tv Bloomberg Markets Balance of Power Bloomberg July 18, 2019 12:00pm-1:00pm EDT
david westin. welcome to "balance of power," where the world of politics meets the world of business. washington. donnanfree today, shawn on the on-again, off-again u.s. trade talks to kevin cirilli on top and imminent deal on the budget and the debt ceiling, and paul gordon on reports the ecb may changing its approach to inflation. let's start with you in washington. itthought that they g20 from -- g20 summit with president xi and president trump getting together they would turn things around. have they? shawn: they've put things on pause and now the sides are trying to figure out how to restart negotiations. steven mnuchin, robert lighthizer, and their chinese counterparts are expected to speak later today to try to figure out how they can get talks started again. we are expecting secretary mnuchin and ambassador
lighthizer to go to beijing in the coming weeks to get things restarted. there are three areas where they are stuck. the first of which is what to do with huawei. the president in osaka committed to president xi that he would loosen restrictions on u.s. sales to huawei, which is a big demand from the chinese. the second piece is the president once the chinese to resume form sales, foreign purchases. that is about addressing one of his big political constituencies. where youthing is start these negotiations? there are 150 pages of text they left in may, and it is unclear if that is where they start or they start all over again. david: trade negotiations are always difficult but i do not remember the one where the parties do not agree what they agreed to.
the president said the chinese have agreed to buy agricultural products, chinese said we have not agreed to that at all. why can they not agree on what they have agreed on? shawn: that is one of the big problem and that is a repeat on what we saw after windows areas -- after buenos ares. there were a few weeks when they were trying to figure out what the leaders had agreed to. that speaks to how this administration operates and likes to shoot from the hip. david: how much pressure is there on the sides and the united states? powell extent has jay reduced some of the pressure on president trump. in june it was all about trade. now it is all about the fed. shawn: the president has done a blame forf laying the any softening in the u.s. economy on the bed and its moves to tighten policy to early rather than his trade wars. clearly, we're seeing an impact, we're seeing that crop up in
earnings season. csx saying it was seeing the trade war affect its bottom line. it was not seeing an economic environment like this in a long time. that pressure will creep back in for the present. for the time being, both sides seem to think they can wait this out. david: shawn donnan, great to be with you in washington. let's go up to capitol hill and kevin cirilli. we heard there might be a deal on the debt ceiling in the budget. where are we on the deal? kevin: not so fast. steven mnuchin saying he has agreed to a two-year deal with nancy pelosi over the debt ceiling. we are hearing on capitol hill that details are still being ironed out. potentially, what they are signaling is there is a homestretch and even amongst republicans, a lot of the staffers are scratching their heads, especially the ultraconservatives in the house freedom caucus.
they raise the concern to the white house about potential do with the democrats on this. then you throw in the effects of how many numbers and the numbers they would need. that is where this gets interesting with heightened political rhetoric around this debate. speaker pelosi is having to manage that but also to strike a deal with secretary mnuchin before the u.s. would default on its credit. we also have: speaker pelosi having to deal with elizabeth moran. elizabeth warren came out with plans about private equities. i understand the speakers about have a news conference. you have any sense of what the speakers position will be on this legislation? kevin: i do not think she will take a position. this has been something that has divided the democrats for years and the top line view of elizabeth warren's plans to rein in wall street calls for reinstating glass-steagall. glass-steagall is one of those issues in the beltway that has divided and aligned strange political bedfellows.
elizabeth warren having previously proposed legislation with john mccain. it has a streak of conservatism support and a streak of more progressive support. if that was not enough, elizabeth warren riding high on the polls and becoming a top-tier presidential candidate, injecting all of this into the economic agenda of the democratic platform. she also calls for making the -- she callservice for them to be doing banking services to underserved communities. david: ok, a lot of work to do on capitol hill. kevin, thank you so much for reporting from washington. now let's turn to paul gordon in frankfurt. first thing in the morning our time there was a report from bloomberg that the ecb staff is thinking about changing his approach to the 2% inflation target. what do we know?
but itt is early on would be a fascinating move it to happen. the ecb has not reviewed his inflation goal since 2003. the feeling is we have had so many years of below target inflation that maybe that target which is below but close to 2% is not specific enough. that seems to be the key idea. the hawkish members of the governing council tent is say that below but close to 2% means 1.7% is fine. what happens if inflation starts to subside again? mario draghi feels differently. we understand he is in favor of a hard 2% target or a specific 2% target with a flexibility to run above that if needed to make up for the weakness that has preceded him. the staff members are reviewing at the moment or evaluating, it is not a formal review, but that is something you could become
under mario draghi or his successor. david: it is early days, but give us some sense of what the thinking might be behind us. it does not sound like it is really 2%, it is not as low as 1.7%. it will be enough to do something that has not been done this far, which is to move inflation up. is this some notion the expectations would be so different that it would fix the problem? paul: that is some of the analysis we have seen from thatmist and we understand senior economist at the ecb did a presentation to policymakers saying precisely that. you do get a chance to boost inflation but you get a chance to boost inflation expectations because the d-league is if you give the ecb the agreement to run inflation above inflation you will keep stimulus in place for a longer time. there is no doubt about that. this symmetry is something mario draghi has stressed himself but
it is not baked into price stability. the sense is you want to see that happen. david: a fascinating time, at the end of his term. many thanks from paul gordon reporting from frankfurt. now we have to find out what is going on in the markets. she is in new york with what is --emma chandra is in new york with what is going on in the markets. emma: another day in the red. the dow jones down and the nasdaq down .5%. earnings and a slightly more negative outlook for global trade weighing on sentiment among investors. if the current situation holds, we will be looking at the third consecutive down day for all three majors. if we take a look at the s&p 500, all but two sectors are trading in the red, being pulled down by communications and consumer discretion. netflix had the big miss. i've a chart that shows you how the s&p is performing on a
weekly basis. that red bar showing we are headed to our first down week after two weeks of gains. also look at this court of red. that would be the worst week since may. may was pretty miserable for stocks. i mentioned the corporate earnings. let's take a look at some of the winners. i'm looking at union pacific, of the most in three months, rising 4%. it topped estimates. that has analysts calling the results commendable. you have ibm having its best day since january. revenue decline for the fourth straight quarter but it did still do slightly better than estimated. investors pinning their hopes on this acquisition they just closed of red hat. not much detail on that. there will be a further update from ibm on august 2. all eyes will be back on ibm. ebay rising 2% on the highs of the session. it has come back since then.
it waspany also said willing to consider asset divestitures. in terms of the earnings losers, let's check those. united rentals and m&t bank falling. the big story is netflix down 11%. the stock down the most in three years. we have seen the company lose $60 billion of its market value because of subscribers. a big miss their. a net loss of subscribers of 130,000 and the growth of sympathizers -- of subscribers internationally came in at just half of what the company had predicted. david: coming up here, "send her back." that is what people chanted at a trump rally. as the president found his foil for the 2020 election? we asked our panel, next. this is bloomberg. ♪
david: this is "balance of power." i am david westin in washington. we turn to mark crumpton in new york. mark: billionaire financier david epstein will remain behind bars as he awaits trial. a judge in new york has denied epstein bail. prosecutors's have argued epstein is a flight risk and an unrepentant criminal. congress may be a step closer toward an agreement on the debt limit. one democratic eight says lawmakers have reached a compromise on running for veterans health care as a part of the debt limit talks. the treasury department has said that unless congress acts, the government could run out of money to meet payment obligations in september. eu economic affairs commissioner says policymakers need to talk
about how to respond to the global slowdown. he spoke with bloomberg at the g7 meeting in chantilly, france. thing but weone have to reflect on fiscal policy. it is high time we built the right policy because what we see today is a slowdown in the economy everywhere and also the need to address various risks that could come together. also expressed concerns about facebook's digital currency, saying it needs to be fully regulated. the city of paris has ordered a deep cleaning for schools near notre dame after the lead roof melted away in a fire in april. the moves after french investigators reported that lead levels in many schools were far higher than what is considered acceptable. paris officials have also recommended blood tests for pregnant women and young children in the area. global news 24 hours a day, on air and @tictoc on twitter,
powered by more than 2700 journalists and analysts in over 120 countries. . am mark crumpton this is bloomberg. david? david: thanks so much. it began last weekend with a presidential tweet telling four new members of congress, all women of color, that they should go back where they came from. it escalated at the presidents rally last night. rump: omar has a history of launching vicious anti-semitic screeds. back.d her david: they are chanting "send her back." we welcome matt gorman, republican strategist, and a democratic strategist. matt, let me start with you. is this good for the president in his reelection, has he found somebody to run against? matt: i think it is disgusting,
what was said. said.he crowd stepping back from this. i think well before this i would have said that the president is best when he has an enemy. he was best when he was running against hillary clinton. in the absence of the mess of the democratic 2020 primary, he needs someone to fill the vacuum. that is what the squad will do. it is good for them. they get to view them as the tip of the spear against trump. they will raise money and get their notoriety out there. david: joel, it may be disgusting what the crowd was chanting, but could this hurt the democrats. the democrats feel obliged to rally around these freshmen congresspeople. they said things that a lot of people would object to and it feels like the democrats are endorsing what they have said. that is the nature of representative democracy.
i was in the senate the last time we had a 60 plus boat majority. you had liberals, you had moderates, you had conservative democrats. in order to have a big tent majority, you will have people that represent a wide swath of opinion. these are to the far left and there are many people to the right and the center. i think what the president did was took a lot of pressure off of nancy pelosi, because four days ago the story was about how nancy pelosi could not control her caucus. now the stories about whether the president has gone over the has, and whether moderates and swing voters will be pushed away by that rhetoric. david: maybe he has unified the caucus, but has he unified it to the left of where nancy pelosi would have liked it to have been? matt: they are moving left. the parties moving left in a real way. i worked for jeb bush and mitt romney and i remember during the primary debates and the
campaigns for their nomination in 2012 and 2016, democrats would flip video and sound bites. i think it is what republicans will do here. joel is right. republicans are frustrated is that all you can talk about were democratic divisions on display. now that is not so much. joel: i do not think the democrats have moved to the left. i think when you look at the democratic majority that took over the house last november, that was led by moderates, by people in purple districts. these are not italy on omar -- these are not omar and to lead. these are people from random districts -- a lot of them are trump districts. democrats are not pushing to the left. they have pushed a mainstream agenda. i'm old enough to remember when nancy pelosi was the big scary object that was the caricature of the left, and now she is not. i'm glad i have lived long enough to see that she is now
the paragon of moderate virtue. david: the grown-up in the room. by canmy questions is understand why this might matter in 2020. does it matter now? we are now facing things like the debt ceiling. we are facing spending limits. we have the usmca, could this sort of rancor between the president and the democratic caucus in the house get in the way of the nation's business in the here and now? matt: absolutely. that is twofold. you already seen bills passed congress and all the sudden the present be toast them. in -- the president vetoes them. in the house, the democratic version of the freedom caucus good rebel. that can make it difficult to pass the must pass legislation. david: there are not that many legislative days left before recess. they come back in the fall and we will be into 2020 soon. gott of those moderates
elected think i will go to washington to get something done. are they vulnerable in 2020 if they say we were just fighting each other? joel: you are always vulnerable in your first one or two races after you've been elected. if you remember the pelosi/aoc rift it started around the border wall bill for $4.6 billion a few years ago. must past legislation. democrats wanted to take a harder stand and pelosi decided to take a more work with republicans stance. these will be issues and the here and now, when you look at the debt ceiling and other must pass legislation, this is the kind of thing that makes it hard for a democrat to work with donald trump. if you are democrat who wants to say i will hold the president accountable, you cannot be making deals about the debt ceiling. that is going to be a problem. david: houses coming across to people across the country. the people that elected donald trump president, not the majority of the people voting
but the majority of the electoral college. matt: he needs to make this election a choice. that is a -- that is his only path to winning a second term. he is tapped out and about 43% in the approval ratings. he needs toextra 7% not only make a choice between him and the democrat from it he did in 2016. wisconsin, michigan, and states like arizona that might be more in play. guy: that is matt gorman -- david: that is matt gorman and joel payne, great to have you with us in washington. coming up next, the stock of the hour. the growth in e-cigarette pulls phillip morris higher but the threat of regulation still looms. this is bloomberg. ♪
chandra in new york. phillip morris is having a good day. emma: it is having a good day and this is based on second-quarter earnings. earnings-per-share and revenues beat. what we saw their was a ship toward e-cigarettes and how --pments of tobacco products came in much better than expected. they rose by 29% in the last quarter. they should also get a further boost from the sister company in the u.s. starts to market its eye to os e-cigarette products which has just got fda approval. that is due to start in atlanta sometime in the next few months. what we are hearing from phillip morris is there expecting uptick of this product to be much quicker in the u.s. versus europe and japan. same time, there is regulatory scrutiny of these
products. particularly when it comes to young people and children. a lot of concern they are being marketed, including flavored e-cigarettes to teenagers. emma: you're absolutely right. that has been a lot of focus on the company juul which makes e-cigarette products. they've been multi-flavored and popular with young people. we have seen young people take up e-cigarette smoking when they have never done traditional smoking. what phillip moore -- what phillip morris says is in a different product, it uses actual tobacco leaves rather than a liquid form of tobacco. they will only offer three types, one plane and two variations on a menthol flavor aimed at all of the customers who might have used a normal cigarette or a regular cigarette before hand and they have had fda approval. they will abide by all of the marketing rules that have been put out by the fda. os veryel that the iq
different from products like juul. just announced that a house panel plans to hold a hearing on juul and its nicotine use later this month. david: thank you so much. that is emma chandra reporting from new york. up next, iran's foreign minister says united states "shot itself in the foot" when it pulled out of the nuclear accord. that is coming up next. if you have a terminal, you can watch is online and click on our charts and graphics and interact with us directly. o> on your tv
check it out! now you can schedule a callback or reschedule an appointment, even on nights and weekends. today's xfinity service. simple. easy. awesome. i'd rather not. david: this is "balance of power." i'm david westin in washington. for bloomberg first word news, we go to mark crumpton in new york. mark: jeffrey epstein will
remain behind bars as he awaits trial on sex trafficking charges. a judge in new york denied epstein bail. prosecutors had argued he is a flight risk and an unrepented criminal. the u.s. and france have sidestepped a tax feud for now. they have agreed to push ahead with creating a global tax system. here is finance minister bruno le maire. >> we are moving on. i think agile taxation is a key issue. you have a new business model based on the use of the set of data. it will develop an the 21st century at the right level. i think it is in interest of all countries including the u.s. to have a fair and efficient taxation of these new business models. mark: treasury secretary steven mnuchin was less enthusiastic. he says the trump administration still has big issues with france's approach. areyoto, japan, 33 people
believed to have died in a suspected arson fire at an animation studio. three dozen others were injured. survivors say a man burst into the studio yelling "you die." and then sudden on fire. a suspect has been arrested. mexico's president says he will use legal channels to get the fortune of convicted drug trafficker joaquin "el chapo" guzman returned to mexico. president andres manuel lopez orbit or said the money will be used for anti-poverty programs. u.s. officials have estimated guzman's fortune at $14 billion. a judge ordered him to pay 12 point $6 billion as part of his sentence was announced yesterday. global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. back to you in washington. david: thanks so much. tensions remain high between the
u.s. and iran with confirmation most recently that iran has seized an oil tanker in the persian gulf. john michael flood sat down with iran's foreign minister and asked about prospects for a new deal between the two countries to replace the one that president trump walked away from. a multilateral agreement and no multilateral agreement can be implemented unilaterally. everybody has to chip in. the europeans believe this was important for their security. if it is important for their security, then you invest in your security. you don't just get security by praying for it, you must invest, you must do what is necessary. and europeans need to take the necessary action. the united states has basically shot itself in the foot by withdrawing from this agreement. john: what is the necessary action the europeans need to take? you want them to buy the oil or
buy it on credit? mr. zarif: it is up to them to decide. they have made a commitment in the deal that iran's economic relations with the rest of the world will be normalized. they made the commitment after the united states left the deal. they knew the u.s. was leaving. impact onthe u.s. their economy. but they committed themselves to allowing iran to sell oil, we patry added money, having shipping, have insurance, and we have none of that. they need to live by their commitment. nothey don't, then we do have a quarrel, we have a mechanism within the jcpoa. within the nuclear deal. we negotiated this deal with open eyes, without trusting each other. nobody trusted the other side. that is why we have mechanisms within the deal that we reduce our commitments, until they comply.
once they comply, it can be reversed. if we go beyond certain limits, the rivers would be much more difficult and constantly -- and costly. john: if they do not comply, you will continue? mr. zarif: we will continue with the steps. these steps are legal, in-line with the agreement, we will not to build nuclear weapons because if we wanted to build nuclear weapons, we could have belted a long time ago. john: you are clear on that. you think you could build nuclear weapons tomorrow? or very rapidly? mr. zarif: very rapidly. if we had wanted to build nuclear weapons, we would have a belted. during the time that we paid the price of building a nuclear weapon. david: that was iran's foreign minister. , wholcome now adam ereli served as u.s. ambassador, and was deputy -- and the state department spokesperson under george w. bush. you heard what the foreign minister said. you said we could develop
nuclear weapons very rapidly if we wanted to. is this a form of negotiation? do they want to get back to the table to negotiate or are we having a permanent separation here? amb. ereli: i think the first audience was the europeans. nothing united states. and it was interesting, him saying that they have to make an investment in their security. what does that mean? it means either you break sanctions and allow us to get revenue for the sale of our products or services, or we are going to basically practice nuclear blackmail on you. we will slowly increase our violations of the jcpoa. we know because they have already started by reaching uranium beyond what is allowed in the jcpoa and having more uranium and they are allowed. this is brinksmanship by the
iranians to divide the europeans from the united states, get sanctions relief, and put things -- push things to the point of confrontation but not over the line of confrontation. look, to understand iran, and understand what is behind his words coming you need to remember two things. thingsee most important for iran are the regime staying in power, preserving their nuclear program, and sanctions relief. in that order. they will do everything they can to preserve the nuclear program, everything they can to stay in power. what he says in building a nuclear bomb quickly, he is right. we believe it would take them a year if they went at a full-scale production going from a standing stop where they are now to a full blown program, one year. they are holding out that stick to beat the europeans into submission.
david: this is what i do not understand from either side, where is the path to what they want to get? for the united states point of view, we do not want them to have nuclear weapons. it is not clear we could stop them, short of perhaps military action. from the europeans point of view, they want the sanctions off, the likelihood the europeans will go to the united states seems far-fetched. if you look at the reductions from china, from turkey, japan, it has been really biting on iranian oil exports. amb. ereli: right. sanctions are having an impact. they have been in place for a year. all sanctions have been in place since november. iran's oil exports, revenue from oil exports is down 60%. barrelsm over 3 billion a day to one billion a day. what is the point of the sanctions? the point of the sanctions is to deny the iranian regime revenue that it uses to fund its proxies
in syria, lebanon, yemen, iraq. they do not have cash to make trouble. you ask what is the long-term solution? you know, to me, it is important for people to understand that we have been trying to crack this code for 40 years. since 1979. democratic and republican administrations have not figured it out. david: is the answer rand paul? ambassador, you have come back from the gulf. now we have reports of president trump is considering appointing rand paul to be his envoy. will he be a fix for us? amb. ereli: this rand paul thing is like throwing a wrench in gears that are moving. areof the reasons people confused is because the administration policy is all over the place. you have pompeo and hook and
bolton saying maximum pressure. let's squeeze the iranians until they come back -- until they capitulate and come back to negotiations or until whatever. and then you have the president saying, looking like a desperate suitor saying, we want to negotiate, we want to negotiate, why? because he is afraid of armed conflict and losing votes in the election. now you have this rand paul idea? was paul, three weeks ago, opposing the use of force by the administration against iran when iran was bombing ships in the gulf of oman. imagine that you are an american ally. sitting 40 miles across the water from iran. and you are wondering, wait, what is going on? is the united states going to protect me or sell me out? david: what are the people of bahrain thinking? people who are right there?
amb. ereli: right. aey feel like there is damocles hanging over their neck. the sword was hailed by a hair. why? because iran has always sought to absorb a bahrain the way iraq tried to absorb kuwait. and iraq is diametrically opposed to saudi arabia and saudi arabia's leadership of iran is diametrically opposed. they want nothing more than to -- the molars go out the back door. they think the u.s. will support them and they were apoplectic when obama went behind their backs and signed the nuclear be it -- nuclear deal. they thought they had something new with trump. but now with rand paul, and trump saying, i just want to talk to these guys, they are saying, holy cow, what is going to happen? david: it is hard to have
diplomacy when there is not much clarity. many thanks to former u.s. ambassador to bahrain, adam ereli. aming up here, he has been leading conservative thinker in washington for a generation. we speak with brute -- with bill kristol about the state of the republican party in the future of conservatism in the era of donald trump. that is next. this is bloomberg. ♪
david: you are watching "balance of power." i'm david westin in washington. been sitting president has renominated by his party since franklin pierce in 1865. that record has not dissuaded former massachusetts governor bill weil from running against president trump or former south carolina congressman from
considering it. when i -- whether he thought he could win, he admitted it was an uphill battle. >> i don't know, i think it is a long shot, in fairness to your point. and i do notgo, know if you can or can't, but if you could actually change the debate in this presidential cycle to include a focus on debt deficit and government spending, it would be worth some number of months of my life. david: we welcome someone who has been an intellectual conservative leader for a generation now, bill kristol was chief of staff to vice president dan quell. he went on to found the weekly standard. he is the director of defending democracy together and we welcome him to bloomberg for today's conversation. bill: good to see you. david: let's pick on -- pick up where mark sanford left off. what has happened to fiscal conservative -- conservatism? about the fact that he was
spending more than the government was taking in and out trump is doing it on republicans have gone into silence about donald trump. saw thatark sanford, i interview, i think he is impressive. he has had his issues but successful governor while he was governor and congressman and a real record on fiscal restraint. i think it has to be more than that. ultimately, if you are challenging an incumbent president, it has to be -- it is not just i agree with him, disagree with him on an issue. the deficit would be 500 billion, not one trillion, that is not a reason to knock out the incumbent president. it has to be that he is fundamentally damaging things in this country that we care about. runs, andnford, if he if others run, will have to make that case and i think there's more receptivity to the case than the headline numbers about how popular trump is among
republicans would suggest. david: does that case, unfit for office, stand up a case, that i gave working america what you needed? that is a message donald trump took to ohio, to michigan, to wisconsin. said, you have been left behind, it is all this globalization will give you your jobs back. if people feel he has done that, will they say i will vote against him anyway because he is not fit for office? bill: some number might. if the economy stays strong, he will not be denied a renomination. i asked the farmers in iowa how they are will give you your jobs back. if people feel he has done feell get better, the chinese will come around. what happens to foreign policy that you were discussing and iran and north korea. it is a volatile world out there. lyndon johnson at this time in 1967, despite vietnam, was a total shoo-in for the democratic nomination and probably for reelection.
gene mccarthy ran against him and he ended up withdrawing from the race. i do not think that will happen this time. is there a chance to make a case and do better than people think? i think do a service to the republican party and the country. i like some of the democrats, some of the others i am uncertain about. when they make a case against trump, voters look at it and say democrats are of course against trump. one a republican stands up and someone like sanford who has been a governor and congressman and says wait a second, i have a problem with the donald trump, i think it has more chance to influence swing voters and independent voters. david: you have made a fact that you have issues with donald trump as president. what does his being president, the fact that we elected him, say about us? we have a tendency to say what does it say about joe biden, donald trump? every election is a reflection of us as well. we get the government that we want and deserve.
what does it say about this country? bill: it is something i have thought a lot about. electing him as a challenger in an open race, time for change, maybe he will be better in office, he will govern as a businessman. i think -- i did not agree with that but friends of mine's about and believed it and i think it was not a crazy thing to believe. reelecting trump says more about us than electing trump. are people going to say that he has grown in office, that he has been responsible, behaved the way a president should? do they think this is good for the country what happened last night? if they are willing to say that and renominate him and reelect him, i will -- it will be bad. i think it will be a bad reflection on the country. maybe it is a reflection for people like me, not explaining how much damage donald trump is doing to our constitutional fabric and democratic norms and civility and decency, but i think we need to spend the next year making the case. david: as we said in the
introduction, it has been since 1865 that we had a sitting president that did not get read nominated by his own party. if donald trump were to be unseated, it is more likely that it would be a democrat then republican. you said you like some democrats. do you see in the field, as you watch the debates, do you see someone and say, i can see a path toward thinking that could be a good president? bill: if i said one name, i would probably hurt them in the primary, why should i do that? now, i think -- some are more liberal than others. some i think really have records that would give someone like me pause. the country will survive more regulation then we should have, higher taxes then we should have, probably survive a more dovish foreign than i would like. but i do think in the case of most of them, it would be better for years of them and then another four years of trump. it is one thing to vote for someone who is an outsider, an open seat.
we need to disrupt things, fine. maybe some of the disruption has been useful. reelecting donald trump, what would he be like in his second term? he is increasingly emboldened, people who were in there at first are gone. i think a second term of trump is playing with fire in a basic american constitutional and democratic values. david: what is it doing to our national discourse? we have had this -- we had this incident last night with the trump rally in which people were saying, send her back. you tweeted out about that saying send her back, conservatism is not a conservatism with defending. is this getting into the water table? bill: totally, don't you think? we have had demagogues before, unpleasant sentiments among the public. rarely have we had a president encourage them and echo them and incite people to do -- to do more them. it becomes a vicious cycle. you can't say that, the
president said that. it is degrading the public discourse in a way that you are normal irresponsible comment by the senator here or that governor there. he is president, when he stands there and enjoys the crowd chanting something that is so un-american, it is bad for the country. david: bill kristol, thank you so much for being here. that is bill crystal, the director of defending democracy together. coming up, puerto rico just can't catch a break after a debt crisis and hurricane and going bankrupt, now it's governor is under stage with people demanding this -- demanding he step down. that is next. this is bloomberg. ♪
president trump waiting tweeting, a lot of bad things are happening in puerto rico, the governor is under siege, the mayor of san juan is despicable and incompetent person who i would not trust under any circumstances. i know the people of puerto rico while and they are great but much of their leadership is corrupt and robbing the u.s. government blind. we welcome michelle caskey who covers puerto rico for bloomberg. she joins us from new york. good to have you here. you have written about this for bloomberg. let me ask you from the governor, did he have popular support before the scandal erupted with the leak, exchange of the texts people object to so strongly? michelle: the governor did have support before these leaks happened. granted, he did not have widespread support, extremely strong support. but he did have some backing there. these leaked text messages really have changed that dramatically. david: explain the problems of
puerto rico, if you can, in order up your they have a huge financial crisis. what extent have they recovered from that hurricane? michelle: the hurricane happened in september of 2017, devastated the island. thousands of people died and residents lived without electricity for months and months. what has happened is some federal aid has trickled into the island that has helped their economy. officials anticipate that they will see or have seen economic growth, and will formally -- that there could be a formal announcement of actual annual growth to the island which would be the first time in years. david: what is the mechanism for removing the governor of puerto rico? we have people in the streets demanding he leave. despite his resignation, what is a mechanism? michelle: we are hearing the head of the legislature, the house of representatives on the island, he is looking into legally, is there a way to
impeach the governor. again, he is just looking into that and examining that. he is of the same political party as sao. that does not bode well for the governor. have tens of thousands of people on the street demanding that the governor go. david: thank you so much. that is michelle caskey reporting from new york. some headlines from the white house, president trump says he disagrees with the people who say chanted, sent her back last night. --says he is not necessarily he is not necessarily appointing rand paul as his envoy to iran. life from new york and washington, this is bloomberg. ♪
alix: i ran and the u.s., the next steps. bloomberg it's done with iranian foreign minister. -- blumberg sets down with iranian foreign minister. it is getting hot in here. two thirds of the u.s. is engulfed in a heat wave. lecture city rep -- precious work. turn the lights back on. conard suffers a blackout in new york city. bloomberg estimates it could mean a $.2 trillion in investments over the next 30 years. ♪ alix: