Chapter 1: What is the main topic discussed in this episode?
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Here in New York City, Mark Shaw, the former chief of staff to the former vice president, Mike Pence, joins us now for more. Mark, good morning. Good morning. Thanks for having me. Thank you for being here. A much more interventionist White House over the past week and maybe the last number of months as well. Can you just weigh in? How are you framing things at the moment? Well...
On this particular topic, I actually think there is probably broader support among a lot of small government people who say, you know what, the notion of a Fed truly being independent was a nice notion when before it had $7 trillion of assets on its books. And so you have a lot of unelected people with 14-year terms have enormous influence over the economy.
Having said that, I think there's probably a desire also that if there was actually effort to change it, it would be more effective. above board than coming up with these fraudulent charges against the board governor, because there's probably plenty of political appointees in the administration who have multiple mortgages, too, and have said they're both their primary residents.
I'm sure there's a double standard here, and I wish there was a more intellectual appeal about the Fed's role as opposed to coming up with bogus charges.
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Chapter 2: What insights does Marc Short provide on the Jeffrey Epstein files?
I just want to pick up on the language, a difference between charges of fraud and fraudulent charges. Which one do you think it is? I think these are bogus charges. What makes you believe that? Well, I don't know how many homes she has or if she listed both as prime residents, but is that really a reason you're going to remove somebody as a board governor?
And again, I believe there's probably plenty of people in the administration who have done the same on their mortgage files. Well, lots of reporting over this summer about Ken Paxton, who's the attorney general of Texas, who's running to be the senator. Great point. And do you think there's a litmus test now for the president?
He's going to decide whether or not he's going to back Ken Paxton because he has three residences listed as a primary mortgage. You know, Emery, he's very flexible on these things. I think this is more about his effort to exert control over the Fed because I think they're concerned that their trade agenda is causing great weakness in the labor market, and they want rates lower.
And to be fair, this is what the president has always wanted, is lower rates. Even when he had the option to appoint Jerome Powell in the first administration, there were three options between Kevin Warsh, John Taylor, and Jerome Powell. And the president asked, who's going to make rates lower?
And that's one of the ironies, is that he chose the person who Steve Mnuchin told him is going to keep rates lower, but obviously he wants them even lower than they are now. How difficult is next week going to be if the Senate Banking Committee begins their hearing of Steve Meyer?
And you look at some of the Republicans on that committee, are we going to see pushback not just from the likes of Elizabeth Warren, but also like Tom Tillis? We haven't seen it yet. And he said, I'm not so confident there's going to be significant pushback on his appointment. And I look again, I think this is about an effort to exert control and have a majority so he can lower rates faster.
But again, I think it's reflective of a concern about where the labor market's going. I remember Stephen Moore nominated for a seat on the Federal Reserve. The Senate was Republican at the time, and he didn't make it, and there was pushback. What's the difference between that first term for the president and this second term?
Yeah, great question, because I think this is much broader than the Federal Reserve. I think it's about all of his nominations. I think that, you know, you go to his cabinet, and I think it'd be hard to envision that RFK would have gotten confirmed in a previous Republican-controlled Senate. I think this is basically a that Republicans are very worried about the President primarying him.
He has shown his ability to engage in primaries and exert that control, and there's just an enormous fear factor, and he's using that with great leverage amongst Senate Republicans. Has the party changed? The party's absolutely changed, John. I mean, I think the party has certainly become far more populous.
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Chapter 3: How might the Epstein issue affect GOP members of Congress?
It reduced taxes. And I feel like the second administration is exerting its influence in all sectors of the economy and looking to exert its muscle. And I think it's a very different agenda. To be more constructive on what they're doing in terms of, say, Intel, there's been a lot of criticism that they're mirroring what China does or this estate capitalism like Europeans did in the 1960s.
What do you actually think Trump is thinking? Is this about building a sovereign wealth fund? What is actually the strategy? I think that he kind of rejected the sovereign wealth fund the other day. But I do think it's concerning that the trajectory there is basically Saudi Arabia, China, Iran, Russia. Those are the ones with sovereign wealth funds. I certainly hope that's not where we're going.
I do think it's more, in his mind, simply about leverage and where he can have leverage. But again, the basis of it was two weeks before he more or less insinuated the Intel CEO as a Chinese spy. And then basically saying, Okay, well, we're not so worried about the national security anymore as long as we can have 10%. It's like, what's the justification?
And I feel like when you do this, you crowd out private investors. I don't think this would be good for either side. I think you're going to see Intel stock probably decline because what private investor wants to engage if they feel like the federal government can just come in and take 10% or more? They suffer in wealth funds, the CHIPS Act. That's the investment vehicle.
I didn't see that coming, but that's where this is going, apparently. Well, yeah, potentially. I mean, and it's also not just the examples Mark Short brought up. You also had the DOD recently take a stake in a company as well. And Howard Lutnick is basically saying that this might be potentially direction of travel for other defense companies. Mark, this was great. It's good to see you.
Thanks for having me. It's good to see you guys. The traditional Republican view of what's playing out down in Washington, D.C. Bloomberg Daybreak is your best way to get informed first thing in the morning, right in your podcast feed. Hi, I'm Karen Moscow. And I'm Nathan Hager. Each morning, we're up early putting together the latest episode of Bloomberg Daybreak U.S. Edition.
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Chapter 4: What is Marc Short's perspective on a potential rescissions package?
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