Trump Says Smart People Back Tariffs

Summary

Balance of Power – "Trump Says Smart People Back Tariffs"

Podcast: Balance of Power (Bloomberg)
Air Date: December 10, 2025
Hosts: Joe Mathieu, Kailey Leinz
Key Guests: Christopher Smart, Rick Davis, Jeannie Shan Zaino, Gene Simmons

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Overview

This episode of "Balance of Power" centers on President Trump's latest campaign push in Pennsylvania, his defense of tariffs as “a smart people” policy, and the broader debate over the U.S. economy, inflation, and Fed policy. Additional topics include political implications of recent races and an extended interview with Gene Simmons (of KISS fame) advocating for the American Music Fairness Act, music industry regulation, and AI.

The conversation offers insight into the economic consequences of tariffs, White House messaging discipline, political fallout from recent elections, and a passionate discussion about royalties for artists from one of rock’s most recognizable figures.

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Key Segments & Discussion Points

President Trump's Pennsylvania Speech: Tariffs, Affordability, and Messaging

• Trump's Late-Night Social Media Blitz (00:55)
  Trump touts his work ethic, claims unparalleled achievements, and repeatedly highlights his performance in cognitive tests. He claims to have aced three cognitive exams "in front of large numbers of doctors and experts, most of whom I do not know."

  • Notable Quote:
    "There has never been a president that has worked as hard as me... My hours are the longest and my results are among the best." – Joe quoting Trump [00:55]

• Tariffs as the "Smart People" Policy (02:23)
  Trump asserts that only "smart people" understand the upside of tariffs, claiming they bring in “hundreds of billions of dollars.” He positions tariffs as central to U.S. economic strength, especially for farmers.

  • Notable Quote:
    "It's the smart people understand it. Other people are starting to learn, but the smart people really understand it." – Trump (quoted/replayed) [02:35]

• Analysis by Christopher Smart (03:06 – 05:53)
  Christopher Smart, former economic official, critically analyzes Trump’s claims:

  • Most economists believe tariff impacts are lagging; the bulk will appear in inflation stats next year.

  • Retailers like Walmart cannot indefinitely absorb extra costs from tariffs—price hikes are forthcoming.

  • Smart foresees headwinds for affordability arguments as tariffs phase through to consumers.

  • A labor supply crunch due to immigration crackdowns may add wage inflation to the economic mix.

  • Key Exchange:
    Joe Matthew: "You're telling me it's not about to get better, it's probably about to get worse." [04:02]
    Christopher Smart: "That's right...when people aren't sure that these tariffs are here to stay...they have to start pricing in the potential for more..." [04:20]

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Fed Decision Anxiety & Political Crosscurrents

• Fed Dilemma, Rate Cuts, and Uncertainty (05:20 – 07:52)

  • With inflation falling significantly from its peak, the Fed is now in “the tricky bit” – choosing whether to keep cutting with tariffs still looming.

  • Christopher Smart notes Jay Powell’s challenge: lacking fresh data due to a government shutdown, and the increased politicization of the Fed.

  • Discussion around whether Kevin Hassett (Trump administration adviser) will be the next Fed chair, and if so, whether he can lead with impartiality.

  • Notable Quote:
    "It's a difficult time for investors to look at. The Fed drama in the background is on their minds, but I don't think it's at the top of the list right now." — Christopher Smart [07:57]

  • Fed Culture and Future:
    Internal divisions at the Fed are more pronounced than usual; the dot plot (forecast) will be closely watched for consensus vs. dispersion.

    • "It's very new, I think, for a Fed to look so divided." — Christopher Smart [08:57]

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Political Panel: Campaign Messaging, Polls, and the Miami Race

• Trump's Campaign Rally Performance (13:22 – 16:06)
  Trump’s rally in Pennsylvania is dissected for its noisy, undisciplined messaging and use of affordability as a “hoax.”

  • Jeannie Shan Zaino argues Trump’s approach is backfiring, with voters not convinced by his framing.

    • "This is not working. And the polls show it." – Jeannie Shan Zaino [15:36]

  • Rick Davis notes the messaging discipline is lacking, and without Trump directly on the ballot, MAGA voters may not show up for midterms as needed.

• Rhetoric Shifts: Immigration Comments (17:54 – 20:58)
  Trump goes off-message, reviving derogatory comments about immigrants and certain countries, risking backlash among moderates and independents.

  • "He resorts to this kind of rhetoric when he's got nothing else to offer." – Jeannie Shan Zaino [19:20]
  • Miami mayoral race is cited, with immigration policies arguably hurting Republican candidates’ prospects.

• Interpreting the Miami Mayoral Result (20:58 – 24:09)
  Rick Davis sees it as a warning sign ("canary in the coal mine") for the GOP, though not as sweeping as last year’s Democratic statehouse victories.

  • "I think it's a wake up call. I don't think it compares to what we saw last November..." – Rick Davis [21:41]
  • Jeannie counters that Democrats’ messaging on issues like ICE raids is resonating across contests, showing Republican vulnerability.

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Fed Cut Expectations (24:09 – 25:23)

• Anticipation of a Quarter-Point Rate Cut
  Rick Davis recommends the administration claim the cut as a victory.
  • "The White House should take a victory lap today if the rates get cut." – Rick Davis [25:15]

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Extended Interview: Gene Simmons on the American Music Fairness Act, Music Business, and AI

• Advocacy for Artist Royalties (28:10 – 32:38) Gene Simmons delivers a forceful case for the American Music Fairness Act, highlighting the hypocrisy of U.S. radio making billions while artists receive nothing for AM/FM airplay (in contrast to practices abroad):

  • "The astonishing, stunning, and shameful fact is that no matter who you hear on AM and FM radio, they're getting zero pennies for the airplay." — Gene Simmons [29:23]
  • "Jimi Hendrix has never in his entire career or now, ever gotten paid a single penny when his music is played on AM and FM radio." [30:22]

• Insider Perspective on Industry Deals (36:15 – 37:36)
  Simmons briefly addresses the sale of KISS’s catalog and legacy, correcting the record on news reports and promising a bright, expansive future for the brand.

• AI in Music: Risks and Policy Needs (39:00 – 41:04) Simmons warns about the rise of AI-generated music, calling for robust federal (and ideally international) regulation:

  • "AI is a concern. If left unregulated, anything...you've got to have some parameters that we control instead of AI." – Gene Simmons [39:22]
  • "You need a federal law that encompasses the entire country. I would highly recommend, and I would hope, the entire planet...it's an issue for the UN." [40:17]

• Advice to Young Musicians (41:11) Simmons urges up-and-comers to have a fallback plan in a tough and changing industry.

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Notable Quotes & Moments

• "There has never been a president that has worked as hard as me... My hours are the longest and my results are among the best."
  — Joe quoting Trump’s Truth Social post [00:55]

• "It's the smart people understand it. Other people are starting to learn, but the smart people really understand it."
  — Trump, on tariffs [02:35]

• "We're not getting our votes out. People aren't happy with what we're doing."
  — Rick Davis, on Republican turnout issues [21:41]

• "You should let me talk more. I can increase your [ratings]...More people will watch this instead of Spongebob Squarepants."
  — Gene Simmons, with characteristic flair [38:56]

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Timestamps for Key Segments

• Trump’s Social Media Post/Cognitive Tests: 00:55 – 01:55
• Tariffs—“Smart People” and Economic Analysis: 02:23 – 05:53
• Fed Policy and Hassett’s Prospects: 05:20 – 11:34
• Trump's Speech & Campaign Messaging: 13:22 – 16:06
• Immigration and Miami Race Fallout: 17:54 – 24:09
• Fed Rate Cut Discussion: 24:09 – 25:23
• Gene Simmons on the American Music Fairness Act: 28:10 – 38:59
• AI Regulation in Music: 39:00 – 41:04
• Gene Simmons' Industry Advice: 41:11

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Overall Tone & Style

Throughout, the hosts maintain an urgent, conversational tone, blending political analysis with humor and industry insight. Simmons infuses energy and directness, especially when advocating for artists’ rights and new music industry regulations. The political panel offers candid, sometimes wry, appraisals of both parties’ tactics and missteps.

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Summary

This episode is a deep dive into the dynamics of 2025 U.S. politics and economics, with sharp commentary on Trump’s evolving political strategy, the realities of tariffs and inflation, and high-stakes Fed leadership decisions. The lively and incisive discussion with Gene Simmons adds unique perspective on music copyright, AI risks, and the intersection of pop culture and policy, underscoring the show’s timely blend of Washington and Wall Street with celebrity gravitas.

Transcript

[Gene Simmons]

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[Joe Matthew]

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[Gene Simmons]

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[Joe Matthew]

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[Gene Simmons]

To change how you do business, let's.

[Joe Matthew]

Create Smart to Business IBM.

[Jeannie Shan Zaino]

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.

[Joe Matthew]

It's quite a night for President Trump. He went all the way up to Pennsylvania to talk about affordability and mocked the word, calling it once again a Democrat hoax. But he was busy on Truth Social. Just about a couple hours before midnight, we saw the post. There has never been a president that has worked as hard as me, he wrote, exclamation point. My hours are the longest and my results are among the best. But interesting. And this was a long post. You get about halfway through it, and it was quite revealing. I have done something no other president has done, he wrote on three separate occasions, the last one being recently by taking what is known as a cognitive examination, something which few people would be able to do very well, including those working at the New York Times. And I aced in all caps, all three of them, in front of large numbers. Get this in front of large numbers of doctors and experts, most of whom I do not know.

So the president of the United States is now taking on the regular. We've had three now in I don't know what period of time is that in the last 10 months with a battery of doctors he doesn't know watching him. We'll just park that because I feel like we need to hear more about it. We heard a lot more about tariffs last night because you can't have one story without the other when it comes to affordability. And the president made it pretty clear to the people watching in Pennsylvania that if you're not on board with the tariffs, well, there's probably something wrong with you.

[Gene Simmons]

Listen, I took a lot of heat. I got up early on. I said my favorite is turning out. You know, tariffs are bringing us hundreds of billions of dollars.

[Joe Matthew]

I just helped our farmers out.

[Gene Simmons]

It's amazing. It's the smart people understand it. Other people are starting to learn, but the smart people really understand it.

[Joe Matthew]

The smart people are starting to understand it. Let's see if Christopher Smart sees it that way. He's the founder, managing partner at our growth group, former special assistant to the president, National Economic Council in the Obama administration. Great to have you back in the nation's capital. Mr. Smart, great to be here. Is the president right about this? Because a lot of smart people have been questioning the impact of these tariffs and on prices specifically.

[Christopher Smart]

Well, we haven't taken our cognitive tests yet at the our broth group and I'm not sure whether you've done that yet at Bloomberg, but at least we.

[Joe Matthew]

Have to do that. James, I didn't get one here.

[Christopher Smart]

Most economists I think will tell you that the tariffs that have been put in place have yet to really hit. And in terms of inflation numbers, a lot of the things that are showing up on store shelves today got on the boats before the tariffs.

[Joe Matthew]

That why is front running we were just talking about with Stuart Paul.

[Christopher Smart]

I think there's some of that going on and then we'll see a little bit more of that coming in next year. I think those will be really reflected in inflation numbers once we start getting inflation numbers again because of course with the government shutdown we had that lag. But I think that's going to be a headwind for a lot of consumers next year and that's going to make his case about affordability maybe a little harder to make. I mean it doesn't really matter. You know, economists and investors look at the numbers and say well things are getting better. But if you don't feel like it's getting better for a politician, I'm not sure that translates into the votes you're hoping.

[Joe Matthew]

Right. That's the political side of things. But you're telling me that it's not about to get better, it's probably about to get worse. Combination of front running and companies. You tell me we're hearing from the likes of Walmart and others to say that we can't absorb this forever, that at some point we will start passing this on in different ways. Is that what you're waiting for and why did it take so long?

[Christopher Smart]

Well, well I think that's right. I mean on the other side of things we don't expect tariffs to go much higher from here. It's really a question of the confusion of where things settle down. And so hence the argument about the.

[Joe Matthew]

One time price adjustment we hear from Scott Bessant.

[Christopher Smart]

Exactly. Exactly. And that's why I think people sort of expect there will be a one time increase. The problem is when it starts feeding into inflation expectations and when people aren't sure that these tariffs are here to stay or whether there might be some adjustments along the way. They have to start pricing in the potential for more coming along in their supply chains. At the same time, you've got the suppliers, the, from abroad looking for other markets to sell into where they may face fewer tariff barriers. And that's going to throw things off as well in terms of the price and the balance of supply and demand. And then on top of that, with the immigration crackdown, you've got a labor supply that may be more contracted and that will probably feed through into wage increases next year. So I think there's a lot for interest for that for the President to look at.

[Joe Matthew]

And of course, the Fed spiral, if, if you consider the wage, well, it's.

[Christopher Smart]

Certainly another wave of things. Whether it gets out of hand beyond that or not. It's certainly not, it's a, it's a, it's a, it's a, it's an inflation fuel rather than a, rather than a.

[Joe Matthew]

So if you're Jay Powell, you're still pulling your hair out. Maybe some folks thought around Liberation Day this would be settled. A lot of it is not, which you have already established. So I guess a quarter points in the books today. Tell me if you see it differently. But there's still great uncertainty about what happens after this last meeting of the year.

[Christopher Smart]

I think there's a lot of uncertainty. I think that is the problem for, well, Jay Powell is probably circling that date in May when he can go on to whatever he comes up next and maybe he decides to stay or maybe he doesn't as a member of the committee. But I think these are the easy cuts. Right when we came from 9% down to 3% in terms of headline inflation to keep Fed funds rates at 5 or 4 seems a little high. But I think now as you get closer with the cut today to 3% inflation and we're sort of below 3% right now. But if these tariffs do come through next year, if we have a spike in oil prices or other commodity prices next year and we have pretty resilient consumer demand, which I think most people are penciling in because of potential for tax cuts because of other benefits in the one big beautiful Bill act that takes effect at the beginning of the year. So I think it's going to be a much trickier path for the fed to look at 3ish inflation and say, gosh, the closer we get to that, you know, we certainly don't want to go below 3% if inflation is persistent there.

[Joe Matthew]

Right. Jay Powell is pretty worried about the job market right now. And I know that's another big question mark going into next year. He's got to stand in front of a room with the likes of Michael McKee and everyone to answer questions about all this stuff today with less data to work with than maybe he's ever had at least recent data going into one of these meetings. Could this be a short news conference? What could he possibly say?

[Christopher Smart]

Well, I think he's got, he's got a problem to fill time because as you say, the data is not there. But you know, there is a lot of nongovernmental data that we've all been piecing together.

[Joe Matthew]

We can chew on the beige book and ADP all day long. But I also wonder about the political layers that are being added on top of the Fed here. The President's doing his final interviews apparently as we speak. With this meeting taking place, it's been widely reported by Bloomberg that Kevin Hassett is at the top of the list here. Is there such thing as a lame duck Fed chair?

[Christopher Smart]

Well, I think it's always difficult in the end of any Fed chair.

[Joe Matthew]

I'm just in trouble now.

[Christopher Smart]

But I think it is, you know, it's a difficult time for investors to look at. I think, you know, most investors are still looking at those headline inflation numbers, those headline growth numbers. The Fed drama in the background is on their minds, but I don't think it's at the top of the list right now. And so again, it's more a question of what happens when the next Fed chair takes charge. How much do they trust when they get close to that 3% number? How dovish is the new Fed going to be? How effective will the new Fed chair be in bringing the committee around? Because it's not just the one vote that matters. It's being able to steer the committee in the right direction.

[Joe Matthew]

Sure. What are you hearing about the culture inside the Fed when they go behind closed doors for a two day meeting? It's like, are we, is this the group of survivors? You know, we're all under fire here, out there where we've got something in common? Or are there factions like the, like the cafeteria in grade school where Stephen Myron doesn't even have a table to sit at?

[Christopher Smart]

Well, I'm not sure it's quite like grade school cafeteria, but it is very new, I think for a Fed to look so divided. And that's one of the things that we'll be looking at today is the dot plot to see how much dispersion there is among the forecasts of the new members, and the more there is a differentiated view of the way the economy works. Steven Myron has a very different view of what our star, what the natural inflation rate is, what the natural interest rate is from a lot of the other mainstream economists. And I think that's going to be the beginning of a pretty fierce debate going forward.

[Joe Matthew]

What are people in the cocktail circuit? What are economists saying about Kevin Hassett? Because this is a man who had a lot of respect. He was an economic adviser on the McCain campaign. He's worked in multiple administrations, but he's taken on a slightly different role in the public sphere, essentially finding himself on cable news every day defending the President. And he's gone to great lengths to defend the President's economic policies. Will he be seen as a political animal if he gets the job?

[Christopher Smart]

Well, first of all, thank you for thinking that. I spent a lot of time on the Congress. I know better, but I think he's in a box. I mean, he is a capable economist. He has done a lot of work over the years. But no matter what he does, it's going to be hard for him to differentiate himself from this role as being a partisan advocate for the President's policies to being a neutral judge of what are the appropriate interest rates are going to be.

[Joe Matthew]

Is the market hoping for a surprise on this then?

[Christopher Smart]

Well, again, it sort of depends on what the numbers look like. You know, it's, there's a, there's a viable case where inflation will drift lower from here and so, so few, few more rate cuts will make sense and the market will accept that and, you know, things will be fine. But I think again, when push comes to shove and you've got the President making social media posts at night and the Fed meeting the next day, how that new Fed chair balances those is going to be very difficult.

[Joe Matthew]

Wouldn't want that job, the question is, because, of course, it's one voice in a room of many expert voices. The question that we keep hearing come up on this program, Christopher, is whether he can lead to consensus. Do you think he can?

[Christopher Smart]

Well, we'll see. I think he's got to be able to do that. And again, I think the problem is he comes from a few of his more recent roles as being, you know, very partisan, supporting the President, supporting the Republican agenda as it is today, and stepping out of that to become more balanced in his judgment. I think time will tell. I think it'll be, it'll, it'll take some, some work on his part to, to do that both with his Fed colleagues, but also with the market. The market, the market audience.

[Joe Matthew]

It's amazing how much we still don't know about what form this Fed will take in the months ahead. Christopher Smart, our growth group, thank you so much. It's great to see you. Great to be the nation's capital. I was up in your fair city last weekend, the great city of Boston. It's a special time of year up there and I wish you happy holidays. I hope it's beautiful. Beautiful the next couple of weeks in Boston, Massachusetts, I'm Joe Matthew in Washington. We'll assemble our political panel next, only on Bloomberg. Stay with us on Balance of Power. We'll have much more coming up after this.

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[Jeannie Shan Zaino]

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 to live on Amazon Alexa from our flagship New York station. Just say Alexa.

[Joe Matthew]

Play Bloomberg 11:30 the Mount Airy Resort and Casino in the Pocono Mountains was the scene of the speech last evening, the first in what we're told will be a series of campaign style rallies addresses to voters by the President of the United States on the issue of affordability. 90 minutes and it was the greatest hits. He did talk about affordability. He also mocked affordability and got through a range of different issues in this period of time, talking about everything.

From Somalia to what he said back in 2018 about certain African nations We'll get to that in a minute. The point is it was a noisy speech. The president was in full campaign rally mode. And there are questions as he reminded the crowd that he didn't even want to give that speech. He only did it because Susie Wiles forced him to. There are questions about whether this is going to be effective. We talked about it coming in. Let's do it now. Coming out with our political panel, Bloomberg Politics contributors Jeannie Shann Zaino and Rick Davis are with us. Rick is our Republican strategist partner at Stone Court Capital. Jeannie Shan Zaino remembering when Joe Biden tried some of this as our daughter Democratic analyst and Democracy visiting fellow at Harvard Kennedy School's Ash Center. Hey, Jeannie, is this going better based on what you saw last night, at least for Donald Trump, than it was for Joe Biden?

[Jeannie Shan Zaino]

It is not Joe. And I think. Did he call her Susie Trump last night a few times as well. So, Susie. Well, listen, I love words, too, but it was good. You know, she said that he doesn't know it yet, but he's going to be out on the campaign trail for the midterm like it's 2024. And if yesterday or last night was any indication, that is not a good strategy. Not just what happened at this rally, but also what happened in Florida and in Georgia and these elections where Republicans are underperforming. So Donald Trump consistently telling people everything's good. You only need to have he brought up again, your favorite Joe, the dolls. You only need a couple dolls.

[Joe Matthew]

Right?

[Jeannie Shan Zaino]

This.

This is not working. And the polls show it.

[Joe Matthew]

He brought up the pencils as well, which we were exploring a little while ago with Stuart Paul. You don't need 37 dolls for your daughter and you don't need all the pencils. He said only one should be enough. He twice called affordability a hoax, Rick, and then said that he's no longer allowed to use that phrase. What was the impact of this speech?

[Rick Davis]

Well, it's got us talking about it. So I think that was part of the strategy was to try and change the narrative. He wasn't having a great narrative in the month of November and December and they've been sort of off on various tangents for quite some time. And so this was at least the staff strategy of getting him out there talking about cost of living and affordability. Problem is they didn't tell him what to say about it, obviously. Yeah, I'm sure he got back to the White House. See, I said affordability 14 times. You can't call it a hoax 14 times and think you're going to get anywhere. Yeah, I mean, I think message discipline is going to be a really hot issue in this White House for the next year because clearly they've made a decision based on what he said last night that, that he believes he's on the ballot in 26. And if I would, you know, if I were running a campaign right now, you know, I wish he were because there's no proof that without him on the ballot, these sort of new Republican voters that came in through MAGA are going to show up to vote. They are, they are one every four years voters and they've always has been. And that's not new to Trump. So when they've signed on with maga, you know, what MAGA signed on to was a very difficult off year election strategy. And so I get it. It's the strategy saying, you know, most presidents would run away from a midterm. He's going to lean in because, you know, without him making this about him, he can't rely on these voters to show up. And then a lot of Democrats are going to get elected and it's going to really derail his second two years in office.

[Joe Matthew]

Rick mentions message discipline and yes, we are talking about the speech. The president certainly got a lot of eyeballs. But I guess one of the issues might be the parts that are going viral. They're not about affordability, they're not even about tariffs. In this case, a brutal attack on the Somalian community. Again, he had some very long passages about immigration and veered into a lot of topics like that that really were not central to the affordable affordability.

Message and even confirmed reports that he had denied about the comments he made about some African and Asian nations. Let's, let's go back to the real here.

[Gene Simmons]

You see, why is it we only take people from countries, right?

[Joe Matthew]

Why can't we have some people from Norway, Sweden? Just a few. Let us have a few from, from Denmark. Do you mind sending us a few people?

[Gene Simmons]

Send us some nice people.

[Joe Matthew]

Do you mind? But we always take people from Somalia.

[Gene Simmons]

Places that are a disaster, right? Filthy, dirty, disgusting, ridden with crime.

[Joe Matthew]

Filthy, dirty, disgusting. Jeannie, back in 2018, when it had been reported that, that he used that term to describe African and Asian nations, he denied it, called it fake news and reported by the enemy of the American people. He was boasting about it last night. Should we take him at his word?

[Jeannie Shan Zaino]

This has been Donald Trump since he came down the elevator in 2016. There is nothing new Here we have it on tape over and over again. He resorts to this kind of rhetoric when he's got nothing else to offer because he thinks he is going to be able to rile up his base and get them out to vote. But the problem is the results, at least this year, are showing something completely different. You look down at that Miami mayor's race where he endorsed the Republican candidate who lost by double digits to the first Democrat since 1998, the first female. And what did she run on, Joe? She ran of course on affordability, but in particular on these ICE raids on the treatment of immigrants. This is something we are seeing writ large across the country as we have an ICE that is out picking up young college age freshmen in Logan Airport and transporting them against a judge's ruling back to a country they haven't been to since they were a child. We have a report out from Amnesty International yesterday describing the conditions at Alcatraz Alley as deplorable violations of human rights. He's taken an issue that he was okay on and doing pretty well on and he has turned it around. And why? Because of his treatment. And this rhetoric is another reminder of his treatment of immigrants and migrants to this country, which most people in the moderate and independents don't find particularly appealing and which is costing Republicans elections like we saw in Miami yesterday.

[Joe Matthew]

How are you reading this Miami race, Rick? Eileen Higgins, the first Democratic mayor in nearly 30 years is a heck of a headline. 59% according to the unofficial results. Emilio Gonzalez had about 40%. He was supported by Trump and DeSantis. Is there a message here or is this a one off?

[Rick Davis]

You know, it's a little bit of a canary in the coal mine. This should have been a no brainer. Republican control of Florida has become a standard. Right? Nobody, Democrats, barely even want to run there anymore. And to see something like this happen in the municipality, look, it's a ceremonial at best.

Mayor'S race. It's not Dade County. Right. And so, but you know, the Republican was a Cuban. That should have ensured victory on its own. Just from the demographics. Cuban community tends to be monolithic in their voting patterns and there are a lot of them in this jurisdiction. So yeah, I think it's, I think it's a wake up call. I don't think it compares to what we saw last November where, you know, Democrats swept state houses and you know, in two important electoral states. I think that's the message, you know, Republicans need to be understanding. But this certainly is consistent with that and that is we're not getting our votes out. People aren't happy with what we're doing. I don't think this was an immigration vote. She ran on the winner. Democrat ran on corruption and cut and red tape so that we can have more real estate development in the city. I mean like I don't buy that that's the narrative that this anti immigration narrative is, is played out in this race. Maybe others for sure, but not this one.

[Joe Matthew]

Are we too quick to try to turn every race into a bellwether here? Jeannie, we've got some time before the.

[Jeannie Shan Zaino]

Midterms, some time to go, you know. Yeah, you can't read too much into any single one. But if you look at the totality of the races, we both the specials and the off year elections this year, they have been all moving in the Democratic into the Democratic side. Even those that Democrats have lost. They have been much too close for comfort. And you know, I disagree with Rick. You look at her, her messaging, she was very, very much focused on the ICE raids. And you look at that and that tells you something. He is not. And Republicans are not just vulnerable on the economy where they are very vul. They are also vulnerable on what has been his go to issue which is immigration. And people are seeing their neighbors treated in a deplorable way. It has been consistent messaging on the Democratic side. You look at the New York City Democratic races coming up, that's what they're messaging on. It's across the country and it is registering with independents, moderates and Democrats in a way that this was always a winning message for him, an issue for him. It is not anymore with the overreach of ice.

[Joe Matthew]

I've got to ask you both because we're walking up on a Fed decision here. We've been talking about affordability for the most part over the course of this hour. Rick, we get a quarter point cut it looks like today. Do you expect anything that will follow or markets going to be disappointed?

[Rick Davis]

You know, I can't tell what the market reaction to this will be. It's everything I've listened to on Bloomberg this morning indicates it's kind of baked into the equation. But what I would hope would happen is the president and his economic advisers go out and say, say we told you so, we got it. We're cutting those rates and this is a huge success for the Trump administration and it's going to bring down cost of housing and other things that are credit sensitive. And I just wish they'd make it a positive instead of saying oh it should have been more right. I mean, like part of the imagery around people feeling comfortable about the economy is that some of what you're doing in the first year of office is actually having an impact. The White House should take a victory lap today if the rates get cut.

[Joe Matthew]

Interesting. Jeannie, we only have 30 seconds. Elizabeth Warren is going to say it's time to keep cutting after this, right? How about you?

[Jeannie Shan Zaino]

Yeah, maybe. I am very excited to see what the Fed does today, Joe, but I'm most excited to hear you with Jean Simmons coming up. I have to say that kiss has been running through my head. It's going to be great, you and I both.

[Joe Matthew]

Since the Kennedy center honors on Sunday night. Guys, he's in the building. Rick Davis and Jeannie Shan Zaino and Jean Simmons on the same show. This might be the pinnacle right here. I'm Joe Matthew in Washington. This better be Bloomberg.

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[Jeannie Shan Zaino]

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.

[Joe Matthew]

Thank you and welcome to the Wednesday edition of Balance of Power. I had to think for a minute because time has become abstract. Just take a look around and see what's happening in Washington this week. Of course, we're always here for you in the nation's capital on Bloomberg TV and Radio as we try to connect the dots between Washington and Wall Street. And today, ahead of our special Fed coverage. And before we start boring down into the Fed and interest rates, later on in the program, we zero in specifically on the connection between Washington and the music industry regulation. And I'll point you no further than an op ed in the Washington Post. The headline, congress, I have a plea for you. It was written by Gene Simmons. Yes, that Gene Simmons, who was on stage at the Kennedy center last weekend, the Kennedy Center Awards. You saw him in the Oval Office with Donald Trump. And you also saw him testifying on Capitol Hill yesterday before the Judiciary Committee for something called the AMFA Act. This is about music fairness, royalties. Listen to what he said.

[Gene Simmons]

How do we dare come in second to Russia, an alleged country led by a despot, when they do a better job of paying our king of rock and roll? And we're going to stand by and not pay today's artists and future artists because, let's face it, our children are tomorrow's stars. You got to change this now for our children and our children's children, and I know you will. The President will sign this once. All you guys respectfully get your act together and put this across the board. Let's do the right thing. God bless America.

[Joe Matthew]

He's talking about the American Music Fairness Act's proposed legislation that may or may not get a floor vote. But of course, with the support of the President, that would go a long way. It's got the support of Gene Simmons, and he's with us right now in studio. You spent the week in Washington. Thanks for making us part of it.

[Gene Simmons]

Well, it's my pleasure. And people are shocked. I'll try to encapsulate what all this is for. I know it's a big word like gymnasium. Look, I don't care what kind of music you listen to, but the American.

Music, let's just stop at that point. American music means we created and invented the music of planet Earth. Rock and roll, blues, jazz, hip hop, country and western, all invented and created here. Our stars are the stars of planet Earth. You can go to Africa and hear you ain't nothing. But no matter where you go every Christmas, everywhere around the world, people listen to Bing Crosby. I'm Dreaming of a White Christmas, written by Irving Berlin. The astonishing, stunning and shameful fact is that no matter who you hear on AM and FM radio, they're getting zero pennies for the airplay. So let's play a game. Who's your favorite recording artist?

[Joe Matthew]

Kiss?

[Gene Simmons]

No. Come on. Some. Somebody from the past.

[Joe Matthew]

All right. Jimi Hendrix.

[Gene Simmons]

Jimi Hendrix. Jimi Hendrix has never in his entire career or now, ever gotten paid a single penny when his music is played on AM and FM radio? The stunning fact is that the Russians and some other countries actually do pay performing artists on Radio.

Land Radio AM fm and Americans do not. And this has got to change and should change. Look, I make a living. And people of my age who've climbed the mountain, clawed and scratched their way to the top, were blessed by the American dream because it is alive and I'm living proof of it. So I make a living. But the new artists, every penny counts. And the fact that they can be played on radio and not even make one penny for their performance is criminal.

[Joe Matthew]

As far as I can to a lot of people. We're on the radio right now. You see that big radio mic in front of you there? It's such a good radio show, Gene. They put it on tv. And I've been knocking around the radio business for a minute. We hear about BMI and ASCAP fees. Has this always been the case? Or was it simply an exchange? You play my music for. For exposure, for publicity. And I sell tickets and I sell albums. And that's now out of balance. Is that. Is that what happened?

[Gene Simmons]

Artists are not interested in negotiating how their careers are built. Understood radio needs.

[Joe Matthew]

Where did the cap and BMI fees go?

[Gene Simmons]

ASCAP and BMI specifically relates to writers and publishers, which doesn't affect the masses whatsoever.

[Joe Matthew]

So is this radio's fault or your contract with the record company? How come the middleman isn't giving you money?

[Gene Simmons]

Nothing to do with the record company. Because they make money when they sell records. And writers and producers. This is the actual recording artist. You like Elvis, you like Sinatra. When you hear that song on the radio, the people we tune in for actually never get paid.

[Joe Matthew]

Amazing.

[Gene Simmons]

Everybody else gets paid. The writers and the publishers and the advertising dollars. Radio last year made $14 billion. You know how much of that went to the Sinatra state or Tame Impala or all the new bands?

[Joe Matthew]

I think I'm getting zero. Yeah. Okay. That's in contrast to satellite radio digital platform.

[Gene Simmons]

But we're not talking about that.

[Joe Matthew]

No, I know, but I just want to square that. Your suggestion? The radio industry is behind the times because all of these other platforms.

[Gene Simmons]

I'm not suggesting anything. I'm stating fact that AM FM radio is. Well, I want to use language that doesn't get anybody legal involved in the patois of the street. It's criminal. You cannot. America is based on the premise that if you work hard, you should get paid. So everybody's getting paid When a radio station AM&FM broadcast. The executives get paid, the advertisers pay money. The billboards on the street which use our name and likeness for free. If you use my name and likeness, otherwise I would take your firstborn and your house. But radio is allowed to do that. They keep 14 billion. And the new artist, by the way, who's trying hard to make it, is not going to make those precious pennies to help them survive. And that's as far as I'm concerned. My opinion is it's criminal.

[Joe Matthew]

Listeners you write in the op ed are more likely today to discover new music on Spotify, Apple, YouTube, TikTok. At the same time, more and more local stations have been bought up by big corporations like iHeart and Odyssey. They still play the music without paying the artists, often hits that listeners already know in order to generate ad revenue. I've, as I mentioned, worked in radio for a while and I've seen rampant consolidation in this business. Has that made it worse?

[Gene Simmons]

Well, one way or the other, whether it's consolidated, the result is the same. A truck runs you over and the guy comes out and says, I'm sorry, I ran you over, I didn't mean to do it, or I don't like you, I ran you over. What's the difference? You've been run over. So the question is an interesting dialectic, another big word like gymnasium. The result is nothing's changed. The artists are not getting paid. I mean, especially our children. And our children's children are going to be the next generation superstars after they climb their way to the top and fight for it. What do they have forward to look? What do they have, you know, looking forward? They're going to get zero pennies when their songs are played on AM and FM radio. And that's. That's insane.

[Joe Matthew]

Do you have the President's support on this? Did you talk to him about it?

[Gene Simmons]

I spent some time with the President alone in the Oval Office and we talked about family. And I've known the President, proud to say, before he became a politician. But what else we talked about is a private issue.

[Joe Matthew]

Okay, so that wasn't about legislation, I.

[Gene Simmons]

Guess I didn't say that. But you're leading the witness, you, Honor.

[Joe Matthew]

Oh, not to. But I wouldn't say that would be.

[Gene Simmons]

Well, these are semantics. But I'm not anti. Semantic.

[Joe Matthew]

I hope that you're not because we.

[Gene Simmons]

Wouldn'T be able to. You let's. A little clickbait there. What I talked. Yes, I specifically said what I spoke with the President about is not for anybody else's consumption.

[Joe Matthew]

Okay.

[Gene Simmons]

Well, there is such a thing as privacy.

[Joe Matthew]

I completely understand. I only ask you because so many lawmakers come on the air and say if we get a directive from the President, we can make this work. What did you hear in the committee from members? Did you get a sense of votes on this?

[Gene Simmons]

I've heard a lot of support. I met privately with Senator Marsha Blackmun and Mr. Schiff. Both sides of the aisle seem.

Let's just say as soon as Congress gets their act together, the President will sign this. I am convinced of it. My personal opinion.

[Joe Matthew]

Well, our audience should know, and you're talking to the business community right now, that you are no stranger to big business. And some pretty shrewd moves. It was a Bloomberg report when you sold your publishing rights last year. House entertainment, $300 million.

[Gene Simmons]

That's not entirely accurate. So just here to correct it for the record, please. An entity called Pop House, a futuristic company out of Sweden, came and bought Kiss. The underlying rights, the makeup, logos, as well as the writing, publishing for a respectable sum. Enough to buy Rhode Island. I give you a pregnant pause so that it sinks in. But the future looks even more gargantuan than the past. We are in the middle of the first motion picture to be directed by McG. There's an awful lot of stuff that I can't talk about because nobody wants to find out where they're going to get for Christmas. Christmas in July.

[Christopher Smart]

Fair enough.

[Gene Simmons]

There is an enormous commitment by Pop House and the future of Kiss. And this is just the beginning. When you look at a caterpillar and you say, well, that's the end of its life. No, you're short sighted. You don't understand that it's going into a cocoon, which is where we are now. And we're going to come out and defy gravity with beautiful wings and soar to the heavens.

[Joe Matthew]

Very poetic.

[Gene Simmons]

I am kind of a big deal.

[Joe Matthew]

I've heard that. And a poet.

[Gene Simmons]

I was a fan actually, of Bloomberg when he was mayor. Met the gentleman and he struck me as a powerful and attractive man.

[Joe Matthew]

Well, I can only agree with that.

[Gene Simmons]

And I loved his algorithm that made him rich and fit, but that's another story.

[Joe Matthew]

Well, I'll tell you what. We've got the terminal right here. I'm sure there's a disclaimer I'm supposed to read somewhere, but with everything you just described, you just outlined the feeling future of the music business. Why are you chasing down the old format?

[Gene Simmons]

Well, look, the old formats are if they worked and they were justified, should and would continue. But tell me what your retort is, even though I know you're not retorted.

How do you validate our stars, the people who fought their way to the top, never getting a century for radio airplay? How do you validate that while radio is making $14 billion? Again, I'm not demonizing them. It bears noting we need each other. But somewhere between paying artists zero and $14 billion, there should be a. Remember, the name of the act is Fairness American Music Fairness Act. You should let me talk more. I can increase your.

[Joe Matthew]

You could.

[Gene Simmons]

You know, more people will watch this instead of spongebob squarepants.

[Christopher Smart]

Come on.

[Joe Matthew]

Believe that. That's why you're here. Nobody gets this much time, Simmons. Okay, so you said a lot. Well, we consider the future of the music business. Do you worry about AI regulation? Do you worry about these fake O bands coming up? Speaking of algorithms, and by the way, Mike Bloomberg is not only the boss here, but Founder Chairman Bloomberg lp.

[Gene Simmons]

That's right.

[Joe Matthew]

AI is a worry for you or not.

[Gene Simmons]

AI is a concern. If left unregulated, anything. Oh, beautiful horse that you just bring in if it runs wild, You've got to have some parameters that we control instead of AI Right now, there's a country in Western Star that's got a number one record of sorts on some chart doesn't actually exist.

[Joe Matthew]

Yeah. What do you think of that?

[Gene Simmons]

Well, let me just go the. The major problem here, potentially, hypothetically and otherwise, is that if states have the right, and this has to be settled right away, the government must get a federal law that encompasses all of AI to get some sanity out of this. Because if you can do AI legally in Delaware, where you have all your companies so you don't pay, so you pay less taxes because you're a very bright man besides being good looking.

Why should they want to do real music and real art in New York when they can just go to Delaware and do AI? No, you need a federal law that encompasses the entire country. And I would highly recommend, and I would hope the entire planet really gets together. It's an issue for the UN to get a world body to accept it because it's going to happen to the same thing that happened to the unions in America. You charge too much here. So we'll do business in China. No, you want to address the AI issue worldwide so we can control what the rules are, the comings and the going, and what's the income stream. Who owns the ip? Who's the owner of the trademark ad infra and I'd like to announce that I'm running for.

[Joe Matthew]

If you were a kid, you bought a guitar, you wanted to get in the music business, what would you tell them? Turn and run?

[Gene Simmons]

Well, I would tell anyone to do as I did, which is to say to have a fallback position because anything that you pour your heart and soul into has a pretty good chance and that means likely 95% or more you will fail. And in my case, I became a sixth grade teacher and an assistant to the editor the of Vogue magazine, Kate Lloyd, and the assistant to the Puerto Rican Interagency Council, Magdalena Miranda, for the Boricua community, where I did work for a government research and demonstration project ad infinitum, ad nauseam. In other words, if your thing doesn't work out, what's the backdrop? Like, I know you took ballet lessons. If this doesn't work out and I've.

[Joe Matthew]

Lost my shots, I'm not keeping keeping up with it. Yeah, it's pretty cool for you to be here and I appreciate it very much. It is the American Music Fairness Act. That's what he came here to talk about. You don't need me to tell you Gene Simmons, only here On Balance of Power I hope you enjoy the rest of the trip In Washington. Many thanks for being with us. I'm Joe Matthew in the nation's capital, a conversation you will only hear, especially on a Fed day on Bloomberg TV and radio.

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