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We're a few days out from election day, but chances are we're not a few days out from knowing who wins the White House. There's fear of a repeat of twenty twenty, when it took four days for Joe Biden to be declared the winner, even before the final votes were counted. Then President Donald Trump stoked false claims of widespread fraud, ballot harvesting, and hacked voting machines. All of that ended with the insurrection at the US Capitol on January sixth.

We're a few days out from election day, but chances are we're not a few days out from knowing who wins the White House. There's fear of a repeat of twenty twenty, when it took four days for Joe Biden to be declared the winner, even before the final votes were counted. Then President Donald Trump stoked false claims of widespread fraud, ballot harvesting, and hacked voting machines. All of that ended with the insurrection at the US Capitol on January sixth.

This is so abnormal in American history. It was very, very disturbing. That is a very major black guy in the reputation of the US as the world's oldest and traditionally seen as most stable democratic society.

This is so abnormal in American history. It was very, very disturbing. That is a very major black guy in the reputation of the US as the world's oldest and traditionally seen as most stable democratic society.

Former Senator to Me was in the Capitol when riders stormed it that day. He's a Republican from Pennsylvania, and he says that if violent interference in the election process becomes a new normal, it could damage not just American democracy, but something else, the global financial system that America dominates.

Former Senator to Me was in the Capitol when riders stormed it that day. He's a Republican from Pennsylvania, and he says that if violent interference in the election process becomes a new normal, it could damage not just American democracy, but something else, the global financial system that America dominates.

Elections are an essential part of a democratic society, but they're not the whole of it. I think on both sides of the aisle, we've really witnessed undermining of some of these institutions and these separate powers. Collectively, it will damage the reputation of the US, and over time, it could damage our ability to remain the dominant reserve currency of the world.

Elections are an essential part of a democratic society, but they're not the whole of it. I think on both sides of the aisle, we've really witnessed undermining of some of these institutions and these separate powers. Collectively, it will damage the reputation of the US, and over time, it could damage our ability to remain the dominant reserve currency of the world.

For the past eighty years, the global economy has run on dollars, and over the past few weeks, I've been speaking with big bank CEOs, money managers, and policymakers like toome about the threat the financial system faces if the US can't count on peaceful transfers of power. Today on the show, what I've learned from all those conversations. What's at stake for a world that runs on American dollars if a peaceful transfer of power is no longer given in the world's oldest democracy. From Bloomberg's Washington Bureau, This is the Big Take DC podcast. I'm Saleamosen. On January sixth, twenty twenty one, then Senator Pat Toomey was in the US Capitol building. Vice President Mike Pence was overseeing what's typically a routine certification of election results. When he stepped away, What did you think when Vice President Pence left the Senate chamber that day.

For the past eighty years, the global economy has run on dollars, and over the past few weeks, I've been speaking with big bank CEOs, money managers, and policymakers like toome about the threat the financial system faces if the US can't count on peaceful transfers of power. Today on the show, what I've learned from all those conversations. What's at stake for a world that runs on American dollars if a peaceful transfer of power is no longer given in the world's oldest democracy. From Bloomberg's Washington Bureau, This is the Big Take DC podcast. I'm Saleamosen. On January sixth, twenty twenty one, then Senator Pat Toomey was in the US Capitol building. Vice President Mike Pence was overseeing what's typically a routine certification of election results. When he stepped away, What did you think when Vice President Pence left the Senate chamber that day.

My initial reaction was not one of great surprise, because the Vice president's role is it's almost ceremonial, you know, as ministerial, and so the idea that he would step off the dais and be replaced by the presiding officer of the Senate it didn't strike me as particularly surprising. I thought, this is just the fact that he doesn't intend to sit there for the full proceedings. He'll do various ceremonial aspects of it, but perhaps not the whole thing.

My initial reaction was not one of great surprise, because the Vice president's role is it's almost ceremonial, you know, as ministerial, and so the idea that he would step off the dais and be replaced by the presiding officer of the Senate it didn't strike me as particularly surprising. I thought, this is just the fact that he doesn't intend to sit there for the full proceedings. He'll do various ceremonial aspects of it, but perhaps not the whole thing.

But in the minutes that followed, a fuller picture of what was happening came into focus. Pence had been whisked out of the chamber by the Secret Service or his safety Rioters were storming the Capitol, calling on the Vice president to reject the results. Can you tell me what you remember most vividly about that day?

But in the minutes that followed, a fuller picture of what was happening came into focus. Pence had been whisked out of the chamber by the Secret Service or his safety Rioters were storming the Capitol, calling on the Vice president to reject the results. Can you tell me what you remember most vividly about that day?

Most vividly was the violence that I was becoming aware of, as we were, in fact frightened by that violence, and we were rushed into what was believed to be a secure room turned out to be secure, and we could watch the violence unfolding on TV, and we knew that to some degree. We were the targets. We members of Congress were the targets of that violence because there was an attempt to prevent us from the root teen process of administering the election results. This was extraordinarily shocking to me.

Most vividly was the violence that I was becoming aware of, as we were, in fact frightened by that violence, and we were rushed into what was believed to be a secure room turned out to be secure, and we could watch the violence unfolding on TV, and we knew that to some degree. We were the targets. We members of Congress were the targets of that violence because there was an attempt to prevent us from the root teen process of administering the election results. This was extraordinarily shocking to me.

Toomey spent much of his congressional career working on economic policy, mostly from the Senates Finance and Banking committees, And if you ask him or Federal Reserve Chair Jerome Powell, Treasury Secretary Janet Yellen, or any of their predecessors, you'll hear that the rule of law is a major reason the US economy, its stock market, currency bonds are all seen as such a sound investment.

Toomey spent much of his congressional career working on economic policy, mostly from the Senates Finance and Banking committees, And if you ask him or Federal Reserve Chair Jerome Powell, Treasury Secretary Janet Yellen, or any of their predecessors, you'll hear that the rule of law is a major reason the US economy, its stock market, currency bonds are all seen as such a sound investment.

Around the world, businesspeople, capital markets, they all like the rule of law.

Around the world, businesspeople, capital markets, they all like the rule of law.

Bloomberg's editor in chief, John Micklethwaite brought this up in an interview with former President Trump at the Economic Club of Chicago earlier this month.

Bloomberg's editor in chief, John Micklethwaite brought this up in an interview with former President Trump at the Economic Club of Chicago earlier this month.

If you look at the events of January sixth, twenty twenty one, and it showed to many people America's democracy was unruly and violent only three weeks to go to the election. Will you commit now to respecting and encouraging a peaceful transfer of power. Well, you had a peaceful transfer. You had a peaceful test of power, that you had.

If you look at the events of January sixth, twenty twenty one, and it showed to many people America's democracy was unruly and violent only three weeks to go to the election. Will you commit now to respecting and encouraging a peaceful transfer of power. Well, you had a peaceful transfer. You had a peaceful test of power, that you had.

A peaceful Trump went on to defend the January sixth riders and deny the results of the election yet again. His continued defense of the capital attack is concerning to people in the business community. I was on a zoom call yesterday with Robert Rubin. He served as treasure Secretary during the Clinton administration and has spent five decades in finance. When it comes to the prospect of instability as the presidency changes hands, he said this, the strength of the dollar does depend on respect for our economy, for rule of law. If there's a real question about the effective, peaceful transfer of power, it could be very unsettling. Rubin says a smooth transition is a bedrock for US democracy and is one reason why the economy is so resilient. It's the reason the country is able to rack up some twenty eight trillion dollars in debt without investors really batting an eye. People around the world want to invest in the US because the government, backed by free and fair elections that prevent dictatorships, won't run away with anyone's money. I asked to me how that strength is held up.

A peaceful Trump went on to defend the January sixth riders and deny the results of the election yet again. His continued defense of the capital attack is concerning to people in the business community. I was on a zoom call yesterday with Robert Rubin. He served as treasure Secretary during the Clinton administration and has spent five decades in finance. When it comes to the prospect of instability as the presidency changes hands, he said this, the strength of the dollar does depend on respect for our economy, for rule of law. If there's a real question about the effective, peaceful transfer of power, it could be very unsettling. Rubin says a smooth transition is a bedrock for US democracy and is one reason why the economy is so resilient. It's the reason the country is able to rack up some twenty eight trillion dollars in debt without investors really batting an eye. People around the world want to invest in the US because the government, backed by free and fair elections that prevent dictatorships, won't run away with anyone's money. I asked to me how that strength is held up.

It's a combination of factors. The biggest economy in the world is one that people can't ignore. The biggest consumer market in the world is very attractive to people. But I would suggest that equally important, if not more important, is the tradition, the history, the clear evidence that the United States respects the rule of law. We also had limits on the power of our governments, both state and federal, and local for that matter. And that's very important too, because a potential investor can invest in the US with a very high level of confidence that the government isn't going to come in and undermine or confiscate or otherwise jeopardize a person's investment. That's not true around much of the world.

It's a combination of factors. The biggest economy in the world is one that people can't ignore. The biggest consumer market in the world is very attractive to people. But I would suggest that equally important, if not more important, is the tradition, the history, the clear evidence that the United States respects the rule of law. We also had limits on the power of our governments, both state and federal, and local for that matter. And that's very important too, because a potential investor can invest in the US with a very high level of confidence that the government isn't going to come in and undermine or confiscate or otherwise jeopardize a person's investment. That's not true around much of the world.

If you're looking for a safe investment, any American asset is a good bet, the S and P five hundred US treasuries or the dollar itself, which is the world's reserve asset. That's great for Americans. It means interest rates for them on everything from credit card debt to student loans and home mortgages are lower, all because any investment in the US economy is backed by a government with credibility. The dollar's regime actually started about eighty years ago at the end of World War Two. During a debate in nineteen forty four, dozens of countries came together to find a way to knit the world around one influential economic force. US Treasury officials convinced everyone that the dollar was the asset to back. America was the world's biggest economy, and its fiscal outlook was the best since its infrastructure hadn't been decimated by two world wars. But in twenty twenty four, the dollar's dominance isn't a given. It's the world foreign investors, central banks, individuals that have decided to put their trust in the dollar as their anchor currency. So if the American political and economic system isn't viewed as stable, could that permanently rattle investors and change their minds about the nation's credibility. That's coming up. I asked former Senator pat Tuwey to reflect on his memories of January sixth, not just the fear of being in the Capitol as an angry mob swarmed, but the potential that moment raised for weakening US democracy in the eyes of the rest of the world.

If you're looking for a safe investment, any American asset is a good bet, the S and P five hundred US treasuries or the dollar itself, which is the world's reserve asset. That's great for Americans. It means interest rates for them on everything from credit card debt to student loans and home mortgages are lower, all because any investment in the US economy is backed by a government with credibility. The dollar's regime actually started about eighty years ago at the end of World War Two. During a debate in nineteen forty four, dozens of countries came together to find a way to knit the world around one influential economic force. US Treasury officials convinced everyone that the dollar was the asset to back. America was the world's biggest economy, and its fiscal outlook was the best since its infrastructure hadn't been decimated by two world wars. But in twenty twenty four, the dollar's dominance isn't a given. It's the world foreign investors, central banks, individuals that have decided to put their trust in the dollar as their anchor currency. So if the American political and economic system isn't viewed as stable, could that permanently rattle investors and change their minds about the nation's credibility. That's coming up. I asked former Senator pat Tuwey to reflect on his memories of January sixth, not just the fear of being in the Capitol as an angry mob swarmed, but the potential that moment raised for weakening US democracy in the eyes of the rest of the world.

It is a very fundamental aspect of a democratic society that the election actually matters and the results are respected. This great, great strength is this great reputation, this great economy, this great society. But it can be eroded, and the cumulative effect of various efforts to basically ignore the rule of law they will contribute to that erosion.

It is a very fundamental aspect of a democratic society that the election actually matters and the results are respected. This great, great strength is this great reputation, this great economy, this great society. But it can be eroded, and the cumulative effect of various efforts to basically ignore the rule of law they will contribute to that erosion.

It's hard to predict the way markets will react this year. It all depends on which previous elections playbook we follow. In two thousand, when the Bush versus Gore rays dragged on for more than a month, the S and P five hundred dropped around five percent. But in twenty twenty, markets were relatively stable since Biden's transition work had begun, so it was clear that a new president would take power. We don't know yet how this could pan out this year, but money managers are bracing for a market event around political instability, and many analysts fear that if questions around the transfer of power become more of a norm than an exception, it could make investors skittish. To me is among those with concerns.

It's hard to predict the way markets will react this year. It all depends on which previous elections playbook we follow. In two thousand, when the Bush versus Gore rays dragged on for more than a month, the S and P five hundred dropped around five percent. But in twenty twenty, markets were relatively stable since Biden's transition work had begun, so it was clear that a new president would take power. We don't know yet how this could pan out this year, but money managers are bracing for a market event around political instability, and many analysts fear that if questions around the transfer of power become more of a norm than an exception, it could make investors skittish. To me is among those with concerns.

I think that the world looks at the US and says, well, even if there is not a smooth and immediate and peaceful transfer or power, as there ought to be. American institutions will prevail, the separations of powers will prevail. The divisions of electoral responsibility among the states and in the various counties within those states is a very, very important safeguard that we have. So I think that there will continue to be confidence, but it's not a good idea to challenge that confidence.

I think that the world looks at the US and says, well, even if there is not a smooth and immediate and peaceful transfer or power, as there ought to be. American institutions will prevail, the separations of powers will prevail. The divisions of electoral responsibility among the states and in the various counties within those states is a very, very important safeguard that we have. So I think that there will continue to be confidence, but it's not a good idea to challenge that confidence.

There's likely a reason Biden dropped out of the race on a Sunday, and why other major political moves often happen when markets are closed. People want stability, and markets can be erratic in response to politics. But however the election goes. Concerns about the relationship between US politics and the economy won't end on January six, twenty twenty five, when the results are certified. There's still the question of what a second Trump term could mean for markets, and criticisms over the use of executive orders as economic policy making tools.

There's likely a reason Biden dropped out of the race on a Sunday, and why other major political moves often happen when markets are closed. People want stability, and markets can be erratic in response to politics. But however the election goes. Concerns about the relationship between US politics and the economy won't end on January six, twenty twenty five, when the results are certified. There's still the question of what a second Trump term could mean for markets, and criticisms over the use of executive orders as economic policy making tools.

More broadly, I would argue the Biden administration has taken a number of steps that it knows is in violation of the law. One example is the ongoing effort to forgive student loans. The Supreme Court has confirmed that they have no legal authority, and they go ahead and try to do it anyway that does not ensure confidence in legality.

More broadly, I would argue the Biden administration has taken a number of steps that it knows is in violation of the law. One example is the ongoing effort to forgive student loans. The Supreme Court has confirmed that they have no legal authority, and they go ahead and try to do it anyway that does not ensure confidence in legality.

And there are plenty of other countries who would love to take America's place as the global economic power if it seeds its position. But Toomey told me, even if the US dollar isn't the only game in town, it's the best.

And there are plenty of other countries who would love to take America's place as the global economic power if it seeds its position. But Toomey told me, even if the US dollar isn't the only game in town, it's the best.

Game, that's for sure, and we ought to strive to keep it that way.

Game, that's for sure, and we ought to strive to keep it that way.

So you think, despite all this hand ringing that we have right now, American exceptionalism is here to stay.

So you think, despite all this hand ringing that we have right now, American exceptionalism is here to stay.

Well, I certainly hope. So if we remain true to our founding principles, to the rule of law. The founders devised a brilliant, brilliant arrangement, and if we respect that, then we'll continue to be the dominant power on the planet.

Well, I certainly hope. So if we remain true to our founding principles, to the rule of law. The founders devised a brilliant, brilliant arrangement, and if we respect that, then we'll continue to be the dominant power on the planet.

Thanks for listening to The Big Take DC podcast from Bloomberg News. I'm Salaia Mosen. This episode was produced by Julia Press. It was edited by Aaron Edwards. It was mixed by Alex Zugier and fact checked by Adriana Tapia. A special thanks to Matt Shirley and Carter Johnson. Naomi Shaven, who also edited this episode, is our senior producer. Wendy Benjaminson and Elizabeth Ponso provide editorial direction. Nicole Beemsterbor is our executive producer. Sage Bauman is Bloomberg's head of podcasts. Please follow and review The Big Take DC wherever you listen to podcasts. It helps new listeners find the show. Hey, everyone, Bloomberg wants to hear from you. Help bake shows like ours even better by taking the Bloomberg Audience Survey and having a coffee on Bloomberg. For doing so, Visit YouTube dot com slash Bloomberg Podcasts and click the link in our profile or community section To take the Bloomberg Survey, hosted by our partners material Go to YouTube dot com slash Bloomberg Podcasts Today

Thanks for listening to The Big Take DC podcast from Bloomberg News. I'm Salaia Mosen. This episode was produced by Julia Press. It was edited by Aaron Edwards. It was mixed by Alex Zugier and fact checked by Adriana Tapia. A special thanks to Matt Shirley and Carter Johnson. Naomi Shaven, who also edited this episode, is our senior producer. Wendy Benjaminson and Elizabeth Ponso provide editorial direction. Nicole Beemsterbor is our executive producer. Sage Bauman is Bloomberg's head of podcasts. Please follow and review The Big Take DC wherever you listen to podcasts. It helps new listeners find the show. Hey, everyone, Bloomberg wants to hear from you. Help bake shows like ours even better by taking the Bloomberg Audience Survey and having a coffee on Bloomberg. For doing so, Visit YouTube dot com slash Bloomberg Podcasts and click the link in our profile or community section To take the Bloomberg Survey, hosted by our partners material Go to YouTube dot com slash Bloomberg Podcasts Today

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