House on Fire

Published Jan 13, 2023, 5:07 PM

Republicans elected a House Speaker. Although Kevin McCarthy seems secure in the role, for now, Bloomberg Opinion columnist Jonathan Bernstein believes there's more instability to come. And Bloomberg's John Liu examines China's geopolitical and economic risks.

Welcome to Bloomberg Opinion. I'm only Quinn this week right now. An attempt to invade Tail one, there's a great deal of risk that that would fail. And if you were to try to invade Taiwan, kill the Chinese economy and then also not be able to take Taiwan, that would put him in an extremely precarious position domestically in China. I just don't think he would take that risk at this moment. Bloomberg Executive Editor for Greater China, John Lure in New York for the first time since Maitland China Open for Travel, joins for an extended conversation about China's direction of travel, politically and economically. Later, at some point, the House cream concuss people. The radicals are going to believe that McCarthy sold them out, whether it's after no shutdown at all or after a three month shutdown. They're gonna think, oh, if only the government closed two more weeks, we would have gotten everything we wanted. And then if they use that and decide, well, let's get rid of the speaker, they may do that. Bloomberg Opinions Jonathan burns enjoins to discuss the aftermath of the fifteen round speaker election in the House and what comes next for the Congress. So to China now, and the question over what kind of leader President she Jin Pink turns out to be for China's economy and markets over the coming years. Bloomberg Executive Editor for Greater China, John Leeu joins. So, John, we've spoken a lot on the show to Shooli Wren for updates on how China has been faring through COVID zero and the pivot away from that. So I wanted to zoom out a little bit and ask you some larger questions about China's direction of travel under President she Now that he's effectively consolidated power for life or for as long as he wants, is this position solid? First of all, is there anyone in the CCP providing a checker balance? I think he's got a pretty solid grasp of power. There does not seem to be any challengers on the horizon. Like you said, he's consolidated power in a way that that has been actually quite surprising to observers. At the Party Congress. The new Standing Committee is filled with his allies. There are no political opponents there. He should have quite a large amount of flexibility in terms of policy, in terms of decision making, and as you said, you know, I think he's in a position to be in power for quite some time. How popular is he among the one point for billion people or so of China. I know that's a large question. You know, it's hard to say because there is not publicly available polling as you have in many other places like the United States. But I would say he's probably more popular than not. And the reasons for that are one. Corruption during his time in power has really been reined in. I remember when I first got to Beijing, our colleagues were telling me, you know, they used to bribe their school teachers so that their kids could sit at the front of the class, and that that's just unheard of now. Pollution has gotten much much better. You'll remember the stories a couple of years ago about you know, there are being so much smog in Beijing that planes couldn't take off, for example, and that's it's the skies have gotten much bluer under she and so as a result of that, I think there there is a lot of reason for people to like some of the changes that they've seen under j Ping. At the same time, there are things when it comes to the room for descent, when it comes to cracking down on things like rights lawyers or or even women's rights groups. There are other parts of society that have lots of reasons to oppose many of she policies, and and where he's not that popular, and there does seem to be a new found well I'm not sure how a new found it is, but desire to protest sometimes. I mean the protests that we saw at the end of November because of COVID that was There are protests in China. They're exceptionally rare, but they do happen. I think what stood out about those protests were that they happened basically over the same weekend across cities all over China, and for the same reason. And in the past when we've had protests, they've been largely about very local issues like I don't want to landfill in my back yard and so I'm going to protest. But that situation, you had people in different cities all over the country protesting the same thing, and so that would have made it made that situation more alarming for the government. How will he provide for or so of China's youth who are unemployed, he certainly doesn't want to see it any discontent in that group. I think opening up, you know, exiting COVID zero is going to go a long way and helping provide jobs, especially in the service industry, which has been really hit. So if you think about restaurants, if you think about airlines, if you think about tourism in general, hotels, those are all businesses that you still employ lots of people, especially younger people. Uh And if if people start traveling again, people start shopping again because they're not being locked down, they don't have to do testing all the time, then that will go a long way again the economy going and providing job opportunities for for that segment of society. In terms of markets, John, how much does she want to keep international market participants interested in China. It did seem like there was a it to a more domestic agenda, but that could have been just through COVID. I think we're gonna see uh we I think we've already started to see in three and the latter part of real focus on growth. I think the embrace that we've seen in the last couple of weeks of private business at financial for example, getting the right to recapitalize add more capital. UH. They've the government has shown a lot more tolerance for the big internet companies. We had the Party Secretary of jo John Province where Ali Baba is based visiting the company. So I think that UH is part and parcel of an attempt to add confidence, not just to global markets, with domestic markets. I think the government right now is growth, growth, growth. They will do anything to get the economy going, and that means sacrificing things like that domestic agenda that you talked about. There's one big elephant in the room. How soon before he decides Taiwan needs to be back in his fold. Markets were quite stressed about that question before Russia and bad did you train? And I think there's still an underlying tension among investors. I mean, I think it's the I don't know what the answer to that is, but in my opinion, I think currently markets are over pricing the risk of an invasion the short term. I don't think it's gonna happen in the short term, and the reason I think it will be further off than people expect is that Jijimi has two things he wants to do. He wants to revitalize the economy. He wants to get China to you know, make it a rich nation, a developed nation, catch the US in terms of GDP. And that's part of this revitalization of the Chinese nation that he talks about all the time. And and part of that revitalization also includes bringing Taiwan into the fold. Well, those those goals are contradictory. And so if he were to if there were an invasion of Taiwan, it would it would crash the global economy, and it would definitely crash the Chinese economy. And you know, right now an attempt to invade Taiwan is not there are there's a great deal of risk that that would fail. And if you were to try to invade Taiwan, kill the Chinese economy and then also not be able to take Taiwan, that would be that would put him in an extremely precarious position domestically in China. I just don't think he would take that risk at this moment, as someone who studied him quite a lot. How capricious is he is there a danger that something like that might just happen overnight on a whim. I think he's he's uh. From what we can tell, he seems to be a very studied person, considers his steps very purposeful in his actions. I think the recent reopening that we've seen in China, it's surprised a lot of people and the speed and the pace that it's it's happened, and there's a lot of things about it that are that are hard to defend. Why they didn't do it until why didn't they didn't get vaccination rates higher before trying to do it? But at the same time, I think it suggests an ability at course correction that is greater than people had expected. So I think being able to take a pragmatic approach, I think is something that has you know, benefited the Communist Party, and I think is something that she in this sense, has shown he can do. It was extraordinary sudden flexibility, So there had been no flexibility. But then, as you say, because of so unexpected, it did seem like maybe he can be flexible when he wants to be. I mean, I think with COVID, they found themselves, they had paid themselves into a corner where there was no other choice, And I think it's very apparent to them that reopening will lead to a large number of deaths, especially among the vulnerable population, the elderly, those with underlying conditions, and they ultimately made the decision that they would reopen in spite of that, because the economy was in such a bad place, they had people protesting. They just couldn't continue to execute COVID zero without causing even more distress. And at least delta was over, so perhaps the number of deaths won't be as great as would have been if it was. The delta a variant A little bit about the economy, if you don't mind so. In terms of consumption, there's a lot of chatter about whether we'll see a V shape or an L tape recovery. These letters are back. We used to talk about them in the United States a lot before we had other things to worry about. What happens in China. I think you will see a slow economy in the first quarter because with the reopening a lot of people are getting sick. We will see absentee ism because people are sick, they won't be able to work. They won't go to the factory, they won't go to the office. I think by the end of the first quarter, you will start to see the benefits of reopening becoming more visible. People going out shopping, people going to the beach, some greater amount of confidence about spending being instilled into the economy. At the same time, the government is going to be, in terms of monetary and fiscal policy, doing more to get the economy going again, and I think that will start to show up. We talked about the embrace of private business, of of the internet companies. The government's also trying to do more to help stabilize the property market, and I think that will start to show up as the year goes on, and so I think through the second half the latter parts of the year, growth will be stronger than the first part. John lieu There Bloomberg Executive Editor for Greater China. John continues with us in moments, it has certainly a debt problem, and it is certainly a vulnerability. The government understands that. They see that very clearly. I think what we are seeing is this oscillation. When growth is good, the government will start to take steps to try and deleverage the economy. But when growth is bad, they're going to push that off to the side and pile on more debt. If it means they can help stimulate growth, they will let companies borrow more. It'll just put deleveraging and trying to fix that that problem on the back burner. More Next on Bloomberg Opinion. I'm Vannie Quinn. You're listening to Bloomberg Opinion. I'm Vonnie Quinn, and we're back with John Lieu, executive editor for Greater China in New York for the first time since the pandemic hit China and President chit and Ping locked down. We spoke about particular areas of vulnerability for China. You mentioned the property market. Will that policy pivot work. Is it clear that Chinese people are as interested as they were in property and the second property and buying properties that aren't built. So, I think the steps that the government has taken recently have been aimed at stabilizing the finances for the developers. And so one of the most striking things that's happened in the the last couple of years has been defaults by the developers ever grant for example. And so the first thing the government has been trying to do is to make sure that situation is stabilized and I think that's steps that they've taken, allowing companies to to raise money through share sells for the first time in a long time, helping companies sell debt again. That that should help stable stabilize that situation. Whether or not consumers come back into the market and buy more homes, I think is more uncertain. Uh. I think in larger cities where there is obvious demand, in places like Beijing and Shanghai shen Jin, I think you will see people coming back into the market if they see an opportunity to pick something up they want. In smaller cities, I think it's less clear if that will happen, and I think it's going to be more challenging for the government to convince people to come back and start buying again. Is it fair today that China has a debt problem and that there are vulnerabilities there. It has certainly a debt problem, and it is certainly a vulnerability. I don't. I don't think the government. The government understands that. They see that very clearly. I think what we are seeing is this oscillation. When growth is good, when GDP is five six percent, the government will start to take steps to try and deleverage the economy, but when growth is bad, they're going to push that off to the side and pile on more debt. If it means they can help stimulate growth, they will let companies borrow more. It'll just put del averaging and trying to fix that problem on the back burner. And how much of an inflation problem could that give China. China's managed to not have an inflation problem for a very long time. If ever, does it suddenly have to worry about inflation Right now, there are no signs that the inflation is a concern. Obviously, as the central bank, as the government tries to simulate the economy when it comes to monetary policy, that's a that's a risk. But I think in the in the recent past, the government has relied more on fiscal on infrastructure spending is a way to get the economy going again, and so I think they've purposely tried to avoid that risk because in the in the aftermath of the financial crisis, that became a real problem with that with the money that was flooded into the economy, it caused inflation, and I think the government has learned the lesson from that end is relying more on the fiscal side of stimulus to try and get growth going. How much room fiscally does China have so uh, there's a difference at the local level. With local governments, it's very very stretched. I mean, we have lots of cases where, for example, we have there's a story out about how some of the people who are hired to do the COVID testing mass testing during COVID's era, they have not been paid because local governments are so stressed in terms of their financing. At the central government level, there is much more room to take on debt to increase fiscal spending, and I think that's where we will see it in and deficit wise, does China have to worry about that expanding. I think we will. I think the deficit will expand. The central government deficit I think it was in the range of about three and so they have more room and I think they will take that. I don't think they're gonna blow it out, but there will be an increase I expect. For So this pivot too domestic priorities hasn't just happened in China. It happened during President Trump's era in the United States. And it's also not clear that President Biden is interested in on doing some of those changes in terms of trade policy, semiconductor policy, and so on. Where do you foresee U. S. China relations headed. I think in you will see from the Chinese side at least more of an attempt to to be uh, to try and get the relationship in a more stable footing, a better place. We've got a new foreign minister in office in China, the former ambassador to the United States. UH. Some of the commentary that's come from him has been very glowing. He was calling Americans, you know, great people, UH, really complimentary in a way that we haven't seen in a long time. I think that indicates this desire by the Chinese side to try and improve the relationship because I think they see that, you know, China in the last couple of years, during the pandemic years, has really lost its footing globally and is finding the relationship that it has with the US, with Europe, Japan, and you have lots of different countries around the world UH being in a very problematic place that that in turn makes it more difficult to get the economy going and has weighed on the economy, especially with the chip uh the chip sanctions that have been put into place by the United States. I think the government and agencies that, you know, trying to improve the relationship will have a real impact on not only economic growth, but China's own efforts to become self sufficient in technologies. Yeah, because China has a problem with US, right, China is a little bit I mean, it's not behind in much, but it does seem to be a little bit behind when it comes to technology when some technology is not all obviously, when it comes to chips, it's certainly behind. I mean it's several generations behind the cutting you know, just if you look at what happened, what has happened with Huawei. You know, Whwawi used to be one of the world's biggest mobile phone vendors, and because the United States essentially cut it off from cutting edge chips, it's no longer able to compete and it's it's actually had to unload that business. And so when it comes to chips, when it comes to various parts of software, China is not at the cutting edge. It needs access to American, European Western technologies to try and get ahead, to catch up and to you know, power its economy, and I think the government there has realized that if it continues to take a more aggressive stance when it comes to diplomacy, that it's going to see its access cut off more quickly. And so that's why I think three you probably are going to see more of a charm offensive from Beijing than anything else. Interesting in the Year of the Rabbit Um. There seems to be a determination on the part of the US to not let that happen, whether it's on national security, go out or other grounds. Does the US change its tone a little bit? I'm not sure, you know. I think there is a lot of bipartisan support for being tough on China, and I don't think that's going to change. But I would say if there was a year for the relationship to improve, the year, because in four you have the election cycle kicking off again in the United States, and I would have to think it would make it even more difficult to improve the relationship in that year. John new their executive editor for Greater China in New York. Stay tuned. We turn our attention to the eighteen Congress next with Bloomberg Opinions Jonathan Bernstein. Again, they have to actually function and what we saw with the speaker vote, and what we'd like to going forward is that this isn't the unified party that can easily keep the whole party together on the floor of the House. Some of them have specific policy preferences, but you know, anytime they can have a tantrum that works for them, you know, whether it does anything any good to anybody else or not. Some of these members seem to enjoy just disruption for disruption's sake. It's not often that they want something in particular, and we saw that through the fifteen votes. It seemed do you foresee chaos? I think that it's going to be extremely hard. Yeah. I don't think we're gonna have a different speaker every week, as some people are talking about, but it's going to be very difficult for them to do their basic responsibilities, which you know in this Congress in particular, we're talking about raising the debt limit, which will happen sometime in the second half of the year. Has to happen, with the danger being that if they don't raise the debt limit, the government could default, which will have a huge immediate catastrophic effect on the economy and passing spending bills, and if they can't do that, then we get a government shutdown, which I would say is way more than fifty fifty likely. Jonathan Bernstein continues with us in moments. I'd love to invite you to share your thoughts and opinions with us. You can email me at v Quinn at Bloomberg dot net. And also, don't forget we're available as a podcast on Apple, Spotify or your favorite podcast platform. More next on Bloomberg Opinion, I'm Vonnie Quinn. You're listening to Bloomberg Opinion. I'm Vonnie Quinn. I hope one thing is clear after this week. I never give up. Well, the show went on in d C last week, that's for sure. With markets largely ignoring the potential for dead ceiling drama later this year. If anything, market participants seem to enjoy the fifteen round speakership vote and the emergence of Kevin McCarthy's concessions for one thing, it looks like it might lead to policies friendlier to big business. But let's get an overview of where we stand now with Bloomberg Opinions and Jonathan Bernstein. So, Jonathan, we have three Freedom Caucus members now who are going to be helping set rules in the Rules Committee. Tell us how that's going to impact congressional business going forward. Well, the Rules Committee is terribly important when it acts independently of the party, which has not been the case for sixty years. But once upon a time, Rules was a powerful committee which could make or break legislation. These days, Rules for the last sixty years has served as a tool of the party leadership, therefore of the party. But every bill that passes through a regular committee on Agriculture, or Ways and Means or arm Services then goes to the Rules Committee to get what they call a rule, which is the procedures under which the bill will be considered in the House of Representatives. And rules can basically do anything. They can kill the bill entirely by refusing to write a rule for it. They can rewrite the bill as much as they want and send it to the floor rewritten, and they can decide if they are sending as the floor. They can decide which amendments are in order in which ones are not, which also has a lot of power. The people who set the agenda have the power. Right, So what this is going to do for the first time in sixty years. Is mean that an independent faction of the party, an organized faction of the party, is going to be able to disrupt what the rest of the party wants to do on the floor of the House. And that's huge. And as we've spoken about before, some of these members seem to enjoy just disruption for disruption's sake. It's not often that they want something in particular, and we saw that through the fifteen votes. It seemed. Yeah, and there's all kinds of things. Some of them have specific policy preferences, but the big thing that drives a lot of these people, as you said, is they want to be on Fox News, they want to be on the other Republican aligned media, and so you know, anytime they can have a tantrum that works for them, you know, whether it does anything and any good to anybody else or not, do you foresee chaos. I think that it's going to be extremely hard. Yeah. I don't think we're gonna have a different speaker every week, because some people are talking about, but it's going to be very difficult for them to do their basic responsibilities, which you know, in this Congress in particular, we're talking about raising the debt limit, which will happen sometime in the second half of the year, has to happen, with the danger being that if they don't raise the debt limit, the government could default, which will have a huge immediate catastrophic effect on the economy and passing spending bills. And if they can't do at then we get a government shutdown, which I would say is way more than fifty fifty likely, and were opinions. John author Is on the program last week said that markets really weren't taking this into account enough at all, But I guess part of the reason for that was that there were some small market positives. For example, the Republican representative Jason Smith from Missouri is now going to be leading the tax writing House Ways and Means Committee, which probably means that those provisions that are coming up for renewal soon will be renewed so friendly to big business. Basically, well, it's hard to tell, because you know, again they have to actually function, And what we saw with the speaker vote and what we're like to going forward is that this isn't the unified party that can easily keep the whole party together on the floor of the House. And because it's a small margin. If they lose five votes, they lose unless they take up Democrats, which is not likely for something like tax extenders unless it's part of a larger deal. And the problem is that the freedom calc has spokes the radicals in the House don't like making deals. They don't believe in compromise and bargaining, and that makes it very hard to function. Jonathan is not even actually scared of Kevin McCarthy. Isn't that a little bit of a prerequisite for doing a good job as a speaker? Well, you know, I don't think he's well suited to the job from what we can tell um. But he's also dealing with a very difficult caucus to wrangle. And John Bayner was a very good congressional leader and he couldn't deal with these people. Paul Ryan couldn't deal with them. Again, the problem is that they don't believe in normal bargaining. They like hostage taking. If there's a hostage, they want to take it. But normal you know, we like this, you like that, let's split the difference. They're sort of as a principal against that sort of thing, and so that's very difficult for any leader to deal with whether their skill or not. And you know McCarthy's history is that, well he's not all that skilled. Well it's so interesting because the hardliners feel that the US government has been weaponized. This is sort of the latest thing that they want investigated. And at the same time, they're quite happy to take sub committee spots. They want a sub miny spots. So it's hard to know how to make logic out of the fact that they're going to try to do business within the rules of how Congress works, and they do seem to be very good at the rules, right. Um, I think in some cases, yes, you know, everybody from House Ream canc has the least conservative people the middle of the party, all of them wanted to get a speaker. They were all equally hurt by not having a speaker and going through this fiasco on the House floor. But the insight of the House Fream Caucus folks, and this is shared by a lot of members of US is you know, take a hostage when you can and hold your breath until you turn blue, and somebody will come in and say, oh, we can't let you die. So you know, it's not the case that House Republicans, for example, are in favor of the government defaulting. Everybody agrees that we have to raise the debt limit when it's time, but they are willing to risk the health of the economy of the nation on the theory that somebody will blink first. And over time, that hasn't really been a very successful strategy for them in terms of getting things done. It's very good for getting publicity and for allowing them to portray themselves as the most conservative group, and everybody else has a bunch of sellouts, but as far as actually getting deals in their favor, it has at best a very mixed records well, and also it doesn't take an outright default to cause market targets in chaos. More than ten years ago when we saw something like this happened before, all we got was a downgrade, and that was enough to throw markets into absolute terror and chaos. Absolutely. As for some of the other subcommittee appointments, Jonathan or other concessions that Kevin McCarthy made, what were the important ones for you? I think that the other ones, the specific chairs of committees will see how they behave. But you know, we're talking about a party where they're all extremely conservative. So I don't think that we're going to have different policy outcomes necessarily because of one committee chair or the other. And some of the promises being made on things like they're going to allow as many amendments as people want to make on appropriations bills, on spending bills this year, that's what they've pledged. The history of these kinds of pledges is that when you actually get to it and you realize that that makes it very hard to pass a bill, those pledges tend to get broken, and everybody in the party went up saying, oh, yeah, this isn't working. We have to try something else. So a lot of the policy pledges that he made aren't donn't matter that much. And some of the other things like sending up this I think investigative is too strong award committee to well, they're gonna make a lot of claims about weaponization of government, which is all pretty much fictional. So but they're going to do that committee and it's going to be fully funded, which is a grateful employment deal for Republican opposition researchers and lawyers who are prepping to be future Supreme Court justices, for example. But I don't know that that was something that all the Republicans were against in the first place. So there were a lot of commitments that really the party has sort of agreed on, right and things like trade and so on. It's likely that we will see just continued policy. I mean, it doesn't seem like there's going to be a huge difference and things like trade and maybe you know, improving supply chains. Everybody wants that, right, Maybe more energy production independence, that might be something we'll see. Yeah, I mean those are things that were not so much concessions he made that. But where the party is so you know, there are some interesting questions about where the Republican Party is right now on trade, um, with sort of the trumpy side of things being a lot less inclined towards trade than than had been the case. But the truth is that they're the real driver. There is going to be opposing whatever Biden supports because that's how partisanship works. And then you know, the same thing happens with some of the foreign policy questions. And we have this talk about you know, bringing that the defense budget down from the and but the hand sides, it is very high right now, went up seventy five million, the billion they're talking about, um, bringing that back down. And it's not really clear that where the votes are right now within the Republican Caucus, within the Republican Conference on Defense and and on Ukraine in particular. Is it possible that we'll actually get policies from some of these people? Now? I think we're going to not get a whole lot, but we will get at some point, um, probably after extended government shutdown, we are going to get some sort of spending bills for next year. Um, and you know, perhaps they're just going to kick over what there was from this year. But it's yeah, some things will happen. And UM, I don't think that the deals that were made right now are going to really affect that very much. What's going to affect it is, you know, the leverage that different groups have and um, you know where the current Republican Party on the House side and also on the Senate side where the Republican Party is. I think it's fair today that Kevin McCarthy will probably survive as speaker, right even though one vote could potentially asked him as speaker. But it sort of suits everybody to keep him in that spot and to keep him dangling. I think that's probably likely. What we don't know is at some point this year government spending will be due. For example, they need to pass something to keep government spending going. At the end of September. At some point the House fream concuss people. The radicals are going to believe that McCarthy sold them out. Whether it's after no shutdown at all or after a three month shutdown, they're going to think, oh, if only the government closed two more weeks, we would have gotten everything we wanted. And then if they use that and decide, well, let's get rid of the speaker, they may do that. It's just real hard to tell. There have been some talk about, well, maybe the Democrats would rescue the speaker in that case. It's all speculative, so I don't expect five different speakers over the next year. But will he survive the two year term hard to know. Francis Wilkinson and Bloomberg Opinion this week makes the point that hacking Jeffrey's first speech was a tour to force. I thought i'd get your thoughts on how you viewed his speech. You know, his speech got excellent reviews, was really remarkable, and this is someplace where I think I was wrong. Several years ago. I said, well, Nancy Pelosi's one real weakness as speaker, and she was a historically terrific speaker, very skilled. Whether you like her policies or not, she was skilled at the job, is that she hadn't really provided for her own successors. Well, it turned out, of course that she had, and they brought in this new slate, the top three new people, including Jefferies as the Democratic leader and who will become the speaker if they win back the House, with no friction at all. And you know, with apparently the entire caucus, from the most conservatives to the very liberal to the squad, are all very happy, not just with him, but with the entire leadership plate. So you know, again an amazing accomplishment. Democrats are not like this. They are the old Will Rogers. I belong to an organized political party. I'm a Democrat. It just isn't true in the House these days. So I think, you know, certainly to Jeffreys credit, he is often we get started holding a party together. The truth is it's always easy to keep a party together in the minority than it is as a majority. So we'll see how it goes if and when he ever becomes speaker. Just to your point about Nancy Pelosi, it does seem to be a feature of these types of jobs not to be concerned about your successor and just a weak fear among your caucus, right. I mean, if you look at it's a different parliamentary system, obviously, but if you look at Britain, for example, people were terrified ab Alis or Campbell when he was whipped. They were terrified of Tony Blair. Yeah, you know, it's it's a different system. I don't think it works through fear as much as through compromise. And you know, it's not as top down a system, even though the commission leadership is we talked about it being very powerful. Certainly the leadership of the Congress comes from the party and the party leadership. It sounds circular, but it really isn't, because once upon a time the party leadership was almost powerless and it was the independently acting congressional committees that really were important in the House. So, you know, I wouldn't necessarily say that fear is the top thing, but it's just the skill of keeping everybody in the same page, knowing how to when to listen and when to talk, and you know how to cut deals that leave everybody reasonably happy. And Pelos, who was of course just a master of all that. Bloomberg Opinions Jonathan Bernstein. That does it for this week's Bloomberg Opinion. Do get in touch with us though, email me at v Quinn at Bloomberg dot net. We love to hear your thoughts and opinions, and don't forget we're available as a podcast on Bloomberg, Spotify, Apple or your favorite podcast platform. We're produced by Eric mollow. Until next time on Bloomberg Opinion

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