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Trump Renames Lake Ontario · Balance of Power

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Speaker 1: Bloomberg Audio Studios. Podcasts.
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Speaker 2: 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 2: We're spending some time on the campaign trail and it's
0:27
Speaker 2: really interesting to get past the bulk of the primaries.
0:31
Speaker 2: And start investing ourselves in the general election cycle that
0:34
Speaker 2: most think begins roughly around Labor Day.
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Speaker 1: That's kind of the unofficial start.
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Speaker 2: And Tyler, that's when we're told that voters really start
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Speaker 2: to crystallize their ideas when it comes to particularly domestic issues.
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Speaker 2: And in many cases, start really making decisions that are
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Speaker 2: hard to change. Once the politicians start running ads later
0:54
Speaker 2: in the cycle, as we get closer to November, that's
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Speaker 2: why the president's getting on a plane today.
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Speaker 5: And the president has had a relatively strong record when
1:00
Speaker 5: it comes to the primary season. And now the question becomes,
1:02
Speaker 5: how does that translate into the general with such slim
1:05
Speaker 5: margins and Democrats trying to flip some races and some seats?
1:10
Speaker 5: Interestingly enough, maybe Texas could be in their sights as
1:13
Speaker 5: recent polling is showing us Ken Paxton, who has the
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Speaker 5: president's backing, currently trailing. So we're going to have to
1:19
Speaker 5: see about how big of an impact the president could
1:22
Speaker 5: have tonight, not just in the polls, but also when
1:24
Speaker 5: it comes to the money.
1:25
Speaker 1: And for that, we're going to check in.
1:27
Speaker 5: And head to the White House and check in with
1:29
Speaker 5: Bloomberg's Kate Sullivan, who is standing by to help us
1:32
Speaker 5: preview this trip. Kate, I wanted to chat with you
1:35
Speaker 5: about some of the defining issues in this race in particular.
1:39
Speaker 5: If we bring all of the different threads together, we're
1:41
Speaker 5: actually seeing data centers become perhaps the most pressing issue
1:45
Speaker 5: in this race. I pulled some polling. A Texas university
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Speaker 5: poll shows 57 percent of Texas voters say they don't
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Speaker 5: want to see data centers anymore.
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Speaker 6: In their community.
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Speaker 5: This is an issue where President Trump has actually gone
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Speaker 5: up against the governor of Texas on. What do we
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Speaker 5: know about how this is defining politics right now?
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Speaker 7: That's right.
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Speaker 6: I mean, there are a number of really critical issues
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Speaker 6: in this midterm election. Data centers, as you mentioned, affordability also,
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Speaker 6: the economy, how the Iran war is impacting that. The
2:16
Speaker 6: president is going, he recognizes how important it is to
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Speaker 6: get out on the trail and really spread his message
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Speaker 6: and try to boost Republican candidates. He's heading to Houston,
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Speaker 6: Texas today. He's going to be leaving in just a
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Speaker 6: few hours. We'll see him headline a Republican National Committee
2:31
Speaker 6: event tonight. And tonight, you know, is really about trying
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Speaker 6: to inject some cash into Ken Paxton's campaign in particular.
2:38
Speaker 6: The president, of course, backed Ken Paxton. who is running
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Speaker 6: against Democrat James Tallarico. It's a very closely watched race.
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Speaker 6: A lot of people want to see how— you know, Texas
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Speaker 6: has not elected a Democrat to statewide office in more
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Speaker 6: than 30 years. But poll after poll shows that this
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Speaker 6: race is quite competitive, which could say a lot about
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Speaker 6: the makeup of the Texas electorate, as well as just
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Speaker 6: the wider midterm elections and the trends that we're trying
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Speaker 6: to see there. The president will be heading to that
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Speaker 6: RNC event tonight. And then he's got a very different
3:09
Speaker 6: kind of event tomorrow. He'll be at NASA's space headquarters
3:13
Speaker 6: there in Houston, and he'll be meeting with Artemis II
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Speaker 6: crew to give the Congressional Space Medal of Honor to
3:20
Speaker 6: that crew. You'll remember, of course, Tyler and Joe, how
3:23
Speaker 6: much that crew captivated the nation's attention when they made
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Speaker 6: history and went around the moon earlier this year.
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Speaker 2: Yeah, so pretty unusual. He's not spending the night in
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Speaker 2: his own bed. The president usually heads home, gets back
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Speaker 2: on the plane the next day. So I guess we've
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Speaker 2: got an overnight in Texas here with polls that you
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Speaker 2: referred to, Kate, Ken Paxton, at 39% to James Talrico's 42%,
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Speaker 2: according to the University of Texas. If the election were
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Speaker 2: held today, who would you vote for? Very straightforward and
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Speaker 2: blew some minds. Some folks thought it was an outlier.
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Speaker 2: But when you look at the money, It's nowhere close.
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Speaker 2: Tyler mentioned this a couple of minutes ago, Kate. Ken
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Speaker 2: Paxton with $ 1. 7 million and James Talrico with more than
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Speaker 2: $ 21. 5 million cash on hand. Can the president make a
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Speaker 2: difference when it comes to the money tonight? This is what,
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Speaker 2: a $ 500, 000 a plate dinner?
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Speaker 8: That's right.
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Speaker 7: It's definitely, it's a huge fundraiser. We'll see.
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Speaker 6: I mean, the president does, as you mentioned, has a
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Speaker 6: good track record with his endorsement does matter. But of course,
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Speaker 6: it's not the only thing that people care about. And
4:30
Speaker 6: this midterm elections, we've seen just Republican voters, but just
4:34
Speaker 6: voters in general, they are really struggling when it comes
4:37
Speaker 6: to the economy, when it comes to affordability, when it
4:40
Speaker 6: comes to affording grocery prices, gas prices.
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Speaker 7: Of course, we've talked a lot on.
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Speaker 6: The show about war in Iran and just how much
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Speaker 6: it's affecting just the economic ripple effects that are coming
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Speaker 6: from that. There's really no end in sight when it
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Speaker 6: comes to that war, and it's having a huge impact
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Speaker 6: in people's pocketbooks.
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Speaker 2: Just to qualify that, Tyler, the tickets start at $ 10, 000
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Speaker 2: per couple. They go as high as $ 443, 000 for top-tier access.
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Speaker 2: So This could be a blockbuster if he plays it right.
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Speaker 5: And it is also underscoring the push here when we're
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Speaker 5: looking at the difference between how much cash on hand
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Speaker 5: these candidates have. And we are in an environment where
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Speaker 5: the ad impact really does make.
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Speaker 9: Impact.
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Speaker 5: And to pick up on Kate's point right there, there
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Speaker 5: is a dovetailing right now when it comes to domestic
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Speaker 5: and foreign policy. And Kate, before we let you go,
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Speaker 5: we have to turn to another story that we're closely tracking.
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Speaker 5: Bloomberg News reporting that the Kremlin could soon escalate the
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Speaker 5: conflict with Ukraine. We're learning about this rare visit that
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Speaker 5: the CIA Director John Ratcliffe just made to Moscow.
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Speaker 1: What can you tell us?
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Speaker 5: What are we learning about what was discussed there?
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Speaker 1: That's right.
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Speaker 6: So it was a surprise visit, an unannounced visit.
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Speaker 7: It was brief.
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Speaker 6: Ratcliffe went to Moscow and it was the first time
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Speaker 6: that we know about the first publicly known trip that
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Speaker 6: Ratcliffe has made to Moscow. Now, the White House has
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Speaker 6: not provided many details about this trip at all, but
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Speaker 6: reports show that he was there.
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Speaker 7: To really give.
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Speaker 6: Russia a warning not to attack any NATO member countries.
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Speaker 6: This is as European and American officials have become increasingly
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Speaker 6: concerned that Moscow could launch some kind of limited assault
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Speaker 6: or limited incursion on a neighboring country, perhaps on a
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Speaker 6: NATO member country. There are also reports that Ratcliffe was
6:26
Speaker 6: there to encourage Russia to stop doing business with Iran,
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Speaker 6: to limit their economic and military support of Iran. This is,
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Speaker 6: of course, after Besson announced Operation Economic Outcast, and as
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Speaker 6: the administration is trying to squeeze Iran and really isolate
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Speaker 6: them on the world stage.
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Speaker 1: Kate, it's great to have you.
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Speaker 2: Kate Sullivan with us live from the White House. As
6:48
Speaker 2: we add the voice of Ambassador John Herbst, we told
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Speaker 2: you he was coming, and we're looking forward to this conversation.
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Speaker 1: The former U.S.
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Speaker 2: Ambassador to Ukraine, Senior Director of of the Atlantic Council's
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Speaker 2: Eurasia Center.
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Speaker 1: Ambassador Herbst, it's great to have you back.
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Speaker 2: We're looking forward to getting your take on what's happening
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Speaker 2: on the ground in Ukraine, but I first would love
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Speaker 2: to hear your reaction to this trip that the CIA
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Speaker 2: director made to Moscow. It's something we don't see very
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Speaker 2: often these days, and I'm wondering if you think Vladimir
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Speaker 2: Putin heard the message.
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Speaker 3: Well, this means that the reports we had, first coming
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Speaker 3: from Baltic Intelligence Services, and then from our own intelligence
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Speaker 3: services over the past few weeks, that Putin is seriously
7:27
Speaker 3: considering some form of kinetic activity, some sort of military
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Speaker 3: strike on the Baltic states or maybe other NATO members
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Speaker 3: in Eastern Europe, is real, and then the administration takes
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Speaker 3: it very seriously. Ratcliffe understands that Moscow considers us to
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Speaker 3: be its principal adversary, and a strike against those states
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Speaker 3: is a strike against us. So I welcome him going
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Speaker 3: to Moscow to tell him not to do it. Excuse me.
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Speaker 8: It's for.
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Speaker 5: potentially pointed toward escalation here. There was a time where
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Speaker 5: it felt like we may be making progress.
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Speaker 1: The U.S.
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Speaker 5: Had committed to firm security guarantees, for example, for Ukraine
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Speaker 5: after months of saying that those guarantees should instead be implicit.
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Speaker 5: Where do we stand in this negotiating process? After what
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Speaker 5: were months of talks, are we really back to square one?
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Speaker 3: The talks were more of them by the end of
8:18
Speaker 3: last year. You're right that President Trump began to move
8:22
Speaker 3: within the negotiations towards a position of greater strength as
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Speaker 3: represented by progress on security guarantees and represented by the
8:32
Speaker 3: sanctions he put on Rosneft and Lukoil, two major Russian
8:35
Speaker 3: hydrocarbon firms, at the end of October. But then we
8:39
Speaker 3: also offered some ideas which made no sense, to my judgment,
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Speaker 3: either for Ukraine but especially for the United States, like
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Speaker 3: Ukraine handing to Russia as a gift to strategic territory
8:50
Speaker 3: in western Donbass that the Russian army has been unable
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Speaker 3: to take. So the push made by the administration has
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Speaker 3: not been one consistently of peace through strength. But Radcliffe, again,
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Speaker 3: is a very serious man, understands the danger that Moscow's
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Speaker 3: aggressive policy represents to the United States. So his visit
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Speaker 3: to Moscow to say knock it off is a plus
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Speaker 3: in my judgment.
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Speaker 2: There's some pretty terrifying reporting by the Wall Street Journal
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Speaker 2: this morning on the status of of the war between
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Speaker 2: Russia and Ukraine, described as entering a new phase, Ambassador,
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Speaker 2: with expanded aerial arsenals and inadequate air defenses, both sides
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Speaker 2: bludgeoning each other in what they call a bare-knuckle fight
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Speaker 2: causing a widening swath of destruction and a rising civilian toll.
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Speaker 1: How long can this go on for?
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Speaker 3: Well, I think that report is only basically correct. It's inadequate, though. Okay.
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Speaker 5: Why?
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Speaker 3: What's happened is they're right about the difficulty of Ukraine
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Speaker 3: to stop Russian ballistic missiles because they don't have many
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Speaker 3: of our Patriot interceptor missiles, which are the only ones
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Speaker 3: that work for that, and the Russians have been unable
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Speaker 3: to stop Ukrainian drones because their territory is vast, but
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Speaker 3: Russia is trying to terrorize the Ukrainian public by targeting civilians.
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Speaker 3: Ukraine is avoiding that. Ukraine is striking at strategic targets,
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Speaker 3: hydrocarbon facilities, because without oil and gas, the Russian war
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Speaker 3: machine won't run, going after munitions plants, going after key
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Speaker 3: transportation nodes. So Ukraine's strikes are weakening Russia's ability to
10:23
Speaker 3: conduct the war. Russia's strikes are merely killing civilians. That's
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Speaker 3: the bludgeoning. That's the brutality.
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Speaker 5: If we continue on this, can you put into context
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Speaker 5: the options left on the table for Ukraine when it
10:35
Speaker 5: comes to bolstering their own defense weapons stockpile and base?
10:40
Speaker 5: You mentioned those Patriot missiles. It was back at the
10:43
Speaker 5: G20 when President Trump had suggested that there was a
10:46
Speaker 5: deal to grant Ukraine the general license to build these
10:49
Speaker 5: on their own. But at this point, it doesn't seem
10:52
Speaker 5: like that deal is going to come to fruition.
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Speaker 3: Well, sadly, what you're saying is true. President Trump said
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Speaker 3: when he met with Zelensky at the Ankara NATO summit in,
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Speaker 3: I don't know, like the 10th of July, that he
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Speaker 3: would license Ukraine to do it, to build those missiles,
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Speaker 3: which would take time, but it would be a strong
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Speaker 3: step in the right direction for us, for Ukraine, for NATO.
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Speaker 3: And he said he saw Zelensky in the Oval Office
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Speaker 3: two weeks after that, and they spoke as if that's
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Speaker 3: what the deal was. But then two days later or
11:21
Speaker 3: three days later, the president said, no, I only said
11:24
Speaker 3: I was going to consider it. So here he was
11:26
Speaker 3: being inconsistent in ways not good for Ukraine's security, but
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Speaker 3: also not good for American security. Giving Ukraine that capability,
11:34
Speaker 3: or rather licensing them, will increase the production of Patriot
11:37
Speaker 3: interceptor missiles, which not only Ukraine needs, but the United
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Speaker 3: States needs, our allies and partners around the Persian Gulf
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Speaker 3: need it, NATO needs it. So this would be the
11:47
Speaker 3: smart move. It would be good to see.
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Speaker 2: What did you think when Vladimir Putin talked about Ukraine
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Speaker 2: opening Pandora's box last weekend? He was asked about some
11:57
Speaker 2: of the attacks that Russia has experienced from Kiev. He said,
12:01
Speaker 2: we'll be ready to get a blowback on your most
12:03
Speaker 2: sensitive sectors of the economy. He will use coal as
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Speaker 2: a weapon again this winter, right?
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Speaker 3: Oh, no doubt about it. Look, Putin's been doing this.
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Speaker 3: He's been going after Ukrainian infrastructure since the successful Ukrainian
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Speaker 3: counteroffensive in the late summer and early fall of 2022.
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Speaker 3: So this is nothing new. Putin has no new tactics
12:23
Speaker 3: that he's been putting into place. All he does is
12:26
Speaker 3: smack the Ukrainian economy and Ukrainian civilians. Whereas the Ukrainian
12:31
Speaker 3: drone offensive we've seen since roughly late March, early April
12:35
Speaker 3: has been devastating to Moscow's production of oil and gas,
12:39
Speaker 3: to its ability to supply its own troops at the front,
12:42
Speaker 3: to its ability to supply Crimea, which is now quasi-isolated.
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Speaker 3: All of those things have clear strategic and military value.
12:49
Speaker 3: Putin strikes only murders Ukrainian civilians. But I just came
12:52
Speaker 3: from Kiev. I was there for three and a half days.
12:55
Speaker 3: While I was there, there were many very senior European officials,
12:59
Speaker 3: so the Russians did not bomb Kiev. But over the
13:01
Speaker 3: last 18 hours, they've been bombing the heck out of
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Speaker 3: Ukrainian civilians, especially in Kiev. And so scores of civilians
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Speaker 3: have died. It's pure terror. It's pure war crimes.
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Speaker 5: We do want to continue with the conversation related to oil,
13:16
Speaker 5: and I want to bring you a redhead that's crossing
13:18
Speaker 5: the Bloomberg terminal right now. Axios reporting that the Trump
13:21
Speaker 5: administration is in talks with Venezuela's interim government about taking
13:25
Speaker 5: an ownership stake in the country's enormous oil resources.
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Speaker 1: This is according to two U.S.
13:30
Speaker 5: Officials. Speaking with Axios, this is a historic deal which
13:34
Speaker 5: could more than double the U.S. oil reserves by drawing
13:38
Speaker 5: on the country that has the world's largest proven oil reserves. reserves.
13:42
Speaker 5: Let's stick on the idea of oil, on sanctions. I
13:46
Speaker 5: want to get your thoughts here about economic pressure very quickly.
13:49
Speaker 5: We're watching the White House threaten economic pressure against Iran.
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Speaker 5: How effective has sanctions and secondary sanctions been when it
13:56
Speaker 5: comes to the conflict with Russia and Ukraine?
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Speaker 3: They've been effective. They have taken a percentage point or
14:03
Speaker 3: two off the Russian economy over the years. but not
14:07
Speaker 3: effective to the point where Putin says, okay, I'm going
14:09
Speaker 3: to make a just peace, or I'm going to make
14:12
Speaker 3: even a stable peace. Trump has offered Putin favorable terms
14:16
Speaker 3: for a stable peace, terms that Ukraine would be willing
14:20
Speaker 3: to accept, but the Russians would refuse each and every
14:22
Speaker 3: one of those proposals because Putin's aim is political control
14:26
Speaker 3: of Ukraine, and that's not Trump's aim. Trump wants a
14:28
Speaker 3: stable peace, and Ukraine wants to be a sovereign country,
14:31
Speaker 3: not living under the Russian boot, full of the Russian
14:34
Speaker 3: war crimes.
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Speaker 5: All right, John Herbst, former U.S. ambassador to Ukraine, thank
14:39
Speaker 5: you so much for joining us here.
14:40
Speaker 1: Stay with us on Balance of Power. We'll have much
14:42
Speaker 1: more coming up after this.
14:47
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Speaker 5: All right.
15:07
Speaker 2: Looks like that's all we're going to get as reporters
15:09
Speaker 2: are removed from the Oval Office after a brief exchange
15:12
Speaker 2: with President Trump, who assembled the White House press corps
15:15
Speaker 2: today to take the motion of renaming the Great Lake
15:22
Speaker 2: of Ontario. Lake Ontario, as he had suggested earlier, will
15:26
Speaker 2: be renamed Ontario. Lake America. But that's not exactly what
15:30
Speaker 2: the questions were focused on. Thank you for joining us
15:33
Speaker 2: here on Balance of Power. That was live from the
15:35
Speaker 2: Oval Office on Bloomberg TV and radio with the president
15:38
Speaker 2: saying that he has had talks with Vladimir Putin. Really interesting,
15:42
Speaker 2: as we were just discussing the war with Russia and
15:45
Speaker 2: Ukraine with Ambassador Herbst. Putin not attacking NATO territory, he said,
15:51
Speaker 2: asked repeatedly about that to say that Putin will not attack.
15:54
Speaker 1: He wouldn't describe more about what he knew.
15:57
Speaker 2: Asked about Iran, they're in big trouble. He said they
16:00
Speaker 2: are not paying their troops. Asked by Bloomberg's Jen DeLui
16:04
Speaker 2: just there in the Oval Office about why we are
16:06
Speaker 2: not talking with Iran. Not too much news to come
16:09
Speaker 2: out of that event today other than An executive order,
16:12
Speaker 2: it seems, to change the name of Lake Ontario to
16:15
Speaker 2: the Lake of America. He also floated the idea of
16:18
Speaker 2: changing the name of an ocean. I'm not sure exactly
16:20
Speaker 2: how that would work.
16:21
Speaker 1: Thanks for being with us again.
16:22
Speaker 2: I'm Joe Matthew alongside Tyler Kendall in Washington as we
16:25
Speaker 2: assemble our political panel to get their take. On everything
16:27
Speaker 2: we just heard, remembering the president is on his way
16:29
Speaker 2: to Texas today, as he mentioned, to help raise money
16:32
Speaker 2: for the RNC and for the Ken Paxton Senate campaign.
16:35
Speaker 2: Rosemary Becky is with us, our Republican strategist, founder and
16:38
Speaker 2: president of Jersey First. Doug Ferrer, principal at Maywood Strategies,
16:42
Speaker 2: our Democratic strategist. We've been talking, guys, about this race
16:46
Speaker 2: in Texas. And, Rosemary, the question is whether the president
16:49
Speaker 2: can bring the dollars needed. There's a massive disparity when
16:53
Speaker 2: it comes to cash on hand between these two candidates,
16:55
Speaker 2: Ken Paxton, the attorney general. And the man that the
16:59
Speaker 2: president just referred to as Talafrico, that's Democrat James Talrico,
17:03
Speaker 2: who is leading not only in money, but in some polls. Granted,
17:06
Speaker 2: within the margin of error. What does this visit mean
17:08
Speaker 2: for the campaign tonight?
17:11
Speaker 8: Oh, I think it's very important for the campaign. As
17:14
Speaker 8: you pointed out, you know, they've got to do a
17:16
Speaker 8: lot of catch up work. And so hopefully they will
17:21
Speaker 8: be raising quite a bit of money. I mean, it's
17:23
Speaker 8: going to be a close and expensive race. So tonight
17:28
Speaker 8: really is important.
17:32
Speaker 5: One of the areas in this race where we actually
17:34
Speaker 5: saw the Democratic candidate come out early and often to
17:37
Speaker 5: talk about is data centers. We were talking about this
17:39
Speaker 5: earlier in the program, Doug. But I'm wondering if this
17:43
Speaker 5: is an area where either side of the aisle really
17:45
Speaker 5: has been able to get a coherent message out, given
17:50
Speaker 5: how difficult it is right now to connect with voters
17:53
Speaker 5: on the issue of data centers. A University of Texas
17:55
Speaker 5: poll finding 57% of Texas voters don't want a data
17:59
Speaker 5: center near them.
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Speaker 9: I think the Democrats are doing a great job on this,
18:02
Speaker 9: and I think it's because they've had leaders like Bernie
18:04
Speaker 9: Sanders and others who've come out really strong and been
18:06
Speaker 9: talking about data centers for more than a year. Look,
18:09
Speaker 9: there are some people like Abbott who are trying to
18:11
Speaker 9: distance themselves from data centers. Donald Trump loves data centers,
18:15
Speaker 9: and he says it as often as he can, and
18:16
Speaker 9: he really is the focal point of the Republican Party.
18:19
Speaker 9: So I think it's a wide open lane for Democrats.
18:21
Speaker 9: The question is, can they seize it? Because a lot
18:23
Speaker 9: of donors to Democrats, especially moderates, are really pro-data center.
18:27
Speaker 9: So we'll see if they're able to work around that.
18:30
Speaker 2: But just to crystallize the message here, you mentioned Bernie Sanders.
18:34
Speaker 2: Is the Democratic message on data center national moratorium until
18:38
Speaker 2: we can figure out?
18:41
Speaker 9: It's a fair point that it hasn't coalesced around a
18:42
Speaker 9: particular idea. There's obviously moratorium. We need to negotiate, have
18:46
Speaker 9: community input. I think being opposed to it or at
18:49
Speaker 9: least being supportive of communities asking questions is key. Yesterday,
18:54
Speaker 9: Donald Trump's EPA announced that they're not going to have
18:56
Speaker 9: any public comment on the permitting process for data center construction, right?
19:00
Speaker 9: They are actively moving to the pro-data center position. So
19:04
Speaker 9: Democrats can be opposed to it even if they don't
19:06
Speaker 9: have a coherent necessarily policy thing that they've coalesced around
19:11
Speaker 9: right now.
19:11
Speaker 5: Rosemary, let's have you weigh in on this because this
19:13
Speaker 5: is actually an issue if we bring it back to
19:15
Speaker 5: the Texas elections today. where President Trump once issued a
19:20
Speaker 5: rare rebuke to Texas's governor, Greg Abbott, over his plans
19:25
Speaker 5: to pause permits so that they can get guardrails in place.
19:29
Speaker 5: How does it work when you have politicians that have
19:32
Speaker 5: to balance the narrative between being competitive, let's say China,
19:35
Speaker 5: but also these voter concerns?
19:37
Speaker 8: Well, first of all, we are a digital economy. And, right,
19:43
Speaker 8: data centers are the backbone of that digital economy We
19:47
Speaker 8: have had data centers in this country since 1940. They
19:52
Speaker 8: are prevalent in every aspect of our economy. And it
19:56
Speaker 8: is so critical that we get out there and that
20:01
Speaker 8: there is a conversation about what is truth, and what
20:05
Speaker 8: is false. And I think that's the struggle right now.
20:08
Speaker 8: I think that there is not a clear message out
20:11
Speaker 8: there about data centers and how much energy they use,
20:16
Speaker 8: how much water they use, are they too loud or not?
20:19
Speaker 8: And I think that that's where this conversation has to start.
20:25
Speaker 8: And otherwise, it is going to become a big part
20:30
Speaker 8: of the conversation in the fall is part of the
20:33
Speaker 8: election cycle. But I really think that there's so much
20:39
Speaker 8: misinformation out there that we really need to have a
20:45
Speaker 8: conversation about what is true and.
20:46
Speaker 3: What is false.
20:49
Speaker 2: Well, it does, I have to admit, feel like a
20:51
Speaker 2: pretty bipartisan issue at this point. When we bring this
20:55
Speaker 2: up with lawmakers, it was Governor Spencer Cox last evening
20:58
Speaker 2: who who had joined us for a series of interviews
21:01
Speaker 2: over the past couple of years about the growth of
21:03
Speaker 2: data centers, alternative energy sources that he was tapping to
21:06
Speaker 2: make it happen. Everyone stops down and gives us an
21:09
Speaker 2: extended answer on this, which really underscores this fear that
21:15
Speaker 2: they seem to have on both sides about this issue
21:18
Speaker 2: that they're all catching up with right now.
21:20
Speaker 9: Yeah, and I think Rosemary's really smart, but the sort
21:24
Speaker 9: of pro-data center, we need to get this misinformation perspective
21:27
Speaker 9: she just shared is going to be a total loser
21:29
Speaker 9: with Democrats and Republicans.
21:31
Speaker 2: Do you believe that China's putting stuff on social media
21:33
Speaker 2: to turn people away from data center?
21:35
Speaker 1: How many people have ever seen a data center? Plenty
21:37
Speaker 1: of people in Loudoun County right down the street.
21:40
Speaker 9: But no, but look, I do think the Chinese may
21:42
Speaker 9: be doing this. But what I have to say is
21:44
Speaker 9: that the opposition is real. Americans do not like what
21:48
Speaker 9: they hear about AI. It says we're going to fire
21:50
Speaker 9: your dad. We're going to make sure you never get
21:52
Speaker 9: a job.
21:53
Speaker 5: Right.
21:53
Speaker 9: We're going to steal your information. We're going to chop
21:55
Speaker 9: up books to train our models.
21:57
Speaker 1: People don't like it. And this is their point of veto.
22:00
Speaker 1: And it's cutting through.
22:01
Speaker 9: Millions, hundreds of millions of dollars in lobbying being done
22:04
Speaker 9: by these companies towards politicians, even on the Republican side.
22:07
Speaker 9: It's truly amazing.
22:08
Speaker 5: Rosemary, we'll give you the final word on this. I
22:10
Speaker 5: know you're about to weigh in there.
22:14
Speaker 8: No, I was just going to say, you know, again,
22:16
Speaker 8: we have to continue to spread things that aren't true.
22:22
Speaker 8: We have to continue to educate people.
22:25
Speaker 3: What is AI? What is it not?
22:27
Speaker 7: What is a data center?
22:28
Speaker 8: What is it not? And I think that that's such
22:31
Speaker 8: a critical part. You know, I have a daughter who
22:35
Speaker 8: just graduated from college and she has a background in AI.
22:39
Speaker 8: I'm amazed to see that. What she's capable of doing.
22:43
Speaker 8: And I think that there's a lot of opportunity out there.
22:46
Speaker 8: And I just think that we need to not create
22:49
Speaker 8: fear and spread fear that we really need to have
22:53
Speaker 8: an honest conversation about what what this.
22:56
Speaker 7: Is and what it's not.
22:59
Speaker 5: All right. Our political panel today, Rosemary Becky, founder and
23:02
Speaker 5: president of Jersey First and Republican strategist alongside Doug Farrar,
23:06
Speaker 5: principal at Maywood Strategies and a Democratic strategist. Thank you
23:10
Speaker 5: both for joining us here.
23:12
Speaker 1: Stay with us on Balance of Power. We'll have much
23:14
Speaker 1: more coming up after this.
23:19
Speaker 4: You're listening to the Bloomberg Balance of Power podcast. Catch
23:23
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23:29
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23:33
Speaker 4: us live on YouTube.
23:35
Speaker 2: As we turn to Jackson Hole, we'll know by this
23:39
Speaker 2: time tomorrow what the message was from Kevin Warsh. Big
23:43
Speaker 2: questions about what he might say and how the market
23:47
Speaker 2: might interpret it. And ahead of our conversation with Catherine Edwards,
23:51
Speaker 2: who's back with us today on Balance of Power, I
23:53
Speaker 2: want to bring you right to the scene. Michael McKee
23:56
Speaker 2: has been there for a couple of days already ahead
23:58
Speaker 2: of the symposium and is with us right now live
24:01
Speaker 2: on Bloomberg TV and radio from Jackson Hole Stadium.
24:04
Speaker 1: Mike, how's it going out there?
24:05
Speaker 2: I'm just curious if you can bring us inside the
24:09
Speaker 2: process in the days that lead up to the speech.
24:11
Speaker 2: I know there are a lot of meetings, a lot
24:13
Speaker 2: of conversations that are happening in the days before the
24:16
Speaker 2: markets ever hear from the Fed chair.
24:19
Speaker 1: What are people doing.
24:19
Speaker 2: With their time and what are the conversations you're hearing?
24:22
Speaker 2: Is it just a big guessing game?
24:26
Speaker 10: It's a big guessing game in terms of what Kevin
24:28
Speaker 10: Warsh is going to say. Nobody really knows except Kevin
24:31
Speaker 10: Warsh and maybe his top aides. So there's going to
24:34
Speaker 10: be a lot of interest when he steps to the
24:36
Speaker 10: microphone at 10 o'clock Wall Street time tomorrow. But there
24:39
Speaker 10: is a kind of an overarching question to it. Will
24:42
Speaker 10: he or won't he give the markets what they're looking for,
24:45
Speaker 10: which is some sort of clue as to how he
24:48
Speaker 10: plans to get to the 2% inflation target.
24:52
Speaker 5: Mike, you are starting to have some of these conversations
24:55
Speaker 5: on the ground. I know you spoke with Jeff Schmidt
24:57
Speaker 5: earlier today, the Kansas City Fed president. He told you
24:59
Speaker 5: that the midterms won't impact the October meeting. How much
25:04
Speaker 5: is Fed independence looming over the conversations that you're having
25:07
Speaker 5: there on the ground?
25:11
Speaker 10: Well, you know, it's sort of died out as a
25:13
Speaker 10: front page issue, except for the fact that Lisa Cook
25:16
Speaker 10: is now back in the news and everybody here is
25:19
Speaker 10: tuned into Truth Social to see if Donald Trump tries
25:22
Speaker 10: to fire her before we leave Jackson Hole, which would
25:25
Speaker 10: indeed be kind.
25:26
Speaker 1: Of overwhelming news for the people here.
25:29
Speaker 10: But in general, people think that because of the Supreme
25:32
Speaker 10: Court decision for right now, the Fed is safe and
25:35
Speaker 10: they're not too worried about that. Now, I don't know
25:37
Speaker 10: that Jeff Schmidt wasn't just giving us the party line.
25:41
Speaker 10: They don't want to tell the markets we're having a
25:43
Speaker 10: meeting and you shouldn't even pay attention. But there is
25:47
Speaker 10: a very low likelihood that they would raise rates five
25:50
Speaker 10: days before the election.
25:51
Speaker 9: Mm hmm.
25:53
Speaker 5: Mike, can we stick on this thread of Fed Governor
25:55
Speaker 5: Lisa Cook? She sent this letter to the White House
25:59
Speaker 5: last night. We know that the Supreme Court ruled that
26:02
Speaker 5: President Trump can't fire her, at least immediately. But is
26:05
Speaker 5: the White House planning additional action? Do we know what
26:08
Speaker 5: other steps they could take here?
26:13
Speaker 10: I'll give you the same answer I give you every
26:14
Speaker 10: question when you ask me what Donald Trump's going to
26:16
Speaker 10: do is, how does anybody know? But he has said
26:19
Speaker 10: he wants to fire her again. And the court said
26:22
Speaker 10: that he couldn't because he had not given her adequate
26:25
Speaker 10: notice and a chance to respond. So after the court decision,
26:28
Speaker 10: he had one of his aides send Lisa Cook a
26:31
Speaker 10: letter saying.
26:32
Speaker 1: You're fired.
26:33
Speaker 10: And we're giving you three weeks to respond.
26:37
Speaker 1: That three weeks was up yesterday.
26:39
Speaker 10: Her lawyer sent a letter to the White House outlining
26:43
Speaker 10: her defense, and now we're all waiting for the White
26:45
Speaker 10: House reactions.
26:47
Speaker 3: All right.
26:48
Speaker 5: Michael McKee, Bloomberg International Economics and Policy Correspondent, live from
26:53
Speaker 5: Jackson Hole.
26:53
Speaker 1: Thank you, as always.
26:54
Speaker 5: And we want to continue the conversation, bring in Catherine Edwards,
26:57
Speaker 5: Bloomberg Opinion columnist and co-host of the Optimist Economy podcast. So, Catherine,
27:02
Speaker 5: let's just get your thoughts, all eyes tomorrow. What are
27:05
Speaker 5: you expecting and wanting to hear from Fed Chair Kevin
27:10
Speaker 5: Warsh as he takes the podium?
27:13
Speaker 11: That's hard to say from a chair who has said
27:16
Speaker 11: he thinks communication should be more limited than in the past.
27:19
Speaker 11: I think that makes a lot of us even, maybe
27:21
Speaker 11: it's working the way he wants that we're even in
27:23
Speaker 11: more anticipation of what he will say since he said
27:26
Speaker 11: he doesn't want to say much, communicate much, give as
27:28
Speaker 11: much insight into what the Fed is thinking or doing
27:30
Speaker 11: to have less forward guidance.
27:33
Speaker 7: So it puts an incredible weight on his words.
27:35
Speaker 11: And maybe shows the weakness of communicating less is that
27:38
Speaker 11: it leads to over-interpretation of the little that's said. But
27:41
Speaker 11: in terms of what I'd like to hear, I think
27:43
Speaker 11: I'm with, I would say, even the most casual viewer
27:47
Speaker 11: or follower of the Federal Reserve is I'd like to
27:49
Speaker 11: hear a strong note of independence, that this is about
27:52
Speaker 11: responding to the needs of the U.S. economy and not
27:55
Speaker 11: about responding to the needs to a very loud and
27:57
Speaker 11: very vocal constituency of one.
28:00
Speaker 1: Well, so is this, Catherine, it's great to have you back.
28:03
Speaker 2: Is this a market that needs to be taken by
28:04
Speaker 2: the shoulders here? Hasn't Warsh kind of already made his
28:09
Speaker 2: point to the extent that we're watching the bond market
28:12
Speaker 2: act up a little bit. Some of the longest rates
28:14
Speaker 2: we've seen on the long bond in years.
28:19
Speaker 11: I mean, that's hard to say what would make the
28:20
Speaker 11: bond markets, say, calm. I mean, at the end of
28:23
Speaker 11: the day, it's not clear how much his influence would
28:26
Speaker 11: extend there versus a Congress that is making better fiscal
28:29
Speaker 11: decisions and what his role is in quelling the bond
28:32
Speaker 11: market versus the Treasury versus Congress just doing a better job.
28:36
Speaker 11: I'd be curious if he weighs in on that at all.
28:39
Speaker 11: I think that I'd be surprised if he brought it
28:42
Speaker 11: up directly. But then again, I'm also incredibly good at
28:45
Speaker 11: not predicting what Federal Reserve chairmen say.
28:50
Speaker 5: Well, we actually are waiting on the Treasury Secretary, somebody else,
28:53
Speaker 5: to announce a fiscal consolidation plan, $ 40 trillion in national debt.
28:59
Speaker 5: How are you thinking about this? What could actually be
29:01
Speaker 5: announced that would move the needle when it comes to
29:04
Speaker 5: the deficit?
29:07
Speaker 11: I'm not sure what the Treasury could announce that would
29:09
Speaker 11: move the needle. I mean, we'd have to have congressional
29:11
Speaker 11: action to either increase revenue or decrease spending, something that
29:15
Speaker 11: Congress has.
29:16
Speaker 7: Been, frankly— loathsome to do.
29:19
Speaker 11: I think we're in such an incredible period of history
29:22
Speaker 11: to have a deficit as large as we have now
29:25
Speaker 11: in peacetime when the unemployment rate is close to 4%.
29:27
Speaker 11: I mean, it's just a really remarkable moment in history
29:31
Speaker 11: of just how fractured and how irresponsibly governed our fiscal
29:35
Speaker 11: situation has been. So I'm not sure what a consolidation
29:38
Speaker 11: plan from the Treasury could really quell when what we
29:41
Speaker 11: need is Congress to do a better job at its
29:43
Speaker 11: primary job.
29:44
Speaker 7: Yeah.
29:46
Speaker 2: We talked to Michael Falkender a couple of days ago here,
29:49
Speaker 2: the former Deputy Treasury Secretary, and he suggested that the
29:52
Speaker 2: message should be, no, it's not a two-handle, it's 2%.
29:57
Speaker 2: And that this Federal Reserve will continue to act until
30:01
Speaker 2: inflation gets to that level.
30:03
Speaker 1: What would the bond market do if he said that?
30:09
Speaker 5: I mean, I.
30:12
Speaker 7: Have to wonder.
30:14
Speaker 11: You have to wonder which master he's serving when we're
30:17
Speaker 11: talking about this. We want to keep borrowing costs low
30:20
Speaker 11: because we're borrowing up to the hilt. We're taking on
30:24
Speaker 11: so much debt and still actively borrowing and paying so
30:26
Speaker 11: much for it that his actions in the short-term market
30:29
Speaker 11: last week and wanting to be aggressive about keeping rates
30:32
Speaker 11: low is on some level fundamentally at odds with the
30:35
Speaker 11: idea that we need to raise interest rates, including on
30:37
Speaker 11: debt issuances, in order to get prices down.
30:40
Speaker 7: I mean, you can't have your cake and eat it too.
30:43
Speaker 11: Stewarding the economy requires very tough, very painful choices some
30:47
Speaker 11: of the time.
30:47
Speaker 7: This is why I think.
30:49
Speaker 11: Going back to what Warsh will talk about tomorrow, is
30:53
Speaker 11: he really going to make the case that we need
30:57
Speaker 11: to have aggressive interest rate increases, knowing what that means
30:59
Speaker 11: for the debt?
31:00
Speaker 7: Or is he going to make the.
31:01
Speaker 11: Case that we need to take care of our fiscal situation,
31:04
Speaker 11: knowing that Kind of the poster child for fiscal irresponsibility
31:08
Speaker 11: is the One Big Beautiful Bill Act. I don't see
31:12
Speaker 11: how the lack of sustainability in our situation can be
31:17
Speaker 11: talked about openly or honestly without incredible criticism of the
31:21
Speaker 11: current administration.
31:24
Speaker 2: When does the 10-year hit 5%?
31:29
Speaker 7: Y'all, I don't know.
31:30
Speaker 1: I have to.
31:32
Speaker 3: I know.
31:33
Speaker 1: It's not fair.
31:33
Speaker 5: Yeah.
31:35
Speaker 7: I'll just say somewhere between the next one and 12 months.
31:40
Speaker 8: All right.
31:40
Speaker 1: In the next year, Tyler.
31:41
Speaker 5: Well, we did want to ask you about some of
31:43
Speaker 5: the actions that the administration is taking, including yesterday the
31:47
Speaker 5: president signed a proclamation that's going to lift tariffs on
31:51
Speaker 5: about 300,000 metric tons of beef for the next 90 days.
31:56
Speaker 5: This is actually a consumer product where consumers kept buying
32:00
Speaker 5: beef despite high prices. But data is starting to show
32:04
Speaker 5: us that there are cracks and that trend may now
32:06
Speaker 5: be reversing.
32:08
Speaker 1: Just from your viewpoint.
32:10
Speaker 5: As we talk about higher prices, what do you think
32:13
Speaker 5: could be done to help sustain lower beef prices after
32:19
Speaker 5: this temporary action?
32:22
Speaker 11: Well, I thought his announcement was a remarkable admission that
32:25
Speaker 11: his administration's policy of tariff is increasing prices, considering that
32:29
Speaker 11: his plan to ameliorate price pain in one market was
32:33
Speaker 11: through a reduction in tariffs. felt like that was plain
32:36
Speaker 11: as day, kind of what we had all been saying
32:38
Speaker 11: this whole time was that he is pursuing an inflationary policy.
32:43
Speaker 11: I think when it comes to the long-term price of
32:47
Speaker 11: beef and other goods in our economy, this is a
32:50
Speaker 11: war we're.
32:50
Speaker 7: Fighting on multiple fronts.
32:52
Speaker 11: Food in some ways is emblematic of this because there
32:55
Speaker 11: are lots of things that are.
32:56
Speaker 7: Outside of the control of food producers.
32:57
Speaker 11: I think from my understanding is that if you talk
33:00
Speaker 11: to farmers, drought and wildfire are massive constraints on their
33:04
Speaker 11: ability to have a stable supply or a large enough supply.
33:07
Speaker 11: But at the same time, we're talking about an industrial
33:10
Speaker 11: sector that is highly, highly concentrated.
33:13
Speaker 7: There's very little competition. You're going to.
33:15
Speaker 11: Have monopolies or duopolies at various parts of the supply chain.
33:19
Speaker 11: Just last year, there was a massive out-of-court settlement for
33:22
Speaker 11: price fixing in beef production. So there are things outside
33:28
Speaker 11: of our control that we need to be able to
33:29
Speaker 11: better manage with an economy and economic policy that is
33:32
Speaker 11: responsive to the needs of producers here in the U.S.
33:35
Speaker 11: At the same time, we've got deep weaknesses in our
33:37
Speaker 11: industrial organization that comes from a reliance on over-concentration that
33:41
Speaker 11: we've ignored in the past because prices were low enough.
33:44
Speaker 11: So having a concentrated food sector was okay so long
33:47
Speaker 11: as the price is low.
33:48
Speaker 7: It's not anymore.
33:50
Speaker 11: Versus policy that is essentially... aggravating the existing problem, like tariffs,
33:56
Speaker 11: not adequately addressing it, like giving a very small share
33:58
Speaker 11: of beef imports a free pass for a period of time,
34:01
Speaker 11: and still not getting to the demands of the American consumer,
34:04
Speaker 11: which is they just want.
34:05
Speaker 7: To be able to afford their life.
34:08
Speaker 1: This is a tough one.
34:11
Speaker 2: Even MAGA cattle ranchers are crying foul in states like
34:14
Speaker 2: Texas and in Montana, concerned that prices will be depressed
34:18
Speaker 2: for a longer period of time because of these imports.
34:21
Speaker 2: You add the situation with Canada. And in our remaining
34:25
Speaker 2: 30 seconds or so here, Catherine, it does make you
34:27
Speaker 2: wonder what the farmer bailout is going to look like
34:30
Speaker 2: next year.
34:32
Speaker 7: I mean, like it would add to the deficit.
34:35
Speaker 11: I think that, you know, Yeah, now we need to
34:39
Speaker 11: bail out farmers and producers, and it's going to be
34:42
Speaker 11: a deficit expense again because of the organization of our
34:45
Speaker 11: economy and fiscal irresponsibility.
34:49
Speaker 1: It's great to have you back with us, Catherine.
34:51
Speaker 2: Bloomberg Opinion columnists, look for her on the terminal and
34:53
Speaker 2: at Bloomberg.com. Catherine Edwards, the Optimist Economy Podcast. Love a
34:58
Speaker 2: guest with a good mic. Thanks for listening to the
35:01
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35:04
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35:08
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35:11
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