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- [00:00]
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- [01:03]
Bloomberg Audio Studios Announcer
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.
- [01:26]
Joe Matthew
Welcome to the Thursday edition. We're live from washing on Bloomberg TV and radio on YouTube and your satellite radio channel 121 with a staggering move here in crude oil futures to Charlie's Point, up more than 11% now following the president's primetime address last evening that did not offer a solution to reopening the Strait of Hormuz. We're going to be talking a lot about that coming up with Dr. Rebecca Grant, who joins us from the Lexington Institute and when we speak with Tyler Kendall. But it is the Department of Justice that's making headlines right now in a story that's being driven by Fox News. We want to be careful with what's being reported, but it does appear that the attorney general is either out of or soon will be out of a job, with Fox News reporting a short time ago that she was fired by the president yesterday ahead of his speech and in fact was on her way back to Florida by the time the president got behind the podium. Fox News now reporting that Bondi will soon leave her job as attorney general. It's unclear if they mean physically in the office or whether the paperwork is done yet here. Citing now an interview with President Trump that Todd Blanch, the deputy attorney general, this would not be a big surprise. A former personal attorney of Donald Trump will temporarily replace Bondi. All of this reporting, by the way. It wasn't just Fox News that had this report now citing the president to suggest that it's happening. But there were multiple reports this morning to say that it was coming. And those reports identified Lee Zeldin, the EPA chief, as the eventual replacement for Bondi. This is all happening as we speak, and we want to bring you directly to the White House to get the latest on this and at least what we do know from Bloomberg Washington correspondent Tyler Kendall. She's on the North Lawn as we speak right now. Tyler, what can you tell us about this either firing or reassignment that a lot of people saw coming?
- [03:23]
Tyler Kendall
Well, Joe, at this point, as you outlined, FOX News now going one step further from previous reports that President Trump has already dismissed Pam Bondi as the attorney general. Not necessarily surprising considering all the speculation that has been swirling recently. But also the fact that we know that this White House has been frustrated in particular when it comes to the handling and the release of the Epstein files. Plus, I'd point you to that now infamous post on Truth Social from last September, when President Trump appeared to post a private message to Attorney General Pam Bondi in a public forum criticizing her and mounting on the pressure that he would like to see more progress when it came to prosecuting some of his perceived political enemies, citing some of them, such as California Senator Adam Schiff or Letitia James, as just some of the examples of the president's frustration with this attorney general. Now, as you mentioned, Fox News is now reporting that the deputy AG Todd Blanche, will step into this role temporarily. But there has also been report that President Trump is eyeing his EPA administrator, Administrator Lee Zeldin, to fill that role on a more permanent basis. As you well know, Zeldin has really been leading the president's deregulation push at the epa. And we know that the pair had met on Tuesday. We should, of course, say that the White House has not confirmed this dismissal quite yet. Just yesterday, the attorney general Pam Bondi, did accompany President Trump to the Supreme Court. So it's going to be something that we'll watch for developments and confirmation from in the coming days.
- [04:56]
Joe Matthew
Well, isn't this a moment we're in here, Tyler. Quite remarkable, the president telling Fox News just to make this clear. And we've got a redhead on the terminal to this end that she's gone. Attorney General Pam Bondi was ousted, that is in the past tense. So presumably Todd Blanch would be the bridge, Tyler, to an Attorney General Zeldin.
- [05:20]
Tyler Kendall
Yep, that appears to be what we see next. Of course, we know that whoever is going to be nominated next to bag is going to have to through that Senate confirmation process. So it would make sense that the deputy would step in to fill the role here. We should also just talk about the broader context that at this point, everything is leading up to the midterm elections. And we know that the White House really wants to make sure that it is prioritizing its own message when it comes to the broader American public. But also those issues that really play with President Trump's base. That's why, for example, we saw the first cabinet dismissal just a couple of weeks ago with the DHS secretary after the president was playing defense on his immigration policies that have really made up a core of his agenda and his platform as we debate the future of DHS funding going forward. Of course, those headlines crossing the terminal over earlier today, too.
- [06:10]
Jeff Mason
All right.
- [06:10]
Joe Matthew
With the lift at the White House, Tyler, thank you so much. Tyler Kendall on the North Lawn. That's the latest we have. And we want to assemble our political panel for their take on this. We have a great one today in Bloomberg Politics contributor and Republican strategist Rick Davis, partner at Stone Court Capital, alongside Democratic strategist Matt Bennett from Third Way. Gentlemen, it's great to have both of you along here. It's really something. Rick, this reporting began last evening. We should be clear. There were reports from CNN and the New York Times that this was in the offing. And when these networks went to the White House for a statement, they got one from the president, quote, attorney General Pam Bondi is a wonderful person and she's doing a good job, unquote. I guess that's all we needed to hear. What do you think, Rick?
- [06:55]
Rick Davis
Yeah, look, I mean, it shouldn't surprise anybody that this president, you know, is going to take swift action. In my own point of view is it was a very strange time right before a presidential speech to the nation to fire your attorney general if there wasn't something that day that precipitated it. And what he did that day was attend the first time a president's ever attended Supreme Court hearing on birthright citizenship, an issue that he has been campaigning on for a very long time with his attorney general, Pam Bondi. And by all accounts, it didn't go well. And I wouldn't be surprised to hear some day after the fact when people write their books about this administration, that he got back the White House and he was furious and he'd had enough. And, and that could have precipitated many other ways to take a look at this story. But that's my Point of view.
- [07:47]
Joe Matthew
Yep. Well, I think it's really interesting and important, Rick, knowing that there was already a narrative that Pam Bondi's days were numbered here. Matt, following the way she handled the Epstein files. We all remember the binders that went to the influencers out there, to the point where Susie Wiles said Bondi completely whiffed in her response. We had that very combative hearing on Capitol Hill in which she showed up with oppo research to actually shout down the Democrats, in some cases Republicans who were asking her questions. And then, of course, just the Epstein file situation in general. You add what happened in Minneapolis and Matt Bennett, are you surprised she's still here?
- [08:29]
Matt Bennett
I'm not at all surprised that she's gone. I do think that I wouldn't want to be Lee Zeldin if he gets this job. I don't think there's any way to succeed at it. I mean, probably the most successful member of the Trump 2.0 cabinet is Marco Rubio. Of course, he has two jobs. He's secretary of State and the National Security Advisor. And he does it by not trying to be a mini me of Trump. He doesn't go before Congress and yell at them. He doesn't yell about how the dow is at 50,000 in response to questions about Minnesota and the Epstein files. He is relatively, for this Cabinet, at least, a sober guy. And I think if Zeldin gets this job, he'd be smart to try to do that. The problem, though, is that Trump is going to expect him to do things that are not doable. It was impossible to have a good day at the court yesterday because the 14th Amendment is very, very clear that it does confer birthright citizenship. They were always going to lose. So Zeldin is going to be facing expectations that he cannot meet.
- [09:32]
Joe Matthew
What do you think, Rick? A lot of people say, speaker, the House, the worst job right now in Washington. It might actually be the Attorney General.
- [09:40]
Rick Davis
Yeah, I actually would agree. I think what Matt said is irrefutable. His pressure on the Justice Department since taking over the presidency has been intense. And we're used to the idea of the Justice Department being relatively independent of the President of the United States and his White House. Yet here we now have the president's former lawyer now becoming acting Attorney General. I don't think you could have a merger acquisition more suited to this administration than that. And so. So it's. It's going to be a very rough go for whoever succeeds at this job. And it's not even going to be a very Easy confirmation because even though there are plenty of Republicans in the Senate to pass on the Attorney General, there are a lot of unanswered questions in many other areas. Just ask Senator Tillis about the fight to try and get the Justice Department to drop the investigation into the federal. The Fed chairman. I wouldn't be surprised that he would withhold his vote for a new attorney general until that's done.
- [10:52]
Joe Matthew
Interesting. Matt, we're learning more as we go here. This must have been quite a phone call that Fox had with the President. Pam Bondi, we can say fired, but she's not leaving the administration. And this follows a pattern. Kristi Noem was reassigned to what, the Shield of the Americas. She took Corey Lewandowski, although I guess he's just hanging out. And of course, Mike Waltz, the very first National Security Advisor, was effectively reassigned. Some would even say promoted to UN Ambassador. What do you think of the way he's handling these not firings.
- [11:24]
Matt Bennett
Yeah. For a guy who got famous literally telling people they were fired, he never fires any.
- [11:29]
Joe Matthew
Yes, sir.
- [11:30]
Matt Bennett
And I don't really know why. I mean he what, what value is there in it for him? The base can't stand Bondi because of the Epstein mistakes. Democrats can't stand her. I don't know who he is pleasing here by keeping her on, other than maybe he feels some kind of loyalty to her. But that's not a strong suit for Donald Trump. So I don't really know what he's doing. It is clear though that he wants his new attorney General to do things that the new attorney General will be unable to do. So he may have a stack of former attorney generals parked somewhere at the end of this thing.
- [12:09]
Joe Matthew
What do you make of this, Rick? Keeping everybody around? Is this about not admitting that you were wrong in hiring them or he actually feels some sort of loyalty to this team?
- [12:20]
Rick Davis
I think there is a element of loyalty within sort of the, the Trump super orbit. But I would say to the best way to keep someone from talking to the press and telling stories about what's really going on inside of an administration is to keep them on the payroll. And, and I would not be surprised that the last thing the President wants because he's seen this happen to himself before, is to have folks who are dispatched from the administration go out, they write books and they get on the television and they're seen as a former high ranking administration official and they start to feather bed their own future. That's the last thing this president wants right now. And I think this device doesn't Cost him anything. It's taxpayer money. Sure. Keep her on board. Give her a title. This will make sure that she doesn't leak or tell stories out of school.
- [13:15]
Joe Matthew
Taxpayer money, Matt. There was the story of retribution, that it wasn't happening the way President Trump wanted it to. We all remember the missive directed to Pam that was apparently a direct mess. Message ended up being posted on Truth Social. What does this mean then for his political adversaries who Pam Bondi was unable to indict or unable to build a case on, beginning with former President Barack Obama? Should he be worried today?
- [13:40]
Matt Bennett
No, because it's all nonsense. And the reason that Bondi was unable to succeed wasn't because she didn't want to. She was totally willing to bring these cases against, you know, Gian Comey and Letitia James and, and the chair of the Federal Reserve. I mean, but they were all based on nothing. You know, Bill Pulte of the Federal Housing Administration is ginning up all these ridiculous ideas that the Justice Department is acting on. So I really don't think it was for lack of trying or for lack of skill, for that matter. There just is no way to win a case that is based on nothing.
- [14:19]
Joe Matthew
We've got a second report now, gentlemen. Reuters has joined the party with breaking news that President Trump has removed Attorney General Pam Bondi from her post. And if you're just joining us on Bloomberg TV and Radio, we do have a big breaker today following the president's address to the nation last evening. It turns out he had fired the attorney general, according to Fox's report, before he actually got to the podium. On her way back to Florida now, following mounting frustration with her performance, including her handling of the investigative files related to. Yes, Jeffrey Epstein. Rick, is Pam Bondi the only US Official who will pay the price for the Epstein files?
- [14:57]
Rick Davis
It's hard to tell how deep the retribution will go within the Justice Department. I'm sure there are frustrations with her team. We've seen some already be removed. So you wonder really how much depth the agency has now. It's really probably amongst all the agencies, the State Department and the, and the Justice Department probably have lost more career professionals than any other agencies in government. So you really have to start to wonder, is there anything left with people there to do? Because Matt's right. I mean, just because you get a new set of legs in there as Attorney General doesn't mean they're going to be able to do anything any better than she was able to accomplish, which obviously didn't meet the standards that Donald Trump wanted.
- [15:51]
Joe Matthew
Boy, do you agree with Matt that confirmation should come pretty easily for Elise Zelda?
- [15:56]
Rick Davis
Yeah, I don't think so. As I said a minute ago, I don't think people like Tillis are going to want to go easy until they get reassurances that, that these investigations against the Fed chairman are dropped. There will be other want other things that the administration has been withholding from Congress. So I think you're finding a Congress now who's realized, oh, my God, I've got to run for reelection. And I'm facing one of the starkest political environments that Republicans have had to grapple with, you know, in, in the modern presidency. And so I think you're going to see a lot of people shaping up to cut deals. And it'll just depend upon how this administration wants to back their candidates and how quick they want to get this done. I mean, under any normal circumstances, this should be a snap. But we're not dealing with normal circumstances right now.
- [16:52]
Joe Matthew
Well, it just in 30 seconds, Matt, the DOJ is still breaking the law. Will this resume the push to release all of the Epstein files?
- [17:01]
Matt Bennett
Probably not. I mean, I think that Congress will push a little bit and maybe Rick is right that at risk members will be pushing. But I don't think you're going to see this increase. I think what, by contrast, the reason Trump is doing this is because he wants somebody to be even tougher in support of his priorities and releasing a bunch of stuff about how he's connected to Jeffrey Epstein, not among them.
- [17:26]
Joe Matthew
Representative Garcia saying that Bondi remains legally obligated to appear for her hearing into all of this on Capitol Hill. Big thanks to our panel, Rick Davis and Matt Bennett. Breaking news only here on Bloomberg. Stay with us on Balance of Power. We'll have much more coming up after this.
- [17:44]
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- [18:44]
Bloomberg Audio Studios Announcer
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. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg 11:30.
- [19:03]
Joe Matthew
I'm Joe Matthew in Washington. On a breaking news Thursday In Washington this day, after the president spoke to the American people about the war in Iran, we learned that the attorney general has been fired. That's not the word he is using, to be clear, but the president on Truth Social referring to Pam Bondi as not only a great American patriot but a loyal friend and says she will be transitioning to a much needed and important new job in the private sector to be announced at a date in the near future. Our Deputy Attorney General, Todd Blanch, the president calls a very legal, very talented and respected legal mind, will step in to serve as acting attorney General. I'm glad to say that Jeff Mason has jumped in to join us here on this breaking news. It's one that some folks saw coming today with multiple reports this morning suggesting that the attorney general might be out. And Jeff, it appears that it has happened. This is the third, if you're keeping score here, member of the Cabinet who has been fired or reassigned. Having seen Kristi Noem reassigned to the Shield of the Americas. Mike Waltz is now our ambassador to the UN Before I ask you why this happened, do we know anything about this private sector role? Should we call this a firing?
- [20:18]
Jeff Mason
I think you can absolutely call it a firing. And I also don't think that you get transitioned to a private sector role. Yeah, I've never heard of that in the way that you get transitioned to another governmental. So it may be that she's going to some sort of a job where she will be assisting President Trump from the outside. People leave the administration to do that, both Republican and Democratic administrations. But that is not the same as continuing to work for him or continuing to work rather in the administration.
- [20:45]
Joe Matthew
This has long been simmering with her handling of the Epstein files, the immigration crackdown. Rick Davis pointed out at the top of the hour, if you it may as well have been drawn to this point yesterday because of what the president witnessed before the Supreme Court, his disappointment over the way that that case was delivered, not by Pam Bondi, but she was with him and may have gone back to the White House to make up his mind at that point. What do you think about this for?
- [21:11]
Jeff Mason
It's hard to say. Well, it's not hard to say, but it is some speculation. I think one of the things that is important to realize about how President Trump views the Justice Department and his attorney general is he sees it as an extension of the White House. I remember him saying during his first term how frustrated he was that he didn't feel that the AG was essentially working for him. That's because that's a shift from what virtually every other president that has held the office has seen. The Justice Department, they've seen it as having its own sort of wall of independence. And that's, in fact, something that Joe Biden tried to restore when he was the president in between Trump's two terms. So all of that is a long way of saying context. President Trump sees this as essentially his personal lawyer. And when she didn't do everything that he wanted or didn't get all of the results that he wanted, because you could argue that she did do everything he wanted, he got fed up.
- [22:09]
Joe Matthew
So why not then tap your personal lawyer, your former personal lawyer, to have the job going all the way through at this point? Todd Blanche, there's been reporting that Lee Zeldin would be looked at for the permanent role. Is that what you're hearing?
- [22:22]
Jeff Mason
We've seen some sourcing that have said that. And. But Todd Blanche, I would guess, is also someone who is certainly at the top of President Trump's list. We'll have to do some more reporting to figure out who else he's looking at, but it wouldn't be out of character for him to choose either of those two.
- [22:39]
Joe Matthew
The retribution cases that he had called on. Remember Pam? He called her by her first name in that post on Truth Social. That apparently was a direct message, wrongfully posted. Should Barack Obama be on the phone with his lawyer right now? What happens to these cases that the president tried to establish against his political enemies?
- [23:01]
Jeff Mason
That's a good question. My suspicion is that any of the cases that he wanted to be pursued, that weren't pursued, pursued, or that are still in progress will be just picked right up by a new attorney general. He's obviously not looking for someone to come in and be more independent, to be a Janet Reno or to be someone who has some distance from the White House. I'm referring, of course, to Bill Clinton's attorney general. So without knowing yet what his final decision will be, my guess is that he's not Looking for a shift in the direction of independence. He's looking for a shift in, in the direction of. Do even more of what I say.
- [23:37]
Joe Matthew
You covered the first term. Doar was swinging a lot more by now.
- [23:42]
Jeff Mason
It was.
- [23:43]
Joe Matthew
Now that we have this third, does that foretell other departures? Because he's handling it differently, the reassignments. A great American, a loyal friend. He's keeping everybody close. Jeff?
- [23:55]
Jeff Mason
Yeah. I mean, he did not say nice things about John Kelly on his way out the door as Chief of staff.
- [24:00]
Joe Matthew
Rex Tillerson.
- [24:01]
Jeff Mason
Rex Tillerson, indeed. So that is absolutely a shift. But it is also a shift if, if it's become, if it's about to be a trend and we're not quite there yet. But it is a shift in his second term to be firing anyone at all. I mean, you mentioned Mike Waltz and you were right to at the beginning, but he went from being national Security advisor to being an ambassador to the United Nations. That was a real landing.
- [24:24]
Joe Matthew
No doubt some thought of promotion.
- [24:25]
Jeff Mason
Yeah. With Secretary Noem, former Secretary Noem, that wasn't really a landing spot.
- [24:32]
Joe Matthew
We're still wondering.
- [24:33]
Public Ad Narrator
Exactly.
- [24:33]
Jeff Mason
We're still trying to figure out what that is. It's certainly not a cabinet level position. And Pam Bondi apparently going to the private sector. We'll have to find out what that is. But it is absolutely being jettisoned from your cabinet and that counts as being fired.
- [24:46]
Joe Matthew
Isn't it interesting? I mean, I guess Kristi Noem was part of the conversation in the early going, but people had their eyes on Pete Hegseth.
- [24:52]
Jeff Mason
Yes.
- [24:53]
Joe Matthew
Tulsi Gabbard.
- [24:54]
Jeff Mason
Yes.
- [24:55]
Joe Matthew
Cash Patel.
- [24:56]
Rick Davis
Yep.
- [24:56]
Joe Matthew
All still employed.
- [24:58]
Jeff Mason
I would also say continue to keep your eyes on them because if President Trump is in a period of frustration, which he seems like he is, with the war, with the economy, with the political prospects that are probably facing him in November, that often leads to him making decisions like this, not forecasting that that's what's coming next. But I don't think it's wrong to keep watching some of the people who looked vulnerable.
- [25:19]
Joe Matthew
We're always fortunate to bump into Jeff Mason when news breaks around here at Bloomberg. It's great to have you, Jeff, and thank you so much for jumping in here on balance of power. We're live in Washington with a big breaker, a redhead on the terminal. Pam Bondi, ousted as attorney general. You can see it at the bottom of your screen. And this story is only about an hour old. Something that follows the president's address to the nation that folks may not have expected today. Although, as Fox News reports, this happened before he ever got on TV last night, having informed Pam Bondi that her tenure as attorney general was up and they're meeting in the Oval Office before he got to the podium. And she was reportedly on her way to Florida before the cameras turned on at 9pm we're trying to tap the voices of as many experts as we can here in the clutch, and we look no further than Robert McWhirter to fulfill that mission. The constitutional lawyer, practicing criminal defense, civil rights lawyer in Maricopa County, Arizona, and the founder of the law office of Robert McWhirter. He's talked us through a lot of cases. I didn't think we'd be doing this one today. Robert, it's great to see you. I'm guessing that you probably saw this as overdue based on our prior conversations. But what does a DOJ led by Todd Blanche look like?
- [26:30]
Robert McWhirter
Well, I think the DOJ by Todd Blanche is just going to be a more intense version of the DOJ by Pam Bondi in terms of his professed loyalty to Donald Trump. So I don't see a lot of changes. He was kind of her henchman to affect all the whims of Donald Trump. So I don't see a big change coming from there. And that's going to actually be unfortunate.
- [26:56]
Joe Matthew
Interesting. She's being reassigned, says the president, transitioning to a job in the private sector. I hope when I get fired someday people frame it that way. What would a former attorney general like Pam Bondi be doing? Does she go back into the legal sector on a private level? Robert, what do you think?
- [27:16]
Robert McWhirter
Well, I think Pam Bondi is going to have a heck of a hard time because I think she's facing bar disciplinary challenges. I don't see how she keeps her bar license given the things that she did as attorney general. And I'll name two things. Filing charges against James Comey without any probable cause when it was clear from the beginning that no crime occurred, the fact that she could not get a grand jury to indict him. I mean, the grand jury will almost indict anybody. And the fact that she couldn't achieve that because she had no case. And it's clear from the outset. And it was also clear that she was just doing it because Donald Trump wanted to attack his perceived political enemies. You know, lawyers get disbarred for that. We're not supposed to do that. We're supposed to make objective decisions under the law with evidence. So Pam Bondi goes back to Florida. I'm not sure there's many law firms that are going to want to hire a lawyer who's facing bar proceedings and likely going to be disbarred very soon. Could be she'll go to some kind of Republican think tank, cushy little thing or whatever. I don't see how getting fired is a transition to the private sector. When you're working in the government, that's a firing.
- [28:26]
Joe Matthew
Yeah, well, it's amazing that I think, as Matt Bennett said earlier, the guy who, who is known for firing at the end of every episode of the Apprentice just can't seem to get that word out. Robert Then let's go a little further down that road. What will be Pam Bondi's legacy at the Department of Justice?
- [28:43]
Robert McWhirter
I think it's going to be one of, ultimately, I think it's going to be one that something is one of ridicule, and I can't really phrase it anyway. She was essentially ineffective at doing the job, but she was ineffective at understanding the basic foundation of the job. The Attorney General, like all cabinet members, take an oath to support the Constitution. They don't take an oath to support the president. Now, they can be fired, of course, by the president, but our government officials are not supposed to be personally loyal to a president of the United States. They're loyal to the Constitution. That's everything from our generals and our soldiers to our attorney generals and our EPA director. All of them take an oath to defend the Constitution, not to defend a given presidency. And the fact that she didn't know that is really problematic. And I'll give you one example. Early in her tenure, she sent an Attorney general memo to all Attorney General offices. Now, those memos usually define things like how to chase after terrorists and prosecute narco traffickers. Her memo was a directive that no Attorney General's offices should ever use paper straws again, because Donald Trump had filed an executive order saying no paper straws because he doesn't like paper straws in one of his 12 Diet Cokes a day. To have an Attorney General of the United States send a memo about paper straws is just absurd. And it shows the lengths at which she was willing to go to basically suck up to Donald Trump.
- [30:20]
Joe Matthew
Well, he says she was a great American patriot and a loyal friend. And I guess he really means this. He says, we love Pam, which is not something you hear a lot when you get fired. What does this mean for 2020, if anything, particularly, ROBERT if we have an acting Attorney general, does that handicap somehow the Attorney General's ability to prosecute these cases?
- [30:42]
Robert McWhirter
Well, I think it might mean that some attorney general offices will go back to plastic straws. But leaving that aside, yes, having an act attorney general is difficult because there are certain statutory functions. There's a, there's a time period at which the an attorney general can only act. An attorney general has to actually be ratified by the Senate so the president appoints him. So whether Todd Blanche, given his missteps, can, can get that is going to be in question, especially with the growing popularity of Donald Trump and also the unpopularity among Senate Republicans who don't fear him as much as they did because they're not as worried about him putting in a MAGA primary against them. So this may be a bumpy ride for what happens. And the problem for the country, Joe, is the attorney general does important things. They prosecute narco traffickers, they prosecute people for federal crimes, frauds foisted upon the American people. It's an important job that needs to have serious people in it. And the fact that we don't and haven't had that, we've all had to suffer
- [31:51]
Joe Matthew
pretty remarkable times. We're in here, Robert. I love the suspenders. I'm delighted you could jump on with us here On Balance of Power. And we appreciate your insights as always. That's Robert McWhirter, the constitutional lawyer practicing criminal law attorney in the offices of Robert McWhirter once again. Back with us On Balance of Power. Stay with us On Balance of Power. We'll have much more coming up after this.
- [32:17]
Public Ad Narrator
Support for the show comes from public. Lately it feels like there are two types of investing platforms. Some are traditional brokerages that haven't changed much in decades. And others feel less like investing and more like a game. Public is positioned differently. It's an investing platform for people who are serious about building their wealth on public. You can build a portfolio of stocks, options, bonds, crypto without all the bugs or the confetti. Retirement accounts. Yep. High yield cash. Yes again. They even have direct indexing. Public has modern design, powerful tools and customer support that actually helps go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market ad paid for by Public Holdings Brokerage Services by public investing member FINRA, SIPC advisory services by public advisors, SEC registered advisor crypto services by 0 hash. All investing involves risk of loss. See complete disclosures@public.com disclosures.
- [33:16]
Bloomberg Audio Studios Announcer
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- [33:35]
Joe Matthew
Pam did a tremendous job, the president says, overseeing a massive crackdown in crime. We love Pam. And she will be transitioning to a much needed and important new job in the private sector to be announced at a date in the near future. Absolutely remarkable. Lee Zelda reportedly in the pipeline here for the job on a permanent basis, but we'll find out together as we do most things around here in real time. As much as I would love to ask Liz Pancati about all of this, and I bet you that would be quite an interview, we wanted to talk about the fact and it's been one of these days. I haven't said it till now. Happy Liberation Day. Remember what we were doing one year ago today. We've made it to the anniversary and Liz Pancati is managing director of Policy and Advocacy at the Groundwork Collaborative. Great to have you back. Should I say happy anniversary?
- [34:25]
Liz Pancati
Happy Liberation.
- [34:26]
Joe Matthew
Is it happy? Because it was doom and gloom and there were wild forecasts about upending the international economy. And maybe you'll tell me we did. What has happened to the global economy in one year of the president's tariff regime?
- [34:40]
Liz Pancati
Well, we had a lot of tacos, so that for one. But I think that if, if we think about the president's speech about this time on the day after April Fool's Day, which he made sure to note when he announced all these tariffs, you know, he said it would usher in a manufacturing renaissance here in the United States, that we would build things again in the United States. And in fact, if we look at the record over the past year, what has actually happened is we have lost 100,000 manufacturing jobs. We are losing construction jobs. We are, in fact, building fewer things in this country as a result. And it is much more expensive to build, given that his tariffs are on building materials, on steel forgings, to manufacture things here in the US across the board, it has really increased prices for consumers and businesses alike. I think inflation is running anywhere between half a point and a point higher than it otherwise would be if we didn't have Trump's tariffs on the books. And it had really erased a lot of the progress we had made on inflation in 2024. And unfortunately, we are seeing the Fed try to grapple with that. And now another twist in the story is, you know, his war on Iran, which is further spiking prices.
- [35:47]
Joe Matthew
Well, that's for sure. I'd like to ask you about that in a moment, but you remember what the forecasts were and there was a thought that by August maybe once existing goods off the shelves had to be replenished, that we would see a massive spike in inflation. And if Peter Navarro were sitting here right now, he would tell us that no, it's a one time change in prices and inflation that does not make. But are you surprised that we're not many multiples higher than we are now?
- [36:13]
Liz Pancati
I think it's a good question. One thing was that those forecasts baked in, you know, Trump not turning the switch off and on and off and on and off and on as we
- [36:21]
Joe Matthew
saw from the Supreme Court ruling. So did the SCOTUS save us from ourselves?
- [36:25]
Liz Pancati
I think it was really one of those things where had Trump kept in place the tariffs he announced 365 days ago we would be in a very different situation. He ended up a couple days later turning many of those off. And you saw him negotiate, quote, unquote trade deals over the course of the past year. Many of those didn't actually go into effect. And obviously given his now across the board 10% tariffs, we are looking at a different situation. I think what changed was that Trump, Trump ultimately didn't go through with it. There were lots of sectoral exemptions, there were country specific exemptions. He changed Chinese tariffs many, many times over. And the bulk of that I think as companies were able to increase their inventories by quite a lot leading up to Liberation Day. And in that short window where things were getting adjusted between April and July during his pause, we were able to keep things on the shelf that were a lot less tariff than they would have otherwise been. Of course, the Supreme Court stepped in last month and now or at the end of February. And now we find ourselves in this kind of new order of this global tariff for the next four and a half months or so. Right now, I think the bigger pressure facing the inflation picture is the war in Iran, which, you know, the President's remarks last night I don't think instilled a lot of confidence in markets or in consumers that we'll be out of the, the, the war anytime soon.
- [37:46]
Joe Matthew
We're seeing the market unfold right before our eyes here. And you know, it's, it's amazing. We couldn't have imagined in the Rose Garden it wasn't the Rose Garden Club, I think at that point yet a year ago that we would be in a war with Iran on the anniversary of Liberation Day you've got crude oil up over 11% in New York today. We're back to what, 111, I think it was. Let me be sure here before I say that. Dollars a barrel. Yeah. 112 almost.
- [38:11]
Liz Pancati
I saw dated crude hit 140 today.
- [38:13]
Joe Matthew
That wasn't that something? As that month turns over, pretty, pretty remarkable. This could go on for weeks, maybe even months more. The president said last evening the strait will open naturally, which makes us think that there will not be an operation to force its reopening. What will be the longer term corrosive effect of all of this?
- [38:32]
Liz Pancati
It's not good. I mean, Kevin Hassett, as you heard a couple of weeks ago, said he's got a flowchart. He's got working through the President's remarks last night suggest to me we have worked our way through the flowchart and we are now at. I don't know, find out and see what happens.
- [38:45]
Jeff Mason
Yeah.
- [38:45]
Liz Pancati
Uncharted territory here as we navigate the Strait of Hormuz. As we look at global shortages in helium, we are looking at a chip shortage that could rival that of the 2022 period. As we look at global fertilizer shortages that will be orders of magnitude greater than the onset of Russia's was war on Ukraine. As we look at jet fuel shortages in Europe, they are already canceling flights. Heathrow will be hammered and even in the US And Canada. Amazon announced just this morning that they will be enacting a surcharge on all shippers that move things through North America. And so I think as this all unfolds, unfortunately for American consumers who thought they might be in the clear after the Supreme Court provided relief from those IPA tariffs, this is, is an even bigger wave of inflation coming.
- [39:31]
Joe Matthew
You know, airlines are kind of the obvious first victims here when it comes to the doubling in jet fuel prices. But next earnings season, the next upcoming earnings season, we're going to start hearing in these conference calls about fuel surcharges in all different industries. Right. If this continues in this direction, I
- [39:47]
Liz Pancati
think it's already going to, given where diesel prices are. I mean, shipping and logistic inflation has really never come under management over the, the last year or two. Those costs are up tremendously post pandemic, we really didn't get a hold on them. And with diesel prices up at 5, 6, $7 here in the next few months, stuff's going to get really expensive.
- [40:06]
Joe Matthew
We've got a minute left. This is getting more depressing as we go. So it's almost over. Liz Pancati When's the recession?
- [40:12]
Liz Pancati
You know, I saw folks really tick up their estimates over the past week. Goldman's at 30, 40. I don't think that if you watch that speech last night that I did, I don't know how on, on the street, I don't know how you walk away and say the rest of the year is in the bag and we'll be okay, we'll be able to weather the storm. The market's got it priced in. I think if we're in this war here in July, August, we've got three more months of this. We're really looking at long term damaging economic effects.
- [40:36]
Joe Matthew
Three more months of this says Liz Pancati. I'll tell you, it's not great to think about, but it's always a pleasure to talk it out with somebody who knows what they're talking about. Groundwork, collaborative lisping. Cotti, thank you so much. Happy Liberation Day. Oil is up and Pam Bondi is out. Breaking news today. It's been a heck of a couple of hours and I'll meet you back here on the late edition of Balance of Power with the latest from the White House on the future of the Department of Justice and yes, the oil markets. Thanks for listening to the Balance of Power podcast. Make sure to subscribe if you haven't already, 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
- [41:20]
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- [42:22]
Joe Matthew
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