker 2: I don't like the guy because of his suit, that's
• 23:12
  Speaker 2: not fair. Maybe he was a good attorney general. Well,
• 23:15
  Speaker 2: the reality is Texas may be the only state in
• 23:18
  Speaker 2: America where Donald Trump's numbers are better than our Senate candidate.
• 23:22
  Speaker 2: And so spending time there, I don't think is a
• 23:26
  Speaker 2: surprise to anybody that we're having a convention in Dallas, Texas.
• 23:29
  Speaker 6: Why?
• 23:29
  Speaker 2: Because Texas is one of Donald Trump's best states. He's
• 23:33
  Speaker 2: even in Texas.
• 23:35
  Speaker 8: It's the only state in.
• 23:37
  Speaker 2: America where he's not underwater in his approval rating. So
• 23:40
  Speaker 2: spend as much time as you can in Texas. See
• 23:43
  Speaker 2: what you can do about getting the base to support
• 23:46
  Speaker 2: our Republican nominee. You actually may have some influence.
• 23:49
  Speaker 1: And you know what?
• 23:50
  Speaker 2: If you want to do a little political jujitsu and
• 23:52
  Speaker 2: go after the guy's clothing and get him to forget
• 23:55
  Speaker 2: the fact that he's really not a very nice person,
• 23:57
  Speaker 2: that's perfect.
• 24:01
  Speaker 5: I just can't wait to see if this line resurfaces
• 24:05
  Speaker 5: in Dallas with Ken Paxton in attendance at the convention.
• 24:10
  Speaker 5: I guess we can't rule anything out on that convention, Rick.
• 24:12
  Speaker 5: Just quickly, while you may have plenty of Republicans, including
• 24:16
  Speaker 5: the president, who are there, it sounds like there's going
• 24:18
  Speaker 5: to be dozens who are not, including, according to Bloomberg's reporting.
• 24:22
  Speaker 5: a number of Republicans who are sitting in swing seats.
• 24:26
  Speaker 5: Is that the smartest political move to stay far away
• 24:30
  Speaker 5: from the festivities next week?
• 24:32
  Speaker 8: Yeah, Kayleigh, when this.
• 24:33
  Speaker 2: First got announced earlier this year, you asked me, is
• 24:35
  Speaker 2: that a good thing? Take a time out from your
• 24:37
  Speaker 2: campaign in September and go to Texas if you're not
• 24:40
  Speaker 2: from Texas. And I told you at the time, I
• 24:42
  Speaker 2: wouldn't let my candidate go. Well, Politico did an analysis,
• 24:46
  Speaker 2: did a survey of candidates, and they found 70, at
• 24:49
  Speaker 2: least in their survey, that said, no way am I
• 24:52
  Speaker 2: going to this thing. So at least I feel like
• 24:54
  Speaker 2: I'm still in touch with the political fabric of America. Look,
• 24:58
  Speaker 2: I mean, he's really good at throwing parties. And his
• 25:00
  Speaker 2: conventions are terrific. And I have no doubt this one
• 25:03
  Speaker 2: will be tons of fun and highly entertaining.
• 25:06
  Speaker 1: Will it make a difference?
• 25:07
  Speaker 2: Maybe only in Texas.
• 25:10
  Speaker 8: Really interesting.
• 25:12
  Speaker 7: For $ 25, 000, Jeannie, did you see this? Lawmakers are telling
• 25:18
  Speaker 7: Politico and others that they can't make it because either
• 25:21
  Speaker 7: they have plans or in the case of Congressman David
• 25:25
  Speaker 7: Valadao in California, I can't.
• 25:28
  Speaker 8: Spend $ 25, 000 to attend. Is that a good way to
• 25:31
  Speaker 8: keep people at home?
• 25:37
  Speaker 3: Yeah, they have to clean out their sock drawer. I mean,
• 25:39
  Speaker 3: so many of them are noncommittal. There was the representative
• 25:43
  Speaker 3: from Iowa approached by The New York Times who sort
• 25:46
  Speaker 3: of got angry at the reporter for asking and said,
• 25:49
  Speaker 3: you know, check with my communication director. I think we're
• 25:52
  Speaker 3: going to have a lot of no shows in Texas
• 25:55
  Speaker 3: because let's face it. This is not where they want
• 25:59
  Speaker 3: to be either. Obviously, geographically, they want to be home
• 26:03
  Speaker 3: campaigning or saddled with a very unpopular president unless they
• 26:08
  Speaker 3: are in a red district in which the get out
• 26:10
  Speaker 3: the vote is going to help them. So, you know,
• 26:13
  Speaker 3: it's going to be fascinating to see. But Donald Trump,
• 26:17
  Speaker 3: you know, Trumpapalooza or whatever they're calling it, he's seeing
• 26:20
  Speaker 3: none of this. I mean, he's speaking very highly of it.
• 26:23
  Speaker 3: And when I mentioned how out of touch he is,
• 26:26
  Speaker 3: Just look at how he started his remarks in the
• 26:28
  Speaker 3: Rose Garden last night. He didn't talk about the candidates,
• 26:32
  Speaker 3: the party, the upcoming election. He talked about the helipad,
• 26:35
  Speaker 3: the revamping of the Rose Garden, the coming ballroom. That
• 26:40
  Speaker 3: is what Donald Trump is focused on. That is what
• 26:42
  Speaker 3: he'll be focused.
• 26:43
  Speaker 1: On in Texas.
• 26:45
  Speaker 3: It couldn't hurt Ken Paxton. I mean, he's having such
• 26:47
  Speaker 3: a difficult time now, so I could maybe help him.
• 26:50
  Speaker 3: But I'm not sure it's going to result in much
• 26:52
  Speaker 3: anything else for the rest of these candidates there. And
• 26:55
  Speaker 3: I'm not sure we're going to see more midterm conventions
• 26:57
  Speaker 3: like this, particularly hosted by a highly unpopular, historically unpopular
• 27:04
  Speaker 3: president of the United States.
• 27:07
  Speaker 5: All right. Jeannie Shanzano and Rick Davis, Bloomberg Politics contributors,
• 27:10
  Speaker 5: the both of them. Thank you so much. We're still waiting,
• 27:14
  Speaker 5: by the way, for Vice President J.D. Vance to take
• 27:16
  Speaker 5: the podium in the briefing room.
• 27:17
  Speaker 8: Fashionably late.
• 27:18
  Speaker 5: Quite fashionably late. Thirty-four minutes late as it stands now,
• 27:21
  Speaker 5: and the clock is still ticking. Of course— When and
• 27:23
  Speaker 5: if he does decide to come speak with reporters, we'll
• 27:27
  Speaker 5: be bringing you any noteworthy headlines live here on Balance
• 27:29
  Speaker 5: of Power.
• 27:30
  Speaker 8: Stay with us on Balance of Power. We'll have much
• 27:32
  Speaker 8: more coming up after this.
• 27:36
  Speaker 4: You're listening to the Bloomberg Balance of Power podcast. Catch
• 27:40
  Speaker 4: us live weekdays at noon and 5 p.m. Eastern on
• 27:43
  Speaker 4: Apple CarPlay and Android Auto with the Bloomberg Business app.
• 27:46
  Speaker 4: You can also listen live on Amazon Alexa from our
• 27:50
  Speaker 4: flagship New York station. Just say Alexa, play Bloomberg 1130.
• 27:56
  Speaker 1: The Vice President, J.D.
• 27:56
  Speaker 5: Vance, was scheduled to take the podium in the briefing
• 27:58
  Speaker 5: room at 1 p.m. We did just get the two-minute
• 28:00
  Speaker 5: warning from the White House, so we do expect that
• 28:02
  Speaker 5: the Vice President will be answering questions from reporters any
• 28:05
  Speaker 5: minute now. And, of course, we saw the President answering
• 28:10
  Speaker 5: a number of questions from reporters yesterday in the Oval Office,
• 28:12
  Speaker 5: as he often does, opening up the room to press
• 28:16
  Speaker 5: while another event was going on. Yesterday's event was focused specifically—
• 28:20
  Speaker 5: on the travel industry. He had a number of travel
• 28:23
  Speaker 5: executives in attendance to talk about what Americans and international
• 28:29
  Speaker 5: travelers are experiencing in the country right now, especially in
• 28:32
  Speaker 5: the aftermath of this summer's World Cup. Here's a little
• 28:35
  Speaker 5: taste of how the president framed things.
• 28:38
  Speaker 6: The numbers are record-setting. The entertainment numbers in our country
• 28:42
  Speaker 6: are just about every number you name, no matter what industry,
• 28:46
  Speaker 6: is record-setting. This is entertainment and hotels and things, and
• 28:51
  Speaker 6: they broke a record by a lot. The airlines are
• 28:54
  Speaker 6: doing incredible business. I think probably better than you've ever
• 28:58
  Speaker 6: done before.
• 29:00
  Speaker 8: Hot travel summer.
• 29:02
  Speaker 7: Certainly been something right here in Washington, D.C., With the
• 29:06
  Speaker 7: World Cup, with the Fourth of July, America 250 celebration,
• 29:10
  Speaker 7: IndyCar and so forth, but across the country, the president
• 29:13
  Speaker 7: is suggesting the nation here, the industry is thriving. One
• 29:18
  Speaker 7: of the people standing with the president yesterday, one of
• 29:21
  Speaker 7: the stakeholders here in this whole conversation, has made his
• 29:23
  Speaker 7: way over to our bureau in Washington. That's Jeff Freeman,
• 29:25
  Speaker 7: the president's CEO of the U.S. Travel Association. Jeff, it's
• 29:29
  Speaker 7: great to see you. Thanks for joining us today on Bloomberg.
• 29:31
  Speaker 7: I've long wondered what it's like to stand behind the
• 29:33
  Speaker 7: president in there. We carry all these events, and you're
• 29:35
  Speaker 7: standing there. He's talking about any number of topics with reporters.
• 29:39
  Speaker 7: But you were the reason why he was there before
• 29:41
  Speaker 7: we got into all the other news. And I'm wondering
• 29:44
  Speaker 7: what your message was for the president and what he
• 29:46
  Speaker 7: told you about this summer for your business.
• 29:49
  Speaker 11: First of all, we had a great conversation. We appreciate
• 29:51
  Speaker 11: the opportunity to do that. I think if we look
• 29:53
  Speaker 11: back at what happened this summer with the World Cup,
• 29:55
  Speaker 11: America's 250th, It really was an epic summer in so
• 29:59
  Speaker 11: many regards. I think we as Americans felt that. The
• 30:02
  Speaker 11: pride we took watching international travelers discover the country, discover
• 30:06
  Speaker 11: oversized gas stations and ranch dressing. We tend to take
• 30:10
  Speaker 11: for granted. It was a very good summer from a
• 30:13
  Speaker 11: travel perspective. And I give the administration a tremendous amount
• 30:16
  Speaker 11: of credit. These are complicated events, particularly the World Cup
• 30:19
  Speaker 11: and 11 different host cities. And it went off smoothly.
• 30:22
  Speaker 11: And that is a great credit to them, all the
• 30:25
  Speaker 11: preparation that went into that. Our message was, if we
• 30:27
  Speaker 11: can bring that same attention, we can achieve even bigger things.
• 30:32
  Speaker 11: Right now, we've got about 70 million people coming to
• 30:35
  Speaker 11: the United States. We had 80 million coming in 2018.
• 30:38
  Speaker 11: How do we put a strategy in place to get
• 30:40
  Speaker 11: to 100 billion to make the US the world's most
• 30:42
  Speaker 11: visited destination? That was the challenge we put to the
• 30:45
  Speaker 11: administration yesterday.
• 30:46
  Speaker 5: Well, and do you have suggestions as to how that
• 30:49
  Speaker 5: can be achieved? What would need to change?
• 30:52
  Speaker 11: Yeah, we certainly have a variety of ways we can
• 30:55
  Speaker 11: get there right. We look at various policy issues. Congress
• 30:58
  Speaker 11: passed a new $ 250 fee on everyone that needs a visa.
• 31:02
  Speaker 11: That's not a good approach when it comes to attracting
• 31:04
  Speaker 11: more visitors. Customs and Border Protection has proposed reviewing the
• 31:08
  Speaker 11: social media of visitors that are coming to the United States.
• 31:12
  Speaker 11: That's not a great way to attract visitors. There has
• 31:14
  Speaker 11: been talk about making everyone that needs a visa post
• 31:17
  Speaker 11: a bond. Those are the types of things that are
• 31:21
  Speaker 11: going to get in the way of attracting more people
• 31:23
  Speaker 11: to the United States. I'm not saying there aren't certain
• 31:25
  Speaker 11: situations where we may need one-off approaches for various travelers.
• 31:30
  Speaker 11: What I am saying is these blanket approaches will certainly
• 31:33
  Speaker 11: discourage people from coming. Well, that's interesting.
• 31:34
  Speaker 7: We hear from a lot of lawmakers around the country
• 31:37
  Speaker 7: on this program, and many have bemoaned the fact that
• 31:40
  Speaker 7: if they're from a place like Las Vegas, even New York,
• 31:44
  Speaker 7: but more on the fact that they're not seeing a
• 31:45
  Speaker 7: lot of Canadian license plates, and that has a direct
• 31:48
  Speaker 7: correlation to our policy when it comes to tariffs, not
• 31:53
  Speaker 7: to mention all the rhetoric that has surrounded it.
• 31:54
  Speaker 8: Was the White House receptive to your message?
• 31:56
  Speaker 11: Well, I know the issue of Canada is an important issue.
• 31:59
  Speaker 11: The President commented yesterday in the press conference, at least,
• 32:04
  Speaker 11: on the trade issues with Canada. We hope those issues
• 32:06
  Speaker 11: get resolved, right? The sooner they can get resolved... the
• 32:09
  Speaker 11: better they will be for our industry. There's no doubt
• 32:11
  Speaker 11: that there are certain aspects of the country, border states,
• 32:14
  Speaker 11: you mentioned Las Vegas, certain aspects of the country, Florida,
• 32:17
  Speaker 11: they've paid a big price in a decline in Canadian visitation.
• 32:20
  Speaker 11: That said, travel spending in the country this year is
• 32:23
  Speaker 11: up 6%. Airlines, hotels have just had their best summer ever.
• 32:27
  Speaker 11: So we are able to thrive without Canada. Imagine what
• 32:31
  Speaker 11: we could do if we can get those issues resolved
• 32:33
  Speaker 11: and just how strong the industry and the broader economy
• 32:35
  Speaker 11: can be.
• 32:36
  Speaker 5: Well, when we talk about the broader economy, is it
• 32:38
  Speaker 5: the broad economy in which we are seeing increased spending
• 32:41
  Speaker 5: on travel, or is it just the upper half of
• 32:42
  Speaker 5: the K?
• 32:43
  Speaker 11: Yeah, there's no doubt that if you look back over
• 32:45
  Speaker 11: the past 18 months or so, that K-shaped economy, the
• 32:47
  Speaker 11: affluent traveler, has played a really critical role. There's no
• 32:50
  Speaker 11: doubt about it. We see it in airlines. We see
• 32:53
  Speaker 11: it in the highest-end hotels. But if you listen to
• 32:56
  Speaker 11: Secretary Besson, if you listen to Chris Nassetta, CEO of Hilton,
• 32:59
  Speaker 11: both of whom have talked now about a C-shaped economy,
• 33:02
  Speaker 11: and seeing the bottom end of that economy starting to
• 33:05
  Speaker 11: come up. That's a great sign. It's not necessarily happening
• 33:08
  Speaker 11: in every market. There are some markets that are more
• 33:10
  Speaker 11: squeezed than others, but we are seeing some good signs
• 33:15
  Speaker 11: in the lower end of the market. We certainly hope
• 33:17
  Speaker 11: that can continue. Obviously, when we look at unemployment, there
• 33:21
  Speaker 11: isn't any unemployment. When we look at the fundamentals of
• 33:25
  Speaker 11: the economy, there's a lot of good out there. Most
• 33:27
  Speaker 11: importantly for us, There's a desire to travel. Post-COVID, people
• 33:32
  Speaker 11: want these experiences. They're willing to spend more than they
• 33:35
  Speaker 11: did in the past. We know from the tax cuts
• 33:37
  Speaker 11: that were done last year, about 60% of those funds
• 33:41
  Speaker 11: were spent on things like travel. So there's this desire
• 33:44
  Speaker 11: to really invest in the experience we provide. The more
• 33:47
  Speaker 11: we can shore up other aspects of the economy, the
• 33:49
  Speaker 11: stronger the industry will do.
• 33:50
  Speaker 7: I'm blown away by it in this sort of post-COVID,
• 33:54
  Speaker 7: let's see everything before we die, YOLO spirit. luxury seems
• 33:59
  Speaker 7: to have no cap. Airlines cannot put enough first-class seats
• 34:05
  Speaker 7: on the jet.
• 34:06
  Speaker 8: Am I wrong? If you made an.
• 34:07
  Speaker 7: All first-class airline, it would probably sell out.
• 34:11
  Speaker 11: I grew up with Midwest Express Airlines in Milwaukee 30
• 34:14
  Speaker 11: years ago. That didn't do well then, but it might
• 34:15
  Speaker 11: do well now, right? You're right. At the upper end
• 34:18
  Speaker 11: of the market, the willingness of travelers to spend to
• 34:21
  Speaker 11: sit in business class, the willingness of travelers to spend
• 34:24
  Speaker 11: $ 2, 000 a night on hotels, the willingness of travelers to
• 34:27
  Speaker 11: spend really large amounts of money on concerts and other
• 34:32
  Speaker 11: live events. It's a situation unlike what we saw before COVID.
• 34:37
  Speaker 11: And whether it's the YOLO aspect or whether it's this,
• 34:40
  Speaker 11: I want experiences, I want memories, I want time with
• 34:43
  Speaker 11: my family, that is what people value. It's obviously what
• 34:47
  Speaker 11: is keeping the industry strong. Can we get rid of
• 34:49
  Speaker 11: some of these headwinds along the way? Can we address
• 34:52
  Speaker 11: some of the tensions with Canada? Can we address the
• 34:55
  Speaker 11: fact that we've seen a decline in travel from northern
• 34:58
  Speaker 11: European countries with some of the concerns that they have?
• 35:01
  Speaker 11: Can we make sure we don't have any more ridiculous
• 35:03
  Speaker 11: government shutdowns that create all this consternation among travelers domestically?
• 35:07
  Speaker 11: The problems we're running into are generally self-inflicted. Let's get
• 35:11
  Speaker 11: rid of those issues and you're really going to see
• 35:12
  Speaker 11: a boom, not just in our industry, but in the
• 35:14
  Speaker 11: broader economy.
• 35:16
  Speaker 5: Well, how is gas price fluctuations a factor in this conversation?
• 35:21
  Speaker 5: You talk about how great the summer was, even in
• 35:23
  Speaker 5: light of the fact that gasoline prices are higher. But
• 35:26
  Speaker 5: if they are higher on a sustained basis, which frankly
• 35:29
  Speaker 5: seems to be the trajectory that we're looking at right now,
• 35:32
  Speaker 5: does it eventually start to have an erosive effect?
• 35:35
  Speaker 11: The logical thought is that it's going to have a
• 35:37
  Speaker 11: corrosive effect. But you go back and look at earlier
• 35:40
  Speaker 11: this year, the war in Iran had just started. We
• 35:42
  Speaker 11: had the strongest spring break. that we had ever seen
• 35:45
  Speaker 11: before in the industry. We had the strongest Memorial Day,
• 35:49
  Speaker 11: the strongest July 4th. We're set to have an extremely
• 35:51
  Speaker 11: strong Labor Day weekend here coming up. So all these time,
• 35:55
  Speaker 11: we think it's going to have a corrosive effect, and
• 35:57
  Speaker 11: yet it hasn't. Now, again, logic tells us there has
• 36:00
  Speaker 11: to be an end to this, but the industry is
• 36:02
  Speaker 11: holding on strong. The willingness of people to spend is
• 36:05
  Speaker 11: certainly there. Again, the more we can get rid of
• 36:08
  Speaker 11: some of these things that are hanging over us, the
• 36:11
  Speaker 11: better we will do. But it is extraordinary to see
• 36:13
  Speaker 11: just how resilient travelers are at this point in time.
• 36:17
  Speaker 7: It's something to consider the threat of. rising energy prices,
• 36:22
  Speaker 7: a war in the Middle East. This is tough stuff
• 36:24
  Speaker 7: when you're in the travel business. But you said something
• 36:27
  Speaker 7: in passing that is clearly a greater threat, and that's
• 36:30
  Speaker 7: an extended government shutdown, right? The extent to which that
• 36:33
  Speaker 7: did damage to the travel business at large by furloughing
• 36:38
  Speaker 7: TSA workers, wreaking havoc on the air traffic control system.
• 36:44
  Speaker 7: Is the prospect of another shutdown your greatest worry?
• 36:46
  Speaker 11: Yeah, the most significant issue we ran into in the
• 36:48
  Speaker 11: past year were two government shutdowns.
• 36:50
  Speaker 8: How about that?
• 36:50
  Speaker 11: Leading up to Thanksgiving last year, where there were great
• 36:54
  Speaker 11: doubts about air traffic control, more ATC officers obviously calling
• 36:58
  Speaker 11: in sick, and then coming into February or so this year,
• 37:01
  Speaker 11: and TSA officers calling out, creating four or five hour
• 37:04
  Speaker 11: long lines. Those are the two biggest issues we've run into. Fortunately,
• 37:08
  Speaker 11: earlier this week, we saw Congress come together, get a
• 37:11
  Speaker 11: deal done so we won't see a shutdown before the election.
• 37:14
  Speaker 11: That's a positive sign. They've pushed that off to December.
• 37:17
  Speaker 11: Right before the holidays. Right before the holidays. We're in
• 37:20
  Speaker 11: a lame duck period. I'm hopeful that wiser minds prevail
• 37:24
  Speaker 11: and we get into January of next year with a
• 37:27
  Speaker 11: functioning government. These shutdowns are something that don't happen at
• 37:30
  Speaker 11: a state level. They don't happen in other countries. They
• 37:33
  Speaker 11: are completely man-made here, completely unnecessary, and completely irresponsible when
• 37:39
  Speaker 11: it comes to these people that need and deserve to
• 37:42
  Speaker 11: be paid. That has been our message and will continue
• 37:44
  Speaker 11: to be.
• 37:45
  Speaker 5: I'd like to return to something you said a moment ago,
• 37:47
  Speaker 5: that a lot of this is being driven by the
• 37:49
  Speaker 5: fact that unemployment is very low in this country. We're
• 37:51
  Speaker 5: going to get another jobs report tomorrow that is expected
• 37:54
  Speaker 5: to show unemployment. Basically, at least the expectation of economists
• 37:57
  Speaker 5: is flat at 4.1 percent. I'm more interested in the
• 38:01
  Speaker 5: labor force participation rate, which has been declining pretty substantially.
• 38:06
  Speaker 5: And I wonder if you're hearing from members of your
• 38:08
  Speaker 5: association about difficulty attracting labor into the leisure and hospitality
• 38:12
  Speaker 5: sector and travel overall, or if things like the president's
• 38:17
  Speaker 5: tax policies and no tax on tips, which he often
• 38:20
  Speaker 5: has touted, are kind of netting out that effect.
• 38:23
  Speaker 11: Yeah, I think when it comes to the workforce in
• 38:24
  Speaker 11: our industry, the issues tend to be a bit more regional.
• 38:27
  Speaker 11: There's no doubt that the no taxes on tips and
• 38:30
  Speaker 11: some of the other things that have been done over
• 38:31
  Speaker 11: time have been very helpful in a place like Las Vegas.
• 38:34
  Speaker 11: When you look broadly at the industry, we are still
• 38:37
  Speaker 11: upwards of a million jobs short of where we would be,
• 38:41
  Speaker 11: where we need to be at full employment. We have
• 38:45
  Speaker 11: struggled to fill some of those jobs. We have seen
• 38:48
  Speaker 11: growth in recent months. But yeah, there has been a
• 38:50
  Speaker 11: switch in where people are in the workforce. We need
• 38:55
  Speaker 11: to get that resolved. What's leading to, obviously, is an
• 38:58
  Speaker 11: industry that's trying to find whole new ways to become efficient.
• 39:01
  Speaker 11: You see that in hotels. You see that in other
• 39:04
  Speaker 11: aspects of the industry. And a lot of that is
• 39:07
  Speaker 11: also what needs to be done, as we've seen labor
• 39:09
  Speaker 11: costs skyrocket. We've certainly seen that happen in various markets.
• 39:13
  Speaker 11: Los Angeles is a great example. New York City is
• 39:15
  Speaker 11: a great example, where what has been required of aspects
• 39:18
  Speaker 11: of the industry is quite extraordinary, and the industry has
• 39:22
  Speaker 11: to respond. So I think you're going to continue to
• 39:25
  Speaker 11: see an industry that is looking for ways to become
• 39:27
  Speaker 11: more efficient in a way, and the traveler experience as
• 39:30
  Speaker 11: such is going to continue to evolve in the years ahead.
• 39:33
  Speaker 7: Well, whether it's the reservation systems that airlines or hotels
• 39:37
  Speaker 7: are using or pricing mechanisms, is AI helping the industry
• 39:42
  Speaker 7: save people?
• 39:43
  Speaker 8: Money yet, if not replacing workers?
• 39:45
  Speaker 11: Well, I think there are two aspects of AI that
• 39:48
  Speaker 11: both work in our favor. One is that it's giving
• 39:50
  Speaker 11: travelers new ways to think about their trips, new ways
• 39:53
  Speaker 11: to plan, new ways to get smarter in advance. There's
• 39:56
  Speaker 11: just things you can do to be a more informed
• 39:59
  Speaker 11: traveler and to be able to do things on your own.
• 40:01
  Speaker 11: That empowering of the traveler takes frictions out of the
• 40:05
  Speaker 11: experience and leads people to travel more. That works for us.
• 40:08
  Speaker 11: The other aspect that works for us, at least from,
• 40:10
  Speaker 11: I think, a political positioning standpoint, Most of this industry,
• 40:14
  Speaker 11: you can't turn over to AI. Most of this industry,
• 40:16
  Speaker 11: you can't outsource. It takes people. We are, in that respect,
• 40:20
  Speaker 11: somewhat of an inefficient industry because to give you the
• 40:23
  Speaker 11: experience you expect, we need to make sure we've got
• 40:25
  Speaker 11: a lot of people there doing that. AI is a
• 40:27
  Speaker 11: resource to those individuals, but it's certainly not getting rid
• 40:30
  Speaker 11: of those individuals, particularly that affluent and the luxury experience.
• 40:34
  Speaker 11: Travel is something that really depends. on the person-to-person experience.
• 40:39
  Speaker 11: All right.
• 40:39
  Speaker 5: It's great to have you today, Jeff, fresh off your
• 40:41
  Speaker 5: meeting in the Oval Office. He's the president and CEO
• 40:44
  Speaker 5: of the U.S. Travel Association, Jeff Freeman, here with us
• 40:47
  Speaker 5: in our Washington, D.C.
• 40:48
  Speaker 1: Studio.
• 40:48
  Speaker 5: Thank you so much. Now, as we were having our
• 40:51
  Speaker 5: conversation with Jeff, Vice President J.D. Vance did step up
• 40:54
  Speaker 5: to the podium as taking questions from reporters now talking
• 40:57
  Speaker 5: about the economy. He says the administration is doing everything
• 41:01
  Speaker 5: it can to bring down prices and that the inflation
• 41:03
  Speaker 5: problem wasn't created in a day. Also touching on the
• 41:06
  Speaker 5: Venezuela oil deal, Joe, he says that U.S. taxpayers will
• 41:10
  Speaker 5: win with that deal.
• 41:14
  Speaker 7: Thanks for listening to the Balance of Power podcast. Make
• 41:17
  Speaker 7: sure to subscribe, if you haven't already, at Apple, Spotify,
• 41:20
  Speaker 7: or wherever you get your podcasts. And you can find
• 41:23
  Speaker 7: us live every weekday from Washington, D.C. at noontime Eastern
• 41:26
  Speaker 7: at Bloomberg.com.