February 18, 2025 • 47 mins
Watch Joe and Kailey LIVE every day on YouTube: http://bit.ly/3vTiACF.
Bloomberg Washington Correspondents Joe Mathieu and Kailey Leinz deliver insight and analysis on the latest headlines from the White House and Capitol Hill, including conversations with influential lawmakers and key figures in politics and policy. On this edition, Joe and Kailey speak with:
- Senior Fellow & Director of Military Analysis at Defense Priorities Jennifer Kavanagh about the meeting between US and Russian officials in Saudi Arabia Tuesday morning.
- Bloomberg Politics Contributors Rick Davis and Jeanne Sheehan Zaino about New York Governor Kathy Hochul's meeting with Democrats about the future of Eric Adams’ administration.
- NASAWatch Editor Keith Cowing about the future of the space agency in this current Trump administration.
- President and CEO of the Alliance For Automotive Innovation John Bozzella about the possible impacts of tariffs on US automakers.
See omnystudio.com/listener for privacy information.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Bloomberg Audio Studios, podcasts, radio news. You're listening to the
Bloomberg Balance of Power podcast. Catch US live weekdays at
noon and five pm Eastern on Apple, Cockley and Android
Auto with the Bloomberg Business app. Listen on demand wherever
(00:20):
you get your podcasts, or watch US live on YouTube.
Speaker 2 (00:25):
But talk today, frankly, is what happened in Riod in
the early hours Eastern time this morning. A meeting between
US and Russian officials to discuss the future of the
war in Ukraine, or perhaps more specifically, an end to
that war, which the US State Department says they want
to see happen as soon as possible. At these talks,
obviously Russian Foreign Minister Sergey Lavrov, a number of emissaries
(00:47):
from the US as well, Mike Waltz, the National Security Advisor,
Steve Witkoff, who is the Special Envoy for the Middle East,
not notably the Special Envoy for Ukraine, Keith Kellogg, and
then of course Secretary of State Marco Rubio, who had
this to stay from Saudi Arabia earlier.
Speaker 3 (01:05):
We're going to appoint a high level team from our
end to help negotiate and walk work through the end
of the conflict in Ukraine in a way that's enduring
and acceptable to all the parties engaged. The third point
is to begin to work at a high level as well,
to begin to discuss and think about and examine both
the geopolitical and economic cooperation that could result from an
(01:28):
end to the conflict in Ukraine.
Speaker 4 (01:31):
That's where we start a conversation with Jennifer Kavanaugh, back
with a senior fellow, director of Military Analysis at Defense
Priorities and co author of the book Truth Decay, an
initial exploration of the diminishing role of facts and analysis
in American public life. Jennifer, it's great to see you.
Welcome back to Bloomberg TV and Radio. There's been a
lot of criticism, as you might expect surrounding such a
(01:53):
sensitive interaction like this first meeting. Much has been said
about who is not at the table. What's your thought
of about the way this is starting. Is this a
positive move or not?
Speaker 5 (02:03):
I do think it's a positive move. It's the first
time that there's been a high level meeting like this
between the United States and Russia since the war started
almost three years ago now, and any negotiation is going
to take a lot of rounds of talks, and it
makes sense that the United States and Russia would start
by dealing with some of their bilateral issues. That does
not mean that Ukraine should be excluded for all the
(02:26):
rounds of talks, but certainly the United States and Russia
have a long history of tense and difficult relationships, and
there are a lot of bilateral issues that the two
countries need to work out before they even sit down
at the table with the other parties, to work through
the tough issues surrounding the war in Ukraine and the
(02:47):
relationship between Russia and the rest of Europe. So, as
you heard Secretary Rubio say in the clip you played,
you know, a big piece of this is thinking about
the future of US Russia relationships. So I see this
first meeting as sort of setting the foundation for future talks.
And it makes sense that the United States and Russia,
which are both two major nuclear powers, would start that
(03:09):
off together alone before inviting the rest of the parties in.
Speaker 2 (03:14):
But does this not also set the foundation for a
deal that could end up being more favorable to Russia
given some of the rhetoric we're hearing, than to Ukraine.
Who wasn't there.
Speaker 5 (03:25):
I don't necessarily think that any decisions were made today
about how.
Speaker 6 (03:28):
The war would end.
Speaker 5 (03:30):
Today. It seems like the key outcome was the appointing
high level negotiating teams to work through those issues. So
no decisions about Ukraine were made without Ukraine today. It
was more decisions about process and how the process might unfold.
I would agree certainly that any decision that deals specifically
with the war Ukraine should be a party to, and
(03:51):
I think that anyone who's working in the Trump administration
who really does want a lasting piece would also want
Ukraine at the table. Research shows that no peace settlements
that are imposed on countries the countries are forced to
sign rarely endure. So if the goal here is to
have a lasting piece, which it seems like it is,
then Ukraine will have to be at the table. So
(04:13):
I don't see any necessarily any foreboding signs here from
Ukraine's perspective.
Speaker 4 (04:19):
Well, you did put your finger on something in the
language that the Secretary of State was using.
Speaker 6 (04:24):
There this idea.
Speaker 4 (04:25):
Of potentially more comprehensive talks involving, as Marco Rubio put it,
both the geopolitical and economic cooperation that could result from
an end of the conflict.
Speaker 6 (04:36):
So what are we talking about here?
Speaker 4 (04:38):
Is this exon mobile and McDonald's going back to Beijing
or should I say Moscow rather.
Speaker 5 (04:44):
It could be I think the key things are Number One,
this war was in the approximate terms, about Ukraine, but
also about Russia's security concerns. There's a debate about wether
those are legitimate or not, but Russia does have concerns
about having NATO right up on its border, and it
made it clear before the war that it wanted to
(05:05):
have at least discussions about the security architecture and the
relationship between NATO and Russia. And so I see in
Secretary rubio statement and indication that that will be something that
the two parties discuss, or the four parties or however
many parties are at the table. And then on the
economic piece, I think there's a recognition coming from Secretary
Rubio and the US team that sanctions, the very stiff
(05:29):
and extensive sanctions that the United States and its allies
and partners have placed on Russia since the beginning of
the war, that some of those sanctions will have to
be rolled back, maybe not all at once, but that
in the long term future a stable relationship between the
United States and Russia and NATO and Russia will have
to have those sanctions removed at least over a period
(05:52):
of time. And so that's what I see is sort
of the economic piece that there has to be some
reopening of these economic relationships.
Speaker 2 (06:00):
Yeah, remarkable to see today Marco Rubio sitting across the
table from Sergey Lavrov, who personally is under sanctioned by
the US government. But that is exactly why Rubio was
talking about the need for a European cooperation here in
that Europe also has sanctions on Russia, so will have
to be involved if you're a leader in a European
capital right now, Jennifer facing down the prospect of not
(06:22):
only being excluded from the talks today, but having to
rethink defense posturing because of the signal of a US
pullback in many of those areas you were just alluding to,
especially those countries right on the front when it comes
to NATO. What are you thinking right now?
Speaker 5 (06:38):
I mean, this has been a challenge for European leaders
for some time now, is the sort of unwillingness to
recognize the changing attitude in the United States towards continuing
to have this all encompassing security guarantee to its European partners.
We heard comments from a number of administration players, whether
(06:58):
it was Secretary of Defense P. Xth or Vice President J.
D Vance, about, you know, the ways in which they
were looking for Russia to step up. And I do
think that there was a change in tone in the
administration to point out that it's not just that the administration,
the Trump administration, is looking for Europe to spend more
under US leadership, but to actually take on that leadership themselves,
(07:21):
and that's that's there's a difference there. And I think
we saw the recognition and the urgency felt in Europe
after that with the summit yesterday in Paris, but the
results were kind of lackluster. So, if you know, if
I personally am a European leader, I'm trying to figure
out what do I need to defend myself with no
US support, because that should be my security goal. I
don't necessarily see that that level of urgency yet for
(07:44):
most of Europe. Certainly you see it in the Baltic
States and in Poland, but those countries can only do
so much without the rest of Europe behind them.
Speaker 4 (07:52):
Yeah, Poland has made that clear, so Frances it will
help with peacekeeping troops as well. The uk kere starmer
those is he wants US military support, it sounds like
he's not.
Speaker 6 (08:03):
Going to get it.
Speaker 5 (08:06):
This seems unlikely at least right now from what the
Administration said last week. I mean, the reality is that
a European whether it's a peacekeeping force or a trip
wire force of any meaningful size, can't really sustain itself
without US support, at least in terms of logistics and
other types of enablers, even if there aren't US boots
on the ground in Ukraine. The administration comments last week
(08:30):
weren't all that clear whether or not that support is
off the table, But there are another other challenges with
any sort of European security guarantees. So I personally am
not that confident that a sort of European peacekeeping force
is a likely outcome of the negotiations, both because of
feasibility as well as because of what Russia is likely
to accept. They're not going to be too enthusiastic about
(08:52):
having a big peacekeeping force or deterrent force of European
soldiers on their border either or on the de facto border.
Ukraine that's likely to come from any settlement, So I
don't really see that as a likely outcome, but certainly
there will be more talk about it because it's the
only real alternative to US backed security guarantees that's on
the table right now.
Speaker 2 (09:14):
All right, Jennifer Kavanaugh, Senior Fellow and Director of Military
Analysis at Defense Priorities, thank you for joining us here
on Balance of Power today. Much appreciated. And I do
Joe just think back to the number of conversations we
have had with foreign ministers, other European diplomats here at
this table, especially during the election, about what it would
mean for Europe infer NATO if Donald Trump were to
(09:36):
be elected, and now that he's president, after all of
them essentially telling us we'll work with any administration. I
do wonder how that tenor might change.
Speaker 4 (09:45):
It's not resulting in much unity at the moments. Italy
showed up late for the emergency meeting over the weekend,
ole Off Schultz left early.
Speaker 6 (09:53):
We'll see how things go Wednesday. Reuter says that will
be the next meeting.
Speaker 1 (09:59):
You're listening to the Bloomberg Balance of Power podcast. Catch
us Live weekdays at noon and five pm. Eastern on
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You can also listen live on Amazon Alexa from our
flagship New York station, Just Say Alexa played Bloomberg eleven thirty.
Speaker 4 (10:18):
We're live from Washington, but we do have our eyes
on New York, right where Charlie Pellett is sitting, where
the news really could be focused on later today, as
the Governor of New York raises questions about the future
of the Eric Adams administration. We talked about this a
bit on Friday, when the resignations began from inside the
(10:38):
Department of Justice over this DOJ order that the corruption
case against him be dropped that has expanded.
Speaker 7 (10:45):
Now.
Speaker 4 (10:45):
Four of Adams's top deputies announced their resignations over the
weekend on this push to drop the corruption case in
apparent exchange for help with Donald Trump's deportation agenda. There
is talk of a quid now Kathy Hokeel, who as
you might remember, was in Washington last week, so she's
weighing the serious step now of removing the mayor.
Speaker 6 (11:07):
How does that happen?
Speaker 4 (11:08):
You say, the city's charter lays it out, and what
is in fact an untested process which the governor can
begin by serving the mayor with charges warranting removal. She's
in meetings today with a lot more to follow here,
including the city council speaker and controller. They're part of
(11:28):
the committee that can declare a mayor unable to serve.
We could be in a situation where things went from
being very good for Eric Adams to not at all
under the Trump White House. It's where we start with
our panel today off the long weekend. Rick Davis, Partner
at Stone Court Capital, Bloomberg Politics contributor and Republican strategist,
(11:49):
joined by Democratic analyst Genie Schanzano, Senior Democracy Fellow at
the Center for the Study of the Presidency in Congress,
Bloomberg Politics contributor, Genie, This hits close to home for
you in New York and as a Democrat, is Eric
Adams going to be the mayor for law?
Speaker 8 (12:05):
You know, it's unclear now. Everybody in democratic politics in
New York is at that meeting, so we'll have to
see what they say. And she, the governor, is certainly
getting a lot of pressure to remove him, but it
is a bad idea. She chose not to remove him,
and she is allowed to as you just mentioned via
city charter when he was indicted in October. So to
(12:28):
remove him now would be to suggest that she is
removing him because he cozied up to Donald Trump and
because they feel that the you know, he is cooperating
with the federal government as it pertains to immigration. I
don't like what the Justice Department did. I don't like
the dropping of the charges. I certainly am not a
(12:49):
big fan of Eric Adams, nor are many New Yorkers.
He's at about nine percent. But this would be a
historic move by a New York governor. Two hundred and
thirty five years, we've never seen this, and so to
do it now would be to open a Pandora's box
in terms of what a mayor could or couldn't be
removed for.
Speaker 9 (13:11):
What do you think of this?
Speaker 4 (13:11):
Rick Governor Hokel says, the alleged conduct at City Hall
that has been reported over the past two weeks is
troubling and cannot be ignored.
Speaker 6 (13:21):
Will she remove the mayor? Well, you know, it's hard
to tell.
Speaker 10 (13:26):
I mean, does she really feel like she's got the leverage.
Speaker 6 (13:29):
To be able to do it?
Speaker 10 (13:31):
I kind of agree with Genie. I mean, if she
was going to do that. She probably should have done
it when he was indicted, said resigner or get kicked out,
and then she should have kicked him out and we
would have been spared all this quid pro quo talk
and losing the leadership of the Southern District.
Speaker 6 (13:48):
Of New York's Justice Department.
Speaker 10 (13:49):
I mean, like this thing has turned in to a
circus when you think of all the impact that this
thing has had on the City of New York, the
Justice Department, the immigration program, the state of New York,
the state of the Democratic Party in the City of
New York. I mean, if Eric Adams doesn't resign based
(14:10):
on the top four people in his administration walking out
on him yesterday, then Kathy Holkl should do something. And
twiddling away at this is only making it worse by
the day, and that's on her.
Speaker 4 (14:26):
You know, it's not going in a good direction. When
Adolph Hitler is invoked Eric adams Genie quote. I was
listening to some of doctor Martin Luther King's teachings and
he talked about the book Mine comf referencing Adolf Hitler's
manifesto quote. He said, if you repeat a lie long
enough loud enough people will believe it is true.
Speaker 6 (14:46):
And that's what you're seeing right now.
Speaker 4 (14:48):
This is a modern day mind comf Where is he
going with that? Because it doesn't sound like someone is
about to resign.
Speaker 8 (14:56):
Oh, and he said clearly and that very bizarre speech
gave yesterday, that he was not going anywhere. Of course,
that has become sort of practice amongst politicians who are
accused of improprieties is to just stay, put fight and
say they are victimized. And this is of course what
Adams has been saying right along. This is why he
(15:18):
went down tomorrow lago. This is why he went to
the inauguration. He's been closing up with Donald Trump because
Donald Trump has been publicly empathetic with him, saying that
he has been a victim of an over zealous prosecution.
You know that said, the timeline here is critically important.
(15:38):
If she doesn't act to remove him before March twenty six,
that's ninety days before the primary, we are in an
election here in New York. There would need to be
a special election by Jimani Williams, who's the public advocate
who would become acting mayor on his removal. So there
are a lot of moving parts here, and you know
(15:59):
you want to add insult to injury. Look at that
Fox interview with Tom Holman on Friday and Eric Adams
where Tom Holman is joking about laughing, I don't know,
joking about a quid pro quo. I mean, the entire
thing is ugly. Adams should resign, he looks like he won't,
and then the governor has lost her chance to remove him.
Speaker 4 (16:21):
Man to be a New York Republican once again, Rick,
I don't know. But if Kathy Hokle removes the mayor
from office, knowing that he is close to Donald Trump,
what does this do for the New York delegation that
was already on thin ice here when it came to
so many issues.
Speaker 6 (16:39):
Including salt. This is a tough room to be a Republican,
Rick Davis.
Speaker 10 (16:45):
Yeah, this is not your grandfather's Republican Party for sure,
and I think that they have to act on their
own interests. In other words, what do they think is
good for the state of New York, for the country.
And lastly, you know you can slot in there something
for the Republican Party if you can still recognize it.
(17:07):
But look, I mean, this is the trouble here. I mean,
you know, if you don't think it was a quid
pro quote, watch that Fox interview with.
Speaker 6 (17:14):
Tom Holman in the Mayor.
Speaker 10 (17:16):
I mean, if you don't deliver for Ice, I'm going
to come to New York and we won't be sitting
on a couch. I will be up your keister. And
I'm saying that on a Bloomberg approved boy. I mean, like, really,
I just can't imagine a scenario that could be worse
for the administration. But they're gonna get what they want
(17:36):
right and Kathy Hokle is the only thing that steps
between them and getting their way. And in the meantime,
you have a crisis at the Justice Department with you know,
the senior leadership of the Southern District of New York's
US Attorney's office walking out because they claim it's a
quid pro quote and politicize. So, I mean, who are
(17:56):
you gonna believe your eyes or your ears?
Speaker 6 (18:01):
Unbelievable that you've both brought it up.
Speaker 4 (18:03):
The optics of seeing these two sit together for the
interview on Fox, even with the sound off, was remarkable.
What does this mean for Kathy Hockele's reelection Genie.
Speaker 6 (18:12):
This is a very sensitive moment.
Speaker 8 (18:15):
Yeah, I mean, I think politically she has a lot
of reason to try to remove Eric Adams because she
is not popular. She has seen as fairly weak. She was,
you know, not everybody's first choice for governor. She became
sort of an accidental governor after we Cuomo resigned or
was pushed out. And by the way, Culomo is likely
(18:37):
to be the New York City's next mayor. He certainly
has a leg up and will announce in March, so
he's not left for long as well. So she has
a lot of political reason to do this, but that
is not enough. If she was going to do it,
it should have been done in October. She didn't do it.
And I think, speaking as Rick was about the Justice Department,
(18:58):
what the Trump administration has done here is preposterous. For
Emil Bouvet to say that we can't prosecute Eric Adams
because if we do, he can't carry out the immigration
raids that we want. Means that you have put an
end to public corruption in the United States, public corruption investigations,
(19:19):
because that means any public official charged with public corruption,
they can't possibly be charged or investigated or removed because
how could they do their job. Well, the answer is
they can resign when they are indicted by a grand jury.
So the preposterousness of what the Trump administration and Emil
Bovet has done to their very own Justice Department and
(19:40):
the Office of Public Integrity should not go unnoticed.
Speaker 4 (19:44):
Here amazing analysis from Rick and Genie, and you mentioned
Andrew Cuomo. Genie, could we be in a world, Rick
where Donald Trump helps to reform the political careers of
both Eric Adams and Andrew Cuomo.
Speaker 10 (19:58):
Well, here just letting blog out of jail from Chicago
and appointed him to a job. So I think this
is sort of, you know, like he's the Grim Reaper,
but in reverse he takes you know, politically dead people
and turns them into superstars. And I don't know, I mean,
like maybe this is just something he wants to do
because he felt that he was unfairly prosecuted by the
(20:22):
legal system. And I kind of get that, right, I mean,
in his mind all of this was made up, and
he probably figures everybody who has the same kind of
thing a political career, either past or present, who are
being pursued by the Justice Department must be just as innocent.
As he is, and so that kind of transference makes sense,
(20:44):
but it doesn't preclude the fact that some of these
people are guilty as hell and they probably ought to
be locked up.
Speaker 6 (20:50):
So I don't know.
Speaker 10 (20:52):
I mean, I think that anybody who thinks that he's
going to make decisions based on the political access or
failure of the Republicans the Democrats, it's all about whether
or not it's his success, and that will determine the alcolaes.
Speaker 4 (21:08):
Okay, so Geenie, how long? And so we see Andrew
Cuomo on the patio at mar A Lago.
Speaker 8 (21:15):
I think it could be imminent. Joe Matthew, you know,
it looks like he again will announce in March. It's
all the signs are pointing in that direction, including a
support from some of his you know, not so long
ago fierce opponents. So that looks likely. And you know,
speaking of old people coming back, Anthony Wiener says he
(21:37):
is running for city council in New York. So no,
they are all coming back, you know, by let by guns,
be byguns. And I think the real loser here again
is the fact that public integrity matters our justice department
at the federal and state level have to be able
to investigate on behalf of the public. When we have
(21:58):
public officials who who have been accused of wrongdoing, the
idea that you can't charge them because then they won't
be able to do the bidding of another public official,
even the president, is the height of irresponsibility. And hopefully
that is addressed. But I I, you know, looking at
well Goidovich, looking at all these folks coming back, it
(22:21):
seems to be public corruption be dammed.
Speaker 6 (22:24):
Well, I guess that's true.
Speaker 4 (22:26):
You know, I don't know what Bloggo thinks about this
whole thing, but producer James does invoke the name of
Curtis Sliwa. Rick, is it time to break out the
red beret here or what?
Speaker 6 (22:36):
I don't know.
Speaker 10 (22:36):
I'm still looking for a Republican who could run in
all this, because what an opportunity for Republicans in New
York City.
Speaker 4 (22:43):
You're here, You're the feral cats, Rick Davis and Jeanie
Shanzino with a conversation we thought we'd never have, but
I guess we can say that. Every day here on
this program.
Speaker 1 (22:55):
You're listening to the Bloomberg Balance of Power podcast. Catch
us live weekdays at noon and five pm Eastern on
Alma Cocklay and Android Auto with the Bloomberg Business App.
Listen on demand wherever you get your podcasts, or watch
us live on YouTube.
Speaker 6 (23:11):
You know it feels like on Monday. I hope you
had a long weekend.
Speaker 4 (23:14):
We're glad you're here on Bloomberg Radio, Satellite radio and YouTube.
Speaker 6 (23:17):
Search Bloomberg Business News Live if you want to find
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Speaker 4 (23:21):
We keep a seat for you constantly here in the studio,
and the cameras are lit. Having survived Valentine's Day massacre,
that's what they're calling it. After several thousand probationary employees
across various government departments were fired over the weekend, fired
by email, fired by voicemail. In some cases, they were
(23:43):
called in to empty their desks and kiss them goodbye.
The termination notices hitting over the weekend after a raft
of executive actions signed by the President. We've talked about
them in real time, and now we're looking at the fallout.
Jim Jones, the head of the Food division at the
US Food and Drug Administration, oversaw the banning of red
(24:04):
dye number three earlier this.
Speaker 6 (24:05):
Year, which RFK Junior, of course won.
Speaker 4 (24:08):
He stepped down yesterday quit, pointing to the layoffs of
eighty nine staffers in the Foond division as indiscriminate, fruitless
for me to continue in this role, says his statement.
The top official at the Social Security Administration also stepped
down this weekend after the DOGE went after Social Security.
(24:28):
Michelle King, the acting commissioner out and the question is
who's next here. It does appear the FAA is part
of what's next as they try to envision ways to
overhaul the air traffic control system and of course lay
off a lot of people. Union leaders said the FAA
canned four hundred probationary employees as part of the.
Speaker 6 (24:52):
Valentine's Day massacre. And so now it's on to NASA now.
Speaker 4 (24:57):
The last we checked here considered a national asset by
both Democrats and Republicans. One of the few bipartisan activities
in Washington is.
Speaker 6 (25:06):
Feeling good about our space program.
Speaker 4 (25:09):
On Tuesday, Donald Trump signed an executive order saying that
DOGE would be installed in agencies, including NASA. By Thursday
of last week. They were on site. Now, We've been
doing a lot of reporting on this, and I've also
been following the work of Keith Cowing, who you hear
and see on this program pretty often whenever we talk
about the space program, it's usually about something good. When
(25:30):
we talk to Keith, something good's about to happen. Hard
to tell this time. Former NASA employee, he's been in
the agency himself. He's now editor at NASA Watch and
has been on the forefront of this coverage the downsizing
of NASA.
Speaker 6 (25:43):
Keith, it's good to have you back. Welcome.
Speaker 4 (25:46):
Have we seen the layoffs we're going to get from
NASA or is this just the beginning, Because people inside
the agency are very worried. Meetings are being canceled. They
don't know if they're going to have a program tomorrow.
Speaker 7 (25:57):
Well, if you look across the government, this is happening everywhere,
but at NASA, the little agency that I follow, this is.
Speaker 9 (26:04):
Sort of the pregame show.
Speaker 7 (26:06):
Early on when they put these all these executive orders out,
they said, by the way, identify all the probationary employees
one or two years, because quote they're the easiest to
get rid of, or they have the fewest complaints if
you just let them go for almost any reason. So
that's now happening, and it's happening in real time. As
we as we talk right now. After that, though, is
(26:28):
the main attraction, which is a reduction in force or
a riff. And that's where they go across a larger
swath of an agency and really try and dig in
to get this. You know, pick a number I here,
ten percent was the ideal, but twenty five percent reduction
in force and so you're gonna have a lot of
people who are not in a particularly good place for
a long time.
Speaker 4 (26:49):
Boy, it sure sounds like it. So this is all right,
just probationary. Then the real stuff is to follow.
Speaker 6 (26:54):
Uh.
Speaker 4 (26:54):
If Donald Trump and the administration here are going for
twenty five billion dollars in budget cuts when it comes
time to craft.
Speaker 6 (27:03):
A budget this year, what would that look like? Keith?
Speaker 4 (27:07):
And when you back off, here is the endgame canceling
the Artemis program.
Speaker 6 (27:11):
What does Elon Musk want to do to NASA?
Speaker 9 (27:14):
I don't know if it's.
Speaker 7 (27:14):
Elon per se as a larger swarm of people that
are using the Project twenty twenty five and other metrics
to guide what they're going to do. As far as
the Artemis program goes. The issue isn't the program going
back to the moon. It's the big sols. Rocket Boeing
has sort of gotten a bit of the writing on
the wall, and they put a war notice out to
(27:35):
for saying that there might be up to upwards a
four h or so layoffs. But here's the thing. If
you start laying off civil servants, you're going to cut
your budget a little bit, but not a whole bunch,
because it's really not the biggest part of the federal budget.
But the knee jerk reaction is that NASA, oh, well,
we'll just get contractors to do that work. Well, you know,
you can just fire them with a nasty look.
Speaker 9 (27:56):
You don't even have.
Speaker 7 (27:57):
To go through any procedures other than what's in the contract.
Speaker 6 (28:00):
So ask yourself.
Speaker 7 (28:01):
You put this with, oh, we want to go to
Mars by twenty twenty five to eight whatever, you're going
to do that with less people. You know, if it
was a private sector company, you might get away with that,
but this is a government agency with government contracts, and
it's probably going to take them two or three years
to figure out what's left. Much less not be able
to do a sprint thing to Mars and to the
(28:24):
Moon and to build a new space station and all
the other things that NASA does well.
Speaker 4 (28:29):
And who runs the biggest space contractor in the world
Keith Right now, apparently.
Speaker 7 (28:35):
It's it's space X with Elon Musk. But you know,
there's I think people would ask me, you know about this.
I don't agree necessarily with his political science, but I
do like his rocket science, and his company has a
lot of people there that they're just there to build
rocket ships and explore the universe. So you got to
kind of parse the personalities here. But at the end
of the day, it's the White House. You know, elections
(28:57):
have consequences. It's the people in the news with the names,
and it's going against the government as a whole. Again,
poor little NASA just happens to be a little more
vulnerable because you can't just take too many pieces out
of the rocket ship because it'll blow up.
Speaker 6 (29:12):
Wow.
Speaker 4 (29:13):
So on January thirty first, Keith NASA paused all activities
of advisory organizations inside the agency and you can talk
about these are scientific groups. They focus on planetary science
and more esoteric fields. The first group affected the Mercury
Exploration Assessment Group. They're supposed to gather on the fourth
(29:34):
of February for a couple of days of talks here
and meetings about some of the planning that they were
doing here.
Speaker 6 (29:40):
Sixty people set to show up JOHNS.
Speaker 4 (29:41):
Hopkins Applied Physics Research Lab in suburban Washington. This is
according to the Washington Post. After the DEI orders went
out from the agency, they try they canceled one topic.
I guess that was talking about DEI and trying to
lift up some community who didn't have access to a
(30:02):
lot of science training. And they thought the meeting was compliant.
On January thirty first, NASA forced them to cancel the
entire thing. This is happening across different groups in the agency.
What does it mean for scientific research, for innovation and
what actually people want to get out of NASA?
Speaker 7 (30:21):
Well, nothing good, And of course you know again with NASA,
there's other space agencies. But I just tweeted something, this
is the most I worked there. It's the most amazing
group of people. You need to collaborate with each other
and talk. And then they've touched the Sun, they've gone
to every planet and we're interstellar space.
Speaker 9 (30:38):
Now.
Speaker 7 (30:39):
You just don't sit down and do that. You have
to work with these groups, and these advisory committees are
usually sanity checks like the program managers itself says hey,
I want to point the telescope here, here, here or there,
and they say, you know what, you should do this,
you should do that. Yeah, we think it's good and
it's just a sanity check, but it's also those people
are also being paid to do the science, so sting
(31:00):
these meetings. They're not just you know, if they said hey,
we're going to go to Zoom, I think all right,
maybe they're going to save some travel funds. No, they're
not doing any of these meetings at all. And when
it comes to the DEEI thing again, you can go
wherever you are on that position. But NASA has always,
as an agency, tried to be is inclusive of everybody everywhere,
even when I was a little kid in the sixties.
(31:21):
And so you know, if you're over zealous with OAP
that looks like a word, I can't use it. You
just slice things off, and that's what's happening.
Speaker 4 (31:30):
What do you think of Jared Isaacman, This is the
billionaire entrepreneur has actually been to space a couple of
times because he's extremely wealthy. He's been a customer of
SpaceX and he's set to run the agency what experience
beyond his own space tourism does he bring to the table.
Speaker 7 (31:48):
Well, I'm looking forward to it, you'd be quite honest
with you. The thing that caught me off guard at
first was Oh, this guy's going to buy these flights.
But then like a second later he said, and we're
going to raise a fast amount of money for Saint Jude,
And I go, all right, that's my sort of guy.
You know, you take the space exploration, you take non
traditional people up there, and you go out of your
(32:09):
way and every way possible to make a good thing
on Earth elsewhere in an unrelated sector, come along with
it and hope and inspire and all that sort of stuff.
So that that got me as a fan right off
the bat. He's gone twice. He puts his money where
his mouth is. He started his own company, so I mean,
you know, rich people tend to figure out how to
do things, and he's got sort of a raw enthusiasm
(32:31):
that reminds me a bit of Jim Bridenstein, who is
the administrator to back you know where they just really want.
They got the whole Star Trek, star Wars, let's explore
the universe things, So you need other skills they'll bring
other people in to help them. But having the raw
I want to go explore space thing embedded in your
head is you know, really important and he's got it
in spades.
Speaker 4 (32:52):
Okay, Well, this is nice to hear something good come
out of this conversation. Yeah, is this going to be
the end of the space launch system by the time
DOGE is done?
Speaker 7 (33:01):
You know what again, if they if they cancel that,
more people will be off, you know, out of work,
which you know again, work is work, but you got
you know, do we want to go back to the moon? Okay?
Is the SOLS the best way to do it? Well,
it was mandated as it is by Congress, it's cost
many billions more than it should, it's many years late,
and are there other ways to do it?
Speaker 6 (33:23):
Yeah?
Speaker 7 (33:23):
Elon Musk is making these big rockets like corn silos
in Texas, and if he blows one up, he says, Okay,
I got three more to go.
Speaker 6 (33:30):
So maybe we have a different way of going to
do things.
Speaker 7 (33:33):
And if we really want to go to the moon
and go elsewhere, maybe we need to bite the bullet
and say, you know, we thought that was the way
to do it, but we've got a better way now
and again, every every SpaceX rocket, every Blue Origin rocket
is built with a lot of X NASA people were
pioneering done by NASA, So you got to be hoping
that NASA's had a real impact on what we're.
Speaker 10 (33:52):
Going to do.
Speaker 4 (33:54):
So wait, all right, so we do we have some
short term pain here that ends up being a long
term solution. Maybe this is all good for NASA, Keith,
Is that what I've learned in talking with you, Well.
Speaker 7 (34:03):
When I left NASA, I had to quit, but they
fired everybody I worked in the space Station Freedom program,
which if you look at the space station now, it's
all the stuff we built, just with different names on it.
But it's not fun when you're on the street and
your friends are on the street. But NASA rebounded, and
you would hope that NASA learns from these things. It's,
you know, never a good reason to do something bad,
(34:24):
but you kind of make it worse if you don't
learn from it. I would hope that the NASA that
results from this, and the contractors community and.
Speaker 9 (34:31):
The science community.
Speaker 6 (34:32):
Yeah, if you parse.
Speaker 7 (34:33):
It down, will you have a clear way of doing things?
If that's what comes from this, then okay, we'll look
back and say, I guess it was good after all.
But if it doesn't.
Speaker 6 (34:43):
From NASA, watch Keith Cowing.
Speaker 4 (34:46):
Are you a Star Trek Guy or a Star Wars Guy,
Keith Star Trek, Star Trek Guy.
Speaker 6 (34:51):
I should have I should have known that. I'm sorry
I even asked you.
Speaker 1 (34:56):
You're listening to the Bloomberg Balance of Power podcast. Catch
us live weekdays at noon and five pm Eastern on
Apple Cocklay and Android Auto with the Bloomberg Business App.
You can also listen live on Amazon Alexa from our
flagship New York station, Just Say Alexa played Bloomberg eleven thirty.
Speaker 2 (35:14):
To with tariffs threatened against Columbia, then pulled back, threatened
against Canada and Mexico, delayed until a few weeks from now,
implemented on all Chinese imports, implemented on steel and aluminum imports.
And as we've heard from the President repeatedly, more very
well could be coming, including what he floated last week.
April second, he's looking at auto.
Speaker 6 (35:35):
Tariffs, Joe, And that was all off the top of
her head. With more where this could come from.
Speaker 4 (35:39):
Yeah, April second, we didn't want to do April Fool's Day.
The idea of auto tariffs going into effect though really
causing the question the way that our auto companies make
the vehicles going back and forth across the border, complicating
the idea when it comes to Mexico and Canada. And
remember what Jim Farley said, it would blow a hole
in the US industry that we've ever seen. You paid
(36:01):
a visit to Capitol Hill to deliver that message last week.
It makes you wonder the impact of reciprocal tariffs as well, if.
Speaker 6 (36:08):
They come around to your point? Right, this all comes together?
Was that what I added?
Speaker 2 (36:11):
Getting something?
Speaker 6 (36:12):
There's always another. John Bazella knows all about this.
Speaker 4 (36:15):
He is the President's CEO of the Alliance for Automotive Innovation,
So what must be going through his minds as ev
incentives are also rescinded? John, It's good to see you.
Speaker 6 (36:24):
Welcome.
Speaker 4 (36:24):
I don't know how you make sense of all of this.
We can barely get through an intro to talk to
somebody like you because there's so much going on. What
is really about to happen when it comes to auto tariffs?
Not the bluster but the reality.
Speaker 11 (36:35):
Yeah, well, first of all, thanks thanks for having me.
Here's what I think Jim was getting at. When you
look at the automotive industry here in the United States,
for over twenty five years now, we have had a
seamless North American industry. As you mentioned just a minute ago,
joe parts, components, and vehicles flow back and forth across
(36:57):
the border. In some cases components several times before they
become a finished vehicle. This benefits American consumers. We get
more affordable vehicles, we get more choice, and the US
ends up more competitive as a result of it. So
here's what I think Jim's getting at. If you look
at the scale of this industry, it's massive, these plants
(37:19):
and you've been in them, millions of feet square feet
under roof. These are massive assets. You cannot move these
assets overnight. You can't shift supply chains overnight, you can't
move production overnight. So what could happen is costs could
increase on consumers before jobs come into the United States.
(37:41):
That's the dilemma, that's the challenge of tariffs that appear
out of nowhere.
Speaker 2 (37:46):
Well, but the President would argue that the tariffs are
intended to protect American industry, protect American made cars. So
what is the appropriate way to do that? If it's
not through policies like this.
Speaker 9 (37:58):
Yeah.
Speaker 11 (37:58):
Well, first of all, I think President Trump really understands
the importance of a healthy and competitive auto industry. I
have no doubt about that. I listened carefully during the campaign.
We've had an opportunity to talk to the team. I
feel like he understands this, this importance, the importance of
a competitive auto industry. I think the way to focus
(38:22):
on this is through discussions like well, that will occur
when USMCA, for example, is reviewed, in other words, the
trade agreement between the US, Mexico and Canada. So during
that process, these are the types of conversations that should
take place. What should those parties to the agreement and
(38:42):
do in order to comply with duty free trade? Those
are reasonable questions, and I think that's the ultimately what
Jim saying is, look, we need a review.
Speaker 4 (38:51):
Sticking with Jim Farley for a minute. After he came
to Washington, he warmed up to the idea of putting
tariffs on imported vehicles. We applaud President Trump's idea to
look at all vehicle imports into the US an important
step forward, which now then calls it the question what's
an important vehicle? Because We just talked about American cars
(39:11):
going back and forth across the border for various stages
of assembly.
Speaker 6 (39:15):
Does that count.
Speaker 9 (39:16):
Yeah, it's a great question.
Speaker 11 (39:17):
Right there is no one hundred percent US vehicle or
one hundred percent Mexican made vehicle or one hundred percent
Canadian made vehicle.
Speaker 6 (39:25):
And you've got Europeans assembling cars here in the US.
Speaker 9 (39:28):
So it's it's a to me.
Speaker 11 (39:30):
The big question is do we need and want a
healthy and competitive auto industry in the United States?
Speaker 9 (39:37):
And I think the answer to that, and I think the.
Speaker 11 (39:39):
President agrees, is yes, because it's important to our economic
security and it's important to our national security. And when
you think about how cutting edge this the manufacturing sector is,
the automotive sector is in the United States, and how
important technology is to vehicles and how important that technology
(39:59):
is to our national defense, I think that you really
do need to focus on competitiveness, and I.
Speaker 9 (40:05):
Think that's what this administration will do.
Speaker 2 (40:06):
And is it competitiveness specifically with China that you're most
focused on.
Speaker 11 (40:10):
Yeah, I think that's a great point. When you look
at what's happening. There is an intense global competition for
automotive investments and It's really happening in three areas China clearly.
Speaker 9 (40:21):
The United States, and Europe.
Speaker 11 (40:23):
And it's important that the US is competitive in this dynamic.
Right now, what you see in China, and I was
recently there just before the end of the year, what
you see there is an industry with massive overcapacity, lots
of government subsidies, and a desire to export all that
(40:45):
extra capacity. And the question is is this trade that's
likely to happen, is it fair right or is this
anti competitive behavior? And so that is really going to
be an important question for policymakers when we.
Speaker 6 (41:00):
Talk about China.
Speaker 4 (41:01):
We're not going to see BYD selling cars here anytime soon,
I can only imagine. But what will be the impact,
with that said, of the lifting or the rescinding of
EV tax credits and other incentives. Elon Musk is doing
pretty well at Tesla right now, but you've also got
Jim Farley, Mary Barra and others trying to break into
(41:23):
this Nason business.
Speaker 6 (41:25):
What does this bring to the table.
Speaker 11 (41:27):
Yeah, I think context is really important here. There's two
bits of context I think we have to understand when
we talk about the EV incentives. The first piece of
context is we right now as an auto industry in
the United States, fast face significant challenging automotive regulations emission standards.
(41:47):
Those really challenging emission standards both set at the federal
level in the Biden administration and by the state of California.
And that's a crazy land story we can get into.
Those were based on the assumption that ev incentives would stay. Yes,
so if you take the incentives out, my question to
you would be.
Speaker 9 (42:06):
Did the standards go away? And so that's context number one.
Context number two.
Speaker 11 (42:10):
What we were just talking about the importance of a
healthy and competitive industry in this competition with China and
the Chinese automotive industry. I would make an argument that
the incentives are important in both sets of contexts. In
other words, they are important in a context where you've
got really aggressive standards, and they're particularly important as we
(42:32):
transform our industrial base to remain competitive and become competitive
with China.
Speaker 2 (42:36):
Well, and you just in your first answer talking to
us about China, talked about how China heavily subsidizes its own,
yeah automotive industry. So is it a mistake for the
US to be pulling back subsidies of any kind? Do
we actually need more of them.
Speaker 11 (42:48):
Yeah, I look, I think this is exactly the question.
This is exactly the question. If you believe in a healthy,
competitive auto industry, and you believe that that industry, that
competitive and healthy in industry is supportive of our economic
and national security, you should look at a balance between
regulation and policy, and in this case, policy would be incentives.
Speaker 9 (43:11):
There are.
Speaker 11 (43:11):
These incentives are not just the consumer incentives that a
lot of people have focused on. In other words, money
at available at the dealership to support the purchase of
an EV. We're talking about incentives to transform the industrial base,
to build the automotive industry of the future. That is
(43:32):
really important for this industry.
Speaker 4 (43:34):
What does this mean for innovation at a time when
we realize, you know what, most people are buying hybrids,
not evs, right, and that Elon Musk may not have
a consumer priced vehicle anytime soon.
Speaker 1 (43:45):
Right.
Speaker 9 (43:46):
Hybrids are a form of electrified vehicle. Right. And I
love this.
Speaker 11 (43:50):
Idea that consumers have choice, and I think that's essential.
They should have a choice a gasoline vehicle if it
fits their wants and needs, a hybrid, a plug in hybrid,
or a battery.
Speaker 6 (44:01):
Keep up with China when it comes to innovation, that's
the key.
Speaker 11 (44:04):
The key is you need an innovative and vibrant auto
industry and so to be able to have choice, choice,
including electrified vehicles, is going to be really important. So
you've got to build an industrial base to have that
innovation and choice.
Speaker 2 (44:18):
Well, and obviously we've talked about and you were talking
about these large facilities that actually assemble these cars, but
what about battery technology. What about the chips that need
to power these cars that can do us so much
more from a technological basis. Talk to us about kind
of those lower rungs of this.
Speaker 11 (44:33):
Yeah, and they're not much lower, right if you think
about it. I mean, the battery is critical to the vehicle,
a hybrid vehicle as well as a battery electric vehicle,
and so are these computer chips. Vehicles are effectively consumers
excuse me, computers on wheels, and consumers recognize this. And
so you need to have access to cutting edge technology.
(44:57):
That means computer chips, semiconductors, and it also means the
latest battery technology. And so investments. Now, should government do
all of this, absolutely not, But the innovators are leading
and so you see chipset manufacturers investing in the United States.
You see battery manufacturers investing in the United States. The
question is for some period of time, should there be
(45:18):
some supportive policy that encourages those investments while the market
remains choppy. The market is going to be spiky for
some period of time as we transform to these new technologies.
Speaker 4 (45:30):
We're almost out of time. When do we get ROBOTAXI?
When does self driving happen? For real?
Speaker 6 (45:33):
Let's get to the innovation, the fun stuff for him.
Speaker 11 (45:36):
Well, look, I think you can go to some places
and get into robotax and right now, absolutely, you know
what the problem is with highly automated vehicles. The holdup
is not the engineering or the science. The holdup is
the policy. Once again, we need a national policy that
recognizes again same idea, the competitive importance of this NEXTOK
(46:00):
technology in the US market.
Speaker 2 (46:01):
So is this when we're kind of talking about that
knowing that Donald Trump and part campaigned on deregulating, on
making things like permitting easier, that's all part and parcel the.
Speaker 6 (46:10):
Way you're talking.
Speaker 9 (46:10):
Yeah, Oh, I think absolutely.
Speaker 11 (46:12):
What I saw in the first Trump administration was a
welcoming of this type of technology and flexible tools in
the Department of Transportation toolbox to encourage those technologies. I
look forward to those conversations with this set of regulators.
Speaker 2 (46:30):
Is there a safety trade off there if you deregulate
too much?
Speaker 9 (46:34):
Absolutely not. There can't be a safety trade off. Absolutely.
Speaker 11 (46:38):
Safety has to be first and foremost in the minds
of what we do, and I think that's one of
the benefits.
Speaker 9 (46:44):
Of highly automated vehicle technology is more safety.
Speaker 4 (46:47):
I just want to know when I can read on
my way to work. I don't want to even look
out the window. I want the car to drive me
to work. That's what I'm getting at here. You want
one of these, right.
Speaker 11 (46:55):
I would love one of those now. By the way,
in our commutes in Washington, d C.
Speaker 4 (47:00):
That's a lot of time. It's a massive productivity story. Also,
the car would drive my seventeen year old. The seventeen
year old would not drive the car, something that I
think masurance company wants.
Speaker 11 (47:09):
We are half joking, but I know you're serious. I
as we're talking about productivity gains, we're also talking about
access to personal mobility for people who can't drive.
Speaker 6 (47:18):
How about that not to mention safety. I guess while
we're out of here.
Speaker 4 (47:22):
You've got a lot to figure out in the next
couple of years. To please get back to.
Speaker 6 (47:25):
Us on the April.
Speaker 4 (47:27):
Maybe I love it that that's true. You should be available.
John Bozzella, president's CEO, Alliance for Automotive Innovation. Great to
meet you and thank you for bringing your experience in
point of view to us here.
Speaker 6 (47:36):
At the table. Thanks for listening to the Balance of
Power podcast.
Speaker 4 (47:44):
Make sure to subscribe if you haven't already, at Apple, Spotify,
or wherever you get your podcasts, and you can find
us live every weekday from Washington, DC at noontime Eastern
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Bloomberg Audio Studios, podcasts, radio news. You're listening to the
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(00:20):
you get your podcasts, or watch US live on YouTube.
Speaker 2 (00:25):
But talk today, frankly, is what happened in Riod in
the early hours Eastern time this morning. A meeting between
US and Russian officials to discuss the future of the
war in Ukraine, or perhaps more specifically, an end to
that war, which the US State Department says they want
to see happen as soon as possible. At these talks,
obviously Russian Foreign Minister Sergey Lavrov, a number of emissaries
(00:47):
from the US as well, Mike Waltz, the National Security Advisor,
Steve Witkoff, who is the Special Envoy for the Middle East,
not notably the Special Envoy for Ukraine, Keith Kellogg, and
then of course Secretary of State Marco Rubio, who had
this to stay from Saudi Arabia earlier.
Speaker 3 (01:05):
We're going to appoint a high level team from our
end to help negotiate and walk work through the end
of the conflict in Ukraine in a way that's enduring
and acceptable to all the parties engaged. The third point
is to begin to work at a high level as well,
to begin to discuss and think about and examine both
the geopolitical and economic cooperation that could result from an
(01:28):
end to the conflict in Ukraine.
Speaker 4 (01:31):
That's where we start a conversation with Jennifer Kavanaugh, back
with a senior fellow, director of Military Analysis at Defense
Priorities and co author of the book Truth Decay, an
initial exploration of the diminishing role of facts and analysis
in American public life. Jennifer, it's great to see you.
Welcome back to Bloomberg TV and Radio. There's been a
lot of criticism, as you might expect surrounding such a
(01:53):
sensitive interaction like this first meeting. Much has been said
about who is not at the table. What's your thought
of about the way this is starting. Is this a
positive move or not?
Speaker 5 (02:03):
I do think it's a positive move. It's the first
time that there's been a high level meeting like this
between the United States and Russia since the war started
almost three years ago now, and any negotiation is going
to take a lot of rounds of talks, and it
makes sense that the United States and Russia would start
by dealing with some of their bilateral issues. That does
not mean that Ukraine should be excluded for all the
(02:26):
rounds of talks, but certainly the United States and Russia
have a long history of tense and difficult relationships, and
there are a lot of bilateral issues that the two
countries need to work out before they even sit down
at the table with the other parties, to work through
the tough issues surrounding the war in Ukraine and the
(02:47):
relationship between Russia and the rest of Europe. So, as
you heard Secretary Rubio say in the clip you played,
you know, a big piece of this is thinking about
the future of US Russia relationships. So I see this
first meeting as sort of setting the foundation for future talks.
And it makes sense that the United States and Russia,
which are both two major nuclear powers, would start that
(03:09):
off together alone before inviting the rest of the parties in.
Speaker 2 (03:14):
But does this not also set the foundation for a
deal that could end up being more favorable to Russia
given some of the rhetoric we're hearing, than to Ukraine.
Who wasn't there.
Speaker 5 (03:25):
I don't necessarily think that any decisions were made today
about how.
Speaker 6 (03:28):
The war would end.
Speaker 5 (03:30):
Today. It seems like the key outcome was the appointing
high level negotiating teams to work through those issues. So
no decisions about Ukraine were made without Ukraine today. It
was more decisions about process and how the process might unfold.
I would agree certainly that any decision that deals specifically
with the war Ukraine should be a party to, and
(03:51):
I think that anyone who's working in the Trump administration
who really does want a lasting piece would also want
Ukraine at the table. Research shows that no peace settlements
that are imposed on countries the countries are forced to
sign rarely endure. So if the goal here is to
have a lasting piece, which it seems like it is,
then Ukraine will have to be at the table. So
(04:13):
I don't see any necessarily any foreboding signs here from
Ukraine's perspective.
Speaker 4 (04:19):
Well, you did put your finger on something in the
language that the Secretary of State was using.
Speaker 6 (04:24):
There this idea.
Speaker 4 (04:25):
Of potentially more comprehensive talks involving, as Marco Rubio put it,
both the geopolitical and economic cooperation that could result from
an end of the conflict.
Speaker 6 (04:36):
So what are we talking about here?
Speaker 4 (04:38):
Is this exon mobile and McDonald's going back to Beijing
or should I say Moscow rather.
Speaker 5 (04:44):
It could be I think the key things are Number One,
this war was in the approximate terms, about Ukraine, but
also about Russia's security concerns. There's a debate about wether
those are legitimate or not, but Russia does have concerns
about having NATO right up on its border, and it
made it clear before the war that it wanted to
(05:05):
have at least discussions about the security architecture and the
relationship between NATO and Russia. And so I see in
Secretary rubio statement and indication that that will be something that
the two parties discuss, or the four parties or however
many parties are at the table. And then on the
economic piece, I think there's a recognition coming from Secretary
Rubio and the US team that sanctions, the very stiff
(05:29):
and extensive sanctions that the United States and its allies
and partners have placed on Russia since the beginning of
the war, that some of those sanctions will have to
be rolled back, maybe not all at once, but that
in the long term future a stable relationship between the
United States and Russia and NATO and Russia will have
to have those sanctions removed at least over a period
(05:52):
of time. And so that's what I see is sort
of the economic piece that there has to be some
reopening of these economic relationships.
Speaker 2 (06:00):
Yeah, remarkable to see today Marco Rubio sitting across the
table from Sergey Lavrov, who personally is under sanctioned by
the US government. But that is exactly why Rubio was
talking about the need for a European cooperation here in
that Europe also has sanctions on Russia, so will have
to be involved if you're a leader in a European
capital right now, Jennifer facing down the prospect of not
(06:22):
only being excluded from the talks today, but having to
rethink defense posturing because of the signal of a US
pullback in many of those areas you were just alluding to,
especially those countries right on the front when it comes
to NATO. What are you thinking right now?
Speaker 5 (06:38):
I mean, this has been a challenge for European leaders
for some time now, is the sort of unwillingness to
recognize the changing attitude in the United States towards continuing
to have this all encompassing security guarantee to its European partners.
We heard comments from a number of administration players, whether
(06:58):
it was Secretary of Defense P. Xth or Vice President J.
D Vance, about, you know, the ways in which they
were looking for Russia to step up. And I do
think that there was a change in tone in the
administration to point out that it's not just that the administration,
the Trump administration, is looking for Europe to spend more
under US leadership, but to actually take on that leadership themselves,
(07:21):
and that's that's there's a difference there. And I think
we saw the recognition and the urgency felt in Europe
after that with the summit yesterday in Paris, but the
results were kind of lackluster. So, if you know, if
I personally am a European leader, I'm trying to figure
out what do I need to defend myself with no
US support, because that should be my security goal. I
don't necessarily see that that level of urgency yet for
(07:44):
most of Europe. Certainly you see it in the Baltic
States and in Poland, but those countries can only do
so much without the rest of Europe behind them.
Speaker 4 (07:52):
Yeah, Poland has made that clear, so Frances it will
help with peacekeeping troops as well. The uk kere starmer
those is he wants US military support, it sounds like
he's not.
Speaker 6 (08:03):
Going to get it.
Speaker 5 (08:06):
This seems unlikely at least right now from what the
Administration said last week. I mean, the reality is that
a European whether it's a peacekeeping force or a trip
wire force of any meaningful size, can't really sustain itself
without US support, at least in terms of logistics and
other types of enablers, even if there aren't US boots
on the ground in Ukraine. The administration comments last week
(08:30):
weren't all that clear whether or not that support is
off the table, But there are another other challenges with
any sort of European security guarantees. So I personally am
not that confident that a sort of European peacekeeping force
is a likely outcome of the negotiations, both because of
feasibility as well as because of what Russia is likely
to accept. They're not going to be too enthusiastic about
(08:52):
having a big peacekeeping force or deterrent force of European
soldiers on their border either or on the de facto border.
Ukraine that's likely to come from any settlement, So I
don't really see that as a likely outcome, but certainly
there will be more talk about it because it's the
only real alternative to US backed security guarantees that's on
the table right now.
Speaker 2 (09:14):
All right, Jennifer Kavanaugh, Senior Fellow and Director of Military
Analysis at Defense Priorities, thank you for joining us here
on Balance of Power today. Much appreciated. And I do
Joe just think back to the number of conversations we
have had with foreign ministers, other European diplomats here at
this table, especially during the election, about what it would
mean for Europe infer NATO if Donald Trump were to
(09:36):
be elected, and now that he's president, after all of
them essentially telling us we'll work with any administration. I
do wonder how that tenor might change.
Speaker 4 (09:45):
It's not resulting in much unity at the moments. Italy
showed up late for the emergency meeting over the weekend,
ole Off Schultz left early.
Speaker 6 (09:53):
We'll see how things go Wednesday. Reuter says that will
be the next meeting.
Speaker 1 (09:59):
You're listening to the Bloomberg Balance of Power podcast. Catch
us Live weekdays at noon and five pm. Eastern on
Apple Cockley and Android Auto with the Bloomberg Business app.
You can also listen live on Amazon Alexa from our
flagship New York station, Just Say Alexa played Bloomberg eleven thirty.
Speaker 4 (10:18):
We're live from Washington, but we do have our eyes
on New York, right where Charlie Pellett is sitting, where
the news really could be focused on later today, as
the Governor of New York raises questions about the future
of the Eric Adams administration. We talked about this a
bit on Friday, when the resignations began from inside the
(10:38):
Department of Justice over this DOJ order that the corruption
case against him be dropped that has expanded.
Speaker 7 (10:45):
Now.
Speaker 4 (10:45):
Four of Adams's top deputies announced their resignations over the
weekend on this push to drop the corruption case in
apparent exchange for help with Donald Trump's deportation agenda. There
is talk of a quid now Kathy Hokeel, who as
you might remember, was in Washington last week, so she's
weighing the serious step now of removing the mayor.
Speaker 6 (11:07):
How does that happen?
Speaker 4 (11:08):
You say, the city's charter lays it out, and what
is in fact an untested process which the governor can
begin by serving the mayor with charges warranting removal. She's
in meetings today with a lot more to follow here,
including the city council speaker and controller. They're part of
(11:28):
the committee that can declare a mayor unable to serve.
We could be in a situation where things went from
being very good for Eric Adams to not at all
under the Trump White House. It's where we start with
our panel today off the long weekend. Rick Davis, Partner
at Stone Court Capital, Bloomberg Politics contributor and Republican strategist,
(11:49):
joined by Democratic analyst Genie Schanzano, Senior Democracy Fellow at
the Center for the Study of the Presidency in Congress,
Bloomberg Politics contributor, Genie, This hits close to home for
you in New York and as a Democrat, is Eric
Adams going to be the mayor for law?
Speaker 8 (12:05):
You know, it's unclear now. Everybody in democratic politics in
New York is at that meeting, so we'll have to
see what they say. And she, the governor, is certainly
getting a lot of pressure to remove him, but it
is a bad idea. She chose not to remove him,
and she is allowed to as you just mentioned via
city charter when he was indicted in October. So to
(12:28):
remove him now would be to suggest that she is
removing him because he cozied up to Donald Trump and
because they feel that the you know, he is cooperating
with the federal government as it pertains to immigration. I
don't like what the Justice Department did. I don't like
the dropping of the charges. I certainly am not a
(12:49):
big fan of Eric Adams, nor are many New Yorkers.
He's at about nine percent. But this would be a
historic move by a New York governor. Two hundred and
thirty five years, we've never seen this, and so to
do it now would be to open a Pandora's box
in terms of what a mayor could or couldn't be
removed for.
Speaker 9 (13:11):
What do you think of this?
Speaker 4 (13:11):
Rick Governor Hokel says, the alleged conduct at City Hall
that has been reported over the past two weeks is
troubling and cannot be ignored.
Speaker 6 (13:21):
Will she remove the mayor? Well, you know, it's hard
to tell.
Speaker 10 (13:26):
I mean, does she really feel like she's got the leverage.
Speaker 6 (13:29):
To be able to do it?
Speaker 10 (13:31):
I kind of agree with Genie. I mean, if she
was going to do that. She probably should have done
it when he was indicted, said resigner or get kicked out,
and then she should have kicked him out and we
would have been spared all this quid pro quo talk
and losing the leadership of the Southern District.
Speaker 6 (13:48):
Of New York's Justice Department.
Speaker 10 (13:49):
I mean, like this thing has turned in to a
circus when you think of all the impact that this
thing has had on the City of New York, the
Justice Department, the immigration program, the state of New York,
the state of the Democratic Party in the City of
New York. I mean, if Eric Adams doesn't resign based
(14:10):
on the top four people in his administration walking out
on him yesterday, then Kathy Holkl should do something. And
twiddling away at this is only making it worse by
the day, and that's on her.
Speaker 4 (14:26):
You know, it's not going in a good direction. When
Adolph Hitler is invoked Eric adams Genie quote. I was
listening to some of doctor Martin Luther King's teachings and
he talked about the book Mine comf referencing Adolf Hitler's
manifesto quote. He said, if you repeat a lie long
enough loud enough people will believe it is true.
Speaker 6 (14:46):
And that's what you're seeing right now.
Speaker 4 (14:48):
This is a modern day mind comf Where is he
going with that? Because it doesn't sound like someone is
about to resign.
Speaker 8 (14:56):
Oh, and he said clearly and that very bizarre speech
gave yesterday, that he was not going anywhere. Of course,
that has become sort of practice amongst politicians who are
accused of improprieties is to just stay, put fight and
say they are victimized. And this is of course what
Adams has been saying right along. This is why he
(15:18):
went down tomorrow lago. This is why he went to
the inauguration. He's been closing up with Donald Trump because
Donald Trump has been publicly empathetic with him, saying that
he has been a victim of an over zealous prosecution.
You know that said, the timeline here is critically important.
(15:38):
If she doesn't act to remove him before March twenty six,
that's ninety days before the primary, we are in an
election here in New York. There would need to be
a special election by Jimani Williams, who's the public advocate
who would become acting mayor on his removal. So there
are a lot of moving parts here, and you know
(15:59):
you want to add insult to injury. Look at that
Fox interview with Tom Holman on Friday and Eric Adams
where Tom Holman is joking about laughing, I don't know,
joking about a quid pro quo. I mean, the entire
thing is ugly. Adams should resign, he looks like he won't,
and then the governor has lost her chance to remove him.
Speaker 4 (16:21):
Man to be a New York Republican once again, Rick,
I don't know. But if Kathy Hokle removes the mayor
from office, knowing that he is close to Donald Trump,
what does this do for the New York delegation that
was already on thin ice here when it came to
so many issues.
Speaker 6 (16:39):
Including salt. This is a tough room to be a Republican,
Rick Davis.
Speaker 10 (16:45):
Yeah, this is not your grandfather's Republican Party for sure,
and I think that they have to act on their
own interests. In other words, what do they think is
good for the state of New York, for the country.
And lastly, you know you can slot in there something
for the Republican Party if you can still recognize it.
(17:07):
But look, I mean, this is the trouble here. I mean,
you know, if you don't think it was a quid
pro quote, watch that Fox interview with.
Speaker 6 (17:14):
Tom Holman in the Mayor.
Speaker 10 (17:16):
I mean, if you don't deliver for Ice, I'm going
to come to New York and we won't be sitting
on a couch. I will be up your keister. And
I'm saying that on a Bloomberg approved boy. I mean, like, really,
I just can't imagine a scenario that could be worse
for the administration. But they're gonna get what they want
(17:36):
right and Kathy Hokle is the only thing that steps
between them and getting their way. And in the meantime,
you have a crisis at the Justice Department with you know,
the senior leadership of the Southern District of New York's
US Attorney's office walking out because they claim it's a
quid pro quote and politicize. So, I mean, who are
(17:56):
you gonna believe your eyes or your ears?
Speaker 6 (18:01):
Unbelievable that you've both brought it up.
Speaker 4 (18:03):
The optics of seeing these two sit together for the
interview on Fox, even with the sound off, was remarkable.
What does this mean for Kathy Hockele's reelection Genie.
Speaker 6 (18:12):
This is a very sensitive moment.
Speaker 8 (18:15):
Yeah, I mean, I think politically she has a lot
of reason to try to remove Eric Adams because she
is not popular. She has seen as fairly weak. She was,
you know, not everybody's first choice for governor. She became
sort of an accidental governor after we Cuomo resigned or
was pushed out. And by the way, Culomo is likely
(18:37):
to be the New York City's next mayor. He certainly
has a leg up and will announce in March, so
he's not left for long as well. So she has
a lot of political reason to do this, but that
is not enough. If she was going to do it,
it should have been done in October. She didn't do it.
And I think, speaking as Rick was about the Justice Department,
(18:58):
what the Trump administration has done here is preposterous. For
Emil Bouvet to say that we can't prosecute Eric Adams
because if we do, he can't carry out the immigration
raids that we want. Means that you have put an
end to public corruption in the United States, public corruption investigations,
(19:19):
because that means any public official charged with public corruption,
they can't possibly be charged or investigated or removed because
how could they do their job. Well, the answer is
they can resign when they are indicted by a grand jury.
So the preposterousness of what the Trump administration and Emil
Bovet has done to their very own Justice Department and
(19:40):
the Office of Public Integrity should not go unnoticed.
Speaker 4 (19:44):
Here amazing analysis from Rick and Genie, and you mentioned
Andrew Cuomo. Genie, could we be in a world, Rick
where Donald Trump helps to reform the political careers of
both Eric Adams and Andrew Cuomo.
Speaker 10 (19:58):
Well, here just letting blog out of jail from Chicago
and appointed him to a job. So I think this
is sort of, you know, like he's the Grim Reaper,
but in reverse he takes you know, politically dead people
and turns them into superstars. And I don't know, I mean,
like maybe this is just something he wants to do
because he felt that he was unfairly prosecuted by the
(20:22):
legal system. And I kind of get that, right, I mean,
in his mind all of this was made up, and
he probably figures everybody who has the same kind of
thing a political career, either past or present, who are
being pursued by the Justice Department must be just as innocent.
As he is, and so that kind of transference makes sense,
(20:44):
but it doesn't preclude the fact that some of these
people are guilty as hell and they probably ought to
be locked up.
Speaker 6 (20:50):
So I don't know.
Speaker 10 (20:52):
I mean, I think that anybody who thinks that he's
going to make decisions based on the political access or
failure of the Republicans the Democrats, it's all about whether
or not it's his success, and that will determine the alcolaes.
Speaker 4 (21:08):
Okay, so Geenie, how long? And so we see Andrew
Cuomo on the patio at mar A Lago.
Speaker 8 (21:15):
I think it could be imminent. Joe Matthew, you know,
it looks like he again will announce in March. It's
all the signs are pointing in that direction, including a
support from some of his you know, not so long
ago fierce opponents. So that looks likely. And you know,
speaking of old people coming back, Anthony Wiener says he
(21:37):
is running for city council in New York. So no,
they are all coming back, you know, by let by guns,
be byguns. And I think the real loser here again
is the fact that public integrity matters our justice department
at the federal and state level have to be able
to investigate on behalf of the public. When we have
(21:58):
public officials who who have been accused of wrongdoing, the
idea that you can't charge them because then they won't
be able to do the bidding of another public official,
even the president, is the height of irresponsibility. And hopefully
that is addressed. But I I, you know, looking at
well Goidovich, looking at all these folks coming back, it
(22:21):
seems to be public corruption be dammed.
Speaker 6 (22:24):
Well, I guess that's true.
Speaker 4 (22:26):
You know, I don't know what Bloggo thinks about this
whole thing, but producer James does invoke the name of
Curtis Sliwa. Rick, is it time to break out the
red beret here or what?
Speaker 6 (22:36):
I don't know.
Speaker 10 (22:36):
I'm still looking for a Republican who could run in
all this, because what an opportunity for Republicans in New
York City.
Speaker 4 (22:43):
You're here, You're the feral cats, Rick Davis and Jeanie
Shanzino with a conversation we thought we'd never have, but
I guess we can say that. Every day here on
this program.
Speaker 1 (22:55):
You're listening to the Bloomberg Balance of Power podcast. Catch
us live weekdays at noon and five pm Eastern on
Alma Cocklay and Android Auto with the Bloomberg Business App.
Listen on demand wherever you get your podcasts, or watch
us live on YouTube.
Speaker 6 (23:11):
You know it feels like on Monday. I hope you
had a long weekend.
Speaker 4 (23:14):
We're glad you're here on Bloomberg Radio, Satellite radio and YouTube.
Speaker 6 (23:17):
Search Bloomberg Business News Live if you want to find
our live string.
Speaker 4 (23:21):
We keep a seat for you constantly here in the studio,
and the cameras are lit. Having survived Valentine's Day massacre,
that's what they're calling it. After several thousand probationary employees
across various government departments were fired over the weekend, fired
by email, fired by voicemail. In some cases, they were
(23:43):
called in to empty their desks and kiss them goodbye.
The termination notices hitting over the weekend after a raft
of executive actions signed by the President. We've talked about
them in real time, and now we're looking at the fallout.
Jim Jones, the head of the Food division at the
US Food and Drug Administration, oversaw the banning of red
(24:04):
dye number three earlier this.
Speaker 6 (24:05):
Year, which RFK Junior, of course won.
Speaker 4 (24:08):
He stepped down yesterday quit, pointing to the layoffs of
eighty nine staffers in the Foond division as indiscriminate, fruitless
for me to continue in this role, says his statement.
The top official at the Social Security Administration also stepped
down this weekend after the DOGE went after Social Security.
(24:28):
Michelle King, the acting commissioner out and the question is
who's next here. It does appear the FAA is part
of what's next as they try to envision ways to
overhaul the air traffic control system and of course lay
off a lot of people. Union leaders said the FAA
canned four hundred probationary employees as part of the.
Speaker 6 (24:52):
Valentine's Day massacre. And so now it's on to NASA now.
Speaker 4 (24:57):
The last we checked here considered a national asset by
both Democrats and Republicans. One of the few bipartisan activities
in Washington is.
Speaker 6 (25:06):
Feeling good about our space program.
Speaker 4 (25:09):
On Tuesday, Donald Trump signed an executive order saying that
DOGE would be installed in agencies, including NASA. By Thursday
of last week. They were on site. Now, We've been
doing a lot of reporting on this, and I've also
been following the work of Keith Cowing, who you hear
and see on this program pretty often whenever we talk
about the space program, it's usually about something good. When
(25:30):
we talk to Keith, something good's about to happen. Hard
to tell this time. Former NASA employee, he's been in
the agency himself. He's now editor at NASA Watch and
has been on the forefront of this coverage the downsizing
of NASA.
Speaker 6 (25:43):
Keith, it's good to have you back. Welcome.
Speaker 4 (25:46):
Have we seen the layoffs we're going to get from
NASA or is this just the beginning, Because people inside
the agency are very worried. Meetings are being canceled. They
don't know if they're going to have a program tomorrow.
Speaker 7 (25:57):
Well, if you look across the government, this is happening everywhere,
but at NASA, the little agency that I follow, this is.
Speaker 9 (26:04):
Sort of the pregame show.
Speaker 7 (26:06):
Early on when they put these all these executive orders out,
they said, by the way, identify all the probationary employees
one or two years, because quote they're the easiest to
get rid of, or they have the fewest complaints if
you just let them go for almost any reason. So
that's now happening, and it's happening in real time. As
we as we talk right now. After that, though, is
(26:28):
the main attraction, which is a reduction in force or
a riff. And that's where they go across a larger
swath of an agency and really try and dig in
to get this. You know, pick a number I here,
ten percent was the ideal, but twenty five percent reduction
in force and so you're gonna have a lot of
people who are not in a particularly good place for
a long time.
Speaker 4 (26:49):
Boy, it sure sounds like it. So this is all right,
just probationary. Then the real stuff is to follow.
Speaker 6 (26:54):
Uh.
Speaker 4 (26:54):
If Donald Trump and the administration here are going for
twenty five billion dollars in budget cuts when it comes
time to craft.
Speaker 6 (27:03):
A budget this year, what would that look like? Keith?
Speaker 4 (27:07):
And when you back off, here is the endgame canceling
the Artemis program.
Speaker 6 (27:11):
What does Elon Musk want to do to NASA?
Speaker 9 (27:14):
I don't know if it's.
Speaker 7 (27:14):
Elon per se as a larger swarm of people that
are using the Project twenty twenty five and other metrics
to guide what they're going to do. As far as
the Artemis program goes. The issue isn't the program going
back to the moon. It's the big sols. Rocket Boeing
has sort of gotten a bit of the writing on
the wall, and they put a war notice out to
(27:35):
for saying that there might be up to upwards a
four h or so layoffs. But here's the thing. If
you start laying off civil servants, you're going to cut
your budget a little bit, but not a whole bunch,
because it's really not the biggest part of the federal budget.
But the knee jerk reaction is that NASA, oh, well,
we'll just get contractors to do that work. Well, you know,
you can just fire them with a nasty look.
Speaker 9 (27:56):
You don't even have.
Speaker 7 (27:57):
To go through any procedures other than what's in the contract.
Speaker 6 (28:00):
So ask yourself.
Speaker 7 (28:01):
You put this with, oh, we want to go to
Mars by twenty twenty five to eight whatever, you're going
to do that with less people. You know, if it
was a private sector company, you might get away with that,
but this is a government agency with government contracts, and
it's probably going to take them two or three years
to figure out what's left. Much less not be able
to do a sprint thing to Mars and to the
(28:24):
Moon and to build a new space station and all
the other things that NASA does well.
Speaker 4 (28:29):
And who runs the biggest space contractor in the world
Keith Right now, apparently.
Speaker 7 (28:35):
It's it's space X with Elon Musk. But you know,
there's I think people would ask me, you know about this.
I don't agree necessarily with his political science, but I
do like his rocket science, and his company has a
lot of people there that they're just there to build
rocket ships and explore the universe. So you got to
kind of parse the personalities here. But at the end
of the day, it's the White House. You know, elections
(28:57):
have consequences. It's the people in the news with the names,
and it's going against the government as a whole. Again,
poor little NASA just happens to be a little more
vulnerable because you can't just take too many pieces out
of the rocket ship because it'll blow up.
Speaker 6 (29:12):
Wow.
Speaker 4 (29:13):
So on January thirty first, Keith NASA paused all activities
of advisory organizations inside the agency and you can talk
about these are scientific groups. They focus on planetary science
and more esoteric fields. The first group affected the Mercury
Exploration Assessment Group. They're supposed to gather on the fourth
(29:34):
of February for a couple of days of talks here
and meetings about some of the planning that they were
doing here.
Speaker 6 (29:40):
Sixty people set to show up JOHNS.
Speaker 4 (29:41):
Hopkins Applied Physics Research Lab in suburban Washington. This is
according to the Washington Post. After the DEI orders went
out from the agency, they try they canceled one topic.
I guess that was talking about DEI and trying to
lift up some community who didn't have access to a
(30:02):
lot of science training. And they thought the meeting was compliant.
On January thirty first, NASA forced them to cancel the
entire thing. This is happening across different groups in the agency.
What does it mean for scientific research, for innovation and
what actually people want to get out of NASA?
Speaker 7 (30:21):
Well, nothing good, And of course you know again with NASA,
there's other space agencies. But I just tweeted something, this
is the most I worked there. It's the most amazing
group of people. You need to collaborate with each other
and talk. And then they've touched the Sun, they've gone
to every planet and we're interstellar space.
Speaker 9 (30:38):
Now.
Speaker 7 (30:39):
You just don't sit down and do that. You have
to work with these groups, and these advisory committees are
usually sanity checks like the program managers itself says hey,
I want to point the telescope here, here, here or there,
and they say, you know what, you should do this,
you should do that. Yeah, we think it's good and
it's just a sanity check, but it's also those people
are also being paid to do the science, so sting
(31:00):
these meetings. They're not just you know, if they said hey,
we're going to go to Zoom, I think all right,
maybe they're going to save some travel funds. No, they're
not doing any of these meetings at all. And when
it comes to the DEEI thing again, you can go
wherever you are on that position. But NASA has always,
as an agency, tried to be is inclusive of everybody everywhere,
even when I was a little kid in the sixties.
(31:21):
And so you know, if you're over zealous with OAP
that looks like a word, I can't use it. You
just slice things off, and that's what's happening.
Speaker 4 (31:30):
What do you think of Jared Isaacman, This is the
billionaire entrepreneur has actually been to space a couple of
times because he's extremely wealthy. He's been a customer of
SpaceX and he's set to run the agency what experience
beyond his own space tourism does he bring to the table.
Speaker 7 (31:48):
Well, I'm looking forward to it, you'd be quite honest
with you. The thing that caught me off guard at
first was Oh, this guy's going to buy these flights.
But then like a second later he said, and we're
going to raise a fast amount of money for Saint Jude,
And I go, all right, that's my sort of guy.
You know, you take the space exploration, you take non
traditional people up there, and you go out of your
(32:09):
way and every way possible to make a good thing
on Earth elsewhere in an unrelated sector, come along with
it and hope and inspire and all that sort of stuff.
So that that got me as a fan right off
the bat. He's gone twice. He puts his money where
his mouth is. He started his own company, so I mean,
you know, rich people tend to figure out how to
do things, and he's got sort of a raw enthusiasm
(32:31):
that reminds me a bit of Jim Bridenstein, who is
the administrator to back you know where they just really want.
They got the whole Star Trek, star Wars, let's explore
the universe things, So you need other skills they'll bring
other people in to help them. But having the raw
I want to go explore space thing embedded in your
head is you know, really important and he's got it
in spades.
Speaker 4 (32:52):
Okay, Well, this is nice to hear something good come
out of this conversation. Yeah, is this going to be
the end of the space launch system by the time
DOGE is done?
Speaker 7 (33:01):
You know what again, if they if they cancel that,
more people will be off, you know, out of work,
which you know again, work is work, but you got
you know, do we want to go back to the moon? Okay?
Is the SOLS the best way to do it? Well,
it was mandated as it is by Congress, it's cost
many billions more than it should, it's many years late,
and are there other ways to do it?
Speaker 6 (33:23):
Yeah?
Speaker 7 (33:23):
Elon Musk is making these big rockets like corn silos
in Texas, and if he blows one up, he says, Okay,
I got three more to go.
Speaker 6 (33:30):
So maybe we have a different way of going to
do things.
Speaker 7 (33:33):
And if we really want to go to the moon
and go elsewhere, maybe we need to bite the bullet
and say, you know, we thought that was the way
to do it, but we've got a better way now
and again, every every SpaceX rocket, every Blue Origin rocket
is built with a lot of X NASA people were
pioneering done by NASA, So you got to be hoping
that NASA's had a real impact on what we're.
Speaker 10 (33:52):
Going to do.
Speaker 4 (33:54):
So wait, all right, so we do we have some
short term pain here that ends up being a long
term solution. Maybe this is all good for NASA, Keith,
Is that what I've learned in talking with you, Well.
Speaker 7 (34:03):
When I left NASA, I had to quit, but they
fired everybody I worked in the space Station Freedom program,
which if you look at the space station now, it's
all the stuff we built, just with different names on it.
But it's not fun when you're on the street and
your friends are on the street. But NASA rebounded, and
you would hope that NASA learns from these things. It's,
you know, never a good reason to do something bad,
(34:24):
but you kind of make it worse if you don't
learn from it. I would hope that the NASA that
results from this, and the contractors community and.
Speaker 9 (34:31):
The science community.
Speaker 6 (34:32):
Yeah, if you parse.
Speaker 7 (34:33):
It down, will you have a clear way of doing things?
If that's what comes from this, then okay, we'll look
back and say, I guess it was good after all.
But if it doesn't.
Speaker 6 (34:43):
From NASA, watch Keith Cowing.
Speaker 4 (34:46):
Are you a Star Trek Guy or a Star Wars Guy,
Keith Star Trek, Star Trek Guy.
Speaker 6 (34:51):
I should have I should have known that. I'm sorry
I even asked you.
Speaker 1 (34:56):
You're listening to the Bloomberg Balance of Power podcast. Catch
us live weekdays at noon and five pm Eastern on
Apple Cocklay and Android Auto with the Bloomberg Business App.
You can also listen live on Amazon Alexa from our
flagship New York station, Just Say Alexa played Bloomberg eleven thirty.
Speaker 2 (35:14):
To with tariffs threatened against Columbia, then pulled back, threatened
against Canada and Mexico, delayed until a few weeks from now,
implemented on all Chinese imports, implemented on steel and aluminum imports.
And as we've heard from the President repeatedly, more very
well could be coming, including what he floated last week.
April second, he's looking at auto.
Speaker 6 (35:35):
Tariffs, Joe, And that was all off the top of
her head. With more where this could come from.
Speaker 4 (35:39):
Yeah, April second, we didn't want to do April Fool's Day.
The idea of auto tariffs going into effect though really
causing the question the way that our auto companies make
the vehicles going back and forth across the border, complicating
the idea when it comes to Mexico and Canada. And
remember what Jim Farley said, it would blow a hole
in the US industry that we've ever seen. You paid
(36:01):
a visit to Capitol Hill to deliver that message last week.
It makes you wonder the impact of reciprocal tariffs as well, if.
Speaker 6 (36:08):
They come around to your point? Right, this all comes together?
Was that what I added?
Speaker 2 (36:11):
Getting something?
Speaker 6 (36:12):
There's always another. John Bazella knows all about this.
Speaker 4 (36:15):
He is the President's CEO of the Alliance for Automotive Innovation,
So what must be going through his minds as ev
incentives are also rescinded? John, It's good to see you.
Speaker 6 (36:24):
Welcome.
Speaker 4 (36:24):
I don't know how you make sense of all of this.
We can barely get through an intro to talk to
somebody like you because there's so much going on. What
is really about to happen when it comes to auto tariffs?
Not the bluster but the reality.
Speaker 11 (36:35):
Yeah, well, first of all, thanks thanks for having me.
Here's what I think Jim was getting at. When you
look at the automotive industry here in the United States,
for over twenty five years now, we have had a
seamless North American industry. As you mentioned just a minute ago,
joe parts, components, and vehicles flow back and forth across
(36:57):
the border. In some cases components several times before they
become a finished vehicle. This benefits American consumers. We get
more affordable vehicles, we get more choice, and the US
ends up more competitive as a result of it. So
here's what I think Jim's getting at. If you look
at the scale of this industry, it's massive, these plants
(37:19):
and you've been in them, millions of feet square feet
under roof. These are massive assets. You cannot move these
assets overnight. You can't shift supply chains overnight, you can't
move production overnight. So what could happen is costs could
increase on consumers before jobs come into the United States.
(37:41):
That's the dilemma, that's the challenge of tariffs that appear
out of nowhere.
Speaker 2 (37:46):
Well, but the President would argue that the tariffs are
intended to protect American industry, protect American made cars. So
what is the appropriate way to do that? If it's
not through policies like this.
Speaker 9 (37:58):
Yeah.
Speaker 11 (37:58):
Well, first of all, I think President Trump really understands
the importance of a healthy and competitive auto industry. I
have no doubt about that. I listened carefully during the campaign.
We've had an opportunity to talk to the team. I
feel like he understands this, this importance, the importance of
a competitive auto industry. I think the way to focus
(38:22):
on this is through discussions like well, that will occur
when USMCA, for example, is reviewed, in other words, the
trade agreement between the US, Mexico and Canada. So during
that process, these are the types of conversations that should
take place. What should those parties to the agreement and
(38:42):
do in order to comply with duty free trade? Those
are reasonable questions, and I think that's the ultimately what
Jim saying is, look, we need a review.
Speaker 4 (38:51):
Sticking with Jim Farley for a minute. After he came
to Washington, he warmed up to the idea of putting
tariffs on imported vehicles. We applaud President Trump's idea to
look at all vehicle imports into the US an important
step forward, which now then calls it the question what's
an important vehicle? Because We just talked about American cars
(39:11):
going back and forth across the border for various stages
of assembly.
Speaker 6 (39:15):
Does that count.
Speaker 9 (39:16):
Yeah, it's a great question.
Speaker 11 (39:17):
Right there is no one hundred percent US vehicle or
one hundred percent Mexican made vehicle or one hundred percent
Canadian made vehicle.
Speaker 6 (39:25):
And you've got Europeans assembling cars here in the US.
Speaker 9 (39:28):
So it's it's a to me.
Speaker 11 (39:30):
The big question is do we need and want a
healthy and competitive auto industry in the United States?
Speaker 9 (39:37):
And I think the answer to that, and I think the.
Speaker 11 (39:39):
President agrees, is yes, because it's important to our economic
security and it's important to our national security. And when
you think about how cutting edge this the manufacturing sector is,
the automotive sector is in the United States, and how
important technology is to vehicles and how important that technology
(39:59):
is to our national defense, I think that you really
do need to focus on competitiveness, and I.
Speaker 9 (40:05):
Think that's what this administration will do.
Speaker 2 (40:06):
And is it competitiveness specifically with China that you're most
focused on.
Speaker 11 (40:10):
Yeah, I think that's a great point. When you look
at what's happening. There is an intense global competition for
automotive investments and It's really happening in three areas China clearly.
Speaker 9 (40:21):
The United States, and Europe.
Speaker 11 (40:23):
And it's important that the US is competitive in this dynamic.
Right now, what you see in China, and I was
recently there just before the end of the year, what
you see there is an industry with massive overcapacity, lots
of government subsidies, and a desire to export all that
(40:45):
extra capacity. And the question is is this trade that's
likely to happen, is it fair right or is this
anti competitive behavior? And so that is really going to
be an important question for policymakers when we.
Speaker 6 (41:00):
Talk about China.
Speaker 4 (41:01):
We're not going to see BYD selling cars here anytime soon,
I can only imagine. But what will be the impact,
with that said, of the lifting or the rescinding of
EV tax credits and other incentives. Elon Musk is doing
pretty well at Tesla right now, but you've also got
Jim Farley, Mary Barra and others trying to break into
(41:23):
this Nason business.
Speaker 6 (41:25):
What does this bring to the table.
Speaker 11 (41:27):
Yeah, I think context is really important here. There's two
bits of context I think we have to understand when
we talk about the EV incentives. The first piece of
context is we right now as an auto industry in
the United States, fast face significant challenging automotive regulations emission standards.
(41:47):
Those really challenging emission standards both set at the federal
level in the Biden administration and by the state of California.
And that's a crazy land story we can get into.
Those were based on the assumption that ev incentives would stay. Yes,
so if you take the incentives out, my question to
you would be.
Speaker 9 (42:06):
Did the standards go away? And so that's context number one.
Context number two.
Speaker 11 (42:10):
What we were just talking about the importance of a
healthy and competitive industry in this competition with China and
the Chinese automotive industry. I would make an argument that
the incentives are important in both sets of contexts. In
other words, they are important in a context where you've
got really aggressive standards, and they're particularly important as we
(42:32):
transform our industrial base to remain competitive and become competitive
with China.
Speaker 2 (42:36):
Well, and you just in your first answer talking to
us about China, talked about how China heavily subsidizes its own,
yeah automotive industry. So is it a mistake for the
US to be pulling back subsidies of any kind? Do
we actually need more of them.
Speaker 11 (42:48):
Yeah, I look, I think this is exactly the question.
This is exactly the question. If you believe in a healthy,
competitive auto industry, and you believe that that industry, that
competitive and healthy in industry is supportive of our economic
and national security, you should look at a balance between
regulation and policy, and in this case, policy would be incentives.
Speaker 9 (43:11):
There are.
Speaker 11 (43:11):
These incentives are not just the consumer incentives that a
lot of people have focused on. In other words, money
at available at the dealership to support the purchase of
an EV. We're talking about incentives to transform the industrial base,
to build the automotive industry of the future. That is
(43:32):
really important for this industry.
Speaker 4 (43:34):
What does this mean for innovation at a time when
we realize, you know what, most people are buying hybrids,
not evs, right, and that Elon Musk may not have
a consumer priced vehicle anytime soon.
Speaker 1 (43:45):
Right.
Speaker 9 (43:46):
Hybrids are a form of electrified vehicle. Right. And I
love this.
Speaker 11 (43:50):
Idea that consumers have choice, and I think that's essential.
They should have a choice a gasoline vehicle if it
fits their wants and needs, a hybrid, a plug in hybrid,
or a battery.
Speaker 6 (44:01):
Keep up with China when it comes to innovation, that's
the key.
Speaker 11 (44:04):
The key is you need an innovative and vibrant auto
industry and so to be able to have choice, choice,
including electrified vehicles, is going to be really important. So
you've got to build an industrial base to have that
innovation and choice.
Speaker 2 (44:18):
Well, and obviously we've talked about and you were talking
about these large facilities that actually assemble these cars, but
what about battery technology. What about the chips that need
to power these cars that can do us so much
more from a technological basis. Talk to us about kind
of those lower rungs of this.
Speaker 11 (44:33):
Yeah, and they're not much lower, right if you think
about it. I mean, the battery is critical to the vehicle,
a hybrid vehicle as well as a battery electric vehicle,
and so are these computer chips. Vehicles are effectively consumers
excuse me, computers on wheels, and consumers recognize this. And
so you need to have access to cutting edge technology.
(44:57):
That means computer chips, semiconductors, and it also means the
latest battery technology. And so investments. Now, should government do
all of this, absolutely not, But the innovators are leading
and so you see chipset manufacturers investing in the United States.
You see battery manufacturers investing in the United States. The
question is for some period of time, should there be
(45:18):
some supportive policy that encourages those investments while the market
remains choppy. The market is going to be spiky for
some period of time as we transform to these new technologies.
Speaker 4 (45:30):
We're almost out of time. When do we get ROBOTAXI?
When does self driving happen? For real?
Speaker 6 (45:33):
Let's get to the innovation, the fun stuff for him.
Speaker 11 (45:36):
Well, look, I think you can go to some places
and get into robotax and right now, absolutely, you know
what the problem is with highly automated vehicles. The holdup
is not the engineering or the science. The holdup is
the policy. Once again, we need a national policy that
recognizes again same idea, the competitive importance of this NEXTOK
(46:00):
technology in the US market.
Speaker 2 (46:01):
So is this when we're kind of talking about that
knowing that Donald Trump and part campaigned on deregulating, on
making things like permitting easier, that's all part and parcel the.
Speaker 6 (46:10):
Way you're talking.
Speaker 9 (46:10):
Yeah, Oh, I think absolutely.
Speaker 11 (46:12):
What I saw in the first Trump administration was a
welcoming of this type of technology and flexible tools in
the Department of Transportation toolbox to encourage those technologies. I
look forward to those conversations with this set of regulators.
Speaker 2 (46:30):
Is there a safety trade off there if you deregulate
too much?
Speaker 9 (46:34):
Absolutely not. There can't be a safety trade off. Absolutely.
Speaker 11 (46:38):
Safety has to be first and foremost in the minds
of what we do, and I think that's one of
the benefits.
Speaker 9 (46:44):
Of highly automated vehicle technology is more safety.
Speaker 4 (46:47):
I just want to know when I can read on
my way to work. I don't want to even look
out the window. I want the car to drive me
to work. That's what I'm getting at here. You want
one of these, right.
Speaker 11 (46:55):
I would love one of those now. By the way,
in our commutes in Washington, d C.
Speaker 4 (47:00):
That's a lot of time. It's a massive productivity story. Also,
the car would drive my seventeen year old. The seventeen
year old would not drive the car, something that I
think masurance company wants.
Speaker 11 (47:09):
We are half joking, but I know you're serious. I
as we're talking about productivity gains, we're also talking about
access to personal mobility for people who can't drive.
Speaker 6 (47:18):
How about that not to mention safety. I guess while
we're out of here.
Speaker 4 (47:22):
You've got a lot to figure out in the next
couple of years. To please get back to.
Speaker 6 (47:25):
Us on the April.
Speaker 4 (47:27):
Maybe I love it that that's true. You should be available.
John Bozzella, president's CEO, Alliance for Automotive Innovation. Great to
meet you and thank you for bringing your experience in
point of view to us here.
Speaker 6 (47:36):
At the table. Thanks for listening to the Balance of
Power podcast.
Speaker 4 (47:44):
Make sure to subscribe if you haven't already, at Apple, Spotify,
or wherever you get your podcasts, and you can find
us live every weekday from Washington, DC at noontime Eastern
at Bloomberg dot com.
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