October 7, 2025 • 15 mins
Former Treasury secretary Robert Rubin discusses the state of the US economy and how he sees President Trump's tariff policy impacting growth and inflation at the Greenwich Economic Forum in conversation with Bloomberg's Lisa Abramowicz.
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:07):
I'm not saying that's the case. Now. These markets may
go on forever. Maybe we finally found Arouna. But I'll
tell you my view of whatever it's worth. I think
one has to think very carefully about what you think
the risks, quire what do you think the rewards are,
and try to make reasonable judgments. And I'm not protecting
it in any way what the markets are going to do.
I'm just going to say that I think that the
(00:28):
risks are enormous, and I think, I guess I do
think I do think that's not I guess I do
think that the markets don't properly wait.
Speaker 1 (00:37):
Those So let's talk about some of the specific risks people.
When the tariffs were announced on Liberation Day, April second,
there was this feeling that business would collapse.
Speaker 2 (00:48):
It wasn't my view, but go ahead.
Speaker 1 (00:50):
Well, why has the market been so surprised? Why have
companies been so surprised themselves? CEOs I talk to say,
we've been shocked that things kind of keep going.
Speaker 2 (01:00):
I mean, lista, they may keep I think the tariffs
are extremely unwise. I think open trade has served our
country extremely well over many many, many, many decades. I
do think that some caveats to that. I do think
you need to protect supply change when they have their
security or economic security dimensions through subsidies or trade restrictions.
But having said that, beyond that, I think open trade
has served us extremely well. I think tariffs will hurt
(01:22):
us in terms of growth, and I think it's a
one time increasing in costs. It's not it's not in
that sense, it's not inflation, but it is a one
time increasing costs. Costs to our producers will go up.
That decreases their efficiency and competitiveness. It could lead I've
never forgotten something poor Boker said to me. You said
that inflation can take on a life of its own,
and of course that was a reference inflation expectations. Maybe
(01:44):
and maybe not. The tariffs could create a set of
inflation expectations and it could lead to inflation. But whether
it does or it doesn't, it almost surely will adverse
the effect growth. But I for one, never thought it
was gonna have an immediate impact. But I thought that
the risk was over time. And I think that's the risk.
And if you speak to CEOs, and you know in
our firm, we do a lot of that. We have
(02:04):
an immense business dealing with basically large corporate America. I
think most CEOs, virtual CEOs. I think they're going to
be passing on a lot of this in terms of prices,
So cost to consumers will go up, and cost to
producers who we're importing excuse me, and components will be
going up.
Speaker 1 (02:20):
What's fascinating is when the tariffs were announced, people thought
that it would be really bond negative because inflation would
go up and you would see sort of this sagflation
like kind of environment, and so bonds would be in
a sort of quagmire, as would the FED, as would
the rest of policymakers. Instead, tariffs are now treated as
(02:40):
a positive because they are a revenue boost that will
offset any deficit spend day. I could tell you agree
with that.
Speaker 2 (02:48):
So I only disagreement because it's wrong, but go ahead.
Speaker 1 (02:52):
Well, so I'm just curious you know where this is
getting miss understood?
Speaker 2 (02:58):
Well, the l Budget Lab, which is terrifically reliable and
sensible about budget about the fiscal matters. I asked her
the other day that one runs at Taja Sarenders, who's
tended Professor Yale and terrific. Was it a PhD in economics?
She told me that she suspects, she thinks that revenues
will be about two point maybe twoing eighty billion a
(03:20):
year or some number like that, which is and then
and that's before the adverse effects on growth and retaliation.
We take it all into account, maybe two hundred it's
a very small fraction of our deficits. This is not
going to be a fiscal response, and you're paying a
price for it. In terms of I said, a moment
ago risks to growth and at least I think the
possible will certainly higher costs to consumers and the producers
(03:41):
and possibly triggering inflationary expectations. What is it? The terriff
is assuming that it gets passed on, which I if
you talk to our clients, I think we're all this
is going to get passed on over time. It's a
regressive tax, and it's a regressive tax which has adverse
effects on growth and as I say, a moment ago
on inflation.
Speaker 1 (04:00):
So I'm trying to pair this with the idea that
we're seeing mergers and acquisitions accelerate. We hear a growing
number of companies talk about in corporate executives, a reacceleration
in the consumer. How do these two things go together.
Speaker 2 (04:13):
I don't think it's complicated. When I was at Gobenzachs,
we had the economists that we had terrific people strategies.
They were always tell me what they thought was going
to happen in the short term, and I would always say,
you're very nice people, and I think that's nice for
you to do, and our clients are interested, so you
should do that. But I myself wouldn't raise my decisions
on them things short terms and short term effects. Least
(04:36):
it could be whatever they're going to be. The question
is what's going to happen over time? And I think
over time for the reasons I've said, I think tariffs
are very substantial negative and I think the open traders
serve with the caveats that I mentioned, I think open
traders served us very well.
Speaker 1 (04:50):
How much are companies rethinking their US footprint in a
new kind of way.
Speaker 2 (04:55):
Well my impression, and I get this largely speaking, I
don't speak to many companies myself. Our people are just
enormously plugged into corporate America. And I also have three
advisory relationships with pretty substantial investment. I guess you call
them funds. I think a lot of people are rethinking
how much they want to be allocated in the United States.
And you see it a little bit by the way
the dollar. The dollar has after all suffered through this thing.
(05:17):
I don't think too much of it has happened so far,
but I think at the risks that we're taking, and
I think, what's so sad to me? At least if
we have such tremendous strengths, that so many advantages, and
I think the damage we're doing is very substantial. Attacking
our research, attacking science and basic research, attacking our universities.
Immigration policy that makes no sense whatsoever. We should have
(05:40):
an economic We should have economic particularly, we should have
immigration that serves our economic needs. And then we should
have at least, in my opinion, measures to deal with
the currently undocumented people so they can become a are
part of our economy. And if they're obviously doing adverse
things or criminal, I think that's a different matter. They
can we continue to prosper in our economy eventually becomes citizens.
(06:02):
There's so much that we can do, but we're doing
the opposite of all these things.
Speaker 1 (06:06):
There is this feeling and we're seeing this in the
political sphere, And as someone who is in the Clinton
administration when globalization was really taking off, I'm wondering what
your perspective is on how the story of globalization is
being told now and that a lot of people are
saying there were a lot of people left behind and
that there are some things that need to be done
(06:27):
to remedy that.
Speaker 2 (06:27):
I totally agree with that. When President Clinton announced NAFTA
in the East Room, I totally agree with that, Lisa,
one of the things he's but I think the wrong
conclusion is therefore, let's not open trading markets. I think
the right conclusion is, let's do at President Clinton talked
about when he announced NAFTA, but that we never were
able to do politically. We lost control of the Congress
and we lost the ability to do it, and that
(06:48):
is have in place retraining, social safety nets, are greatly increased,
earn income tax credit so that people with low incomes
will have higher incomes and have all that to deal
with job losses. And as much as that is a
fun a problem with spector trade AI in my opinion,
and you all have your own views, so we probably
know ick a lot more about and I do, but
I say I'm thinking horror for the last two years
twice a week, so I kind of know something about it.
(07:10):
I think that the potential for job loss is very substantial.
And so as much as we needed that kind of
an adjustment set of programs to deal with trade, and
we did need that at least absolutely, and we don't
have it, I think we're going to need even more
to deal with AI, which.
Speaker 1 (07:24):
Is something that we're not hearing as much about as
a lot of people think.
Speaker 2 (07:28):
There's no it's not part of the political dialogue, and
it should be. Look, our political system is in terrible shape.
And that's not a partisan comment, though I do think
Trump is doing just immense damage to our country. It
was econopologies and actions, but in neither party we talk
about a lot of what we need to talk about,
and one of the things we need to do is
to do exactly what I just said, But there's no
(07:51):
political ability to get not a lot of political focus
on it, and really no political ability to get it done.
Speaker 1 (07:55):
Given the footprint that you have and the access to companies,
do you have a of how much they plan to
reduce their staff or whether they are not necessarily hiring
recent college graduates as a result of their using Yeah, yeah.
Speaker 2 (08:09):
I get the question. I don't have much wisdom on that.
I've asked our people that too. I mean, clearly the
labor market is softened, there's no question about that. I'll
give you my personal opinion whatever it's worth, but really
mostly based on just what I think about AI. I
think AI has the potential for tremendous positives in terms
of productivity, which by the way, could be partially responsive,
albeit not fully responsive to our fiscal trajectory and our
(08:30):
trad fiscal trajectory. On multiple basis. It seems to me
as a tremendous risk to our economy over time. So
this can be partly respond partly responses to that productivity,
increased growth, increased revenues and so forth. But I think
a lot of Yeah, I do think it's going to
have very substantial dub replacement fix. A lot of things
(08:52):
that are being done now by people are going to
be done by AI and AI. As you know, what
is the human mind human by neural systems? Right, what
is AI? AI is neural systems. And if you take
AI and you pursue it, and some of you know
much more badas than I do. But you pursue. You
build bigger and bigger data centers and more and more capacity.
You create neural systems that are able to do not
(09:13):
only the more mundane task Lisa, but all the kinds
of many of the kinds of complex thinking that were
accustomed to associating with human beings. And that's that, as
you know, is sort of the question of AGI in admittle.
You can you can, You can define AGI a lot
of different ways. I get that, But whatever you want
toever you want to define it, I don't need any
(09:36):
question that AI is moving, at least in my opinion.
I may be wrong, but I don't think I'm wrong,
moving very quickly toward ever more sophisticated capabilities that can
more and more replicate the neural processes to the human mind.
Speaker 1 (09:47):
Which is the reason why when you talk to some
FED officials on and off the record, more off the record,
they will talk about running the economy hot or prioritizing
the labor market as a way to ameliorate some of
the potential job losses from AI, because it encourages companies
to invest more in their workers and keeps people employed
(10:10):
so people won't be left behind as much. I mean,
do you buy into that kind of idea and sort
of endorse the idea of having a more accommodative monetary
policy at a time like this.
Speaker 2 (10:21):
Yeah, I get the point, And this is good debate.
This is kind of things that if you have sensible
people sitting in a room, you can really discuss in
very interesting ways. No, I actually don't agree with Lisa.
I'm much more concerned about the possiblity of inflation. And
if you run the economy too hot and you get
higher rate of inflation, and that in turn has a
weaker dollar and it has higher interest rates, I think
(10:43):
that can have a lot more adverse effect than the
benefits you're getting from FED funds rates being lower than
whatever you think my contrue. So you might actually accomplish
the opposite of what you wish. So I know, if
I were at the look, nobody's going to ask me
what I think at the FED. I promise you. If
anybody did, I think I would say to them, you've
got a duel mandate under Humphrey Hawkins, as we all know,
(11:05):
and I would worry more about the inflationary side of that,
than I would. I'd worry about both, but I'd be
quite concerned about inflation.
Speaker 1 (11:16):
One thing, Ray Dalio is speaking earlier, and he drew
the parallel to the nineteen seventies as well as the
nineteen thirties, which is a little bit even more alarming.
I'm just wondering, from your perspective, do you think that
the nineteen seventies style inflation is the correct analog.
Speaker 2 (11:31):
Well, nineteen seventy is an interesting time, and that's actually
what Paul Boker was talking about and I were talking
about this. I don't know, probably not many of you here,
well maybe none of you actually lived through the nineteen seventies.
I did, and inflation took on a life of its own, Lisa.
And this was Paul's point. Inflation expectations built on themselves,
(11:51):
and once that happened, it's very very hard to deal with.
And Paul's point was, and I think he's right about this,
that once inflation gets going, inflation expectation just a very,
very difficult to deal with. That's why if I were
the FED, I'd be focused on both both aspects of
my dual mandate. Humphrey Hawkins but I would be quite
concerned with not allowing inflation to move in a way
(12:13):
that is threatening.
Speaker 1 (12:14):
We spoke a bit ago and you said the US
is still the best place to invest. Do you still
feel that?
Speaker 2 (12:22):
Yes, I do, But it's complicated. We have such a
everything a troubled about trouble is the wrong where. It
is tragic what we're doing ourselves and what this administration
is doing on so many dimensions in my opinion, in
terms of public policy. But I think we have enormous
strengths compared to others. I'm repeating myself when I know
that we have flexible labor and capital markets. We have
dynamic culture. We have the capital markets that are unrivaled
(12:46):
in any place else in the world. We have great
universities of now we're attacking them in the ways that
are usually counterproductive in my opinion, and so much else
to going up natural resources. We have so much else
going our way, but we are doing a lot of
damage on the Yes, I would still invest here because
I think I think, Look, I think all the waing
its going to depend what happens our political system, and
(13:08):
I think sooner or later we'll come back. I hope.
I hope it's a word. I think the odds are
we will come back at some point to the historical
system that we've had, where you have a conservative party
sort of a Rottal regular as a historical conservative. You
have a progressive or liberal democratic probably do you want
to call it center left? I don't care, And then
they have the debates and we're back where we used
to be. It won't be the same, it will not
(13:30):
be the same, but it'll be some analog to that.
So I believe that's the most likely outcome. And China
has a normous look. China has some great strengths and
we all know that, but it also has enormous problems
we also all know. And you're you know, you're From
twenty nineteen to twenty twenty two, productivity in Europe group
point four percent. Producting in our states were six percent.
(13:51):
And the Mario Dragi Report, which was designed to deal
I was with Marria the other day, which man aarity.
I just told about this because he was in New
York and we got together. If it's designed to address
the productivity problems in Europe, they've done virtually nothing on it.
So yeah, I'd still bet on us but I think
we I've still bet on us. I'd still rather be here.
I am here to my own personal resources. But but
(14:15):
I think what we're doing to ourselves is is very
seriously troubling.
Speaker 1 (14:19):
There's a lot of question around gold and the fact
that a lot of people are going into it, and
whether this is sort of a signal of something with
a debasement of the dollar or of people's state of mind.
What's the message, what's the signal?
Speaker 2 (14:33):
From the figgist notion, Look, gold has always been this
sort of so called refuge from the dollar, I assume
I mean from uncertainty, and uh, you know it's that
thousands of years of history of that is it is
the current action of gold as a signal of something.
I have not the figgiest notion. I personally wouldn't own it,
(14:54):
but that's just because I've never gold has no use value.
It's only a psychological I'm not demeaning it. It's for
thousands of years it's been a psychological refuge from uncertainty.
But I don't know if it had I wouldn't call
it how I mean, I think one could think reactionally
and thoughtfully of all these things. I personally wouldn't weigh
the price of gold in my thinking about what the
odds are
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:07):
I'm not saying that's the case. Now. These markets may
go on forever. Maybe we finally found Arouna. But I'll
tell you my view of whatever it's worth. I think
one has to think very carefully about what you think
the risks, quire what do you think the rewards are,
and try to make reasonable judgments. And I'm not protecting
it in any way what the markets are going to do.
I'm just going to say that I think that the
(00:28):
risks are enormous, and I think, I guess I do
think I do think that's not I guess I do
think that the markets don't properly wait.
Speaker 1 (00:37):
Those So let's talk about some of the specific risks people.
When the tariffs were announced on Liberation Day, April second,
there was this feeling that business would collapse.
Speaker 2 (00:48):
It wasn't my view, but go ahead.
Speaker 1 (00:50):
Well, why has the market been so surprised? Why have
companies been so surprised themselves? CEOs I talk to say,
we've been shocked that things kind of keep going.
Speaker 2 (01:00):
I mean, lista, they may keep I think the tariffs
are extremely unwise. I think open trade has served our
country extremely well over many many, many, many decades. I
do think that some caveats to that. I do think
you need to protect supply change when they have their
security or economic security dimensions through subsidies or trade restrictions.
But having said that, beyond that, I think open trade
has served us extremely well. I think tariffs will hurt
(01:22):
us in terms of growth, and I think it's a
one time increasing in costs. It's not it's not in
that sense, it's not inflation, but it is a one
time increasing costs. Costs to our producers will go up.
That decreases their efficiency and competitiveness. It could lead I've
never forgotten something poor Boker said to me. You said
that inflation can take on a life of its own,
and of course that was a reference inflation expectations. Maybe
(01:44):
and maybe not. The tariffs could create a set of
inflation expectations and it could lead to inflation. But whether
it does or it doesn't, it almost surely will adverse
the effect growth. But I for one, never thought it
was gonna have an immediate impact. But I thought that
the risk was over time. And I think that's the risk.
And if you speak to CEOs, and you know in
our firm, we do a lot of that. We have
(02:04):
an immense business dealing with basically large corporate America. I
think most CEOs, virtual CEOs. I think they're going to
be passing on a lot of this in terms of prices,
So cost to consumers will go up, and cost to
producers who we're importing excuse me, and components will be
going up.
Speaker 1 (02:20):
What's fascinating is when the tariffs were announced, people thought
that it would be really bond negative because inflation would
go up and you would see sort of this sagflation
like kind of environment, and so bonds would be in
a sort of quagmire, as would the FED, as would
the rest of policymakers. Instead, tariffs are now treated as
(02:40):
a positive because they are a revenue boost that will
offset any deficit spend day. I could tell you agree
with that.
Speaker 2 (02:48):
So I only disagreement because it's wrong, but go ahead.
Speaker 1 (02:52):
Well, so I'm just curious you know where this is
getting miss understood?
Speaker 2 (02:58):
Well, the l Budget Lab, which is terrifically reliable and
sensible about budget about the fiscal matters. I asked her
the other day that one runs at Taja Sarenders, who's
tended Professor Yale and terrific. Was it a PhD in economics?
She told me that she suspects, she thinks that revenues
will be about two point maybe twoing eighty billion a
(03:20):
year or some number like that, which is and then
and that's before the adverse effects on growth and retaliation.
We take it all into account, maybe two hundred it's
a very small fraction of our deficits. This is not
going to be a fiscal response, and you're paying a
price for it. In terms of I said, a moment
ago risks to growth and at least I think the
possible will certainly higher costs to consumers and the producers
(03:41):
and possibly triggering inflationary expectations. What is it? The terriff
is assuming that it gets passed on, which I if
you talk to our clients, I think we're all this
is going to get passed on over time. It's a
regressive tax, and it's a regressive tax which has adverse
effects on growth and as I say, a moment ago
on inflation.
Speaker 1 (04:00):
So I'm trying to pair this with the idea that
we're seeing mergers and acquisitions accelerate. We hear a growing
number of companies talk about in corporate executives, a reacceleration
in the consumer. How do these two things go together.
Speaker 2 (04:13):
I don't think it's complicated. When I was at Gobenzachs,
we had the economists that we had terrific people strategies.
They were always tell me what they thought was going
to happen in the short term, and I would always say,
you're very nice people, and I think that's nice for
you to do, and our clients are interested, so you
should do that. But I myself wouldn't raise my decisions
on them things short terms and short term effects. Least
(04:36):
it could be whatever they're going to be. The question
is what's going to happen over time? And I think
over time for the reasons I've said, I think tariffs
are very substantial negative and I think the open traders
serve with the caveats that I mentioned, I think open
traders served us very well.
Speaker 1 (04:50):
How much are companies rethinking their US footprint in a
new kind of way.
Speaker 2 (04:55):
Well my impression, and I get this largely speaking, I
don't speak to many companies myself. Our people are just
enormously plugged into corporate America. And I also have three
advisory relationships with pretty substantial investment. I guess you call
them funds. I think a lot of people are rethinking
how much they want to be allocated in the United States.
And you see it a little bit by the way
the dollar. The dollar has after all suffered through this thing.
(05:17):
I don't think too much of it has happened so far,
but I think at the risks that we're taking, and
I think, what's so sad to me? At least if
we have such tremendous strengths, that so many advantages, and
I think the damage we're doing is very substantial. Attacking
our research, attacking science and basic research, attacking our universities.
Immigration policy that makes no sense whatsoever. We should have
(05:40):
an economic We should have economic particularly, we should have
immigration that serves our economic needs. And then we should
have at least, in my opinion, measures to deal with
the currently undocumented people so they can become a are
part of our economy. And if they're obviously doing adverse
things or criminal, I think that's a different matter. They
can we continue to prosper in our economy eventually becomes citizens.
(06:02):
There's so much that we can do, but we're doing
the opposite of all these things.
Speaker 1 (06:06):
There is this feeling and we're seeing this in the
political sphere, And as someone who is in the Clinton
administration when globalization was really taking off, I'm wondering what
your perspective is on how the story of globalization is
being told now and that a lot of people are
saying there were a lot of people left behind and
that there are some things that need to be done
(06:27):
to remedy that.
Speaker 2 (06:27):
I totally agree with that. When President Clinton announced NAFTA
in the East Room, I totally agree with that, Lisa,
one of the things he's but I think the wrong
conclusion is therefore, let's not open trading markets. I think
the right conclusion is, let's do at President Clinton talked
about when he announced NAFTA, but that we never were
able to do politically. We lost control of the Congress
and we lost the ability to do it, and that
(06:48):
is have in place retraining, social safety nets, are greatly increased,
earn income tax credit so that people with low incomes
will have higher incomes and have all that to deal
with job losses. And as much as that is a
fun a problem with spector trade AI in my opinion,
and you all have your own views, so we probably
know ick a lot more about and I do, but
I say I'm thinking horror for the last two years
twice a week, so I kind of know something about it.
(07:10):
I think that the potential for job loss is very substantial.
And so as much as we needed that kind of
an adjustment set of programs to deal with trade, and
we did need that at least absolutely, and we don't
have it, I think we're going to need even more
to deal with AI, which.
Speaker 1 (07:24):
Is something that we're not hearing as much about as
a lot of people think.
Speaker 2 (07:28):
There's no it's not part of the political dialogue, and
it should be. Look, our political system is in terrible shape.
And that's not a partisan comment, though I do think
Trump is doing just immense damage to our country. It
was econopologies and actions, but in neither party we talk
about a lot of what we need to talk about,
and one of the things we need to do is
to do exactly what I just said, But there's no
(07:51):
political ability to get not a lot of political focus
on it, and really no political ability to get it done.
Speaker 1 (07:55):
Given the footprint that you have and the access to companies,
do you have a of how much they plan to
reduce their staff or whether they are not necessarily hiring
recent college graduates as a result of their using Yeah, yeah.
Speaker 2 (08:09):
I get the question. I don't have much wisdom on that.
I've asked our people that too. I mean, clearly the
labor market is softened, there's no question about that. I'll
give you my personal opinion whatever it's worth, but really
mostly based on just what I think about AI. I
think AI has the potential for tremendous positives in terms
of productivity, which by the way, could be partially responsive,
albeit not fully responsive to our fiscal trajectory and our
(08:30):
trad fiscal trajectory. On multiple basis. It seems to me
as a tremendous risk to our economy over time. So
this can be partly respond partly responses to that productivity,
increased growth, increased revenues and so forth. But I think
a lot of Yeah, I do think it's going to
have very substantial dub replacement fix. A lot of things
(08:52):
that are being done now by people are going to
be done by AI and AI. As you know, what
is the human mind human by neural systems? Right, what
is AI? AI is neural systems. And if you take
AI and you pursue it, and some of you know
much more badas than I do. But you pursue. You
build bigger and bigger data centers and more and more capacity.
You create neural systems that are able to do not
(09:13):
only the more mundane task Lisa, but all the kinds
of many of the kinds of complex thinking that were
accustomed to associating with human beings. And that's that, as
you know, is sort of the question of AGI in admittle.
You can you can, You can define AGI a lot
of different ways. I get that, But whatever you want
toever you want to define it, I don't need any
(09:36):
question that AI is moving, at least in my opinion.
I may be wrong, but I don't think I'm wrong,
moving very quickly toward ever more sophisticated capabilities that can
more and more replicate the neural processes to the human mind.
Speaker 1 (09:47):
Which is the reason why when you talk to some
FED officials on and off the record, more off the record,
they will talk about running the economy hot or prioritizing
the labor market as a way to ameliorate some of
the potential job losses from AI, because it encourages companies
to invest more in their workers and keeps people employed
(10:10):
so people won't be left behind as much. I mean,
do you buy into that kind of idea and sort
of endorse the idea of having a more accommodative monetary
policy at a time like this.
Speaker 2 (10:21):
Yeah, I get the point, And this is good debate.
This is kind of things that if you have sensible
people sitting in a room, you can really discuss in
very interesting ways. No, I actually don't agree with Lisa.
I'm much more concerned about the possiblity of inflation. And
if you run the economy too hot and you get
higher rate of inflation, and that in turn has a
weaker dollar and it has higher interest rates, I think
(10:43):
that can have a lot more adverse effect than the
benefits you're getting from FED funds rates being lower than
whatever you think my contrue. So you might actually accomplish
the opposite of what you wish. So I know, if
I were at the look, nobody's going to ask me
what I think at the FED. I promise you. If
anybody did, I think I would say to them, you've
got a duel mandate under Humphrey Hawkins, as we all know,
(11:05):
and I would worry more about the inflationary side of that,
than I would. I'd worry about both, but I'd be
quite concerned about inflation.
Speaker 1 (11:16):
One thing, Ray Dalio is speaking earlier, and he drew
the parallel to the nineteen seventies as well as the
nineteen thirties, which is a little bit even more alarming.
I'm just wondering, from your perspective, do you think that
the nineteen seventies style inflation is the correct analog.
Speaker 2 (11:31):
Well, nineteen seventy is an interesting time, and that's actually
what Paul Boker was talking about and I were talking
about this. I don't know, probably not many of you here,
well maybe none of you actually lived through the nineteen seventies.
I did, and inflation took on a life of its own, Lisa.
And this was Paul's point. Inflation expectations built on themselves,
(11:51):
and once that happened, it's very very hard to deal with.
And Paul's point was, and I think he's right about this,
that once inflation gets going, inflation expectation just a very,
very difficult to deal with. That's why if I were
the FED, I'd be focused on both both aspects of
my dual mandate. Humphrey Hawkins but I would be quite
concerned with not allowing inflation to move in a way
(12:13):
that is threatening.
Speaker 1 (12:14):
We spoke a bit ago and you said the US
is still the best place to invest. Do you still
feel that?
Speaker 2 (12:22):
Yes, I do, But it's complicated. We have such a
everything a troubled about trouble is the wrong where. It
is tragic what we're doing ourselves and what this administration
is doing on so many dimensions in my opinion, in
terms of public policy. But I think we have enormous
strengths compared to others. I'm repeating myself when I know
that we have flexible labor and capital markets. We have
dynamic culture. We have the capital markets that are unrivaled
(12:46):
in any place else in the world. We have great
universities of now we're attacking them in the ways that
are usually counterproductive in my opinion, and so much else
to going up natural resources. We have so much else
going our way, but we are doing a lot of
damage on the Yes, I would still invest here because
I think I think, Look, I think all the waing
its going to depend what happens our political system, and
(13:08):
I think sooner or later we'll come back. I hope.
I hope it's a word. I think the odds are
we will come back at some point to the historical
system that we've had, where you have a conservative party
sort of a Rottal regular as a historical conservative. You
have a progressive or liberal democratic probably do you want
to call it center left? I don't care, And then
they have the debates and we're back where we used
to be. It won't be the same, it will not
(13:30):
be the same, but it'll be some analog to that.
So I believe that's the most likely outcome. And China
has a normous look. China has some great strengths and
we all know that, but it also has enormous problems
we also all know. And you're you know, you're From
twenty nineteen to twenty twenty two, productivity in Europe group
point four percent. Producting in our states were six percent.
(13:51):
And the Mario Dragi Report, which was designed to deal
I was with Marria the other day, which man aarity.
I just told about this because he was in New
York and we got together. If it's designed to address
the productivity problems in Europe, they've done virtually nothing on it.
So yeah, I'd still bet on us but I think
we I've still bet on us. I'd still rather be here.
I am here to my own personal resources. But but
(14:15):
I think what we're doing to ourselves is is very
seriously troubling.
Speaker 1 (14:19):
There's a lot of question around gold and the fact
that a lot of people are going into it, and
whether this is sort of a signal of something with
a debasement of the dollar or of people's state of mind.
What's the message, what's the signal?
Speaker 2 (14:33):
From the figgist notion, Look, gold has always been this
sort of so called refuge from the dollar, I assume
I mean from uncertainty, and uh, you know it's that
thousands of years of history of that is it is
the current action of gold as a signal of something.
I have not the figgiest notion. I personally wouldn't own it,
(14:54):
but that's just because I've never gold has no use value.
It's only a psychological I'm not demeaning it. It's for
thousands of years it's been a psychological refuge from uncertainty.
But I don't know if it had I wouldn't call
it how I mean, I think one could think reactionally
and thoughtfully of all these things. I personally wouldn't weigh
the price of gold in my thinking about what the
odds are
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