The Inauguration of President Donald Trump

Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.

Carol Massar, Tim Stenovec and David Gura break down the inauguration of the 47th President of the United States, Donald Trump. 
Guests include:

Wendy Schiller, Professor of Political Science at Brown University 
Tina Fordham, Geopolitical Risk Expert at Fordham Global Foresight
Daryn Dodson, Managing Partner at Illumen Capital, on MLK Jr. Day aligning with the inauguration of a President poised to challenge DEI initiatives
Gautam Mukunda, Executive Fellow at Yale
Ed Mills, Washington Policy Analyst at Raymond James
Ed Price, Senior Fellow at New York University, on the geopolitical landscape under the Trump administration

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business Week,
Insight from the reporters and editors that bring you America's
most trusted business magazine, plus global business, finance and tech news.
The Bloomberg Business Week Podcast with Carol Masser and Tim

(00:23):
Stenebeck on Bloomberg Radio.

Speaker 2 (00:26):
But a lot going on in Washington this afternoon. We
did see the peaceful transfer of power from Joe Biden
to Donald Trump, and now Carol and David, we're seeing
all the pomp and circumstance around a normalized version of
what we saw four years ago, which, as you mentioned, David,
came at a time not just when Donald Trump was
not around to see this happen, but also we're at

(00:49):
the height of COVID, so a lot of the events
around a traditional inauguration, no.

Speaker 3 (00:53):
Jim Packed hauls for luncheons at the Capitol that time around.
And it's interesting you bring up the fact that we
have this kind of return to normal see yes, but
with a slightly different flavor as we wait for the
president now to make his way to a basketball and
hockey arena in the nation's capital where he's going to
greet folks who've been standing in line for most of
the day to get to get so well there that
is unusual. They'll hear from him, and as we heard

(01:15):
from Jody Schneider just a moment ago, perhaps there'll be
a desk there on the floor of this arena where
the President's going to sign some of these much anticipated
perhaps Ballyhood by his supporter's executive order is dealing with energy,
with cultural issues. We'll see in fact how many of
them there are and what's in them. And as our
colleague Gregory Cordy gave us good counsel on just a

(01:35):
moment ago, wise for us to kind of read through
them and see what they actually do. But this is
kind of red meat for a lot of his supporters
and something he's promised quite a bit on the campaign
trail and in this transition period.

Speaker 4 (01:45):
Having said that President Trump in his inaugural address vowing
to prioritize America's interest with a golden age for the
country while also taking on a radical and corrupt establishment.
Dare I say the swamp if you will. So we're
going to continue with our coverage of the next couple
of ours coming up, though in the next sixty minutes
author and political scientist Gotha Mkanda of Yale in the
Fletcher School of Law and Diplomacy at Tufts University. A

(02:08):
great view when it comes to American politics, looking forward
to that.

Speaker 2 (02:11):
Also joining us this afternoon and this hour. Ed Mills,
Washington policy analyst and managing director over at Raymond James.

Speaker 3 (02:18):
Ed Price is going to be here too. We've talked
a little bit about trade, and we did hear from
the President that there isn't going to be a kind
of big marquee announcement on trade policy and tariff's policy today.
There was some speculation going into inauguration day perhaps you
would see an announcement to that effect in these executive orders.
It sounds like that's not going to happen here for
a little while. So again we're going to kind of
piece together with you all as we see we're waiting.

(02:41):
I mean, I think the anticipation is real, but we
don't exactly know what we're waiting for in terms of
quantity or quality of what's going to be in these
executive orders. But we'll bring them to you as soon
as we learn more about them.

Speaker 2 (02:49):
Well, as we mentioned, President Trump launching his second term
with a strident inaugural address that vowed to prioritize America's
interests with a golden age for the country. We'll taking
on a radical and corrupt establishment. From more, we bring
in Gotham mccunda, Executive Fellow at the Yale School of Management,
also adjunct Associate Professor at the Fletcher School of Law

(03:10):
and Diplomacy at Tufts University. Gotham also the author of
the book Picking Presidents, How to Make the Most Consequential
Decision in the World. Also with us as Ed Mills,
Washington policy analyst and managing director over at Raymond James.
Professor mccunda joins us from Boston, Ed from Washington, DC.
A big welcome to both of you. Professor, I do
want to start with you, what specifically did we learn

(03:32):
about Trump's agenda from his inaugural address, the flurry of
executive orders, and also from his off the cuff re
marks a little earlier this afternoon.

Speaker 5 (03:40):
Yeah, I think we learned more than anything else that
he really meant a lot of the things that he
said during his campaign in twenty sixteen, the line about
Trump was that we should take him seriously but not literally.
This time around. I think literally was probably a pretty
good guide. Maybe the most striking thing he said in
the inaugural address of work from the sort of the
tone was mention of the seventeen ninety eight Alien Act,

(04:02):
which is a power sort of best left in the
dawns of time. That was the key to things like
the Japanese internment during the Second World War. Not just
being willing to invoke that, but willing to invoke it
when you were being inaugurated is an extraordinary statement of
how he both sees the breadth of presdential powers and
how he's willing to use them.

Speaker 6 (04:20):
I want to bring you also to the discussion ed Mills.

Speaker 4 (04:23):
You guys in your note that you put out, you
are watching those executive orders very very closely. What in
particular do you think all investors and all of the
Bloomberg Audians should have kind of front and center here.

Speaker 7 (04:37):
Yeah, Carol, So when I've been talking to clients at
Raymond James all last week, they wanted to know our
tariff's coming. The answer is yes, But guess what not
day one, as we're finding out what's happening with immigration.
Is there an impact to the workforce, Is there an
impact on inflation. What's happening on energy? Is it drill
baby drill or lease baby lease? And it seems much
more opening up these areas. Are we going to get

(05:00):
that regulatory freeze? It does seem very likely. And I
think probably where investors that I talked to at Raymond
James are most confused or most kind of debating is
where are the powers of the executive that can be
invoked through these executive orders? And when do these executive
orders just become a press release on nicer stationary.

Speaker 3 (05:20):
Gothamcundon, let me have you pick up on that. And
I think we were kind of looking to this inauguration
addressed for some direction, some clarity on sort of where
the president was going to go policy wise. I emerge
from that with somewhat of a better sense of that,
and then we had this what was supposed to be
a brief appearance before those who couldn't fit into the
Capital rotunda. It was an entirely different speech with kind
of a variation kind of different issues that the President highlighted.

(05:43):
How did you kind of process or think about those
two speeches together and what does it tell you about
the direction of the presidency?

Speaker 8 (05:49):
So what it tells me.

Speaker 5 (05:50):
Is that when the President exerts powers in these ways,
the ways that are very hard to review and that
I'll bring in a lot of discretion, it also opens
up a space for a lot being in place from
an investris perspective, where what are this company's ties and
words level of favoritism from the executive branch is going
to be a determinative factor in looking at success. If

(06:11):
I were thinking from an investors perspective, I might spend
the next week or two studying Hungary and the part
corporate behavior in Hungary and understanding how companies that were
close to orbon were favored, because the analogs to how
that will operate in the United States are looking increasingly
clear and increasingly important.

Speaker 2 (06:26):
Hey, ed Mills, come on back in here. I want
to specifically go to energy here because you pointed out
in your note, and we also did hear from the
President in his inaugural address the idea of drill, baby drill.
Do oil companies want to drill? Does the US need
to drill? Does the US need more of its own
fossil fuels to be extracted from the ground?

Speaker 7 (06:48):
Maybe is I think the best answer there we hear
from a lot of energy companies. I've talked to our
energy team. We host these companies through kind of conference
calls at Raymond James, and what they tell us is
capital discipline is the number one issue for them. It
is not actually necessarily the best thing for some of
these companies to have much lower energy prices, especially on

(07:11):
oil here in the United States. There are break even
prices that are higher here in the United States than globally.
So we're in about a sweet spot right now for
the price of oil. If there is an exogenous shock,
if there is some sort of geopolitical event to the
extent that there is availability of more lands to lease
and to drill, that's probably good for the world markets.

(07:33):
On natural gas, unlocking some of the natural gas that
has been trapped geographically here in the United States probably
is something what those energy companies would like to see.
They'd actually get higher prices if there are more pipelines,
more ability to export it. We're just having really inexpensive
natural gas due to that geographic boundary. But the question

(07:55):
I get from investors at Raymond James is if that
goes too high, is that something that Donald Trump walks
back on because certainly he would not want to see
more exploration lead to higher prices.

Speaker 4 (08:07):
Yeah, it's kind of tricky, right, because if it's too low,
it's going to be cost prohibitive for all of these
energy companies to actually drill, baby drill, if you will.

Speaker 6 (08:15):
But so it's kind of this funny balance.

Speaker 4 (08:17):
Gavin, I want to go back to you because you
mentioned to watch Victor Orbon of Hungary companies close to
the president and kind of comparing that to President Trump.
Companies executives close to President Trump. Having said that, are
the financial markets, The US financial markets in particular kind
of a gut check on President Trump's policies.

Speaker 5 (08:38):
I think the bond market is likely to be the
sort of if it decides to we have the return
of the bond vigilantes in the United States, then I
think you're likely to see that be a big check.

Speaker 8 (08:47):
But my rate is we're still pretty far away from that.

Speaker 5 (08:50):
The United States's unique position on global markets gives it
an enormous amount of fiscal slack.

Speaker 8 (08:54):
So my own sense is.

Speaker 4 (08:56):
That the US exceptionalism, right, the US exceptional.

Speaker 5 (08:59):
US exceptionalism every way, we always forget what that means,
that it just means the US is different. It doesn't
necessarily mean better or worse. It just means different. And
the US is very, very different in every possible way.
So here Trump, President Trump has a lot of space
to spike deth sences, all that sort of stuff, and
financial markets are likely to also react, as we know

(09:19):
when he say massive deregulation. The short term, the short
term benefits of that are pretty large.

Speaker 8 (09:26):
The long term costs the sort of things we see
in two thousand and eight, you might not feel them
for a while. So might that might be the next
person's problem.

Speaker 3 (09:33):
And let me bring in on that point, this sort
of short term versus medium term and long term. And
I think that the message of the day, the message
leading up to the inauguration today has been one of
urgency on the president elect. Now President's part, he's going
to sign all these executive orders, He's going to make
all these changes. What's your sense of how long it's
going to take until we feel the results of these
executive orders. So let's take you know, the ones having

(09:54):
to do with energy today, Let's maybe step back and
talk about trade. Even if those aren't signed today, when
do they become things that you feel like you will
have clarity on how long is it going to take
for you to get that kind of clarity on some
of these policy proposals that the present's been talking about.

Speaker 7 (10:08):
It's a really great question, because these are some of
the things I've been having conversations with folks in and
around now President Trump. One of the things they said
is back in Trump one point zero, they feel as
if it took too long to implement some of these policies.
They took three years negotiating a trade deal, we called
it the Phase one trade deal with China, and before

(10:29):
the ink was drive, we had COVID and Trump lost
and it was never enforced. And so when I talk
to them, they warn me that some of this is
going to come faster this time because they don't want
to wait two three years. So I would certainly think
the first couple of months we're going to have a
lot of these announcements. Second half of this year is

(10:50):
where a lot of it is actually going to be felt,
and then I think next year is where Trump the
deal maker comes into play and we start getting more
of those deals. And then on the regulatory agenda, normally
that's a really long slog and a lot of people
that I talked to at Raymond James, they say, he
promised all this deregulation in one point zero, How are

(11:11):
we going to get in two point zero? The thing
that I think people are missing is how fundamentally the
Supreme Court has upended regulation and there is an ability
through kind of a change to statutal limitations restrictions, to
challenge all these rules. And with some other changes at
the Supreme Court, those rules are going to come off
faster than what the market anticipates. And so that's where

(11:33):
they think that they can have a earlier impact in
Trump two point zero and in twenty twenty five versus
what they had in twenty seventeen.

Speaker 4 (11:40):
I mean, Gotham, do you feel like you have a
clearer picture of what a Trump second White House is
going to look like? Are there's still a lot of questions.
I mean, I feel like all of the conversations we've
had since the election after an initial market bounce, was
that there were still a lot of questions about what
will be implemented, what will Congress agree to sign on to,
what will be care out in these executive orders? So

(12:01):
do you feel like you have some more clarity here.

Speaker 8 (12:04):
It depends on the issue on tariffs.

Speaker 5 (12:06):
I think we had clarity he's going to do it,
and I just note that what happens there is companies
will be able to go to Trump for exemptions to tariffs,
and then there will be side payments and things like that.
So that becomes a much more complicated and much more
political game than it used to date. But there are
lots of issues where we just don't know. We've already
seen a huge fissure within the Magat movement between Elon
Musk and his tech sort of the tech powers who

(12:28):
really really like high skilled immigration and the rest of
Trump's people who really oppose it. We know in the
first Trump administration there were massive cuts not just to illegal.

Speaker 8 (12:37):
Immigration, but to skill the immigration. It was really really.

Speaker 5 (12:40):
Hard for people with PhDs to get in the United
States too. We don't know if he's going to do
that again, and that looks like it's going to be
the first major fisher in the coalition.

Speaker 8 (12:48):
Who wins. That is completely up in the air.

Speaker 9 (12:50):
No one knows.

Speaker 8 (12:51):
I mean even Donald Trump probably doesn't know yet.

Speaker 2 (12:54):
Appreciate both of your time this afternoon. Gotha Mcunda, executive
Fellow at the Yale School of Management, Adjunct Associate Professor
at the Fletcher School of Law and Diplomacy. Also the
author of Picking Presidents. Also Ed Mills, Washington policy analyst
and managing director at Raymond James.

Speaker 1 (13:10):
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Speaker 3 (13:24):
What have got out to someone who's a student of
all things presidential and politics? That's Wendy Shielder, Professor Political Science,
International and Public Affairs, Director of the Tavern Center for
American Politics and Policy at Brown University. Professor Schieler joining
us now from Providence, Rhode Island. Professor Schiller, let me
just start with these two addresses and what you learn
from them. We were talking just a moment ago about
how if you look at them and complement, they were

(13:45):
radically different. Yes, we got some detail in terms of
what the president's priorities are going to be here, But
what stood out to you sort of listening to them
in compliment in.

Speaker 10 (13:53):
Parallel, Well, what we always see is that Donald Trump
doesn't do as well with scripted addresses. He's sort of flat.
He is methodical, but he doesn't have that free wheeling,
charismatic energy that really marked his whole campaign trail and
in fact his whole four years outside of office. So

(14:14):
that was really the striking thing. It's just the tone
is so different. He really feeds off a crowd, or
at least so distance to a crowd. But you know,
it wasn't quite as dark as the first Trump administration
in augle address. And you know that's because I think
the president is looking now at history. I mean, he's
constitutionally prohibited from running again. He may seek to try

(14:34):
to overcome that, but it's a pretty big barrier, and
now he wants to actually accomplish a lot of the
things that he's promising. So that's the sort of difference
in tone. He reverts, I think when he gets into
a big crowd, but he understands that he wants to
expand presidential power, and presidential power, by the way, right
now is pretty pretty large. I mean it's been expanding
for many, many years under different presidents, and he's ready

(14:57):
to take advantage of that, as we're about to see
with all these executive orders.

Speaker 6 (15:01):
You know what's interesting too, Wendy.

Speaker 4 (15:02):
What struck me this morning is that President Trump is
planning to delay unveiling China specific tariffs. This is something
we kind of anticipated expected out of the gate. Does
that already tell us that maybe what we heard in
terms of on the campaign trail and leading up to
his second term in the White House, that maybe things
won't be as as extreme as we anticipated.

Speaker 10 (15:21):
Well, it depends on where you are. I mean, declaring
that the fail govermon only recognizes men and women, for example,
to some communities might seem fairly extreme. So on social policy,
certainly border immigration policy, defining that term extreme is going
to be something that we're all talking about. But certainly economically,
I think he is listening at the moment to his
advisors saying, you've still got inflation and if you impose

(15:44):
lots of tariffs, that promise you're delivering to the American
people in your inaugural address inside the Capitol that said
you will defeat inflation sounds like Gerald Ford from nineteen
seventy six. But you know, if he wants to do that,
he can't cause inflation at the same time. So I
think that's something to look at. And in terms of deportation,
same thing goes you deport millions of people who are

(16:06):
occupying jobs, you'll have to you'll have a job shortage,
or you have to raise wages, which will also increase inflation.
So it seems like he's listening from the moment to
people who are telling him to go slow.

Speaker 2 (16:17):
There, it does, professor, But he did also say in
his inaugural address today that he will begin sending people
back from the United States to where they came from.
Does it seem like he will moderate that policy at all,
given that you think it could be inflationary and you're
not the only one, well, Tim.

Speaker 10 (16:35):
I think that it was a good combination by his
speech writers of saying, you know, he's going to stay true,
you know, deport people. But we've been hearing for weeks
now that they will start slowly. They will try to
deport people who've been arrested, not convicted necessarily, but arrested
of any kind of crime. And he said he would
go after gang members that are here undocumented. So that's

(16:58):
the first sort of set and at the same time,
closing off the border now as Biden has already done
really since June, but closing it to these asylum seekers
and this day in Mexico policy will be reinstalled, so
that will diminish warer crossings already. And I think in
terms of illustrating what he's doing and being effective, if
he can do those two things and get those things

(17:19):
done in the next couple of months, he may not
have to do all the other more extreme measures that
he's been talking about.

Speaker 3 (17:25):
Wendy, how about the power of these executive orders? We've
talked a bit about how many have been used in
past Administration's heard that just a moment ago from our
colleague Tyler Kendall about the first time he was in
office fifty five in the first year. Talk a bit
about the tendency to lean into these more And also,
when we get these dozens after dozens of them, how
should we understand them as sort of binding what they

(17:45):
may or may not do.

Speaker 10 (17:47):
Well, There's two things I think about here. One is
this is signal sending, and it's signal sending by the
Trump administration and his advisors to Congress and the Supreme
Court as well as the American people that he will
try to use executive power to do what he wants
to do, and he may not heat Congress or the
Supreme Court in trying to do it, So he's really
pushing the boundaries of solo unitary executive power. That's a

(18:11):
signal when you're doing that one hundred or two hundred
times on the first day. And as you will know, David,
getting the federal government to do anything is very difficult
to do. So, you know, implementing and showing the American
people that you're going to be effective here on so
many different policies when you're also planning to fire a
lot of federal employees or take away their job security,
that is going to be a pretty neat magic trick.

(18:33):
And that's going to be difficult to accomplish. But maybe
he doesn't have to do all of it. Maybe he
just has to look like he's trying to do some
of it and come away with some short term victories.

Speaker 4 (18:42):
Hey, real quickly, last question here I'm curious is is
Donald Trump already a lame duck president and is the
clock already ticking and getting things done?

Speaker 10 (18:52):
Well, Carol, I think that you've you've seen the Democrats.
You know, they'll call President Musk President Musk to irritate Trump,
but they're not calling him a lame duck because they
we don't want to irritate him further or anger him.
I mean, there's nothing worse than being told you're ineffective
on day one after you've had a pretty big political comeback.
So people are avoiding that language. And I don't think
this is exactly right. He's trying to use executive power,

(19:13):
and you don't need Congress, you don't need political support,
you don't need public opinion, You just need the pen
of the president of the United States. And that's where
I think Donald Trump will try to make his mark
and make sure that mark is indelible.

Speaker 6 (19:26):
All right, got to leave it there.

Speaker 4 (19:27):
And I do wonder what we lose as a democracy
when we use so many executive orders. Wendy Schiller so
appreciated political science, International and Public Affairs professor and director
of the Tellman Center for American Politics and Policy at
Brown University. All Right, so we know President Trump talked
about his domestic attend all that.

Speaker 2 (19:42):
Yeah, he also touch on global issues, saying he will
be a quote peacemaker, while also talking again about plans
for territorial expansion the Gulf of Mexico, for example, becoming
the Gulf of America. He talked about taking back the
Panama Canal. Let's get to our guest, Tina Fordham, co
founder and geopolitical strategist at the advisory firm Fordham Global Foresight,
joining us from London this afternoon. Tina, certainly appreciate you

(20:05):
staying up a little later for us. Give us an
idea of how you think the US's role will be
in the world during the second Trump term, given what
we saw on Trump's first term, but also how maybe
his rhetoric has changed during the campaign, and even though
we heard from him today.

Speaker 11 (20:20):
Thanks very much. Well, I'm kind of listening through two lenses.
One is an American abroad and the other is, you know,
the head of a geopolitical advisory firm talking to the
C suite around the world and thinking as an American.
You know, the comments that followed the inauguration, We're very

(20:43):
much focused on the domestic audience on immigration and on
the kind of quicker wins, right, that blizzard of one
hundred executive orders, which you know, is really designed to
show that the Trump administration means business. When we look
at how the rest of the world is observing what's

(21:04):
happening today in Washington.

Speaker 8 (21:06):
It is a really mixed bag.

Speaker 11 (21:09):
I was looking at some data from IPSOS on expectations
from global publics on how positive they thought the Trump
government would be for their country, and it's a very
interesting inversion of what we would have seen in the
past in that traditional American allies in Europe, also Japan

(21:32):
and South Korea don't think that Trump will be very
good for their country. But bricks countries including China despite
the tariffs, and Russia, where obviously the US has pretty
significant sanctions, Brazils, Saudi Arabia, India expect that Trump presidency

(21:52):
will be good for their country. And that speaks to
the extent to which traditional allies are really concern that
they are going to be on this sharp end of
this White House's policies.

Speaker 3 (22:06):
How do you react to the expansionary rhetoric that we
heard during that speech tim mentioning just a second ago,
the fact that we heard about the Panama Canal again,
I'm not sure if there was a mention of Greenland,
but we've certainly heard it since that was first a
glancing mention a couple of weeks back. Do you process
that yes, as the head of the consultancy that you
run as somebody abroad, do you take those comments seriously

(22:27):
or is this something that's kind of plastic at this point,
something he's tossing around, but very well may turn into
a real policy proposal by this president.

Speaker 11 (22:35):
Well, I think that Americans have a certain vintage will
Well remember the Monroe doctrine from Civics classes, which don't
exist anymore, I don't think, and manifest destiny. So without
kind of over normalizing this very surprising comments that Trump

(22:57):
has made, some of them quite ludicrous, like the Gulf
of Mexico becoming the Gulf of America, they do have
roots in nineteenth century US foreign policy, which had almost
kind of a divine you know, right about it about
the US right to prevent hedgemonds anywhere. And of course

(23:20):
this goes back to wanting to prevent Latin America from
being recolonized by by Europe. But again, I don't want to,
you know, kind of over intellectualize. I just mean that
a lot of this isn't new. But what's interesting is
that none of that, you know, what you mentioned Greenland
or the Panama Canal were mentioned during the campaign, So

(23:45):
you know, did this come from out of nowhere? Well,
who knows. But there is going to be a European
summit on February third, which the UK will participate in.
And the plan had been at least for Kier Starber
for example, to talk talk about a reset, which post
Brexit is something that growth constrained Britain really needs. Well,

(24:08):
now that agenda is going to be pretty much hijacked
by how to respond to Donald Trump in these latest comments?

Speaker 6 (24:15):
Tina, what's this going to be mean? Especially for American
global CEOs?

Speaker 4 (24:19):
And I just think about you know, antagonistic efforts, whether
it's to China or other nations, expansionary policies for the
likes of some of those big tech CEOs that were
actually there in the Capital rotunda, Tim Cook, Sundar Pracai
of Alphabet, Elon Musk, Mark Zuckerberg, they all have business
around the globe. So how does a Donald Trump and

(24:40):
his administration possibly complicate complicate their efforts.

Speaker 11 (24:44):
Well, if you're not a US tech titan, things look
fairly bewildering, right, And I think one of the most
consequential impact of having Elon Musk in that seat, know,
in such a privileged position is that Musk is very
pro China, and so you know, the extent to which

(25:08):
that puts a damper or constrains what Donald Trump you know,
has said historically going back a very long time about
his antipathy towards China will be very interesting to see.
I think, unless you are, you know, really kind of
trying to play the US dollars as a global business leader,
you're going to want to wait and see a little bit,

(25:29):
because you know, executive orders are going to be in
the press. What are the things that are not said?
What are the things that are hard and are going
to take a long time. Clearly Ukraine is one of them,
and we're now seeing didn't Trump say a study group
would be convened to look at TEBs on China. Again,

(25:52):
US allies are going to hope that that some kind
of caution prevails with regard to their two right.

Speaker 4 (26:01):
We also did see Putin say that Russia President Putin
is open to dialogue on Ukraine with Trump.

Speaker 6 (26:07):
That came out a little bit earlier today. Tina Fordham,
thank you so much, so appreciate it.

Speaker 1 (26:12):
This is the Bloomberg Business Week Podcast. Listen live each
weekday starting at two pm Eastern on Applecarflay 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 Play Bloomberg eleven thirty.

Speaker 4 (26:30):
Meantime, Donald Trump intending to sign an executive order that
recognizes two sexes, male and female, and also taking action
to roll back some of those DEI efforts in the
federal government. In his inaugural address, though, President Trump took
a moment to honor Martin Luther King Junior and his legacy.

Speaker 1 (26:46):
Today is Martin Luther King Day and his honor.

Speaker 9 (26:50):
This will be a great honor.

Speaker 7 (26:52):
But in his honor, we will strive together to make
his dream a reality.

Speaker 4 (26:58):
We will make his dream.

Speaker 2 (27:01):
Someone who's working to achieve racial and gender equity across
investing as Darren Dodson, managing partner at I Llumin Capital.
Darren joining us once again from Oakland. Darren also on
the board of Ben and Jerry's. Darren always great to
check in with you. Thanks so much for joining us
on this Monday, given what we heard from the President. Now,

(27:22):
what are your expectations given that his administration will make
this dream a reality that he mentioned versus what he
said publicly, what he's said today about executive orders. When
it comes to how he thinks about DEI.

Speaker 12 (27:39):
I think that the challenge of those that would be
fully against DEI is that they're also against, from what
we've analyzed at a lumin capital economic return, also market optimization.
They're against Nobel Prize winning economic value within corporations. Also

(28:04):
we also see there against some of the basic underlying
principles of modern portfolio theory.

Speaker 9 (28:11):
So I think that.

Speaker 12 (28:13):
What leadership looks like now is figuring out ways to
embrace some of the important ways of addressing biases towards
people who are overlooked and underestimated within corporations and unlocking
that to achieve prosperity. Like like Martin Luther King so
poignantly put in in a in a very similar in

(28:37):
a very similar way, from a similar place in Washington,
d C. That Trump is in now.

Speaker 3 (28:44):
Darin, where are we on this spectrum of companies adopting
and embracing DEI policies. We're talking here, of course about
this in the context of the new, the new and
past president, but more broadly, I mean there have been
so many changes of foot I think back on an
interview that Mark Zuckerberg gave with Joe Rogan which he
talked about the need for more masculine energy in companies.
It strikes me that there really has been a regression,

(29:07):
a move backward here, and I wonder how you process
that and sort of are thinking about ways in which
to again get this back on the radar of executives
and boards and make it something that's not seen as
I mean even a hot button issue is putting it
mildly here, but something that I think a lot of
companies are kind of studiously avoiding at this point in time.

Speaker 12 (29:28):
I think one way to put it back on the
radar is to do what Wharton and Stanford Business School
have done, which has put excellent leaders at the helm,
including Dean Eric James and as of last week, Dean
Sarah Soul, the first woman in one hundred year history

(29:51):
of Stanford Business School, where I have the pleasure of
serving on the faculty. So every young person around the country,
whether they're women or men, or boys or girls, looking
at the future of business leadership, can see themselves either

(30:14):
being managed by an extraordinary woman in leadership or also
seeing that they could become, you know, dean or CEO.
I think that's why companies like Apple and Costco are
stepping forward at this moment. And what I've always learned

(30:34):
is that when we're in moments like this, it's not
that character is built in moments like this, it's that
it's revealed. And I think it's powerful to see these
companies revealing their character and not just kind of unfolding
what they've stepped forward and committed to over the last

(30:54):
several years.

Speaker 6 (30:56):
Darren, what are you.

Speaker 4 (30:56):
Seeing there on the financial side of things when it
comes to racial and gender equity.

Speaker 6 (31:01):
Are you still seeing.

Speaker 4 (31:02):
Initiatives the money, you know, follow the money. Is it
going towards those efforts? Does it continue to are you
seeing a slowing down.

Speaker 12 (31:12):
We've seen a number of foundations, and you know, Apple
seems like a good company that has created a lot
of economic value over the years to be continuing along
the journey. So economic value and DEI I think for
a very long period of time, especially as we look
at the biases and heuristics that Warren Buffett and Charlie

(31:34):
Munger talk about within investment decision making and processes and
detail out in innumerable different biases, but we still think
that one of the greatest overlooking and underestimating of financial
value in economic markets is when race and gender is present.
So that's a really important aspect of continuing down the

(31:58):
process and enabling investors, some of the largest investors in
the world, to continue to find latent value in economic markets.

Speaker 2 (32:07):
Darren, I'm wondering if you think that this could end
up being a problem the market solves itself without actually
regulations or rules coming into focus. Because you've been on
with us many times over the past few years and
you've shared with us outperformance of investments that you've made
and that you haven't made as a result of who

(32:29):
is leading these funds or who is leading these companies.
Is this something that the market can solve because people
understand there is value there, So.

Speaker 12 (32:38):
It really can't be solved without some type of intervention.
And the reason why is bias is something that's unseen.
So by naming that and working effortfully and monitoring it,
as Daniel Kahnemann talked about it as Nobel Prize winning research,
we're able to really ascertain what those biases are and

(33:00):
then build systems to address them. So one point three
percent of eighty two trillion dollars is managed by women
and people of coloring global asset management and global asset
management business right now. And part of what we see
is despite forty years of at or above performance of
women and people of color, asset flows are not going

(33:21):
to match that out performance like we would expect in
an efficient market. So what that tells us that we
have to double click and look at those biases that
asset allocators, many of them unintentionally apply and miss economic
opportunities to grow their beneficiaries portfolios and to really unlock
economic value for their clients, et cetera.

Speaker 4 (33:43):
Hey, listen just ten seconds, Darren, Are you more hopeful?

Speaker 6 (33:47):
Are you more nervous?

Speaker 7 (33:50):
Well?

Speaker 12 (33:50):
One of the things that I think, well, on a
day like today, in celebrating Martin Luther King's birth, a
person who was assassinated for the things that he believed in,
it's great to be working on a mission to address
these fundamental problems of bias in the global asset management business.

Speaker 4 (34:12):
Agreed, Agreed, So glad to get some time with you
on this very important day, Darren.

Speaker 6 (34:16):
Thank you.

Speaker 4 (34:17):
Darren Dotson, managing partner at a lumin Capital, joining US
from Oakland, California.

Speaker 1 (34:22):
You're listening to the Bloomberg Business Week podcast. Catch US
live weekday afternoons from two to five these during that
listen on Applecarplay and Android Otto with the Bloomberg Business app,
or watch US live on YouTube.

Speaker 6 (34:35):
Back with Us is Ed Price.

Speaker 4 (34:37):
He's former British trade official, now non resident Senior Fellow
over at NYU. He has advised members of the European
and British parliaments. Writes regularly about politics, economic policy and where.
We are so delighted to have them back in studio.

Speaker 6 (34:49):
How are you. I'm doing well.

Speaker 4 (34:52):
We're kind of taking everything in trying to assess what
the next few years look like.

Speaker 6 (34:57):
How are you thinking about it?

Speaker 4 (34:58):
Let's start with geopolitics, since we still have obviously we
have a ceasefire here in the Middle East, but we're
watching that very closely. We still have a war between
Russia and Ukraine. We still have conflict or stress, I
will say, between US and China relations.

Speaker 6 (35:12):
We could go on and on.

Speaker 4 (35:13):
So how do you see it now under a second
Trump term?

Speaker 9 (35:17):
Donald Trump is right when he says he could probably
avoid World War three, but the transaction in exchange for
World War three is probably something to do with the republic,
something to do with existing US soft power, So it's
not a freebie. What I mean by that is that
he has introduced this idea of an imperium, you know,

(35:37):
absolutely baled, absolutely simple. There it is on the table.
If we take Greenland and Panama. Panama is slightly different.

Speaker 6 (35:45):
But if we take that, we treat those seriously.

Speaker 9 (35:47):
His team used to say take him seriously, but not literally.
I think we should take him literally and seriously. Now. Honestly,
I do think that's something that he could do, might do,
would do. Truman thought about it during the Second World War. Johnson,
President Johnson back in the nineteenth century thought about it.
It's a meme. But if he did that, of course,
I'm not sure that we wouldn't lose more in our

(36:08):
soft power with this, you know, China and Russia and
them turning around and saying, well, look it's fine to
do that sort of thing. Then then we would gain
I don't know what it is in Greenland that we
would gain.

Speaker 3 (36:17):
Versus that was listening to Pod Save the World, and
Ben Rhodes, who hosts that, was talking a bit about
presents through history and how acquisition of territory is something
that kind of puts somebody into the history books automatically.
And I was kind of listening to this speech today
watching it unfold, with kind of an eye to that,
And I wonder how you think we've talked a little
about them and Roe doctrine, which I was anticipating us
talking about already on the.

Speaker 6 (36:38):
Show in history class.

Speaker 3 (36:39):
But do you see similarly a president here who is
more connizant of his place in history than he might
have been the first time around.

Speaker 9 (36:45):
Yes, absolutely, absolutely. I think that's a good observation. Donald
Trump would like nothing more than to be added to
Mount Rushmore. I've been there their space, and he would
like nothing more than to be considered a strong leader
almost said strong man. Okay, So I think he is
thinking about that now. If we want to be entirely balanced,

(37:05):
there is some sense to expanding territory right inverted commas
that has been done in US history Louisiana purchase, Mexico, California,
and so on. It's just as I said before, what
would be the cost now now that we are in
twenty twenty five and we have a predominantly rules based order,
at least for Now, what is it that we gain

(37:25):
from Greenland and Panama that we lose with Taiwan, Ukraine
and wherever else? And I guess, like you know, I
came in and said, on the global elite, I don't
think that's a good trade.

Speaker 2 (37:35):
We'll help us unpack that a little bit. Specifically with
regard to Greenland. What would we get as Greenland as
an asset to the US and would the US be
able to do that with soft power?

Speaker 9 (37:45):
The way I would have done it is I would
have called Denmark. I would have said to them, listen,
you're tiny, we're huge. Why don't we give you the
six hundred million or whatever it is, or double it
every year. You don't have to worry. We already have bases,
we can finagle it. And I think there are many
ways that the United States does that around the world today. Anyway.
The United Kingdom in some ways is a garrison. Germany
is a garrison. Japan was basically conquered. Right, So we

(38:09):
already do this. We don't need to say that we're
doing it now. If we did, you know, again, this
is science fiction. But if we did say, right, turn
the troops over to Greenland, it's ours now, that would
inaugurate all sorts of hell in the world, Because, of
course other people would do exactly the same thing. You'd have.
Japan would have to get nuclear weapons immediately, probably Germany
as well. God knows what Aram would do, and the

(38:32):
Monroe doctrin aforementioned would have to be enforced.

Speaker 4 (38:36):
Okay, so let's go to Panama and your anticipation of
what happens there. Does he have some points to be
made here?

Speaker 9 (38:46):
Or I think the Panama Canal was designed from naval purposes, right,
it's so that we can move our fleet around the world.
That was the original Roosevelt's idea. I don't see that
it's necessary right now to say that we can't do that.
I think we can. He said something about China controlling
the conrect I mean for goodness.

Speaker 3 (39:04):
For goodness speech and the inaugural part two.

Speaker 9 (39:06):
Yes, yes, what an address that will ask to echo
through the ages. No, I don't, and I sort of
I've been googling that trying to find out if that's true.
I don't think it is true, right, So no, I
don't think it's true. So there's all sorts of nonsense.
And as I understand it, the treaty does allow us
to go back anyway if we really need to. But
but I guess the point for me is that as
we look at Trump's vision of this American imperium, it

(39:28):
contradicts so many of the macroeconomic policies that he's actually
also floating. For example, keeping the dollar standard, this is one.
I mean, I do know you guys think about this.
But he says, on the one hand, I want to
maintain the international dollar standard. That's critical. But on the
other hand, I'm going to start denying other countries, you know,
the dollar through these incredible new tariffs. I mean that
ultimately doesn't jibe right. So there are these huge contradictions

(39:51):
running through this thing. I think we should take him
seriously in everything that he says, but they don't make sense.

Speaker 3 (39:56):
We've talked a little bit about tariffs and trade policy,
and I wonder how you see that factoring into the
conversation that we're having here. So if we take your
lead here on this American imperium, what do you make
of what he's floated thus far? We were kind of
anticipating maybe some more meat on the bone today with
these executive orders. It doesn't sound like we're going to
get one on trade policy in particular. But do you

(40:16):
see the rhetoric as punitive for the point of negotiation?
Putitive because he intends to show force to these allies
and whatever come, whatever may. How do you process sort
of what he said so far? How much does that
bombas or a rhetoric translate to actual policies?

Speaker 9 (40:31):
Do you think I think he would? I think that, listen.
I don't think he understands what a tariff is. Okay,
I'm gonna get in trouble saying this. I think he
thinks that a tariff is a great big stick that
you can permanently beat your opponent over the head with.
I don't think he understands that the supply side over
time would shift and these supply chains would change, and
that that goes the same for these you know, the

(40:53):
currency that other countries need, they would wouldn't get as much. Okay,
So it really doesn't make sense if he wants to
take his own tariff policy suitiously, he needs to continue
and expand Joe Biden's industrial policy, right, because then you
quickly develop your US supply side. You get these cars
he's talking about, You get all that going and so
I would suggest that he takes this seriously because he

(41:14):
doesn't understand what he's saying. All right, So that's all
very well and good for me to sit in your
studio and say that as a commentator, right, as a punt,
But it doesn't make sense, particularly not against what he's
saying about the dollar standard at all.

Speaker 4 (41:26):
So okay, So markets certainly are and investors are pretty smart,
and they will pass through some of this. But when
you're getting conflicting messages, what do investors do in that environment?

Speaker 6 (41:38):
Like, how do you figure out what's reality?

Speaker 9 (41:41):
I would imagine that sophisticated investors, more sophisticated than I,
are wondering about when to get out of anything. Right,
And you can follow this narrative, this Trump narrative, this
Trump curve up, and we saw that with equities. But
you're going to start seeing these contradictions appear, and at
that point, I think people will start getting out of
things they like. Sit I'll give you an example. Scott

(42:02):
Besn't okay, Treasury Secretary pick, extremely smart, erudite guy. He
said recently that tariffs are not inflationary in the aggregate,
making reference to the Chicago School of monetarism, and you
scratch your head and think, well, my goodness, meet like,
that's not how Trump supporters or voters think, right, So
there is this sugar rush. I think there will be

(42:23):
some excitement. We've seen that in the markets. You're right,
But as these contradictions start working their way through the system,
as you see this potential civil war between the sort
of Trump purists, MAGA purists, and the established sensible Republicans
who are also in the cabinet, as you see that
sort of come to a head, I think that you'll
see that in markets. And I'm not ruling out of
financial crisis at some point in his turn.

Speaker 2 (42:43):
Truly would what would what would trigger that financial crist
and what kind of crisis?

Speaker 9 (42:48):
Well, first of all, it might be that the FED
turns around and says, look, CPI is going in the
right direction. It's okay right now.

Speaker 4 (42:53):
Like three point eight two gave a story in the
terminal that while it's not popular that the idea that
the next FED moves or possibly in the future could
be higher.

Speaker 9 (43:01):
Well, this is what I'm saying. I think they could
be higher. Right if they're watching the economy. Unemployment of
four percent of that lobby's against that, but I'm not
ruling this out. And then at that point of course,
Jpower would have to pull the rug out of anything
that's considered a bubble. So jpal not Trump's friends, and
markets nobody's friend if they decide that they're going to

(43:21):
pull the rub on you.

Speaker 3 (43:22):
Anyway, when do you look at the international order as
it stands? Who are the individuals that Donald Trump can
have a conversation with or I guess conversely, who feels
like he or she can have a frank conversation with
this new president about multilateralism international affairs. I mean, we've
seen him paleling around with Javier Milat, who's down for

(43:44):
the inaugurations, But more broadly than that, who has his
ear with whom does he have a kind of can
he have a dialogue about the international order?

Speaker 9 (43:52):
More broadly, I was going to answer nobody. I was
going to answer nobody. I don't think that's his plan.
I was going through the list of world leaders in
my head. Obviously he wants to sit down with Putin
and talk about ending the war in Ukraine. He probably
wants to call she or visit she and talk about Taiwan.
But I don't get the sense that this is the
art of the deal. I get the sense that this

(44:13):
is the art of the act and he's just going
to start doing things. He's also on the clock, right,
I mean two years from now there'll be Senate elections.
If he loses four seats, that's trouble too. So it's
a really good question, but I think the answer is
a bit disingenuous. Nobody he's not intending to do that.

Speaker 4 (44:29):
So then what does it mean for something like the
Russia Ukraine War? So if he does sit down with
President Putin, how do you possibly see that scenario playing out?
Because the US, as we know, has been a big
backer in terms of financial and weapons right in terms
for Ukraine. So how might that ultimately end?

Speaker 9 (44:47):
Well?

Speaker 6 (44:47):
I think does it?

Speaker 9 (44:48):
Well? This is the question. I don't think we were
a big enough backer. I think the United States fundamentally
mishandled this this question. In Ukraine. We seemed to accept
Putin's nuclear framing. He said, and I've got these nuclear weapons,
so I'm going in and we sort of said, all right,
then we'll give out little bits and bobs of weapons.
I think I said this before in your show. I
just would have handed everything to the Ukrainians all in all,

(45:10):
in long range go for it.

Speaker 2 (45:12):
Would you have sent American troops to.

Speaker 9 (45:14):
Absolutely I would have closed the airspace. Absolutely I would have.
And I think if you if you present weakness to dictate,
as history is torts us, that get you get more
in the way of annexations, You get more in the
way of aggression. So I think so to answer your.

Speaker 6 (45:28):
Question, exactly what Putin did, right to turn around.

Speaker 9 (45:31):
Exactly what he did, and we should have slapped him
in twenty fourteen over CRIMEA to be honest with you.

Speaker 4 (45:36):
Yeah, I think we're also going to be listening and
watching to see if indeed any of the signing of
those executive orders and actions come down, whether or not
we see and hear anything about the January sixth individuals,
some who aren't in prison, and whether or not there
is some kind of pardon for them. So there's a
lot to be watched for still in terms of specifics

(45:58):
coming out of the new president, the forty seventh president
of the United States, of course, Donald Trump.

Speaker 6 (46:03):
So we're going to continue monitoring it and take you
back there.

Speaker 4 (46:05):
In the meantime, we've been talking with Ed Price, former
British Trade official, non resident senior fellow over at NYU,
And as we remind you, he has advised members of
the European and British parliaments. We were talking in the
break about kind of where we wanted to go next,
ed and I do think a lot about US China relations.
I mean United States and China, the two biggest global economies.
When they do different things, a lot of other countries,

(46:28):
a lot of companies feel it, a lot of investors
feel it. How do you anticipate that relationship evolves during
the next couple of years with Donald Trump?

Speaker 9 (46:39):
It's a great question, Carol. So you have two emperors
eyeballing each other across the ocean, both of whom think, believe,
indeed that the other should bow down to the other.
That is a way of saying, of course, that Shi
Jinpin and Trump believe themselves to be powerful individuals who
deserve respect from the other. And it's another way of
saying that both China and the US consider themselves to

(47:03):
be the conservative power. It depends on the horizon, right,
So if you look at things from a sort of
one hundred year horizon, the United States is the conservative
power in the region trying to uphold the existing order
if you look at things from a three hundred or
more year horizon. Of course, China was their first and
who on earth are we right? We're sort of flashing
the pan. So China US relations are extremely complex. I

(47:25):
think they will get more combative, and ultimately the pinch
point will be something in the South China Sea or Taiwan.

Speaker 2 (47:32):
You say relations will get more combative, but we saw
the vice president essentially of China in the US today
for the inauguration. We saw the TikTok ceo as well.
We saw the President saying that TikTok no will not
be banned under my watch, at least for the first

(47:53):
ninety days.

Speaker 11 (47:54):
And then now we.

Speaker 2 (47:55):
Don't get tariffs on day one, more tariffs with China
on day one. So it seems to me it's less
aggressive than a lot of people thought, at least in
the weeks and months leading up to this.

Speaker 9 (48:06):
When the Chinese come to the United States, my interpretation
is that we're having an argument. I don't think that
they would come if we weren't, and if they weren't here,
I would be more relaxed about the forward path of
our relationship. It's axiomatic.

Speaker 6 (48:20):
They weren't here.

Speaker 9 (48:21):
Yeah, I'd be like, okay, So you know, when you
really argue with someone, you go over to their house
and say we need to talk, right, And I would
assume that's why they're here. Sigin Pin was invited, by
the way, and didn't come, which probably would have been
a breach of protocol on some level. But there is
a fundamental difference between the United States current interest in
the South China Sea and in the world versus what

(48:43):
the Chinese are proposing. Right now, we are on a
collision course. As I said earlier, Donald Trump, President Trump,
to be fair to him, seize this, understands this. It
probably takes a con man to spot a con and
I think that's why he put his hand up earlier
in you know, history in twenty sixteen seventeen about tariffs.
But to be fair to him, he sees the world

(49:04):
through real politique lens. He sees the world through a
power lens. He knows what the Chinese want to do.
He might avoid a conflict with China, but it would
probably mean giving them what they want in exchange for
a freer hand in the rest of the world. I
don't think that trade works because I think we're already
on top.

Speaker 3 (49:21):
I had an opportunity to have some conversations with the
outgoing Secretary of State and Treasury Secretary, and what each
of them stressed is the importance of rebuilding and reanimating
a conduit of communication, because I think that they saw
what you're alluding to, that is this collision course, a
fear that if there was no red phone to pick
up or way to contact a Chinese official or an
American official, vice versa, that could be really cataclysmic. And

(49:43):
something both of those individuals told me was they were
really trying to impress upon their successors the importance of
having that. Are you at all optimistic that that view
one out that there can be this kind of pugilistic rhetoric,
but there may be in a Marco Rubio or in
a Scott Bessen an awareness of the fact that it
at least having any means by which you can talk
to your counterpart is useful from a negotiating standpoint.

Speaker 9 (50:05):
So the wonderful thing about the Bloomberg terminal is that
it is information rich, as our markets and your market
listeners have so much information at the fingertips my limited
experience of policy and policy making is that it is
information low, information poor, and I don't see that we
have enough of a conduit with the Chinese right now
to avoid that sort of thing. I mean, Christ Jeff

(50:26):
basically sent Kennedy a facts, right, or two facts, and
I don't know that we are at that level of
communication or understanding. There was an equilibrium between the United
States and the Soviet Union. Both of them were enlightenment
projects in a sense. One of them was a bit perverse,
but they were about managing a country essentially, right. The Chinese,
I think, have a different view of the world. They

(50:48):
have a civilizational view of the world. And I don't know,
and this is our fault. I don't know that we
understand them promptly, or that we truly understand them, or
are always respectful. Again, I mean, there's one word that
you can throw out their opium and you know, tell
an entire story of how the West hasn't always been
respectful to the Chinese. That's a long winded way of
saying I don't think that we are communicating with them properly,

(51:11):
and I don't I don't feel confident that.

Speaker 6 (51:14):
We can, you know, to be fair.

Speaker 4 (51:16):
You know, President Trump, you know, pushed back with tariffs
on China in his first term. They were carried over
into President Biden's term, And if you think about China,
I think that's fair to say that both sides of
the aisle agree that there needs to be some pushback.
So having said that, are we just at this point where,
you know, for what twenty twenty five years? I feel
like from the beginning of my career in business news,

(51:37):
it was all about making sure that global multinationals were
in China, US big firms were in China, and now
we're starting to rethink what needs to be going forward.
And I just whether it's the pushback against globalization push
back against China specifically. I mean, is it just a
new chapter that's being created in the US China relationship

(51:58):
that lasts for I don't know the next it could be.

Speaker 9 (52:02):
I think it's I think it's a bit of a
conundrum because on the one hand, businesses and American capital
need as much positive exposure to the Chinese economy of
scale as they can get. Still still absolutely and I
think they would be both. I mean, if you look
at I don't know, JP Morgan, what have you like,
they would be loath to unilaterally pull out, particularly if
their competitors were still there. So this is economics right,

(52:25):
And ultimately JP Morgan pays a lot of tax and
that goes into the US military, So there's a there's
a conduit there. On the other hand, at some point,
either through uncertainty or through executive order or what have you,
there will be a moment that there is a strong
case to be the first out and to cut your
losses and to get away from a negative exposure to China.

(52:47):
I think that businesses are in a constant state of
uncertainty right now. They don't know how to comply. This
is very similar to the Brexit process, which I sort
of saw someone from the inside, where the Commission would
say something, European Commission would say something, and then the
British financial s, which is sort of thing, should we
just overcomply because we're not sure? So I don't know
that China and the US have a clear glide path

(53:09):
in either direction. I think it's a conundrum. It's a dilemma,
and there are and it's a trade off that either
way there's going to be lost in somewhere and.

Speaker 2 (53:16):
I want to step back a little bit and talk
about you know, we're talking investment, talk about the investment
environment here for Americans and for people in the US
during this next administration. During this current administration, you wrote
in a recent column for FDI Intelligence over at the
Ft that there could be this Orange gold rush if
certain Biden policies are kept in place, but also certain

(53:37):
Trump policies are enacted, but other Trump policies are not enacted.
Sort of this perfect storm of like, Okay, don't go
too hard when it comes to deportations and immigration controls,
but also go ahead with those tax cuts. What's the
sort of best case scenario here?

Speaker 9 (53:52):
Well, I would remind you of very erudyte listeners that
the gold Rush was a disaster and not many people
got riche I think the best case policy is that
Trump sort of redoes Reagan, that there is sensible deregulation,
that maybe we pull back on Basil three a little bit,
and all the rest of it. We've we've read it,
it's in my column its and everyone's writing about what

(54:13):
he could do that would make sense. And if that
and if he manages to say we're going to get
out of the hair of business a little bit. We're
going to calm down on tariffs. We're going to remove criminals,
but not the labor upon which this country is foundationally built.
By the way that labor is not always American. Then
there is a way of sort of reading the Trump

(54:33):
ruins where you can say this might be quite good.
And I think that's what's happening now with the markets.
Back to your earlier point, Carol, the problem is if
you if you blow more dust off this big tablet
that I've now invented, and there are further runs you
can see again it doesn't add up. There is a
fundamental contradiction between cutting people's taxes and lowering the available
number of goods. I mean, that's the money goods ratio.

(54:55):
As everyone points out, that's inflationary. So we're in a
spot of pot with Trump. I think if you scrutinize
what he says, if you just feel happy about it,
and you know, have a nice can of orange soda,
you should be fine.

Speaker 3 (55:09):
You know, there's there's on occasion when when the wizard's
play or the capital's play, they'll bring in a desk.
I guess for the sportscasters. We're seeing that now in
a different way at the Capitol One Arena as a
wooden desk with the presidential seals being brought out to
the floor of the Capitol One Arena and we're waiting
to see what executive orders the President intends to sign
when he's there on the arena floor, we're talking with

(55:29):
Ed Price, and as we wait for that to happen, Ed,
I want to go back to something we heard from
Tina Fordham, that is, there's going to be this European
summit in a few weeks time, and whatever agenda might
have been in place has been has been scuttled now
and I wonder sort of what the consequences of that
are of all of these other global powers having to
kind of comport themselves in a different way because of
the president who's in the White House. And I think

(55:50):
back on when I was covering the G twenty, the
US had this very reduced presence there on the ground
in Rio, and you could kind of see those other
countries reconfiguring the kind of magnetism they have with with
other countries. So the alliances were really shifting in real time.
They're in terms of who was meeting with whom, what
are the consequences sort of exclusive of the US, to

(56:10):
having the US take up so much oxygen and so
much bandwidth under this president.

Speaker 9 (56:15):
There are only there are only a couple of sensible
things that other countries can do now Germany, which is
basically the EU needs to re arm, which as an Englishman,
I think is an astonishing thing to say. You know,
I'll be getting some emails later. I'm sure as does Japan.
And that's that's a way of saying that countries. It's
like this, like asymmetric risk. Right, if there's only a

(56:35):
five percent chance ten percent chance that Trump is serious
about half of this stuff, then you have to put
more than five or ten percent of your resources into
thinking about how to deal with it. I mean, imagine
if Trump sits down with Putin and says, okay, what
parts of Ukraine do you want? That's fine with me.
I don't care, they're yours, and then Putin thinks, well, okay,
the Bultics or Poland annexed. Germany has to stop making

(56:57):
cars and start making tanks, right, and I think this
is true of Japan. So one are the consequences for
the US taking up so much oxygen? Ironically, we're going
to have to go back to a world that probably
previously existed closer to nineteen ten, which is that regional
powers try and look after their own interests and have
a battle plan effectively for looking after themselves.

Speaker 6 (57:20):
Okay, so there's a lot still to be known.

Speaker 4 (57:23):
And as we are watching the Capital One Arena, as
we said, desk has been set up, and we are
anticipating President Trump to sign or do something, but probably
sign some of those executive orders. Having said that, Ed,
can you start to think about I always think about
long term impact. And we'll have another election, We'll have
midterms in two years, We'll have another election presidential election

(57:44):
four years. So I just wonder. And we have a
government that has so many people in there so that
things kind of move more slowly. We have checks and balances,
although we're now questioning whether or not all those checks
and balances are in place. What's the thing that you
are most concerned about that will be a long, you know,
lasting effect. I mean, we haven't even talked about climate
change or AI which are some of the other big

(58:04):
issues that are facing our world.

Speaker 9 (58:06):
So I said this before I say it again, I
don't think Donald Trump is a threat to democracy. I
think he is a threat to the republic, which is
ever so slightly different, but is an important distinction to make.
He degrades the way we do things, codified or otherwise
that we could previously have counted on to be a
part of the checks and balance system. Right, for example,

(58:27):
firing Comy back in the day, right, firing Comy wild
and so law. But the rule of law is this
sort of ethereal thing, right, because it's a spirit and
the letter. And I think that he's not always a
threat to the letter. He took the oath. Today he
is the constitutionally elected president of the United States. But
I don't think he likes the spirit. And this is

(58:48):
the thing that I would really watch carefully, which is
the extent to which his comportment, his manner, his worldview
start to seep into the American establishment, and you start
to make assumptions about what, well, how would JD. Vance
behave were he president in the future.

Speaker 6 (59:03):
We don't know, right, we don't know at all.

Speaker 9 (59:05):
Of course, I can come back later and tell you
I'm completely wrong if you like, I mean, that might be,
that might be wise.

Speaker 4 (59:10):
Is it wise for us to assume that someone's going
to pick up the mantle from him and continue.

Speaker 9 (59:15):
Something that has been let out of the box in
the American body politic. Okay, and it's hyper democracy. It's
the sort of democracy the founding fathers did not want,
which is that someone who is quite combative, quite crude,
and not necessarily in favor of the spirit of the
Constitution is now in power. And I blame me and
all of the other people. I mean, I'm a registered independent,

(59:37):
but all of the Democratic voters. Let's be honest, who
thought for a very long time, twenty five years that
we know best sitting around on the coasts sipping frappuccinos. Okay,
guilty is charged, and we completely took our eye off
the ball as to what matters to a lot of Americans.
And this is their response.

Speaker 2 (59:54):
We're speaking with Ed Price, foreigner British trade official, now
non resident senior fellow at NYU, the advised members of
the European and British parliaments. He writes regularly about politics,
economic policy and more. As a reminder too, are also
keeping an eye on what's happening at the Capitol One
Arena in Washington, DC, where we do expect to hear
from the president in just a few minutes ed. What

(01:00:16):
happens though, if it doesn't work. What happens if the
Americans who you spoke to and you met throughout your
road trip this summer we've had you want to speak
about that, You've written a lot about it. What happens
if the policies from this Trump administration do not improve
their lives? What's the next iteration?

Speaker 9 (01:00:34):
I think the next iteration could be past populism, and
then you would be appropriate if you were talking about fascism.
This has happened in history time and time again. There
is a solid backbone of good, honest people in this
country who have followed the rules and really seriously been
let down in the last quarter century. And that is
a fundamental observation that Trump made. He's promised them the world,

(01:00:57):
He's promised them to get back on their feet. They've
leave to him. You're asking exactly the right question. If
he lets them down now and we go into this
kind of like dystopia tech Overlord's you know, situation, then
they are going there's going to be hell to pay
from them, and rightly so. Now I wish that there
was some third way of doing this. I wish there

(01:01:19):
was a romanticized small L liberalism, small R republicanism like
the aforementioned tr Roosevelt, that we could get Americans interested
in again. But the choice between Trump and the Democratic
Party isn't working.

Speaker 4 (01:01:33):
We are a young democracy, as you reminded us versus
something like China, or just not a demand even if
in terms of government. I mean, is this just kind
of what we need to go through to get to
a better end. I don't think to make our government evolve.

Speaker 9 (01:01:47):
I think that the fundamental mistake we made was twofold
one in the seventies of Fiat dollar without a better
way of controlling it. We can get into that if
you want or not. And the second one was allowing
China into the WTO and allowing it to be a
developing rather than developed country status for too long. So
these are really structural, huge structural problems. There are now
too many dollars in in existence. We've enriched a potential adversary.

(01:02:11):
We are in a precarious position. We imported deflation, so
we're in trouble ed.

Speaker 3 (01:02:16):
Price great to speak with you, Thank you very much
for an extended period time.

Speaker 9 (01:02:18):
With a price thinking of NYU from a British.

Speaker 3 (01:02:20):
Trade official, non resident Senior Fellow at NYU.

Speaker 1 (01:02:23):
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(01:02:44):
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