tv Bloomberg Markets Balance of Power Bloomberg November 1, 2019 12:00pm-1:00pm EDT
from bloomberg world headquarters in new york to our tv and radio audiences worldwide, i am david westin. ofcome to a special edition balance of power where the world of politics meets the world of business. a short time ago, i sat down with house speaker nancy pelosi covering the impeachment, the economy, the 2020 campaign and more. we will bring you parts of the interview, but first, we
will start with today's jobs numbers 128,000 job g ain. speaker pelosi: while you make some indications that the economy may be improving, and god willing it is, in the lives of american workers, they still feel a stagnation of wages, stagnation of their opportunity. i think we have been having some -- i know we have been having constructive conversation about how we have an economy that works for everyone.
and the economy recognizes we are a free market economy, and though we want everyone to participate more fully in our success. that means that we say to people , two books, the wealth of a nation, and responsibilities. a compassionate book, but it was a pragmatic book. president bush ran, he said compassionate , it resonated well with the american people. i think our capitalism has to be more inclusive in terms of success. so our policies, whether it is taxation or whether it is appropriations in terms of budget, or just policy and terms of how we value the climate
crisis and what a job opportunity that is for many new people who have not been in the higher ranks of our economy to have opportunity. we just have to be thinking to more than just trickle down, but bubble up. david: as we look at 2020 where we have not just a presidential election, but the senate, what is the democratic equivalent to capital -- compassionate conservative? what is the alternative? speaker pelosi: it is something we have to do working together because we are talking about every aspect in terms of taxation, budget spending, investments, etc. where our agenda was in the last election which we continue with is for the people to lower health care costs by lowering the cost of prescription drugs, and guaranteeing the benefit of a pre-existing
condition and not barring you from health care. that addresses not only the health of the american people but the financial health. they are very concerned about health
needs just making it possible for them to succeed. prescription drugs being a big part of that. nancy speaker pelosi talking about the state of the u.s. economy. you heard what she said, maybe economy some overall but it is not being shared equally, there is wage stagnation. is she right? >> economics are not meant to be fair, so it is not well distributed. we have seen things in the early stages of the cycle, things like quantitative easing really helping things like the equity markets which helps up cash in the upper income households. other is the job of policymakers to distribute the gains in the economy, but she is absolutely right that wage
stagnation has been a problem for the economy not just in this cycle but the last several, because in the past, the fed took the punch bowl away too soon just as lower income workers who are last a benefit in the economic cycle, finally are starting to bear that fruit. the last cycle ended prematurely due to the housing bust and cycles before that came to a the low menefore and women on the totem pole really bore fruit. as we look at today's job report, this cycle has been exceptionally long. despite that criticism, the fed in been very cool headed tightening policy slowly. janet yellen got tremendous criticism for dragging her feet on moving the fed funds rate higher. in hindsight, that was a wise decision because the economy
could run hotter than most economists believe at the time. what we are finally seeing is a little bit of wage pressure, but a very low unemployment rate that is coaxing in individuals off of the sideline. enter date'report -- in today's rising, sosaw that we are stirring to see more distribution of economic gains through different demographics. david: you say it is not the fed's job to worry about the distribution. the speaker said, she believes in a free market system and cited adam smith, but says that there should be compassion with it. is that tax policy? speaker pelosi: tax policy could be -- carl: tax policy could be one redistributive tool, and there are lots of different channels or tax policy would be a big one and that is a very hot issue. david: talk about the timing of that.
education policy sounds like it takes a wild. carl: it takes a long time. transfer payments, whether it is an unemployment benefit or tuition reimbursement can have a very quick impact on the economy. there are long-term gains from education funding, but very near term impact. david: bloomberg's economic .hief economist carl riccadonna on health care she talks
about the bill and she cares a lot about this issue. speaker pelosi: one of the reasons we had a success last year was the concern that health care made our own environment and not just us. patient advocacy groups, middle lobbyists with 10,000 events held throughout the country about health care cost to individuals, families, etc. -- i welcome the
debate. i think we should have health care care for all. i think the affordable care benefit is better than the medicare benefits, but we have invited advocates to testify and budget committee and on the rules committee. be respectful of this point of , and but it is expensive who pays is very important, and what are the benefits that come in there. asould think that hopefully we emerge into the election year, the mantra would be more health care for all americans. there is a comfort level that people have with their current, private insurance that they
have, and if that is to be phased out, let's talk about it, but let's not just have one bill that do that. november, december, this is the time we have to win the electoral college, otherwise we will be faced with another president who does not really care. david: i understand that your policy position is you do not think that is the best way to go, but what about a political matter? speaker pelosi: if we increase the vote in my own districts, but that is not what we need to do in order to win the electoral college. i think as we come out of the seeary season and people what the challenges are that are out there, because when people are on the campaign trail, they are listening to people. when they hear people say, i think that something will emerge that will connect with the
aspirations and concerns that people have. david: you mention prescription drugs and you are working on that actively. what are the prospects of getting that done before the election next year? speaker pelosi: the president has said that this is something that he wants to do and we want to work together to do that. that wethe principles have in our legislation are initiatives that i think might be acceptable to
him. we will find out as we go along how committed he is to it. to enable of secretary to negotiate prescription drugs, it makes it much less expensive for consumers to pay. maybe they are paying five times what is happening in other countries and that will be down to only 120%. the benefits could be increased for medicare as we shape the bill. transformative because it will directly improve the lives
of americans. theve seen grown men cry on campaign trail saying i want to take care of my family, my wife is sick, we can't afford the drugs. when people do not take their medication because they can't afford it, that is just not right. ofid: it is clear that a lot americans are worried about prescription drug prices. you say there is a bipartisan move in that direction. if you get that done, prescription drugs are relatively modest portion of overall health care costs. are you concerned? 8% of gdp right now, it is very expensive. has -- speaker pelosi: i want to disagree with you on one point. the reason that the increase has not leveled off to the extent that we want is because of the cost of prescription drugs. other elements of the affordable , except for
president, and can she work with president trump even while investigating him for impeachment? speaker pelosi: we have decided that we were going to support and defend the constitution of the united states. that is the oath of office we take. for a long time, i resisted weighing the equities of whether this is divisive to the country, but what the president did to the president of ukraine removed all doubt that we had to act upon that. this is not about his personality, his policies, that is for the election. this is about defending our democracy. --ch the president has said article ii says that i can do whatever i want, but is -- it doesn't. benjaminlic franklin says, if we can keep it. we think the time has found us.
thomas payne said at the time of the revolution to declare to do all that our founders did, they wrote a constitution and thank god they made it amendable so we could expand freedom over time and continue to do so, but what the president has done is three separate coequal branches of government, forget that. article ii, it is about me. david: the thing that has changed in the president's dealings with the president of ukraine that we have from the transcript, can you limit the inquiry going forward to that subjects, or will eventually broaden? speaker pelosi: that will be up to the committee's jurisdiction. however, in that call, he undermined our national security by interpreting what congress intended in a bipartisan way to send military aid and who
doesn't like that? putin. what they did in syria, who likes that? putin. giving him a stronger toehold in the middle east. what he has said about nato and our commitment to nato, who benefits from that? putin. they are not all related to the constitution, but the call, the phone call did. weigh theed to equities of all of this and not divide the country further, but we took an oath to protect and defend our democracy. and that is what he has made an assault on. the republicans have a higher loyalty to the president and they do the oath of office, that is their problem. just imagine, suppose a
democratic president emerged. do you think those same people would want that president to say article ii says i can do whatever i want? i'd -- do not think they would want that. rule of law is a democracy. rule of a person is a monarchy and we rejected that the beginning of our country. david: you served with mike pence when he was in the congress. what would he be like as a president? speaker pelosi: i have no idea. we have not even made a decision to impeach. this is what an inquiry is about. david: the logical extreme is the removal of president. speaker pelosi: i do not think it is so extreme if he violated the constitution. but our response ability in the house is to make a judgment about impeachment and then that would go to the senate and they would have to decide whether they are honoring their oath of office to protect our democracy. this is what changed everything
for me. people wanted me to impeach president bush when we went to iraq. what could be worse than that? about the election, it is not about the impeachment. i thought it was wrong to impeach president clinton. i do not like impeachment. it divides. whatever you do, remember that we are one. i think that is important. what we are talking about now is it to a whole other class of objection to what the president has done. there were 11 obstruction of justice provisions in the mueller report to have some of them, but that will be a part of the inquiry. have: coming up, we will more of my interview with house speaker nancy pelosi. we talked about many things including the future of usmca and whether we can get it
♪ this is balance of power on bloomberg television and radio. i am david westin. one of the things i spoke with speaker pelosi today is that usmca and she pointed to that as one thing she think she can get done despite the impeachment proceedings. speaker pelosi: we are working the mexico, u.s., canada trade agreement and i am
optimistic that we can be successful. david: what is keeping us from getting it done? speaker pelosi: we do not have the assurances we need on enforcement. one of the big disappointments is if you do not have enforcement, you are just having a conversation.
nice things that are listed, but you do not have enforcement. i think we can come to a place on this that not only is a good trade agreement of itself, but a template for good trade agreements as we go forward. it is not just a nafta, old nafta was sugar on top to say, it is better for it it has to be really better. i do not like trickle down economics and i do not like trickle down trade. david: would you be willing to go forward with usmca with a minority of your caucus? majority of the house. speaker pelosi: i won't have that. it is not about that, it is about having an agreement on the trade agreement. have gone in the past to the floor with a minority of my members. but that is not to this is. this is about a policy that we not,stablishing that is that will pass something less that has true enforcement in it,
because if you do not have true enforcement, i have chinese leadership in my office and i complained about the dumping of rubber and they said, when we joined wto, they told us we did not have to obey those regulations. so if you do not have real enforcement and a commitment to honoring the agreement, we are just
doing a bad deal for america's workers. and workers in mexico and canada. david: that was part of my interview with house speaker nancy pelosi. we will have much more coming up throughout the day on bloomberg television and radio, but in the meantime, we check in on the markets. past, it has not happened yet, but the day is all about jobs. kailey: anything on trade can change on a dime or a tweet, but all of today was the jobs report which was significantly stronger. payroll that consumers feel stronger, which is key because they are the pillar of the economy.
that is really adding to our sentiment. we up on the highs of the session with the s&p 500 at a record. there is a rally between seven /10ts and 9/10 -- 7/10 and 9 of a percent. i am looking at the imap function on the bloomberg. most sectors are higher today. the ones that are underperforming are the defensive sectors, real estate, utilities are lower. outperforming is the cyclical sectors especially energy. part of that is oil, risk asset also rallying taking part in the risk on day, and we got pretty solid earnings from exxon and chevron. david: one that jumped out to me is that manufacturing and the gm strike. there was a loss in manufacturing, $36,000. that indicates a really strong economy. kailey: that is why it led to and tosurprise as well,
some of was offsetting that a weaker number would send a terrible number to the economy. but the fact that it came in so stronger is adding a lot to sentiment. it is causing a lot of people to take it down there bets, but it does seem to be a case of good news. bond market reacted accordingly as a practical matter. the other thing interesting was the participation rate jumping up, 63.3%. more people are coming in off the sidelines. kailey: yeah, but you are also seeing solid 3.0% 20 think about the fed's inflation equation. again, it leads credence that the consumerist will still be able to spend. david: real wages are growing because that 3% may not be that high, but compared to inflation which is below 2%, so people are
net with more money in their pocket. that is the macro picture and then you have some really solid earnings on the micro picture. there are a lot of reasons for investors to be optimistic on this friday. should nothing else crazy happened with trade. [laughter] david: the day is still young. thank you so much the bloomberg's kailey leinz. up next, we hear speaker pelosi's thoughts on the possibility of a wealth tax. do they really want to go after the wealthy the way some candidates have indicated? she talked about income distribution across the united states. that is coming up next on bloomberg television and radio. ♪ ♪ the game doesn't end after that insane buzzer beater.
and radio. nancy pelosi about what democrats will run on in 2020, specifically the most tax. is that
a winning proposition for them? speaker pelosi: i say all the time, whatever we do about our revenue, taxation has to be done in a bipartisan way. we have to have fairness and we also have two have enough to run the government, but we don't want any more government than we need. candidates are putting forth their ideas on these things. it is up to them to describe why that is a good thing, how that will help grow the economy. but i do think, i would enlarge the issue to talk about how do we conduct our meetings and needs of the american people in a way that does not increase the deficit, that does increase in job creation and have job creation for good paying jobs.
growing the infrastructure of america is a path to get that done. i would like that in a green way. we will see what the president is willing to do but there are plenty of areas of common ground for us to do that. what we want to do is to increase the paychecks. however it is paid for, and negotiation. david: you talk about growth, which is terribly important. if there is more for everyone, everyone will do better, we hope. president trump ran on a progrowth policy, but he delivered some tax cuts. speaker pelosi: a tax scam. the top 1% got the benefits. david: unemployment is at a 50-year low. if you were a trump a voter in one of those key districts in causewhat in 2020 will you to say i will switch to a democratic approach to growth in this country? speaker pelosi: let me say this
about your characterization. person,age working where the stock market is, gdp, that is not resonating with them. they want to know why their wages are stagnating. unemployment is interesting and important, but what we are talking about is growing the paycheck, reducing the cost of health care, growing the paycheck. our economy will grow bigger and will have consumer confidence. they spend and they inject demand into the economy which further creates jobs. not about some indicators that may or may not relate to their life. part of what we mean when you say gdp is higher. in one respect? tax bill, in the dark of night and then the speed of light, with many mistakes, benefiting the top 1%.
now they are coming to us to say you have to help us correct all the mistakes that we made. we are working on some of the technical corrections, seeing what we can get for american families. you should not do a tax bill of that magnitude without it being bipartisan. david: let's talk about the democratic alternative, growth for everyone. we hear a lot of proposals, not but it seems tax, to have democrats running against big business, big tech, big wealth. is that a winning strategy for the democrats in 2020? speaker pelosi: they are different categories. again, when i send my members to a discussion, as we have in the past about the budget, how we
reduce the deficit, the national debt, i always say the following. just put in the middle of the table growth. have toposals do people grow the economy, to create good paying jobs and not adding to the national debt? all the debt service we have to pay for tax cuts for the rich. be agnostic. wherever the solution comes from, right, left, it doesn't matter the provenance. what matters is the result for the american people. one of our main initiatives on the growth area is to do in a -- address the, infrastructure needs in our country. trillions of dollars of deficit. we need to invest in that in a way to create good paying jobs
for the american people. and those jobs are here. i think certain things are inevitable. globalization, innovation, and the rest. thinking, what does that mean in the mind of the average american worker? and not make decisions that are separate. bubble up, not trickle down. david: that was nancy pelosi on the subject of big wealth and how to grow the economy. i also talked about what her relationship is with donald is right now, and how that can be if they continue with impeachment. this is "balance of power" on bloomberg television and radio. ♪ oomberg television and radio. ♪
david: this is "balance of power" on bloomberg television and radio. i'm david westin. pelosi also talked about her relationship with donald trump, the man and the president, given the fact they had a meltdown in the last meeting and she is investigating him for impeachment. we always want a president of the united states to succeed. the election happens, you want the president to succeed. but if he does not really believe in governance, it is hard to get to a place where we have results oriented proposals to go forward. he has said he wants to reduce the cost of prescription drugs, -- we will find common ground. i think we can. he said he wants to build the
infrastructure of america. almost every conversation i have had with him up until recently included infrastructure. our three things were lower cost of conviction -- prescription drugs, bigger paychecks, and cleaning up the environment. david: you said until recently there was that infamous meltdown at the white house. have you spoken to the president since? speaker pelosi: no. reestablish a you relationship with this man after some things that have happened in the white house? are workingsi: we with the administration and trade representative on free trade. we are working with his people about what we can do about the prescription drug bill. we work with him and the republicans on doing our appropriations bills, which is but we have to do right now, passing the appropriations bill. we have some obstacles to get that done.
the house, senate, and white house are part of those negotiations. we don't have to be the ones talking all the time. there is a lot of work that the staff can do. appropriator. democrats and republicans working together can bring us to a place that can keep government open. on intelligence, when the president told me how perfect his conversation was, i said, your in my wheelhouse now. this is not perfect, this is perfectly wrong. that preceded the meeting at the white house. david:
that is nancy pelosi talking about her relationship with president trump. let's bring in craig gordon, executive bureau chief. she does not seem to be in a big rush to get in touch with donald trump the man. bite talked to her a little
on the new side, but she was nancy pelosided -- devoted her entire life to public service, the good that government can do, and here is a guy who does not believe in that, does not think he has to follow the constitution. of her there is a part that cannot process that there is somebody in the oval office that feels that way. she is happy to do her thing in the congress, and trump can do his thing. have a situation where the speaker and the president are not speaking and get things done? >> she talked encouragingly about usmca. she basically said it would be the easiest radial to get done, she is eager to get a vote scheduled. obviously, if congress passes it, the president would sign it. loring drug prices seems to be a place of agreement. if she can get some legislation
done that her folks can run on in 2020, she would be happy to do that. david: anna is also with us. it did strike me, this seems to be a shift on her part. she had tussles in the past and said, let's pray for him. this time she said, we will work with his people. >> her staff is still talking to white house staff. it comes to usmca, trade representative lighthizer is still talking to democrats about this. there are still negotiations going on. there will be other areas where she will have to negotiate things that the president will have to sign. i thought itca, was interesting, she says they are close to getting it done. i said, would you do it without the majority of your caucus? she said, no, i have done that with other legislation but i will not hear.
for may not speak well usmca. she has to bring her caucus along. >> that is a good point. is her threshold the democratic caucus? does she want to demonstrate that they can pass this on their own? one thing she told us, they had labor, thees with outside groups that want to get this passed. there is a path forward to getting to yes on this. david: she also talks about prescription drugs. is that doable? you know congress well. >> i always run my eyes when i hear about bipartisan drug prices, but when president trump talks about drug prices, it sounds more like a democrat. to the speaker, all sorts of things that she thinks she can get done, usmca, drug prices. matter,ctical
impeachment will take a lot of the oxygen out of the room. >> you have impeachment. she broke the news today that she expects public hearings to start in the next few weeks. you also have a small thing called the iowa caucuses. you have an impeachment, presidential election, and donald trump. it, more than i would expect at this point. but deadlines do focus the mind in washington. she made jam the new nafta through, just to get it under the wire. david: many thanks to both of you. we will be playing more of the interview with speaker pelosi throughout the day and weekend. coming up, kay bailey hutchison, u.s. ambassador to nato. syria,l be talking about turkey, and much more. this is "balance of power" on bloomberg television and radio. ♪ ision and radio. ♪
david: this is "balance of power" on bloomberg television and radio. i'm david westin. kay bailey hutchison is the 22nd united states permanent representative to nato, a position she took after serving her home state of texas in the senate for 22 years. we to have you here in new york. great to be on set for a change. i get to talk to you across the pond, but this is great. david: you just came from a defense ministers meeting. what was on the agenda, what was important for the u.s. and nato? kay: our defense ministers meet three times a year, and they were talking about the serious situation. thatone is very concerned that is now in a state of flux. everyone is watching it. we are talking about afghanistan. we are also talking about some new things that we will do, determining space as an area in
which we will be able to operate. looking at all the new kinds of technology that is now in defense and security is mind-boggling. with syria. start lots of developments, both with the u.s. pulling back, the turks coming across the safety zone, and then the killing of baghdad he. is syria a safer place then a month ago or about the same? ago, impared to a month would say about the same. -- volatile bottom situation, no doubt about it. all the defense ministers were very insistent that we need to try to bring down certainly the violence, assure that isis is still on our radar as an adversary. baghdadi was a
major feat but we all know that isis can resurrect and attack us here in america, any of our allies in europe. we are going to be very vigilant. the ministers are going to continue to work in the framework which we have in a rack. the coalition is bigger than nato. there are a lot of earners in the coalition. it has been a treacherous terrorist group. we want to make sure that it does not rise again with a new leader. pullingith the u.s. forces back, does somebody else need to step into that role, specifically with respect to islamic state? certainly, our allies are looking at how they can be helpful. we now know that russia is a part of the safe zone. we were able to work with them,
that framework to get a baghdadi -- the baghdadi issue settled. i think it will take more than just russia and turkey and syria. to a peaces to go settlement in geneva. that is what we are for. we want syria to have a government that will accommodate its minorities, including the kurds, have a form of human rights in that country. the long-term goal is the peace agreement that would include all parties and be done in geneva. david: who has the most leverage to bring about that negotiation? russia, vladimir putin as a practical matter? kay: very good question. , noia is a key player doubt, turkey, but so are the
european nations. france is there. we are still there. a part ofll very much making sure isis does not rise again. that is why we were there in the first place, why we are still going to have some capabilities isis does notre rise in some part of syria and come back and do its terrorist acts against any of our allies or ourselves. david: we are talking with kay bailey hutchison. you mentioned turkey. in thaty some strains relationship over the building of the safe zone. what is our relationship like with turkey, how is it functioning within nato? variable --is a valuable nato ally. we work with turkey on so many levels. but the key area now with turkey is the russian missile defense that they are looking
like they will be putting in a nkara. we are against it, the allies are against it. if you have a russian missile defense system in a native country, that will affect the interoperability of nato. we are trying to see if we can have another way for them to get the security they need. we have offered patriot missiles, even some of the other european missile systems for defense. we are still working, we have not given up. but it is essential we don't have a russian missile defense system. david: it is fascinating, that was an issue six months ago. can that be turned around? it can be, it will be a heavy lift to do it, because
they are taking part of it in turkey now, training troops to try to deploy it. but it is not deployed yet. there will be sanctions that have been passed by congress, that you cannot buy military equipment from russia, that is our major adversary right now. we have to work with turkey to get them the security they need, which we absolutely understand they have a right to their sovereignty and security, but we cannot do it with this kind of program. it is not totally out of the barn, we are still hoping to keep the door open. david: we are speaking the kay bailey hutchison, our nato turkey ambassador to nato.
my understand more people have met over the past, but we have a ways to go. kay: we are going in the right direction but we are not where we need to be. we have every country stepping up more. every country is moving in the right direction. the amount of over $100 billion by the end of the year, more than in 2016. years, wers, three have made great strides, but we are not nearly where we need to be. let me just explain, we are talking about the capabilities to address the risks that we face. the risk of russia, the risk of a rising china that is also looking like it is more military oriented, we have to have the cash and the capability to gear up against that. as 2% was decided in 2014
what was needed. we did not choose it out of the air. , ins what we think we need submarines, tanks, aircraft, missile defense systems, to be thinko deter russia, not that they can ever come into europe and take over a sovereign country again, and also to prepare for a rising china. david: we are talking with kay bailey hutchison, our u.s. ambassador to nato. said they want to, it is their goal to get there. a lot of people say they would be better off spending money, the german government, so what is keeping them from doing it? germans have a divided government, they have a partnership, rather than a clear , she had to get some partners. some of them do not want defense spending. it is amazing to us. we would think because they are
the best economy in europe, that they would be able to do more. we know they are able to, they are stepping up. the new defense minister has said that they will go for the 2%. they are going in the right direction but not nearly as fast as we hoped they will. david: still on your to do list. many things to our ambassador to nato, kay bailey hutchison. coming up, balance of power continues on bloomberg radio. more of my interview with nancy pelosi. plus, we are nearing a special program of my conversation with the speaker across all bloomberg platforms. this is "balance of power" on bloomberg television and radio. ♪
jonathan: from new york city for our audience worldwide, i'm jonathan ferro. bloomberg real yield starts right now. coming up, the u.s. economy delivering stronger-than-expected jobs growth. validating the fence pause. clarida says the economy is in a good place. just as the u.s. and china look to close out phase one. we begin with a big issue, and unexpectedly solid jobs report. >> pretty solid report. >> really strong. >>