Senator Elizabeth Warren on Tech Restrictions

Published Feb 28, 2024, 9:21 AM

Senator Elizabeth Warren called for a new restriction on major cloud providers Microsoft, Amazon and Alphabet, barring them from developing some of the most promising artificial intelligence technologies. The Massachusetts Democrat also assailed proposed acquisitions of Albertsons by Kroger and of Discover Financial Services by Capital One Financial Corp. She speaks with Bloomberg's Joe Mathieu and Kailey Leinz. 

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With us now in Washington, d C. The senior Senator from Massachusetts, Senator Elizabeth Warren, is with us. It's great to see you, Senator, welcome.

Thank you.

Good to be here here at Bloomberg. Of course, we've had some big news about anti trust this week that we're looking forward to talking with you about. But we're also getting a lot of questions about whether the government is going to start shutting down on Friday. I realize you might not have the answer to that, but there's an effort underway right now, I guess, a last ditch following this meeting at the White House with the four leaders to get something done. We're hearing from Mitch McConnell's office that there could be a minibus that comes up for a vote. Would you support that to keep the government?

Yes? Look, can I just be clear, this is the craziest kind of negotiation you would ever see, and that is that, as far as I can tell, everybody wants to deal keep the government open. We've all agreed on what the numbers are. It's a budget deal, right, and everyone's agreed on it, and the Republicans in the House are just saying no. And it's hard to sit out and negotiate with somebody when you see because you want what and then some crazy thing flies in that the majority of Republicans don't even want much less that you'll get Democrats on. So we're kind of in this shutdown the government for what purpose? What are the Republicans trying to accomplish here? It's a kind of dysfunction that is not about Democrats and Republicans fighting each other. It's just Republicans who just can't seem to get their act together so that we do the most basic basic job of government, and that is fund it and keep it going well.

The goalposts, as we keep hearing, are moving on a couple of matters, including the supplemental emergency funding request for Ukraine, for Israel, for Taiwan. There's an effort in the House now to subvert the Speaker that involves Democrats and Republicans a discharge petition that would bring defense, only it's a little different than the one you passed, and we'll see what they get on the border. Would you support an approach like that if it got the money to Ukraine?

Look, I think the key thing, right now, and we were just talking about this among the Democrats just an hour ago. Pass the bill that's already passed the Senate. We have Republicans, we have Democrats who voted for it. Ukraine needs the money now. The Ukrainians are running out of ammunition. Literally, they need the help right now. This thing has already been vetted, It's gotten strong support from Republicans in the Senate. There are Republicans in the House who want to do it, There are Democrats in the House who want to do it. The path is there. All you have to do is just take it. Come on, Elire Johnson, MA could happen?

Well, of course, it's not just aid for Ukraine in question, it's aid for Israel as well. You have previously said the US should be conditioning aid to Israel to protect civilian life in Palestine. And that is very much a topic of discussion in Michigan right now, where there is a primary underway and an effort for voters to back uncommitted rather than President Biden because of his policy and support Israel. Despite what we're seeing happen in Gaza. Does the president deserve to lose those votes?

The president is doing, he is working hard, and the president deserves our support. He has earned it, and he has earned it across the board. I want to be clear, though, when we're talking about what's happening right now in Israel, that the Nittya Who government in response to terrorist attacks, the fact that there are still hostages that are held the Nittanya Who government has created a humanitarian disaster, and it's a disaster that gets worse every single day. In addition to that, the Nittya Who government has said no to a long term peace solution that is a two state solution, which is the official policy of the United States of America and the one way that we can make certain that two states for two peoples who are able to live in dignity and security and with self determination. We know what we need to do right now. We need to get those hostages back, we need to cease fire in place, we need to open up that humanitarian relief big time, and we need to be pushing both parties toward a two state solution where everyone in the region can live in dignity, security and self determination.

The economy is, of course a big part of Joe Biden's pitch in Michigan and all over the country right now, because the data are undeniable. The strength of this economy despite the debate that seems to be being had around whether we're going to have a recession or not. But it's interesting, the more the Fed hikes interest rates, it seems the stronger this job market gets. Somehow, And I recall some pretty tough conversations you had with Jay Powell in senate hearings. We call them a dangerous man because the idea was that this job market might not survive such intense rate hikes.

Do you feel differently, not only might not remember that the Fed put out a report a year ago this past December that said they were targeting watching the unemployment rate go up, they were going to keep raising interest rates until more people millions of people were unemployed. Now it turned out they raised those interest rates and that didn't happen. And it's the reminder the Fed has basically one tool on inflation, right it raises interest rates. That works for some kinds of inflation problems. But this was a time when price is shot up, in part because we were coming out of COVID, we had supply chain canks, in part because the war in Ukraine had disrupted both food and energy supplies, and in part and it's still happening because in concentrated industries we've watched big increases in profit margins as companies have engaged in price gouging. The FED can't touch any of those and in fact, I've asked your own Powell about this in hearings and he's admitted they can't do anything about it. Right now, those high interest rates are actually increasing costs for families because one of the big parts of cost for families is housing. And with interest rates high, we know it's more expensive to buy a home. We also know it's more expensive to finance an apartment building or finance any new housing construction, and all of that gets passed on to consumers. It's time to get those interest rates down.

So you would like to see the FED start cutting rates as soon as the next meeting. Yes, despite what may happen to the fight against inflation as.

A result, well, you know they're off supposedly fighting inflation. They are not fighting some, not all, of the principal causes of inflation. Besides, let's keep in mind six out of the last seven months inflation has been at two percent or lower. We've watched the numbers. They're in a pretty good place. And what matters, I think is that we pay attention to how families are experiencing this economy. The Fed's job is not just a bunch of papers and numbers on a sheet of paper. It's about how families are living this economy, and keeping families so stressed on housing not good for our country.

Of course, here at Bloomberg we talk a lot about the Federal Reserve. We also talk a lot about deals, as we have seen a lot of news within the last week, the FTC yesterday filing suit to block the merger between Kroger and Albertson's. Of course, within the last week and change, we've had news of the Capital One Discover Financial merger, both of which I know you are against on anti competitive grounds. But what these companies argue is that is how they're able to compete against a Visa or a MasterCard, or an Amazon or a Walmart. Is it not anti competitive to not allow consolidation to compete with the largest players that are out there.

So let me just start with this is not the first time we've heard this argument. This argument has been used pretty much since the beginning of time in Eddie trust law. Oh please, just let me get bigger so I can compete with the other giants. But let's unpack these just a little bit. So, for example, in the case of the Kroger Albertson's merger, we've now in earlier lawsuits that have been brought and now information that's coming out through discovery, we see that those two giants have been communicating with each other about how to keep wages down for grocery workers at both stores. Potentially a violation of the law, but it tells us what they want.

They don't want to con agreement.

Yeah, these are the no poachr agreements, right, Which is just a way to say, I'm paying these folks seven dollars and fifty cents an hour, eleven dollars and fifty cents an hour, and I don't have to worry they're going to get hired away for twelve dollars or twelve and a half dollars, right, I don't have to worry about that. This is another way to say that this is how the giants see their way to improve profits. Do they improve profits by offering better service? Do they improve profits by lowering costs. Now, that's not where they're going. They're looking at ways to reduce competition. And I got to say right now, particularly in the grocery business, where we've actually seen margins increase dramatically, both for the individual items you buy and at the stores, this is not a time for the FTC to say, sure, go ahead and merge. Let's just have one grocery store in each of these areas, setting prices and setting wages wherever they want to set them. Bad idea.

There's another issue you're very passionate about in addition to antitrust, and that is crypto. You have just the last week gotten a new challenger for your Senate seat in Massachusetts, John Deeton, a pro crypto attorney. There is tens of millions of dollars in crypto backpacks that could be weaponized against you in this election cycle. As the industry sees that you are pushing legislation in your anti money laundering legislation that would essentially apply the bank secretcy atky SEE restrictions to this industry. That that is something that could completely wipe it out in the United States. Clearly, this relationship is antagonistic. Why not try to collaborate with the industry to fix the issues.

I just want to collaborate with the industry. What I don't understand is why the industry seems to be saying that the only way that they can survive is if there's plenty of space for the drug traffickers and the human traffickers, oh and the terrorists and the ransomware scammers and the consumer scammers, and the rogue nations North Korea that is financing about half of its nuclear missile program with crypto, that all of that has to be left open. You know, keep in mind, in our financial system, pretty much everybody follows the same set of rules. I'm talking banks and credit unions and credit card companies, gold traders and stockbrokers, private ec he now has to follow the rules precious metal dealers, Venmo, Western Union, but not crypto. My view of the world is same kind of activity, same kind of risk, should have the same regulation. I'm not looking for fancy or regulation for them. I'm not looking for anything tougher for them. I just want to level playing field here where if you're part of the financial system moving around literally billions of dollars that remember my bill is not a regulatory bill. It's a bill about law enforcement that law enforcement has the same tools that it has anywhere else to be able to shut down the terrorists and the drug traffickers and the scammers. I think that's the right thing, and I welcome anybody who wants to come in and make that happen. And frankly, I don't understand a defense that says no, no, We've got to make sure that there is a place for those guys to play without getting caught.