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Bloomberg Washington Correspondents Joe Mathieu and Kailey Leinz deliver insight and analysis on the latest headlines from the White House and Capitol Hill, including conversations with influential lawmakers and key figures in politics and policy. On this edition, Joe and Kailey speak with:
- Bloomberg Politics Contributors Rick Davis and Jeanne Sheehan Zaino about some of the primetime speakers scheduled for next week's Democratic National Convention in Chicago.
- Bloomberg White House and Politics Reporter Stephanie Lai about Donald Trump's conversation with Elon Musk on X Monday night.
- Beacon Global Strategies Managing Director and Partner Michael Allen as the US officials say an Iranian attack against Israel is increasingly likely.
- FS Investments Chief US Economist Lara Rhame about the latest US economic data.
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On Bloomberg Radio, on the satellite radio and on YouTube, where you can search Bloomberg Business News Live. Find us. Our live stream awaits you with news from the campaign trail today and from Chicago. We were just talking to Nathan Dean about what's going to take place next week at the DNC, and we do have news on the lineup this morning. Pretty interesting to think about the way this is all going to work. Knowing of course Tim Walls will be speaking on Wednesday night, and Kamala Harris we'll speak on Thursday. We're filling in the blanks. Joe Biden is going to open this thing on Monday. Talked about that with Rick and Jenie already. They're kind of ripping off the band aid check the box. Get Joe Biden done Monday night so we can look to the future. Former Secretary of State Hillary Clinton. It turns out as also being held on Monday Night, gets more interesting from there Tuesday Barack Obama. It is his hometown after all, and a big reason, big part of the reason why Joe Biden is not in this race anymore. Then it's Bill Clinton. Isn't this interesting? On Wednesday Night? Introducing Tim Walls, not Hillary Clinton. They're going to the former president for this one, presumably for some kind of a folksy presentation. And this is where we start with our panel today. They're both back with us. Bloomberg Politics contributor Genie Shanzano, a political science professor iona University and senior Democracy Fellow at the Center for the Study of the Presidency in Congress, Rick Davis partner Stone Court Capital, of course, and longtime Republican strategists. What do you make of the lineup here, Genie? I know I'm probably reading into all this stuff, but you get Hillary and Joe Biden out of the way on Monday nights so you can feature Bill Clinton on what will be a very well watched night on Wednesday with the Vice President. Why these decisions?
I do think it makes sense. You know, obviously, both Joe Biden and Hillary Clinton have run, and of course he won. She did not. They serve together in Obama's administration, So I do think that makes sense.
And then to your.
Point, you have Barack Obama, a great speaker, and it's its home, his hometown and still widely beloved. I'm curious to see if we hear anything from Michelle Obama. Haven't heard her name yet. And Bill Clinton, he's known as one of the people who really does a great job introducing somebody like Walt I keep wondering, does he pull out the old saxophone?
Who knows what happened? But they do have.
A similar sort of background in terms of being from the Midwest and you know, having served as governors and that kind of thing. So I do think that makes sense. And then of course the question becomes who introduces Kamala Harris. I am curious to see as well. I don't think we.
Know that yet, No, we don't. And Rick, you've run a convention, so talk to me about the process that goes into decisions like these when you're figuring out the speaking schedule and how to best capture the media coverage that'll come with it.
Yeah, you can imagine the monkey runch. It was thrown into this three weeks ago when the top of the ticket flipped and all the focus, all the agenda was built around showcasing Joe Biden's accomplishments as president and his vision for the next presidency. And that includes the kinds of people who are speaking the stories of Joe Biden's you know, growing up and you know his uh sort of you know, middle class roots and you know, working hard for the working man. And now all that has been turned upside down. So there's a lot of rewriting that's going on and a lot of new recruitment of new faces. And as you've described, you know, these are the standards, right when you've got former presidents and former nominees a plenty who were willing actually to come to the convention, unlike the Republican convention where George W. Bush wasn't willing to be anywhere near that zip code when Donald Trump was doing his victory lap. You have ready and willing participants, and so how do you then juggle them around? And I do think that that part of the Biden burden for the convention managers was talking about his legacy without standing like he's been around forever, right and playing to the age issue here you don't have that problem. It's all going to be new, almost as if, uh, you know, Harris wasn't even part of the Biden administration. You know, we'll get credit for that to Joe Biden and all the accomplishments, and then she'll peel off and say, and for the future, here's my act, and that's where the new economic policy comes in. That's where the new optics come in with my new Vice president Walls, and so I think that will be the handoff. You know that Bill Clinton gives the Walls and then they peel into it. You know on Thursday, Wednesday and Thursday Night, Genie.
Bill Clinton is seventy seven years old. He's one year younger than Donald Trump. This is who's been chosen now to introduce Tim Walls on Wednesday Night. This is an individual who was almost canceled. I don't think that's possible with a former president. Certainly. Donald Trump has proven that, but was not seen as a helping hand to the Democratic Party during the Me Too movement. It looked like he was being moved to the sidelines. Here Are you surprised to see him with such a prominent role in twenty twenty four.
I'm not. You know, he is a former president who is living healthy, able to speak to your point. Obviously, there is a lot there and we saw that in the Me Too movement rightly so, and I think that may be one of the many reasons why you don't see him on a Thursday Night introducing Kamala Harris. But again, he's proven to be over several decades, really really good at getting out there speaking to Democrats, particularly the kind of Democrats that Hillar, sorry, Kamala Harris and Tim Waltz want to appeal to, which are from the Midwest, from these Rusta Belt states. I mean, after all, that's how Bill Clinton made his name as a very very moderate Democrat who went out there and showed that the Democrats were not so liberal that they should, you know, just be washed away in an election that he ended up winning. So you know, he does have that appeal on so andly obviously it comes with downsides, and I think again in my mind, one of the big questions is what do they do in terms of a direction on the Thursday Night for Kamala Harris. I think there's a lot of really really attractive possibilities. I'm going to put my vote in for Michelle Obama and Beyonce charity as well. But there's a lot of others.
There's a lot of others.
But I do think it showcases that difference from that Wednesday to Thursday night in terms of generation big time.
It's a big turning of the page here, unless, of course, the uncommitteds cause a problem. Rick. I don't think they'll disrupt the whole flow here, but it could be part of the story. They're calling them cease fire delegates up in Boston this morning, Rick. According to Politico, they're about thirty uncommitted delegates representing the Democratic primary voters who opposed Joe Biden. This of course brings us to the matter of Israel and the many uncommitted votes that we saw in some of the swing states during the primaries that we talked about, Rick, if you were running this convention, as you have done in your career, what would you be doing right now to try to meet with these people to try to diffuse the situation before everybody shows up in Chicago.
Yeah, I mean we talked about this the other day, Joe and I suggested that, you know, you'd want to put a group together that would start literally handholding these folks, trying to resolve issues and you know, find things of interest that they have in the platform and other options future administration points of view, and also you know, work them over hard on the fact that you know, Donald Trump's not their kind of person. They shouldn't do anything to enhance his appeal. And then I would make sure that I surrounded them with my best political operatives when they're inside the convention, so that at least I got a heads up. But for sure, I mean most of them are in Michigan delegation, and that Michigan delegation would probab I'd be sitting in the rafters, you know, where there would be literally no ability for a camera crew to take a picture of them.
All. Right now, we're getting warmer, Genie, how do you think Kamala Harris and her campaign handle this. We talked yesterday about the potential for thousands of protesters outside. What about the couple a dozen inside?
Yeah, and those couple a dozen are arguably even more potentially problematic for the DNC and the Democrats then the thousands outside. In addition to Michigan, we've also got some from Minnesota, and that creates a dilemma in terms of what Rick's talking about. I don't know if you can put the Minnesota delegates in the rafters because they have a vice presidential nominee there and so that I think is where the issue is. But I do think the Democrats are exercising good risk management here. They have, you know, been meeting with these folks. They've been talking to them. They have a list of demands. Certainly some of the they're never going to meet. But if they can start to meet these people halfway or a quarter of the way, if you will, they may be able to get them to hold off on doing anything with shows dissension and does what none of them want, which is showing support for Donald Trump. So I do think this is the way to proceed. But of course this is going to be one of the big things that the media are watching for the entire week.
To what extent should Democrats be leveraging celebrity in this convention? Rick, you just heard Genie mentioned Beyonce. That's the caliber we could be talking about here. Everything we hear coming out of the DNC is big surprises, lots of entertainment. We've seen a lot of musicians and entertainers showing up for Kamala Harris on the campaign trail. Is there a point of diminishing returns for Democrats on this, Yeah? I think so.
I mean, look, I mean, voters are going to look in and they want to see something that they can vote on, right, and it's not an a down boat on Beyonce and her latest outfit.
Uh.
That stuff is entertaining to the delegates, it's entertaining to the media. We'll have a blast watching and listening to it when we're there. Most of it does not get broadcasts on network television or on cable, So it's the kind of thing that has a diminishing return. But at the end of the day, you know, uh, Donald Trump brought the world wrestling championship types to his convention. You can expect Hollywood to show up at the Democratic convention and you know, pick your poison.
One of the highlights of Milwaukee for me was the split screen with Rick, Genie and Kid Rock as part of our live coverage. Genie, how do you counter Kid Rock? Is it's Beyonce that you just said it? Right?
It could be Beyonce, it could be Charlie X. What is it, Joe CSXXCX you correct.
Whatever you say.
Sure, And well, one thing we do know is they have a they have a really really at the Democratic side, well developed streaming output that's going to go out. They have been targeting gen Z like no tomorrow. And also we're hearing that they are moving away, as the Republicans did, from a list celebrities to more targeted folks, so you know, people who can really target those groups that they want to get out. So, you know, as much as we all love Beyonce, she may just be too a list this kind of voter targeting activities. So it's a really way in which they're doing. Yeah, she's too mainstream Joe. So you know, Donald Trump wants gamers. You know, the Democrats want somebody else. So I think we're going to see some targeted names that have you know, can really move the needle with this group and Joe. The vibe very very important this year, so happy good vibes is what they're going for.
Yeah, I listen, I know how brat you are, Genie and X see X from producer James. They're listening to Brat in the control room right now making fun of us. Rick you're saved by the bell. I'm not going to ask you about any of the performers in Chicago. That's a no comment from Rick Davis. It's quite all right. They're going to be back with us in our second hour, the best panel in the business, Rick Davis and Genie Shanzeo here on Balance of Power on Bloomberg Radio. We'll invite our global television audience to our little talk here coming up. Aren't we lucky we get to do this every day in the midst of one of the most historic presidential campaign cycles of our lives. Coming up next hour, Kayley's back from New York too. She'll be here with us on Balance of Power and a conversation coming up with Michael Allen from Beacon Global Strategies and the news that we haven't even had a chance to touch yet from Israel today and from Ukraine. We've got a lot cooking. You want to stay with us here on Bloomberg.
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Stog, I know where you're going.
Wasn't necessarily the case with the promised eight pm start. Last night of the X Space between Elon Musk and Donald Trump started a little bit behind schedule, and we're blaming technical difficulties or if Elon Muskus to be believed a denial of service.
Yeah right, that's correct. It was forty minutes late, just to bring everyone in for one second, because we're always honest. It's just us here. Kayley and I were on the train back from New York, so we were the captive audience. We had nothing left, nothing else to do, and you got in pretty quick.
I pad it day about a half now.
No one else could. I couldn't tell if I was honored.
Or well, I don't know. I felt like you had an invitation, but you got to listen to that great music for forty minutes while finally got in, and then we sat there for two hours listening to what sounded like a couple of guys talking on the phone.
Yeah. Oh, it was just a and it was, as promised, an unscripted conversation Elon Musk said it would be, and that there were no limits to the subject matter. But frankly, the subject matter did stray often back to what we hear repeatedly from Donald Trump, who true spoke a lot and not all of it attacks aimed at his opponent com.
You know, Stephanie Laie, it was her job to listen to it as well. She was listening, so you don't have too Bloomberg, White House and a politics reporter with us now at the table. Stephanie, thank you for being here as always. I'm sure you're still recovering from this whole episode as well. How do we refer to this? It was essentially a two hour live political advertisement, and the Trump campaign was actually running ads on it was sponsoring the space. So was this basically a Trump campaign ad by?
I mean, we have to remember that this was a conversation, you know. I think at some points during the day before some media outlets were naming it an interview with Elon Musk, and that really wasn't the case. You know, it was very much Elon Musk giving his opinion on some topic and asking Trump, you know, how do you feel about this? Or you know, is this what you think as well? And so, you know, this entire event felt like a rally, but there was some you know, some conversation between.
Yeah, a digital one perhaps. I have to say when I was taking part in the space, I was one of the what I saw at maximum a one point three million that were tuned in at that time. But I know Donald Trump on it last night said something closer to sixty million. Ex itself said the engagement levels beyond that, we're far higher. So I guess the question, Stephanie is is that all they were trying to achieve To point out as Donald Trump has been very concerned with the crowd size that Kamala Harris has been drawing in that he has the ability to get that many people to listen to him on whatever elon Musk and he decided to talk about.
Yeah, I mean they were looking for some sort of splashy event to make headlines, to bring the attention back to the campaign. Because the last three weeks we've really seen the focus on Kamala Harris and Tim Walls. There's been so much momentum behind them, just given the fact that we're in this news cycle where we're figuring out what the Democratic ticket is going to look like, what the agenda is going to look like. And so this was really the moment for the Trump campaign to regain the narrative and to maybe make some news. But from what I was hearing, there was no newsmade. It was very much just Trump rehashing what he said in his past proposals. I think one thing that stuck out to me was that he mentioned that he was worried of nuclear warming, which was not a phrase that I had heard before. But essentially the idea is, you know, we have to be worried about our national security. A lot of countries have access to nuclear weapons. But that wasn't anything that I quite heard of, or that term specific.
Different version on a refrain from Donald Trump. By the way, you know, it was Elon Musco I think first called it an interview, and then the Trump campaign called it, I think think the most important interview of all time. As it was getting ready to get started. But so you know, picture us there, we're clacking down the tracks on It's forty minutes into this and we've got the earbuds in and then the music stops and we hear this.
We unfortunately had a massive Distributednihledge service attack against our servers. As this massive attack illustrates, there's a lot of opposition to people just hearing what President Trump has to say.
There was a question about whether this invitation would be extended to Kamala Harris. Elon Musk has suggested as much. He referred to her as Kamala as opposed to President Trump in his tweet, Well, the Harris campaign indulge such an invitation.
I've not seen any signals just yet, but you know, even last week when Trump was interviewed by a video gamer, Aiden Ross also extended an invitation to the Vice president Harris. And so it's not entirely clear if that's really the audience that they're looking.
Does she get a cyber truck too?
If she does it, maybe see yeah, that's the question in a watch, right, Yeah, yeah.
Fancy watch at that. It is worth noting that you obviously are on the campaign trail a lot. Donald Trump is going to be in North Carolina this week outlining his economic policy. We expect now that Kamala Harris will also be in North Carolina on Friday to outline hers This is after we heard her float the idea of no taxes on tips, which Donald Trump had floated. Jadie Vance is talking about an expanded child tax credit, something that Democrats like Harris have long been in favor of. So when we get these economic policies fully outlined, are we going to come to find that there's actually not that much difference between them?
I mean, I think that's the most interesting thing about this election cycle so far. There's been so many areas where it actually seems like Democrats and Republicans agree. You know, even just looking at the last year, Democrats in the House and Senate decided to up an immigration bill, right, and obviously it didn't go through. But just the fact that these issues are things that everyone is talking about, everyone cares about, shows a lot more agreement than disagreement among the two parties.
Yeah.
Absolutely, Stephanie Lai, thank you so much as always covering politics for us here at Bloomberg. We appreciate it. And as Stephanie brings up that border agreement that obviously did not make it through Congress. Donald Trump also pointed out on the call last night that she seems to be trying to be Trump when it comes to stricter border measures. At least that was his suggestion. She too, has started singing a different tune than she was when she ran for president of the first time around in twenty nine.
We talked a little bit yesterday about some of the overlap on other issues. Expanded child tax credit promoted by j d Vance, no taxes on tips promoted by Kamala Harris. Maybe things get a little mushy on some of these issues. Then there's the matter, of course of geopolitics. Knowing that we could have a significant number of protesters and even uncommitted delegates at the Chicago convention next week. Kaylee, We're still waiting to find out what Iran will do to retaliate against Israel.
And this is actually something that came up on this X space between Donald Trump and Elon Musk last night. Here's what the former president had to say on this matter.
They're all waiting for an attack from Iran. Iran would not be attacking believe me, you know what. I was there, and I say it with respect because I think we would have been good with Iran. I don't want to do anything bad to Iran, but they knew not to mess around.
So for more on what's happening in the Middle East, and I guess what would have happened if there were a different president in the office or not. Michael Allen is with us now. He is former special assistant to the President during the Bush administration, now managing director and partner at Beacon Global Strategies. Mike, always good to see you here in studio on Bloomberg TV and Radio. Appreciate you joining us. So Donald Trump has said this about a number of hot geopolitical conflicts in the world, that Russia never would have gone into Ukraine, that what's happening in the Middle East October seventh wouldn't have happened. Obviously they both happened now. I don't know if you really believe that to be true. But his suggestion that Aron wouldn't be going after Israel, considering the contentious nature of Israel's role in the Middle East that has been there pretty much perpetually, is this being intellectually honest.
It's hard to just throw out a counterfactual and make an assertion. There's no way to test it. Of course, I think what he's trying to do is premise everything on what most people agree was a bad call from President Biden, and that was the way that he got out of Afghanistan. And the narrative starts there, which is that because of the way you did it, you were weak and perceived it is weak, and therefore everybody moved against you. I think that's a fair criticism that people can make. But I mean, can we discern either way these counterfactuals. It's too hard to do. But it's politics. We're in a presidential election year, and I understand people are going to make those arguments.
It's been almost two weeks. Tomorrow is two weeks since the killing of the political leader of Hamas in Tehran. What is Iran waiting for or is this part of the retaliation as has been suggested the weight.
Yeah, I've seen a little bit about that. Maybe they're trying to do psychological mind games on the Israelis, but I don't really think so. I think it's one like we've talked about, they need to land a punch this time, so they need to figure out the combination of cruise missiles and or ballistic missiles and drones, some of which need to get through. But the hard part. The other thing they need to balance is is that they don't want to be extraordinarily successful, and they don't want to kill too many civilians because then that might risk a total war with the Israelis, and I don't think the Iranians really want to get into a complete and total war. They benefit by having their proxies operate. And that leads to the sort of the second thing that they're weighing, which is Hesbeal is going to take some shots. But are they going to go at them in a total war type fashion or is it going to be just enough to make them look credible, to make them look strong, but not provoke a multi week contest with the stronger Israelis.
Well, surely they're also weighing the fact that currently another proxy, Hamas and Israel and other mediators are at least talking about talking again when it comes to a ceasefire. I believe Hamas still hasn't firmly committed to joining those talks that have been suggested for Thursday. How did the ceasefire negotiations factor into this calculation? Can both of these things happen around retaliates and a proxy find some kind of deal with Israel.
I think you're onto something. I didn't think it made sense to put all these things and try and cram them together. I understand the Biden administration is trying to do all that they can to get a ceasefire, but more importantly to get these hostages home, especially since at least five of them are Americans. But I didn't think it just sort of suited what was on the international agenda for the week, which is Esplas trying to take a shot it Israel Iran, the so called head of the octopus, and I didn't think that Hamas was going to just step up and say, hey, you know what, it's time for us to make this deal now. I think it would look weak if Sinwar were to make it now, because it would have made them seem afraid of what the Israelis were about to do. So I know how badly everybody wants it, but it didn't seem like the week to advance the ball on it.
Yeah. Well, in the meantime, the Pentagon's busy sending a guided missile submarine to the theater the USS Georgia. One hundred and fifty Tomahawks on board the USS Abraham Lincoln Aircraft Carrier Strike Group is speeding its way there. Now there's a question about whether this is deterrence or whether we're girding for something more substantive than what we saw in April.
So I totally agree it's to terrence. But there's another factor, and that is what is the status of the Iranian nuclear program. I don't put this at a high probability, but a couple of things have happened lately, and that one, the US intelligence community has backed away from its pronouncement that Iran is no longer working on the weaponization of a nuclear weapon. By that, they mean putting the fissile material together and putting it on a ballistic missile or something. So that's significant. People have noticed that, And at the same time, the Iranians are thinking to themselves, if we go into a total war situation, what's to stop these Raelies? And maybe the United States. I wouldn't put it over fifty percent, but you've got to think about it. What if the United States says, you know what, I didn't really want Iran to go nuclear on my watch anyway, says President Biden. So maybe we'll go for it now. Don't think that's it, but you have to consider it when you think about how much progress Iran has made on fissile material and now perhaps have restarted the weaponization part of a bomb.
Well, you allude to this side that Biden maybe going for things he once was not. Can we also call that true now in the conflict in Ukraine? Considering the US policy for a very long time in this war was not to support offensive action against Russia, and now Ukraine has seized one thousand kilometers of territory in the Curse region in Russia, and you're seeing one hundred thousand more of Russian's fleet there. What is your read on what's happening there? Is this something that the US is really behind?
I think that the US probably wasn't consulted because they didn't want to know what the answer would be. I think the Ukrainians kept it a big secret. It sounded like many of the top figures in Ukraine didn't even know what they were doing, even those that were in the officer corps that got moved into the line of fire. I do, however, believe that this is great that the A. Biden administration is apparently not fighting it. I think that they are allowing it to happen. Allowing it to happen, not hectoring the Ukrainians about what they're up to to me, and we'll have to see how it works out. It's inn a genious move. It's put Putin on the defensive. It's caused apparently. We're starting to see news reports that the Russians are moving troops out of the south of Ukraine to reinforce where the Ukrainians are running and making incursions into Kursks. So that's good news. I'm not ready to declare this a victory or that the course of the war has changed, but I'm really glad to see that Ukrainians are mixing it up well.
You're seeing tens of thousands of Russians also as civilians, be evacuated from that area. Could we be talking days from now about something awful that Vladimir Putin is going to do to the troops in that region. He's clearing out civilians to do something.
I think it's very, very possible. It's you almost can't put anything past what Putin might be up to. I think he is absolutely trying his best to think of something new to penalize the Ukrainians with and they better look out. Something's coming at them. But I think they're largely fearless. I think they're glad that they're on the offensive for once, that their military has come up with something ingenious and new, so that they're not always sitting in a trench having positional warfare with the Russian the Russian troops coming across.
It's good to have you back with us, Michael. Thank you. Michael Allent with insights from Beacon Global Strategies, his perch now former Special Assistant to the President in the Bush administration. I'm Joe Matthew alongside Kaylee Lines in Washington, where we have a lot more to cover. We start today with geopolitics. We turned back to the campaign trail ahead with our signature panel. Rick Davis and Jeanie Shanzano are on board. Tim Walls making his big solo debut on the campaign trail today. We'll have a lot more next. This is Bloomberg TV and Radio.
You're listening to the Bloomberg Balance of Power podcast. Catch Just Live weekdays at noon Eastern on applecar Play and then oh with the Bloomberg Business app. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
This is Balance of Power on Bloomberg TV and Radio. Or of course, we bring you all of the political coverage you need to know, and we do it as a team. And Tim Walls and Kamala Harris are a pretty new team now. We just learned officially that they have become a team on the Democratic ticket as of last week, and to this point we've seen them on the campaign trail together. That changes today though for Tim Walls, who will be making his first solo campaign stop in Los Angeles, and of all things, Joe, this is happening with a union. He is speaking at the diennial convention of the American Federation of State, County and Municipal Employees. And of course we know that the selection of Walls was welcomed by many unions, considering he is seen to be a very pro labor governor.
Especially Yeah, unions snapped to attention as soon as Kamala Harris got to the top of the ticket, and they loved the idea. I think we can argue had quite a bit to do with the election of Tim Walls over Josh Shapiro, remembering the concern over school vouchers and so forth for the governor of Pennsylvania. So yeah, this has asked me and he's going to be going to a fundraiser afterwards in Newport Beach, California, which is where we start with our signature panel. Rick Davis and Genie Shanzano are with A. S. Bloomberg Politics contributors. Rick of course partner at Stone Court Capital, and Genie political science professor at Iona University. It's great to see you both. Welcome aboard here, Genie. The battle for organized labor is pronounced. And I wonder how well Tim Walls has to perform on his first outing, his first solo outing on the campaign trail, or if that vote is already built in for this campaign.
No, you know, he has to perform well. He also has the advantage of being a former union member himself, famously as a teacher. He also has a really strong union record. As governor in Minnesota, when the Democrats took over the state legislature, he signed into law legislation that protected some of the most vulnerable workers there. So these would be like nursing home workers and others. They also get to earn paid sick leave, which is not something that is common across the country, and there will be a time in the future where they will get family and medical leaves. So he's got a really solid record himself. And what he needs to do today, obviously, is he needs to get them riled up to support Kamala Harris by talking about what the Biden Harris administration has done for workers and what she wants to do next when she is elected, hopefully from their perspective president.
Well.
As we consider the appeal to labor and unions, of course, we've seen a lot of this on the Republican side too, as JD. Vance especially has talked about the working man. Donald Trump, we know himself, has courted unions too, maybe more so members than actual union leadership. But on the subject of unions, it is worth pointing out the United Autoworkers Union filed an unfair labor practice charge against former President Trump and Elon Musk after their X spaces last night, Wrick accusing them of illegally intimidating workers after Trump was talking about how employers could fire workers for going on strike with Elon Musk, how does this play with the unions. The kind of conversation we saw between these two yesterday evening.
Yeah, I think it's mutually exclusive. I mean, the Musk interview was just a rally around the MAGA world. Musk is well known for his anti union views. Didn't take a interview with Donald Trump to know that. And of course Donald Trump never saw a union and he didn't want to break even though he has some decent relationships with a few notable union executives. The bottom line is, you know, the table is set on that as far as who's best for the unions, and this clash I think is just sort of electioneering another way to sort show the difference. But I think the mistake Democrats tend to make is that they they basically try to lump every working class individual in the United States as a union worker. And sure, you can love unions as they do, but it leaves out the vast majority of working people in America. If that's all you talk about, and so great that you know the vice presidential nominee Walls is doing this in California, and you know these are obviously unions that he worked with directly, you know, as governor. But like, if they don't expand that class in that conversation to non union working class voters. Then they're not talking to the right people, especially in the sun Belt.
I want to just listen to what Donald Trump and Elon Musk were saying in that moment where he talked about this idea. Will continue our conversation. This is from the X space's convo between Elon Musk, who you will hear as well as Donald Trump.
I think it would be great to just have a government efficiency commission that takes a look at these things and just ensures that the taxpayer money, the taxpayers are harder money is spent in a good way. And I'd be happy to help out on such a commission.
I well, you you're the greatest cutter. Okay, so Elon Musk pitching himself for a possible role somehow there it sounded like a in a potential Trump administration, a two point zero. But Donald Trump went on after you're the greatest cutter. He said, I won't mention the name of the company. But they go on strike, and you say, that's okay, you're all gone. You're all gone, So every one of you is gone. You want to quit, They go on strike and he gets rid of them. Genie, we keep talking about the fact that EA W rank and file I've been voting for Trump over the Democrats in the last two elections, depending on which state you're looking at. How could that be the case with a conversation.
Like this, Yeah, I mean, I think when people start to focus on these kinds of statements, and that's what the Democrats are trying to do, is to say, great, you have two you know, million billionaires talking to each other, and this is where they come down. Fire workers. That's what Democrats are going to be saying. Another thing they're going to be saying is, look at what Project twenty twenty five says about firing civil servants, the very union that Kim Wats is going to be talking to, placing them, potentially replacing them with political appointees, maybe banning public employee unions altogether, which is in keeping with some kind of commission I guess that Elon Musk wants to join. But not just for public employee unions, I guess, but for unions, particularly in the automobile sector. This is a disaster for Republicans if this is the message. Donald Trump was much better off when he was appealing to white blue collar workers, both union and to Rich' point, nonunion talking about firing people, and particularly billionaires firing people is not a message you want to send out right now, and I think this works to the Democrats' advantage.
I want to go back to this whole notion that it kind of felt like Elon Musk was asking Donald Trump for a job last night.
Rick.
I'm not sure if that was kind of the point of this whole exercise for Elon, but I wonder what the point of the exercise really was for the Trump campaign. Was this just about getting attention or was this about trying to reset the messaging? And if so, considering he didn't even really seem to be able to recall the name of the vice presidential nominee on the Democratic ticket, Tim Wall specifically, was this a success for Donald Trump last night?
Yeah, Anything that's not been an abject failure would be considered a success for Donald Trump.
In this last month, most.
Of his outings have been a an epic failure. Here he could sit at his desk and read notes, He could you know, be organized around some of the themes his campaign has been begging him to please return to some level of normalcy with his talking points. You know, there is an argument for you know, what he did for you know, in his administration economically, and of course that's the appeal. What the platform at X gives him is a whole lot more people than the sort of quiet little crowd that has been assembled around you know, his own social media outlet truth you know it's I think last night was over a million people who tuned in that That is significantly more than he's ever going to get, you know, on true social So so that was a success to be able to expand his group, find listeners who are interested in him. My guess is the people who made up that audience were the media and his own hardcore supporters, so reassuring them that he's on a track to win, reassuring that he's got a plan, not going off the rails on a lot of conspiracy theories, and frankly, I think Musk kept him from doing that. He sort of kept it along a chatty way. So I'd have to say they're probably all thankful that it went as well as it did, but I don't think it moves the numbers at all. I think these are people who are already supporting Donald Trump. He's not communicating with swing voters on X.
Interesting response from the Harris campaign on this, referring to the fact that these two rich guys cannot actually serve a live stream in the year twenty twenty four. Genny, I don't know if Elon Musk actually wants a role in another Trump White House if Donald Trump wins this election. Does this have more to do with working with the government as the leader of SpaceX, dealing with regulations, maybe getting a foot in the door for evs in a Trump administration.
Yeah, I think all of the above, I think. And he would also, as an aside, like to keep energizing the X platform. You know, advertisements are still way down. He has been able to play with some of the reporting on the election so far. I mean, Joe Biden announced him that he was leaving the race on X, so I think he would like to attract more people to X as well. But you know, to the point about these two, you know, you're sitting there listening and I did after the elevator music for forty five minutes, and when Donald Trump is talking about the biggest threat is not from global warming and we don't really have to worry about that because we're going to have more ocean front property. I mean, this is the kind of statement he's sending out to people. You've got to be an extremely wealthy person to be thinking that global warming is not a threat because we're going to have more ocean front property. I mean, it was my numbing to listen to. It was not disciplined, and he was pretty much all over the map. So I don't think this was the win his team wanted. He needs to be disciplined. On Kamala Harris and what she will do to the economy, immigration, and security. That did not happen, you know, to borrow a used phrase, It was a very weird conversation between these two for two hours.
All right, we'll leave it on that note. Jeanie Schanzeno and Rick Davis, Gloomberg Politics contributors, thank you both so much. As always, it was certainly a long conversation. I think we can call it that. And of course, the first portion of it, Joe was really dominated by Trump's recounting of the assassination attempt in Pennsylvania last month, which he said in his RNC speech when he was accepting the nomination he was only going to tell that story once. Yeah, but we heard it several times.
It seemed last night, so it wasn't very nice, and Elon Musk suggested that he was inspired by what he saw that that's why hed the statement from the Harris campaign that I refer to Trump's entire campaign is in service of people like Elon Musk and himself, what they describe as self obsessed, rich guys who can't run a live stream. In twenty twenty four.
You're listening to the Bloomberg Balance of Power podcast kens just live weekdays at noon Eastern on Applecarplay and then ron Oo 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.
So much happening in the world of politics. This is Balance of Power Live from Washington on Bloomberg TV and Radio. I'm Joe Matthew alongside Kaylee Lines in Washington. An important day and important week when it comes to the economy. Kaylee PPI, today we're going to look ahead to CPI in a moment with breaking news now that has to do with the conversation we were having earlier this hour, the wait for a possible cease fire deal in Israel or a possible retaliatory strike by Iran against Israel, both up in the air right now, Kaylee. And news from Axios that the Secretary of State is changing his way travel plans.
Yeah.
Of course, Axios had reported that Blinken was going to be heading to the Middle East this week as we await both news on Iran retaliation and also news on a ceasefire agreement. Now Axios is reporting that BLNCN has postponed that trip will not be traveling to the region tonight due to uncertainty around the situation. Axios here citing two sources, and it just speaks to the very uncertain nature of what's happening in the Middle East right now, which of course does factor into the markets. Amy they're talking about impact potentially on oil prices, and what we do know is that geopolitical conflict in the Middle East could actually have economic ramifications for that very reason. If it did lead to the disruption of the way crude oil starts to move throughout the world.
Well, that's for sure. It's been pretty resilience so far, but of course, with so many questions about what would happen next imagine if in fact Iran does land a punch with the words that Michael Allen used on Israel, we could be having a really different conversation.
Certainly, and it may lead to a different conversation than the one we're having now on the subject of inflation. Ultimately, of course, there is no predicting at this point that actually a war of that size and scale is going to erupt, just that the risk is out there. Should Ron not calibrate this properly or Israel not calibrate its response accordingly. But the narrative right now is that inflation is on the way down, and that was born out once again today in the PPI data. We got softer than expected. If you look at PPI X food and energy month over month, flat zero percent is what we're talking about, and of course this tease up the CPI report we're going to get tomorrow. So here to talk about all of this is Laura Raim, who is with US now. She's Chief US Economists over at FS Investments. Welcome to Balance of Power, Laur here on Bloomberg TV and Radio. Great to have you. We obviously have been seeing now what to me feels like we could maybe call a trend in softer than expected inflation data. I'm not sure the Fed is going to feel quite ready to call it that yet, unless you think differently, or do we have to wait until CPI tomorrow to say that for sure?
We do to wait for CPI tomorrow simply because you know, the household is really the big engine both driving the economy, and that's the biggest sector when we think of inflation and that sort of loop to wages and then again back to inflation. So when we look at the trend, it certainly has been really positive and moving in the right direction. Over the last two months. We saw after four really tough months where inflation spiked January to April, then two months where we really got a much more benign reading. And I think everyone's looking to tomorrow's data to reinforce that trend, and I think to open the door wide for the FED ratout that everyone's expecting on September eighteen.
Well, how about reinforcing the idea that the Fed might have waited too long here, Laura, the Personal consumption Expenditures price index, which we all obsess over the PCE said to be the Fed's preferred inflation measure. All the components from PPI that feed the PCE were tame. Should the FED have cut in July when it had the chance.
You know, I'm not terribly worried that the FED is meaningfully behind the curve. The reality is that the economy remains healthy and on solid footing. My forecast is really for an incremental slowdown. The reality is the pace of growth has been so strong one might argue it has been unsustainably strong. Moving from two and a half percent growth to two percent is a slowdown, and I think markets were just really caught wrong footed because expectations had been really i would say, at volume eleven maximum optimism. So I think it's a mistake to read an incremental slowdown is weakness. And let me put it in another way, if the FED is behind the curve, they have room to cut rates more significantly. But I'm going to look beyond the ism manufacturing data for that.
Well. Just as we're having this conversation, Laura, Raphael Bostic of the Atlanta FED is participating in a moderated Q and A. He says he's hopeful in the next several months of normalized economy. He also says a rate cut is coming, but he wants to see a little more data. Obviously, we're going to get more of that data this week, and if a rate cut comes, the expectation is it won't be until September, when we're going to be just around the corner from a presidential election, Laura, which Joe and I spend the great chunk of our time, the biggest chunk of our time covering, and we're hearing more and more about the economic policies that each of these candidates, Donald Trump and Kamala Harris may put forward. We'll hear even more from Harris later on this week. She's expected to outline it in North Carolina. But it does seem like we're getting similar things, be it related to the child tax credit or this notion of perhaps no taxes on tipped income. From your views an economists, we've heard a lot about what that would do to the actual US balance sheet, if you will, the kind of revenue laps that may result from that. But what would that actually do to a labor market that is maybe just now starting to feel the effects of tighter policy. What would that do to wages and the way that things literally just work in the US labor market.
I think that particular policy may be more popular because it's a way of helping that lower cohort of workers without putting the burden on the employer, because you know, things like the minimum wage increases I think, you know, have been mixed in popularity because the employers feel that burden in a more pronounced way. And I think maybe underlying this there is another issue, which is that we're starting to see delinquency rates from you know, creep up and credit card loans and auto loans. That is that sort of lower cohort of income that has obviously also felt inflation most acutely. So you know, it's a question of paying for these tax cuts. I think, unfortunately, that's what it always comes down to. And we'll see as these policies develop. Certainly, I think it's something that hopefully will be you know, I would expect to be popular across the board, and I think this is an area that we're watching closely because cracks are forming in the balance sheet of that cohort of employee.
Well, as we speak now, Laura, we still don't have plans from either campaign, detailed plans on how they would work to lower prices both are promising to do, so we just don't know how. In the case of Vice President Harris, we've been reporting that she's going to be fleshing out her whole economic plan in Raleigh on Friday. What does she need to say to be different than so called Bidenomics. Is there such a thing as kamalonomics.
So we're going to find that out together. But I think when it comes to the FED and the way that they think about their policy changes, they really wait until actual policy has been enacted or announced. They're definitely not making policy changes based on campaign rhetoric. So I think it's something to keep in mind as we move into twenty twenty five, because on the one hand, you have some policy proposals to lower costs and lower prices, and on the other hand, things like tariffs are inflationary, so we need to really, I think keep in mind that different policy proposals impact both sides of the inflation equation, and when we look at in particular, as the campaign rhetoric heats up, the FED is really going to keep its eye on the ball of the data that it's right in front of them, and not think too far ahead about what inflation could do in coming quarters.
Well, yeah, we consistently hear the FED is data dependent. It is not going to operate with political factors in mind. Hen's why we could see them cut in September, despite perhaps some Republicans suggesting that that would be perceived politically. We've also heard from both of these candidates about the independence of the FED just within the last week. Donald Trump, at a news conference in mar A Lago last Thursday, was talking about this notion that he actually thinks the president should have input into monetary policy. Kamala Harris bikes to differ on that. We heard her say so this past weekend. When we actually think about that notion of FED independence, though, what mechanisms are realistically in place to prevent that kind of political interference? Is this literally entirely up to the given FED chair and whether or not he is he or she is willing to consider what the president wants in policy decisions.
I think we have now four and a half five decades of evidence that it really does work well when the FED is truly independent. And let's face it, higher interest rates rate hikes have never been popular with the sitting administration. We saw that under Clinton. We just didn't have you know, Twitter at that time, and we let sort of a more back channel pressure get applied by maybe the Treasury Secretary Robert Rubin at the time sort of you know, saying some rhetoric to that effect. But at the end of the day, you know, it's never popular when rate hikes happen, and the reality is we do often need them as a policy response. The FED needs to have that latitude. I think there is another layer to this as well, where we may see and the reality is it would probably take Congress to make some of these changes to the Federal Reserve Act. There is another layer to this, which is in emergency situations, the FED has come through in very heavy handed terms with some of their you know, financial market provisions and facilities. That may be an area where also politicians over time try to claw back some FED independence, But I think that that is very low on the list of priorities, and certainly, you know, when we look at the way the FEDS handle policy over five decades, it's hard to point to independence as being a problem.
Well, in our last moment here, I asked you abou Kamala Harris's plan to lower prices or I guess plan to be unveiled. So I should ask you about Donald Trump's He says, drill, baby, drill. If you increase production enough to unlock lower oil and gas prices, that filters through the system and does the job. Is that a plan.
I clearly oil and gas is going to be central to both parties economic plans in terms of, you know, keeping prices lower, and I think, you know, keeping gasoline prices lower, because this is a huge psychological pain point for households when gas prices get above five percent five dollars a gallon, households really find that psychologically challenging. However, that has not been a key source of inflation. And really I think we see spikes in gas, but they come back down again. The US energy industry today is much more mature, and I think much more rational about their ability and their productivity to create and supply gas. I don't think that necessarily more drilling is actually a magic bullet for other problems that may be more related to distribution, refinery, and other areas which may at the end of the day, impact inflation for households.
More specifically, as we continue producing at record levels here in the US, Laura Raim, Thanks for joining a great conversation with the chief US economist managing director on the investment research team.
At FS Investment. Thanks for listening to the Balance of Power podcast. Make sure to subscribe if you haven't already, at Apple, Spotify, or wherever you get your podcasts, and you can find us live every weekday from Washington, DC at Noontimeeastern at Bloomberg dot com.
