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- [00:00]
Odoo Advertiser
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- [00:33]
Podcast Host / Bloomberg Intro
Bloomberg Audio Studios podcasts Radio news. You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app Listen on demand wherever you get your podcasts or watch us live on YouTube.
- [00:56]
Kailey Leinz
I'm Kailey Leinz alongside Joe Matthew here in Washington, D.C. where I have to say traffic was pretty abysmal this morning in large part than thanks to the gathering that was taking place at the Donald J. Trump Institute of Peace. Whether or not it's going to remain named, that probably is going to depend on the outcome of what's happening in courts of law after he effectively seized it last year. The question, of course, though that was being visited beyond the name of the building inside the building was the rebuilding of Gaza and the role the various members and signatories to the Board of Peace will play in that. President Trump announcing today that the United States will be providing $10 billion in the aid of rebuilding Gaza. Other nations on the Board of Peace will be provid $7 billion. And he described the mission as an incredibly important global one that could extend well beyond Gaza. Here's a taste of what President Trump said this morning.
- [01:43]
Joe Matthew
I believe it's the most consequential board, certainly in terms of power and in terms of prestige. There's never been anything close because these are the greatest world leaders. Almost everybody's accepted and the ones that haven't will be. Some are playing a little cute. It doesn't work. You can't play cute with me. The Institute of Peace on the west side of D.C. a very short walk from the Potomac river, which at the moment apparently smells like sewage. So that was the atmosphere for these world leaders. And we want to start ahead of our conversation with Meghan o' Sullivan with an update from the White House. Bloomberg White House correspondent Skyler Woodhouse joins us right now from the North Lawn. This is interesting, Skyler. About 60 invitation sent to heads of state around the world. Only about two dozen countries have agreed to join and they are not the countries that you might expect. Who sits on this board?
- [02:40]
Skyler Woodhouse
Yeah, I mean, what we're seeing with this board, it's pretty in line with President Trump as a person. He's going the non traditional route as he tries to establish this board of peace. Today we had the president of Argentina. You had representatives from Morocco, Czech Republic, Israel, Azerbaijan. So you had Armenia, you had representatives from, you know, countries that don't traditionally at the forefront of peace conversations as the president tries to make this sort of a dupe of the United Nations. And one thing that we were watching today as the president has hinted at a potential attack to Iran was was this going to come up in conversation today? The president didn't offer any new details on what he plans to do, but it was definitely, definitely something that folks are watching as he really tries to lean into peace in the Middle East.
- [03:34]
Kailey Leinz
Yeah, peace or perhaps lack thereof, depending on what happens 10 days from now, I guess, Skyler, as he said, that's when we'll find out whether or not diplomacy can win out in Iran. As we think though, about the the geopolitical elements of which President Trump has been largely focused as of late, obviously there are forces within the White House, including the chief of staff Susie Wiles, who are hoping to narrow the focus back on domestic issues ahead of the midterms. Hence the trip to Georgia today that the president is literally on board the plane about to take off for Rome, Georgia to talk about affordability. To what extent is this just a preview, Skyler, of what he's going to say at the State of the Union on Tuesday?
- [04:16]
Skyler Woodhouse
Yeah, well, Chief of Staff Susie Weil, I mean, she has real aides around the White House, not just herself, but they have really been trying to push the president to talk about affordability as the November midterms are just around the corner. I know it might seem like it's a couple of months or it's just months away, but it's going to come very quickly. And Republicans are trying to crack down on their affordability message, obviously with the president. With the president's tariffs, higher costs are trying to figure out how they can best get their message to voters. I mean, like you mentioned, Kelly, at the top of the show, this is former Congresswoman Marjorie Taylor Greene's district. So this will be an interesting speech for President Trump. It'll be interesting to see does he just swing shot after shot on the former congresswoman or does he stick to the script and really lean into affordability? As he talks about housing, he's also expected to visit a local business and he's going to tour a steel factory. You know, so he's trying to get out there and essentially talk to the people. But I mean, with President Trump, you never know which way the script might go. I mean, he could lean into affordability or take it a total different direction.
- [05:19]
Kailey Leinz
Well, that is very true indeed. Skyler Woodhouse reporting for us live from the White House. Thank you so much. Meantime, President Trump did speak with reporters on the tarmac before boarding Air Force One en route to Georgia, once again saying that, quote, really bad things will happen if there's no Iran deal. It echoes what we heard from him earlier today speaking at the Institute of Peace.
- [05:40]
Joe Matthew
Iran is a hotspot right now and they're meeting and they have a good relationship with the representatives Iran. And, you know, good talks are being had. It's proven to be over the years not easy to make a meaningful deal with Iran. We have to make a meaningful deal. Otherwise bad things happen. But we have to make a meaningful deal. Now, we may have to take it a step further or we may not. Maybe we're going to make a deal. You're going to be, you're going to be finding out over the next probably 10 days.
- [06:08]
Kailey Leinz
So for more, we turn to Megan O', Sullivan, former deputy national security adviser during the George W. Bush administration, now director of the Harvard Belfer center here with us on Bloomberg TV and Radio. Meghan, thank you so much for being here. I guess I have a few questions based strictly off what President Trump said. First, to have a meaningful deal, is 10 days enough time?
- [06:29]
Meghan O'Sullivan
Well, I think it depends on how you define meaningful. If you look at the deal that the Trump administration fashioned around Gaza, that was a meaningful deal, but it was short on details. And so that could be what President Trump has in mind if he's thinking of a meaningful deal like the deal that the Obama administration, the jcpoa, did with Iran many years ago. That was a document over a thousand pages long, many, many, you know, months, years in the making. That kind of thing is not obviously possible. The Iranians are used to negotiating, haggling over very every detail in the pace and the pressure with which the Trump administration and the president in particular want to see actions and deals made. These two things are very much at odds with one another. And certainly a 10 day time frame could allow for a deal in principle, but certainly won't allow for a detailed scope.
- [07:29]
Joe Matthew
Meghan, it's good to see you and I'm glad you're back with us. On this day of days, I'm seeing 2003 mentioned in stories all over the terminal and all over the Internet today. The biggest military buildup since the invasion that you helped to prepare the invasion of Iraq in 2003. Have we ever seen this much hardware assembled in one place without it being used?
- [07:51]
Kailey Leinz
Sure.
- [07:51]
Meghan O'Sullivan
And I should say that I was there. I went to Kuwait before the invasion of Kuwait, but at the time I, I was reasonably junior but certain. Certainly I was there for it and part of it. This, as you pointed out, this is the largest military buildup that of American force and firepower that the world has seen since 2003. And I think it really raises questions about what kind of action could the Trump administration be preparing. Certainly this wouldn't be the first time that the Trump administration, or President Trump, I should say, would be be using force in Iran. But the nature of this buildup and the lack of clarity around exactly what the objective would be in this particular use of force, I think is adding to some of the insecurity around the moment, is adding to the global jitters. Also the questions around Iran's retaliation. I think in the past, what we've seen, whether it was the assassination of Qasem Soleimani in the first Trump administration or the strikes on Iran's nuclear facilities last summer, those were very specific and targeted military actions and Iranian response was quite contained. I think the possibility is real that we'd be looking at something that was larger, more uncertain and less contained. Of course, as President Trump made clear today, there's still the possibility of a deal on the table and it could continue to be the case that this show of military force is to increase the pressure on the Iranians because no doubt there's still a large gap between the US And Iran on what each side would like to see in a deal.
- [09:32]
Kailey Leinz
Well, and so certainly there is some flexing happening, Meghan, of America's military might. But to your point on potential retaliation from Iran, what military might does Iran have right now, knowing that we did do damage back in June with the first strike? What is their capability to respond? Where do you think Iran could target?
- [09:51]
Meghan O'Sullivan
Sure, Kayleigh, thanks for that question. First of all, your viewers should have no doubt that the US Is militarily superior in every dimension that that is meaningful in a long term sense here, where Iran still does have capabilities, it still has missile capabilities. And that is one of the issues that the Trump administration would like to see and the Israelis and others would like to see be part of a deal which hasn't been the case in the past deal that has been solely related to nuclear issues. So it still has some missile capabilities, and that would likely be the focus of any initial American strike. What is causing concern is that Iran's remaining capabilities could still have an impact on America's Gulf friends and partners. So the region, I think, feels on edge and very vulnerable. There's also Iran, as your viewers will know, staged a military exercise in the Straits of Hormuz that is, of course, also making people quite nervous because that's, of course, where 20% of the world's daily oil consumption passes through that strait. Now, when we've seen the military action that I referred to earlier unfold in the Gulf over the last months and even years, but particularly in the last year, all that military operation didn't really raise the price of oil because it didn't disrupt supplies. Something that brought conflict into the Gulf and particularly into the Straits of Hormuz would certainly disrupt supplies. And the markets are telling us that they really do distinguish between military force and military force that disrupts oil supplies.
- [11:40]
Joe Matthew
Meghan, we talked about your experience in 2003. Four years later, you are credited with being one of the original advocates of the surge strategy. And I'm wondering what your advice would be to the administration when it comes to the day after conversation. What are they mapping out for scenarios and what should they be prepared for?
- [12:00]
Meghan O'Sullivan
Well, I think this gets to the point I made earlier about what is the objective that the Trump administration would be seeking. There's several objectives that they may embrace, and it's not entirely clear to someone who, who's not involved in the internal discussions. You know, certainly one objective could feasibly be regime change. And that makes it akin to the American action in 2003 that got rid of Saddam Hussein from Iraq. Now, in the last year, President Trump has demonstrated kind of an allergy to that kind of intervention because of the really open endedness of that. And certainly that is one of the scenarios that I think deserves very significant attention is what would happen if one of two things happen. What would happen if US Military force was targeting the regime, the supreme leader, elements of the irgc, that brought about a regime collapse. Now, certainly my experience in Iraq and that of many, many other Americans in our coalition allies was that that collapse, collapse takes a very, very long time to rebuild, to reconstitute, and opens up a security vacuum that can have a lot of unanticipated consequences. So I find it hard to manage that a collapse of the regime wouldn't require A much more robust American engagement in Iran for potentially a much longer period. Something way beyond, I think the American people are interested in, in right now, whether the Trump administration has had a relationship with some members of the IRGC that could take over. And something that would be more seamless and less disruptive is only probably known to the President and his closest advisers.
- [13:50]
Kailey Leinz
Well, so Megan, it sounds like you're saying in our final minute here that there is a risk that we accidentally tumble into another, if not forever war, forever presence.
- [13:58]
Meghan O'Sullivan
You know, I think there is a risk. I wouldn't say, say it is the central risk right now. My guess is if we look at President Trump's, his propensity to use military force, it has always been quite targeted for a specific objective without the intention to get involved over the longer term. And so my near term expectation would be first, a real push for a deal. I don't take the 10 day window to be definitive. Certainly there's been flexibility on timing on a lot of these conflicts. So look at Ukraine, which was going to be solved, you know, in the hours running up to the inauguration. So I think the desire for a deal is going to be real. It depends if the Iranians can show more flexibility. Secondly, if there is military force, I think it will go after the ballistic missiles. I think the idea that the Trump administration would want to topple the regime without any real prospect for stabilizing the country is, is something that I think is a risk, but not the largest risk that we are exposed to right now.
- [15:02]
Joe Matthew
Megan, we'd like to stay close to you for the next 10 days as we figure this out. Really appreciate your insights. Megan o', Sullivan, former deputy National Security Adviser in the George W. Bush administration. She's now at the Harvard Belfer center where she is director. Stay with us on balance of power. We'll have much more coming up after this.
- [15:23]
Odoo Advertiser
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- [16:25]
Podcast Host / Bloomberg Intro
the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg 11:30 Here
- [16:44]
Kailey Leinz
in Washington, where President Trump no longer is. He departed earlier this hour en route now to Georgia, specifically to the former district of former Congresswoman Marjorie Taylor Greene. Probably not a coincidence, given the fallout between the president and someone who was once one of his most loyal allies in Congress. But his message that he will be bringing there regardless of district is one that he's hoping to take across the whole country, at least if Susie Wiles, his chief of staff, has her way, which is a message around affordability, something we also expect him to focus on at the State of the Union next week. Perhaps this speech today will be a preview of the speech on Tuesday, though he also gave us another preview of the speech on Tuesday when he spoke yesterday.
- [17:24]
Joe Matthew
Watch the State of the Union. We're going to be talking about the economy. We inherited a mess and now we have prices way down. We have energy way down. Gasoline is now breaking $2 a gallon and many places. And it's been actually amazing. So President Trump is on his way now and of course we've got a speech set for a bit later on that actually may coincide with the late edition of Balance of Power, which starts at 5pm Eastern. The KUSA Steel Corporation is where this is going to be happening, right across the street from the Darlington softball field. And the president will be talking in his element. As we always hear, he's happier on the road. The the question is, will he deliver the message? Will he stick to the script on a day that began with a meeting of the President's Board of Peace and has been consumed by talk of a potential strike against Iran? This is where we start today with our political panel. Republican strategist Maura Gillespie is back with us. Founder and president of Bluestack Strategies, Doug Farrer, Democratic strategist, is with us as well. Principal at Maywood Strategies and former senior adviser to FTC Commissioner Lina Khan. It's great to have you both with us. Maura, what's your expectation? Because the tour was sidelined a bit, the Affordability tour. At one point, we heard he'd be traveling every week and he missed a couple. Can he get the message back on track in Georgia?
- [18:43]
Maura Gillespie
I think the juxtaposition today between his announcement at the Board of Peace that the United states is pledging $10 billion and then going to a town in Georgia where, yes, we'll be looking to see how often he talks or mentions Marjorie Taylor Greene, the former congresswoman, but in a town in an area where roughly 20% of the population is below the poverty line. And then you're talking about $10 billion for this board of Peace that you've created, that you're the chairman of. I just think that that contrast there is going to be stark. And so if he can stay focused on the issues that matter to that community, which is manufacturing and bringing jobs home and things of that nature, then maybe he'll fare well. But if he goes on a 95 plus minute speech and hitting his, you know, the highlight reel, I don't know that that really sits as well when people are hurting.
- [19:34]
Kailey Leinz
Well, it strikes me, Doug, how similar this moment feels for a US President compared to two years ago when we were talking about President Joe Biden, who at that time was still seeking reelection and was trying and pretty much failing to convince voters that the economy was better than they felt. It is that the data was better than what they were experiencing. We know that Biden largely was unsuccessful in that. How? What would it take for Donald Trump to be successful knowing he himself isn't even up for reelection? This is really about convincing voters that the party is worth continuing to keep in power.
- [20:03]
Maura Gillespie
Yeah.
- [20:04]
Doug Farrer
I mean, at least Joe Biden tried. I think, you know, the chances of Donald Trump sticking to an affordability message in Marjorie Taylor Greene's district after he sent the FBI into Georgia to get their voter file is functionally zero. And so I think he's going to have a real struggle. And, you know, I mean, he announced a $10 billion Board of Peace today. This is sort of this crazy vanity project. It's the Donald Trump Board of Peace announced by Donald Trump at the Donald Trump Institute of Peace. You know, there's some questions about whether this $10 billion that he transferred to it was actually a legitimate move of federal resources. So, look, I mean, people are hurting. The president is not doing anything to lower costs for people. And I suspect he probably won't talk about it that much today.
- [20:45]
Joe Matthew
He's apparently showing up with a deliverable here. More A $600 million industrial diamonds plant funded by Japan as he tries to address moving supply chains away from China. And that's a busy day. I mean there is some strategy behind this. He's got the local business stop followed by a podcast interview, then the factory tour and then the speech itself which would coincide with Nightly News if things stay on time. And they're already way off the schedule here. More you spent time running communications for a former speaker of the House in John Boehner. Is this the kind of day that you need to see on his schedule for the rest of the campaign?
- [21:26]
Maura Gillespie
I think that if he can do it and I don't suspect that it will be a timely operation, but I do think that it's important to get on, to get on the ground and for him especially because so much of his focus has been foreign policy related and his base and those who support him wholeheartedly, they need to see him out there touting issues that matter to them and actually delivering on things that he promised them. If it's helpful to Republicans in that area to have him and his presence there, then great for the GOP and as they look forward to a what's going to be a very rough midterm for him. And it does matter, even though he's not on the ballot, even though he's not running again, it does matter to him what happens in the midterms, obviously because it dictates the next two years of his presidency. And so he should be taking an active role in talking about affordability and talking about housing costs and talking about supply chains and are, you know, essentially pushing back against the stronghold that China has. If he can do that in a, in a, you know, responsible way, in a tailored way, then that's great. But I have, I have a little bit of doubts.
- [22:26]
Kailey Leinz
Jill. Well, the White House just kicked out a press release about the visit to Georgia today. I think it probably details what they are hoping the speech will touch on if it is read as written. No surprises here necessarily. They talk about tax relief, boosting take home pay for working families in Georgia. There's a touch on what Joe was mentioning as well, major investments creating jobs in the state. But the very first bullet point here is what sticks out to me, which is lower energy costs are putting money back in Georgians pockets, noting the average gas price in Georgia right now is 271A gallon, down 40% from the all time record high during the Biden era. And we're talking about Lower gas prices here at the very same same time, Doug, that Joe and I are fresh off a conversation with a national security expert who notes that Iran, if attacked, could very well close the Strait of Hormuz, which is about a quarter of the world's oil flows through it. Could President Trump's geopolitical efforts actually be working against his domestic efforts in terms of prices ultimately, if he does decide to strike?
- [23:23]
Doug Farrer
They absolutely are. I mean, they've raised costs for health care, they've raised costs for housing, they've raised costs of costs the board, they haven't delivered manufacturing jobs. The one bright spot he talks about all the time, gas is going to be lower than $2. Well, I saw a report that said if he goes forward with this mission in Iran, it could spike to, you know, the barrel of oil could spike to $90. The price could go through the roof. So not only is he working against himself, he's eliminating probably the one area where he's actually delivered real price reductions heading into a midterm. That could be a real bloodbath for
- [23:53]
Joe Matthew
the Republicans if there's a strike. Although we are seeing to Kelly's point, movement ahead of that. I mean, with WTI back above water, where we are six, the highest level
- [24:01]
Kailey Leinz
since August of last year, six and
- [24:03]
Joe Matthew
a half up 2%. That, that $2.71 a gallon that they're linking to in Georgia probably won't stay that way. To your point, Kelly, how important, Maura, when you think about the economic implications, is it for Donald Trump to make a deal, to find a deal with Iran if affordability is what matters?
- [24:23]
Maura Gillespie
Well, I think it should matter in terms of what are the goals with his feud with Iran. I don't think any of us should have any sympathy for the Ayatollah. They're committing heinous war crimes and human rights violations against their own people right now and have done so for a very long time. But I think that there is a conflict in what the intentions are with this battle. Is this to help Israel? Is this to, is this an ego fight? Is this about human rights? Is this about oil? I think there is confusion for many Americans and many people around the world about what the real driving force is here and these threats of saying that the strikes could come as soon as this weekend. I do think again to what I was saying earlier about the heavy emphasis the president has played in foreign policy, as opposed to local issues, as opposed to issues that got him elected, is going to frustrate his voters, but also the American people when they don't see the golden age of America impacting them and only impacting those who are most powerful and most wealthy.
- [25:22]
Kailey Leinz
Well, and Maura, to that point, that is actually what is behind the fracture between him and Marjorie Taylor Greene. Right. In part, it was the Epstein files, but also because she felt like he was abandoning MAGA and what the American First Movement was supposed to stand for. She's been tweeting up a storm about the prospect of war in Iran in the last few days. Could President Trump actually be greeted in Georgia, in her old district, by a lot more people who think like she does and feel that way than he expects?
- [25:47]
Maura Gillespie
I'm certainly curious to see what the reception will be and if there are more people who will speak out about, you know, this promise that he made about not starting wars and about focusing on America first and making America great. It does seem as though, and she's pointing out a lot of things that conflict with that. And again, she represented this area and she knows that the, you know, medium income is 50,000 or so a year and they're struggling and they're trying to pay their bills and to see, you know, buildings in D.C. go up with gold and marble and things of that nature, it does conflict. And it doesn't make them feel better because not only can they sit there and take his promises and hope and hope and hope, but not see anything come to fruition, how long can they hold out for? And so I'm curious, the reception will be. Yes, I think that people are going to be excited to see him regardless, because those who are loyal to Donald Trump, there is this MAGA fever that still holds pretty true in certain areas of the country, but there is fraying and there is fracturing. And I've been keeping my eye on that for sure.
- [26:43]
Joe Matthew
More. And Doug, we've been talking for the better part of 10 minutes without mentioning a partial government shutdown that is now in its sixth day. It's not above the fold. It's not even on the front page. And I guess when you have one agency, maybe things go by. And we know that ICE is funded through the big beautiful bill. But in a couple of weeks, we're going to be talking about missed paychecks for fema, for the tsa. Doug, in our remaining moment, this is an affordability issue as well for those families. Do Democrats risk losing the narrative when that kicks in?
- [27:11]
Doug Farrer
There's certainly a risk because like you said, FEMA and TSA and others can have an impact not only on those workers but on our lives. If there's an emergency. I saw a headline that said that ICE is spending something close to $40 billion buying up warehouses where they plan to host people before they deport them. You know, as long as the issue of immigration, the way Donald Trump is pursuing it continues and this manner, I think Democrats are going to have a field day with this one.
- [27:35]
Kailey Leinz
All right, Doug Ferrer, we appreciate you joining us, our political panel today alongside Maura Gillespie here On Balance of Power. We're going to have more on the president's remarks in Georgia, the message he's bringing, who he's bringing it to, and how it will all resonate with Andre Gillespie of Emory University.
- [27:50]
Joe Matthew
Stay with us. On Balance of Power. We'll have much more coming up after this.
- [27:57]
Odoo Advertiser
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- [29:00]
Podcast Host / Bloomberg Intro
You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg business app Listen on demand wherever you get your podcasts or watch us live on YouTube.
- [29:16]
Joe Matthew
The President is not focused on Iran. At least that's not the plan as he heads for Georgia this afternoon, having spent the better part of the morning dealing with his Board of Peace in its inaugural meeting here in Washington, D.C. the destination, Rome, Georgia. The district once represented by Marjorie Taylor Greene. That is the next stop on the so called affordability tour that the White House has been promoting. Here's press secretary Caroline Levitt.
- [29:39]
Skyler Woodhouse
Georgia is obviously a very important state to the President and to the Republican Party and the President loves the people of Georgia. He'll be touring, like I said, a steel facility. And then he'll also be stopping by another local business. And he will be giving remarks on affordability, on the economy, on all of the great economic news that he's spoken about, his intention to go across the country a lot more. And obviously, tomorrow's trip is evidence of that.
- [30:06]
Kailey Leinz
So for more, we turn now to Andra Gillespie of Emory University, who is back with us here on Balance of Power. And it's been some time. It's good to have you back on Bloomberg TV and radio, Andra, as we can consider this affordability message. And I would note that there is a great piece on the idea of affordability and the squeeze Americans are feeling. It's our big Take piece today that can be found on the terminal or on bloomberg.com but it notes how since the pandemic, what used to cost $100 now cost the American family $126. It goes bit by bit to things like groceries with flour up 40% since 2020, seafood up 23%, medical costs pretty remarkable as well, nursing homes up 29%, for example. Now, a lot of this did happen when Donald Trump was not president, and yet he is president now, and it's his burden to bear. What will it take for him to be successful in turning that narrative around and convincing people in Georgia and elsewhere that actually he's doing good things for them on the question of affordability?
- [31:01]
Andra Gillespie
Well, thanks for having me. President Trump has a big task ahead of him, and I think he's figuring out that just as it was hard for President Biden to convince the American public that he had a handle on the affordability situation.
- [31:15]
Kailey Leinz
Situation.
- [31:15]
Andra Gillespie
President Trump is also having trouble claiming the narrative, and he's trying to retake the narrative with this national tour and this stop in Georgia. I think he's trying to stop Democrats who have used affordability as a way to triangulate Trump policy and to point out that President Trump has not kept his campaign promises with respect to that. So I think he's trying to pivot and reclaim the narrative and use terminology that will help voters see that he is doing what he can. The problem with this is that there are the economic numbers that he can look at. He can look at how inflation was lower than expected last month, but there's also the way people perceive and how people feel about these particular issues. And so the mood isn't good. And if we look at President Trump's national numbers in terms of job number approval on issues related to the economy and inflation. He is typically in most national polls underwater and underwater by a substantial amount in a lot of these polls. So he really is behind the eight ball a little bit. And I think he's trying to figure out what message will actually resonate and pierce through the malaise that a lot of people feel because they expected, given the promises on the 2024 campaign trail, that this was one going to be his top priority and that he was going to address it quickly. And that hasn't materialized.
- [32:35]
Joe Matthew
Well, professor, we were struck, as Kaylee and I were thinking back at the last time we had a chance to compare notes with you and even further, say two years ago, the conversations that we were having about this very same issue when the president's last name was Biden. What does this President Trump have to learn from his predecessor when it comes to prices?
- [32:59]
Andra Gillespie
I think that there are a lot of things that you have to learn. One talk is big. There comes a point at which you have to deliver. And he might be in the period right now where it's becoming less plausible for President Trump to blame everything on the mistakes of the Biden administration.
- [33:17]
Mike McGlone
Right.
- [33:17]
Andra Gillespie
So now that we're more than a year into his administration, this is his economy, and he's going to have to own it and take responsibility for it. Second, I mean, you know, the thing that is unique for Biden and Trump is the fact that President Trump has, you know, initiated tariffs from countries around the world. And so it's a question of to what extent have those tariffs actually not actually helped dampen prices. Right. I mean, he's possibly thinking long term about promoting manufacturing in the United States. But I think that there was and has always been a larger structural question about whether or not that's, in the long term, a feasible plan in order to make sure that we can keep prices down in the United States. But I think just in general, right. It points to the role that governments can actually play in helping to manage the economy. And then what things are outside of their control, like what is the market kind of doing on its own that government intervention is not going to be able to help. And I think it's a question of whether or not government intervention and can actually, actually end up exacerbating some of these market phenomena that we're, that we're witnessing.
- [34:23]
Kailey Leinz
So, Andre, when we consider what this means electorally, knowing President Trump, unlike Joe Biden, is not up for reelection himself, but is concerned with what happens in terms of the outcome of the midterms and whether or not the Republican Party can retain control of both chambers of Congress. What is the impact on affordability, of affordability likely to be on voter behavior in the midterm elections? If you're dissatisfied with the economy, are you more likely to turn out to vote against the party in power, or are you just less likely to participate at all? Knowing it isn't a presidential election year, I just wonder how we should think about the force of this, whether it's driving people to the polls or just encouraging people to maybe not participate at all.
- [35:00]
Meghan O'Sullivan
Yeah.
- [35:01]
Andra Gillespie
So the way that political scientists would factor this into modeling is actually a little bit more indirect, even though there are ways that we can make direct correlations between perceptions of the economy and built choice. But in lot of the models that would predict vote choice, perceptions of the economy would funnel into overall perceptions of job approval. And it's those job approval ratings that are then combined with other data like voter preferences in the generic ballot to try to predict how many seats we expect Democrats and Republicans to win in both the House and the Senate. So this is going to be an important factor that many voters consider. And for people who voted for Donald Trump because they perceived him to be better adept at handling the economy than Kamala Harris, I think the fear or the concern is, does President Trump have enough time to turn the economy around and change perceptions, or are those people going to defect? Are they going to defect to the Republican Party or are they going to not vote in this election? Either way, that's going to have an impact on the results of this midterm election cycle.
- [36:05]
Joe Matthew
Andre Gillespie, we've got about a minute left. I want to ask you what the conversation is on the ground in Georgia following the seizing of ballots and other materials from Fulton county, which happened at the end of January, now January 28th, when the FBI rolled into town, Tulsi Gabbard photographed. Is Georgia going to be the center of questions about election integrity once again in this election?
- [36:27]
Andra Gillespie
President Trump seems to want to make it that way. The thing about Georgia that's really interesting is that while this is is still a Republican state, there are many different types of Republicans in the state and they hold power and compete against each other. So there are some Republicans who welcomed this raid, and then there are others who dreaded it because it was just resurfacing old issues that they were hoping were buried. And then there is the response of Democrats. So Democrats have been alarmed by what they have seen. They are concerned about voter integrity. They are concerned about the veracity of the case that's being presented and the grounds on which there was a warrant for this particular case. And then there were larger concerns about whether or not this could be used as a tool of voter suppression. This could be the potential has the potential to galvanize voters against President Trump in the Republican Party. And so this is something that people from the more establishment wing of the Republican Party would have probably preferred not happen.
- [37:25]
Joe Matthew
Great to have you back with us. Andra Gillespie, professor at Emory University, ahead of the speech this evening. Thank you, professor, for joining us. We'll have coverage of that address which, by the way, may coincide with the late edition of Balance of Power. So do join us when we come back at 5pm Eastern Time alongside Kailey Leinz, I'm Joe Matthew with our eyes on oil. This is something that we want to explore before we hand things over to Bloomberg Businessweek Daily. Kelly, where are we at $66 West Texas Intermediate 66 and a half. Now this is a 2% move today. And of course, you know, we were talking about plumbing the depths of prices with oil just weeks ago. This march to a potential strike once again against Iran has changed the game. And we wanted to ask Mike McGlone about the latest here. Bloomberg Intelligence senior commodity strategist has been a bear on oil. Mike, is this going to end up being the peak for the year depending on when this story finally breaks, whether it's a strike or not.
- [38:16]
Mike McGlone
So, Joe, how did you know what I was thinking? I think that's more more likely the case. We've had a bear market, bear market bounce. You know, you don't want to sell bear markets in the hole. Now 55 was a low for the year. Right now we're pushing new highs in the year, but it's right around last year's mean. Last year's high was 80 and the consistent trend in crude oils. Anytime you get these bounces on potential supply disruption events in the Middle east, it puts in peaks. The Western dominated producers sell forward and prices go back downward. So I think all traders now are looking for is how high the space can it be and when can they reset some of their hedges to increase that supply surplus on the Western Hemisphere.
- [38:55]
Kailey Leinz
Well, so when we think about that supply surplus, maglone is there the extra capacity in other like OPEC producing countries to offset, offset any supply concerns, knowing that one of the scenarios we're gaming out here is potentially that some of those Gulf states actually can't get that excess capacity out of the Strait of Hormuz is blocked by Iran. Is that not a different factor? This Time around.
- [39:18]
Mike McGlone
Well, welcome back, Kelly. And that's the typical reason people use for prices that go up is some kind of blockage of the Strait of Hormuz, which hurts one country the most, Iran. So I don't think it's going to hurt too much. And we all know Mr. President, our President has cozied up to most certainly Saudi Arabia, but a lot of the Middle Eastern producers we know we can bring that supply on right away. He's showed what he's willing to do to get prices lower by kind of taking over Venezuela and what really matters for the midterms, lower prices. I think he's going to get it.
- [39:47]
Joe Matthew
So save an interruption and you know, we do have this conversation. You're right, Mike, every time. And journalists who don't know as much as you do start writing stories about this because everybody's an expert when we go to war. Save an actual disruption, including the, I guess the, the closure of the Strait. Is there spare capacity elsewhere to make the difference?
- [40:06]
Mike McGlone
Oh, sure, absolutely. Saudi Arabia can come bring back and more. They start to curtail a little bit out of opec.
- [40:12]
Joe Matthew
Bottom we could have a protracted military operation and it doesn't actually send prices higher than where we are exactly.
- [40:19]
Mike McGlone
Initially, it'll be about okay. Is there going to be an immediate supply disruption? Well, we'll judge that. If not, it might just accelerate the preexisting terms. But having traded through the, the Gulf War, I just remember the peak started kicked in right when the invasion started, even before we really knew. So if there's not a swift resolution to whatever might happen, that's a problem. But right now this is just adding to that bear market sensitivity. How long can we stay at these high prices? Often what happens typically takes a little spike, cleanse the shorts and then you go back down.
- [40:48]
Kailey Leinz
Mike, just quickly as you mentioned, President Trump's desire to get oil prices lower and how you think that might be be connected to the action we've seen in Venezuela. What role does Venezuelan oil play in the market now? What influence does it have?
- [41:00]
Mike McGlone
Well, it's, it's, it's, it's part of that shift to the Western hemisphere from Canada down to Argentina. Just US And Canada alone. Our net liquid fuel and crude oil Exports are running 8 million barrels a day. To put that in context, when crude oil peaked at 145, we were importing about 11 million barrels a day. So it's just shifting that focus. Venezuela oil is adding to that trend of more supply from Canada, the U.S. brazil, Argentina, Guyana. You see the trend there. So it's also, it's kind of made a statement a lot of that, that Brazil, I'm sorry, Venezuelan oil went to Cuba and now they're getting cut off. So this is putting kind of close and narrowing down Iran and China and Russia in their connections.
- [41:42]
Kailey Leinz
All right, Bloomberg Intelligence commodity strategist Mike McGlone down in Miami, Florida. Thank you you so much for joining us. And Mike, of course, speaking to what we're seeing in oil, what he thinks we could see in oil, Joe, potentially if it is lower prices, I guess it's good news for President Trump in that that is one of the primary messages he wants to be able to bring to Georgia and elsewhere on his affordability tour.
- [42:01]
Joe Matthew
Well, and certainly as we talk about gasoline prices, president pointed to $2.71, the average in Georgia right now. Nationally, we're at 292. And so we'll keep tabs on these for you. Incidentally, 76 degrees where Miami Mike McGlone is located today at Bloomberg Intelligence. Just let that wash over you. 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, D.C. at noontime eastern@bloomberg.com Every Lenovo is built to let them go. Let them work and rework. Let them animate. A dinosaur.
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