Bloomberg Audio Studios, podcasts, radio news.

Bloomberg Audio Studios, podcasts, radio news.

Eric Canter joins us now, the former House Majority leader and vice chair of Molus and Company.

Eric Canter joins us now, the former House Majority leader and vice chair of Molus and Company.

Eric, Good to see you, sir, Good to be here.

Eric, Good to see you, sir, Good to be here.

We're all trying to figure out how close are we to a point where a leader in America comes out with a set of policies and this market rejects it.

We're all trying to figure out how close are we to a point where a leader in America comes out with a set of policies and this market rejects it.

How close are we to that moment?

How close are we to that moment?

You know, John, it is so reminiscent of the discussion that we had even when I was on the hill, and if you look back even ten years ago, we were screaming the same thing that we have reached a point of unsustainable debt levels. We have to do something about it. And I certainly agree with what both Kim Griffin and Larry Frank Larry Fink have said that we are on an unsustainable path. I think, though, that the discussion around the debt and deficit is a little bit too simplistic, because yes, it's okay to have some level of debt and deficit. I think people, most people in their lives have it, and I think the government's the same. I think the trouble you get into is when you start growing that deficit more quick and the debt more quickly than you grow the economy. And there is no agreement though on what to do about this, And so if the parties would sort of step back and focus on growing the economy, it actually the decisions to correct the situation would be a little bit easier, the political cost a little less if people could just try and focus on how we're growing the economy instead of a lot of the policy that's underway in Washington.

You know, John, it is so reminiscent of the discussion that we had even when I was on the hill, and if you look back even ten years ago, we were screaming the same thing that we have reached a point of unsustainable debt levels. We have to do something about it. And I certainly agree with what both Kim Griffin and Larry Frank Larry Fink have said that we are on an unsustainable path. I think, though, that the discussion around the debt and deficit is a little bit too simplistic, because yes, it's okay to have some level of debt and deficit. I think people, most people in their lives have it, and I think the government's the same. I think the trouble you get into is when you start growing that deficit more quick and the debt more quickly than you grow the economy. And there is no agreement though on what to do about this, And so if the parties would sort of step back and focus on growing the economy, it actually the decisions to correct the situation would be a little bit easier, the political cost a little less if people could just try and focus on how we're growing the economy instead of a lot of the policy that's underway in Washington.

Isn't that the argument that the former administration led by President Donald Trump essentially made that we can pile a more debt, but ultimately we're going to do it because we're pro growth.

Isn't that the argument that the former administration led by President Donald Trump essentially made that we can pile a more debt, but ultimately we're going to do it because we're pro growth.

Did that work out well?

Did that work out well?

No, because you've got to address both. I mean, there's no question that it is the demographics in our country and the healthcare costs and the increase in those healthcare costs turbo charge now with higher interest rates. That's where this is. This trifecta of a really toxic mix that we've got that is threatening I think the future. And I don't know if we're going to see the two candidates for president, the existing the incumbent and Donald Trump ever propose a fix to this. But I think we know how to do it. We talked about how to do it when I was there.

No, because you've got to address both. I mean, there's no question that it is the demographics in our country and the healthcare costs and the increase in those healthcare costs turbo charge now with higher interest rates. That's where this is. This trifecta of a really toxic mix that we've got that is threatening I think the future. And I don't know if we're going to see the two candidates for president, the existing the incumbent and Donald Trump ever propose a fix to this. But I think we know how to do it. We talked about how to do it when I was there.

It's interesting that you have both sides of this. You have from the policy perspective when you're in Congress, and you have now from the Wall Street perspective when you're deciding how to invest and where to allocate. How convinced are you that this time is different, that the bond market is going to wake up to the risks that you see from the fiscal side.

It's interesting that you have both sides of this. You have from the policy perspective when you're in Congress, and you have now from the Wall Street perspective when you're deciding how to invest and where to allocate. How convinced are you that this time is different, that the bond market is going to wake up to the risks that you see from the fiscal side.

Well, listen, I.

Well, listen, I.

Think on the deal making side at MOLAS, I mean, what we're seeing is clients who really reacted over the last couple of years to this volatility and uncertainly around interest rates. Obviously, interest rates when you're in the deal making business are very very impactful. So you know, I do think you know, at some point the market is going to reject this continued incurrence of debt. I mean, we're spending a trillion, seven hundred billion dollars more of money than we have every single year at some point. But again, I always go back to the fact that we're quote unquote the fastest killed on the block in this country. Where else are you going to put your money? And whether we're seeing signs of that now and diversification, I'm not sure yet. I'm not sure because when I look at it and you look at the ADP.

Think on the deal making side at MOLAS, I mean, what we're seeing is clients who really reacted over the last couple of years to this volatility and uncertainly around interest rates. Obviously, interest rates when you're in the deal making business are very very impactful. So you know, I do think you know, at some point the market is going to reject this continued incurrence of debt. I mean, we're spending a trillion, seven hundred billion dollars more of money than we have every single year at some point. But again, I always go back to the fact that we're quote unquote the fastest killed on the block in this country. Where else are you going to put your money? And whether we're seeing signs of that now and diversification, I'm not sure yet. I'm not sure because when I look at it and you look at the ADP.

Report out today.

Report out today.

We'll get the jobs repoured out later this week. But you know where else is there this innovation and dynamism. I mean, we're on a role in this country where you've got more small business startups than we've ever had before. That is a signal that people are optimistic about America.

We'll get the jobs repoured out later this week. But you know where else is there this innovation and dynamism. I mean, we're on a role in this country where you've got more small business startups than we've ever had before. That is a signal that people are optimistic about America.

If the market, though, was to push Washington's hand, because you know, Washington is not going to be the ones to come up with a plan for the fiscal deficit. Are the right people in place? You had a great relationship in twenty eleven with then former Vice President Biden. He's spoken glowingly about you able to work in a bipartisan fashion. Are the right people in place to actually come to the crisis?

If the market, though, was to push Washington's hand, because you know, Washington is not going to be the ones to come up with a plan for the fiscal deficit. Are the right people in place? You had a great relationship in twenty eleven with then former Vice President Biden. He's spoken glowingly about you able to work in a bipartisan fashion. Are the right people in place to actually come to the crisis?

Look, I think that the situation will demand that people you know, step up and come up with a solution. And there's really to me. If you want to fix the problem and send the signal to the markets that the country and the investors in the markets that the country is on the right path, you know, it's a simple notion, But it's difficult politically. You know, you just take the steps to change the healthcare entitlement, the Medicare program from a defined benefit system to a defined contribution and basically off lay some of the risks to the beneficiaries. That's really really tough politically. But if there were a crisis, if the markets did reject what's going on in Washington, you could take more interim steps to go in and tweak the age of a retirement, to reduce the indexing of benefits. You could means test there are some things where you could buy and the government could buy us decade plus in terms of the viability of these programs.

Look, I think that the situation will demand that people you know, step up and come up with a solution. And there's really to me. If you want to fix the problem and send the signal to the markets that the country and the investors in the markets that the country is on the right path, you know, it's a simple notion, But it's difficult politically. You know, you just take the steps to change the healthcare entitlement, the Medicare program from a defined benefit system to a defined contribution and basically off lay some of the risks to the beneficiaries. That's really really tough politically. But if there were a crisis, if the markets did reject what's going on in Washington, you could take more interim steps to go in and tweak the age of a retirement, to reduce the indexing of benefits. You could means test there are some things where you could buy and the government could buy us decade plus in terms of the viability of these programs.

That just doesn't win elections. I want to talk about some of the proposals we are hearing from the candidates. Former President Don Trump is talking about ten percent tariffs a wall and then sixty percent blanket tariffs on China.

That just doesn't win elections. I want to talk about some of the proposals we are hearing from the candidates. Former President Don Trump is talking about ten percent tariffs a wall and then sixty percent blanket tariffs on China.

We ran the.

We ran the.

Numbers, says PC would be north of three percent. Yet again, do you think you would actually do that given the fact that this can mean such higher inflation, especially on everyday Americans.

Numbers, says PC would be north of three percent. Yet again, do you think you would actually do that given the fact that this can mean such higher inflation, especially on everyday Americans.

Well, you know, I.

Well, you know, I.

Think he goes back to that ammunition that someone had given back in sixteen. You know, don't take him literally, take him figuratively. Who knows, who knows what we can expect. I think the unpredictability is what he likes. And there's no question that his messages we have been taken advantage of by others, in particular China, and we need to step up and gain some leverage when we try and negotiate some resolution of this situation. But listen, there are very troubling signs coming out of China suffering apart from the national security concerns around particularly sensitive industries. And you know, because you think about what's going on with EVS and the fact that the Chinese government is well aware they've got to do something to take care of their domestic economy, so they are ramping up production manufacturing sector and guess what, they're going to have so much excess that now they're already looking like they're sort of dumping all those into Europe. And the Eve situation very very concerning in our OEMs here are equally I think, as concerned that that may.

Think he goes back to that ammunition that someone had given back in sixteen. You know, don't take him literally, take him figuratively. Who knows, who knows what we can expect. I think the unpredictability is what he likes. And there's no question that his messages we have been taken advantage of by others, in particular China, and we need to step up and gain some leverage when we try and negotiate some resolution of this situation. But listen, there are very troubling signs coming out of China suffering apart from the national security concerns around particularly sensitive industries. And you know, because you think about what's going on with EVS and the fact that the Chinese government is well aware they've got to do something to take care of their domestic economy, so they are ramping up production manufacturing sector and guess what, they're going to have so much excess that now they're already looking like they're sort of dumping all those into Europe. And the Eve situation very very concerning in our OEMs here are equally I think, as concerned that that may.

Happen when it comes to a deal making perspective, how much you're avoiding cross border deals because of some of these questions and concerns.

Happen when it comes to a deal making perspective, how much you're avoiding cross border deals because of some of these questions and concerns.

Well, you know, I think it's very interesting because so much of the sectors that investors will look to really we're shining in the US, and there's a lot of European, Asian Middle East investors who are looking to allocate their capital here in the US. But of course there are political ramifications to monies coming in, and we've seen that when it comes to countries that are not aligned with US, whether it's China or someone else who is just not on the favored list, you have to go through the hoops with Scippius and things like that. But I think the real concern that you know, I continue to hear from clients at MOLUS and others is the fact that we've got a situation with our anti trust regulators that it's not just applicable to cross border deals, it's applicable to every deal. And I think what Lena Kahan Jonathan Canner have done at both FTC and DOJ has been such a stretch in terms of interpreting the law and the anti trust law, and they've I think done a disservice to our country, to investors, and frankly damaging the competitiveness of America. As a destination for capital.

Well, you know, I think it's very interesting because so much of the sectors that investors will look to really we're shining in the US, and there's a lot of European, Asian Middle East investors who are looking to allocate their capital here in the US. But of course there are political ramifications to monies coming in, and we've seen that when it comes to countries that are not aligned with US, whether it's China or someone else who is just not on the favored list, you have to go through the hoops with Scippius and things like that. But I think the real concern that you know, I continue to hear from clients at MOLUS and others is the fact that we've got a situation with our anti trust regulators that it's not just applicable to cross border deals, it's applicable to every deal. And I think what Lena Kahan Jonathan Canner have done at both FTC and DOJ has been such a stretch in terms of interpreting the law and the anti trust law, and they've I think done a disservice to our country, to investors, and frankly damaging the competitiveness of America. As a destination for capital.

That's the world we live in right now.

That's the world we live in right now.

We were talking to Brian moynihan just the other week on the trading floor of Banks for America had a similar complaint. He was talking about the amount of deals that were being held back by the prospect of them just not being able to pass, not being able to go through, and no one wanted to be on the wrong side of that, being left to hung out to drive for a year without any idea of whether the deal will close or not. You've seen the same thing, potential deals that could close that just aren't being made right now.

We were talking to Brian moynihan just the other week on the trading floor of Banks for America had a similar complaint. He was talking about the amount of deals that were being held back by the prospect of them just not being able to pass, not being able to go through, and no one wanted to be on the wrong side of that, being left to hung out to drive for a year without any idea of whether the deal will close or not. You've seen the same thing, potential deals that could close that just aren't being made right now.

You know, I do think, and what I will say to decision makers is that you know, if we're going to go forward, if there's going to be a deal to work, we're going to have to make sure that we allocate the necessary time, resources and commitment to get through that process.

You know, I do think, and what I will say to decision makers is that you know, if we're going to go forward, if there's going to be a deal to work, we're going to have to make sure that we allocate the necessary time, resources and commitment to get through that process.

But think about it, if we like to.

But think about it, if we like to.

Be the location in the world where capital flows to its most efficient use, where it's the most dynamic economy velocity.

Be the location in the world where capital flows to its most efficient use, where it's the most dynamic economy velocity.

Of capital, we shouldn't have to do this.

Of capital, we shouldn't have to do this.

And unfortunately, there is just an overwhelming ideology that's infecting the policy in the current administration in Washington that is not necessarily that favorable. But again, all the while you look to and say where else or is it any better?

And unfortunately, there is just an overwhelming ideology that's infecting the policy in the current administration in Washington that is not necessarily that favorable. But again, all the while you look to and say where else or is it any better?

Let me ask you this though, is that ideology infect in both parties? Because right on cue deal crosses the Blimberg terminal. We announce it, we talk about it, we go to the Twitter account of the Center of Massachusetts tweet shock.

Let me ask you this though, is that ideology infect in both parties? Because right on cue deal crosses the Blimberg terminal. We announce it, we talk about it, we go to the Twitter account of the Center of Massachusetts tweet shock.

Not surprised at all. What is surprising is the amount.

Not surprised at all. What is surprising is the amount.

Of Republicans that agree with the Now that's a shift, and I'm trying to work out do we actually have a business friendly party in Washington law does one exist?

Of Republicans that agree with the Now that's a shift, and I'm trying to work out do we actually have a business friendly party in Washington law does one exist?

Well, let's say, I always le'd say I'm a limited government, pro free market, pro national security conservative Republican. But I agree, Jonathan, with your with your sentiment that Donald Trump has changed the nature of the Republican Party. We are, i believe, now perceived as the working class party, and the Democratic Party has done more to ingratiate itself with quote unquote the elite and the very and the very far left on the ideological spectrum. And somehow the extremes are meeting and you're seeing this happen. And I worry about this because this extreme push in terms of government role in the economy has happened with the support of both parties. You look at the IRA Bill, certainly that was one party, that was the Democratic Party.

Well, let's say, I always le'd say I'm a limited government, pro free market, pro national security conservative Republican. But I agree, Jonathan, with your with your sentiment that Donald Trump has changed the nature of the Republican Party. We are, i believe, now perceived as the working class party, and the Democratic Party has done more to ingratiate itself with quote unquote the elite and the very and the very far left on the ideological spectrum. And somehow the extremes are meeting and you're seeing this happen. And I worry about this because this extreme push in terms of government role in the economy has happened with the support of both parties. You look at the IRA Bill, certainly that was one party, that was the Democratic Party.

But if you look at the Chips Bill, uh, look that look what that did?

But if you look at the Chips Bill, uh, look that look what that did?

I mean that was industrial policy focus on a particular industry that folks in my party decided was a good thing for national security. So let's let the government go all in. That is not sort of the limited government outlook that you see.

I mean that was industrial policy focus on a particular industry that folks in my party decided was a good thing for national security. So let's let the government go all in. That is not sort of the limited government outlook that you see.

And so you're right there is a shift towards labor.

And so you're right there is a shift towards labor.

Labor is in the polling public polling in this country at all time high in terms of favorability, and both parties you've seen it. How in the world can a White House go and join the picket lines.

Labor is in the polling public polling in this country at all time high in terms of favorability, and both parties you've seen it. How in the world can a White House go and join the picket lines.

That's what President Biden did, But you know what, so did Donald Trump.

That's what President Biden did, But you know what, so did Donald Trump.

So did several Republican Senators joined the picket lines in Detroit.

So did several Republican Senators joined the picket lines in Detroit.

Well to Jonathan's point, jd Vance, who is a VP shortlist candidate, literally came out and said he thinks, men, a con is maybe the only effective person in the Biden administration.

Well to Jonathan's point, jd Vance, who is a VP shortlist candidate, literally came out and said he thinks, men, a con is maybe the only effective person in the Biden administration.

So say it was to be Trump, are you getting the.

So say it was to be Trump, are you getting the.

Same sort of doj same sort of FTC.

Same sort of doj same sort of FTC.

I see, and you know that's the real question. As the weather, we're going to continue to see the extremity. I don't buy that because I still think there is a DNN.

I see, and you know that's the real question. As the weather, we're going to continue to see the extremity. I don't buy that because I still think there is a DNN.

We're a product of that extremity. You lost your seat because of that, in that populous wave that people said you were really the beginning of it.

We're a product of that extremity. You lost your seat because of that, in that populous wave that people said you were really the beginning of it.

But remember where the anger was. The anger really was against the so called establishment. It wasn't necessarily towards you know, it was towards everything we thought and probably assigned an over weight to the import of profalygates spending in Washington. I think it was just more it is about the establishment, the system, et cetera. I don't necessarily think people are going to the polls in November based on anti trust regulation.

But remember where the anger was. The anger really was against the so called establishment. It wasn't necessarily towards you know, it was towards everything we thought and probably assigned an over weight to the import of profalygates spending in Washington. I think it was just more it is about the establishment, the system, et cetera. I don't necessarily think people are going to the polls in November based on anti trust regulation.

I really don't.

I really don't.

So I think that where you're going to have manifests in a next Republican Trump administration is more of the DNA that's a little bit more balanced and not so punitive on corporates.

So I think that where you're going to have manifests in a next Republican Trump administration is more of the DNA that's a little bit more balanced and not so punitive on corporates.

People might not be going to the polls, but you have to plan a business around it. And that's really one of the key questions. And we keep getting people in here saying LORI Calvacina. It's like staring at the sun. How do you plan for something that feels like it is shifting and you don't know exactly? How is there any way that you are planning with the business and the deal making to get ahead of whatever kind of push we're going to get in November.

People might not be going to the polls, but you have to plan a business around it. And that's really one of the key questions. And we keep getting people in here saying LORI Calvacina. It's like staring at the sun. How do you plan for something that feels like it is shifting and you don't know exactly? How is there any way that you are planning with the business and the deal making to get ahead of whatever kind of push we're going to get in November.

So I just think that we've got to be very mindful. In twenty twenty five, there will be the super Bowl of fiscal policy debate because you've got expiration of the Trump tax cuts and some would say, well not all of them, Well, yes, there will be. Everything will be on the table. And just to extend the lower the four hundred thousand dollars and under income bracket, that's a three point two trillion dollar issue.

So I just think that we've got to be very mindful. In twenty twenty five, there will be the super Bowl of fiscal policy debate because you've got expiration of the Trump tax cuts and some would say, well not all of them, Well, yes, there will be. Everything will be on the table. And just to extend the lower the four hundred thousand dollars and under income bracket, that's a three point two trillion dollar issue.

You talk about the debt.

You talk about the debt.

Fiscal year twenty three, we were at seven hundred and ninety one billion dollars of interest costs and we're going up, and so everything's going to be on the table.

Fiscal year twenty three, we were at seven hundred and ninety one billion dollars of interest costs and we're going up, and so everything's going to be on the table.

IRA.

IRA.

The subsidies I can, I would say if there's any anticipation and advice I would give for those who have been on the uptake in terms of these subsidies with the IRA, especially as relates to EVS and renewable industries, we better take a real look to see whether we think those will continue, because they're going to be on the table too. I believe my party will first up look at some of those subsidies and get rid of them.

The subsidies I can, I would say if there's any anticipation and advice I would give for those who have been on the uptake in terms of these subsidies with the IRA, especially as relates to EVS and renewable industries, we better take a real look to see whether we think those will continue, because they're going to be on the table too. I believe my party will first up look at some of those subsidies and get rid of them.

So final question for you trying to work this sold out because I think this is really really difficult. In twenty sixteen, we had a candidate, and I think if you could divorce the person from the policy, the policy you looked at was pro business, low tax is confrontation at some point with China, and then TikTok cappened in the last couple of weeks, and I was just thinking, it's the Trump template from Volume one.

So final question for you trying to work this sold out because I think this is really really difficult. In twenty sixteen, we had a candidate, and I think if you could divorce the person from the policy, the policy you looked at was pro business, low tax is confrontation at some point with China, and then TikTok cappened in the last couple of weeks, and I was just thinking, it's the Trump template from Volume one.

Applicable to volume two. Do you think it is?

Applicable to volume two. Do you think it is?

I do. I don't think that he has changed much in terms of his career trajectory. He's always been anti China. He's always tried to go and getting some leverage in negotiations. He's a deal maker. I also think that he is focused on a growing economy.

I do. I don't think that he has changed much in terms of his career trajectory. He's always been anti China. He's always tried to go and getting some leverage in negotiations. He's a deal maker. I also think that he is focused on a growing economy.

I think at the end of the day, with all.

I think at the end of the day, with all.

The noise you see from j D Bands coming together with Elizabeth Warren and what have you, you, at the end of the day, the Trump administration next time will be pro business because he'll want to see a growing economy.

The noise you see from j D Bands coming together with Elizabeth Warren and what have you, you, at the end of the day, the Trump administration next time will be pro business because he'll want to see a growing economy.

I could tell you all day this was great. I stood against so him.

I could tell you all day this was great. I stood against so him.

Eric.

Eric.

Thank you, Eric Cantor the of my lists.

Thank you, Eric Cantor the of my lists.