ELIZABETH WARREN JOINING US FROM CAPITOL HILL.
I WANT TO WELCOME YOU BACK TO BLOOMBERG TV. IT IS A BIG DAY.
WE HAVE THE CPI REPORT.
YOU FAMOUSLY CALLED A JAY POWELL A DANGEROUS MAN.
NOW THAT WE ARE SEEING INFLATION ACTUALLY BEGIN TO
DROP, THE JOB MARKET HOLDS STRONG WITH WAGES ACTUALLY
RISING.
>> IF HE STOPS THE EXTRAORDINARY RATE INCREASES HE
HAS BEEN DOING, WE WILL HAVE MADE IT THROUGH THIS.
WE HAVE GREAT NEWS. INFLATION HAS BEEN CUT BY TWO
THIRDS. TAKE YES FOR AN ANSWER, CHAIR
POWELL.
KUENG'S MONETARY POLICY IS ONLY ONE RESPONSIBILITY OF THE
FEDERAL RESERVE.
THE OTHER SUPERVISION, THE FED VICE CHAIR OF SUPERVISION,
MICHAEL BARR HAS RECENTLY MADE A PROPOSAL TO STRENGTHEN
CAPITAL REQUIREMENTS. ARE YOU SATISFIED WITH THIS
PROPOSAL? DO YOU THINK HE HAS THE
AUTHORITY WITHIN THE FEDERAL RESERVE TO SEE IT THROUGH?
>> THE ANSWER IS HE CLEARLY HAS THE AUTHORITY TO BE ABLE TO PUT
IT HIGHER STANDARDS AND TO BE ABLE TO ENFORCE THOSE HIGHER
STANDARDS.
WE STILL HAVE A LOT OF PROBLEMS, TOO MUCH
CONCENTRATION IN THE BANKING INDUSTRY, WE HAVE MORE TOO BIG
TO FAIL BANKS THAT WE DID AND IT SHOULD BE TO FAIL BANKS ARE
BIGGER THAN THEY WERE BACK THEN. SO WE ARE NOT OUT OF THE WOODS
YET BUT I FEEL A LOT BETTER WHEN I READ MICHAEL BARR
TALKING ABOUT HOW WE NEED TO TIGHTEN DOWN ON BANK REGULATION.
GO MICHAEL.
>> YOU HELD A HEARING ON VACANCY RATE -- THANKS TODAY.
WHAT ABOUT SMALL AND MEDIUM-SIZED BANKS?
SHOULD THEY BE ALLOWED TO GET MARRIED SO THEY CAN BETTER
COMPETE?
>> THE PROBLEM WE HAVE FACED IS MORE AND MORE CONCENTRATION AT
THE TOP.
ALWAYS KEEP IN MIND THAT ONE IS OBVIOUSLY TOO BIG TO FAIL WITH
OUR ENTIRE ECONOMY AT RISK THE OTHER HALF IS TO REMEMBER IT IS
THE SMALL BANKS THAT ARE THE ONES THAT ACTUALLY DO THE SMALL
BUSINESS LENDING AND THAT DRIVES OUR ECONOMY AND ALSO
DRIVES EMPLOYMENT. THAT THE SMALL BUSINESSES ARE
THE ENGINE OF OUR ECONOMY. ANYTHING THAT WIPES THOSE BANKS
OUT IS A BAD IDEA. FINDING WAYS TO KEEP THOSE
BANKS OPEN AS INDEPENDENT OR ALLIED BANKS, I AM IN FAVOR OF
THAT.
THE PROBLEM IS THE BIG BANKS COME IN AND SNAP UP THE LITTLE
BANKS.
THEY MAKE A HANDFUL OF PROMISES ABOUT AND NOTHING WILL CHANGE
AND THEN THOSE BANKS DISAPPEAR. WE KNOW AND UP IN A THIRD OF
ALL RURAL COUNTIES IN AMERICA, THERE IS NO SMALL, INDEPENDENT
BANK. THERE IS NOBODY THERE WHO
ACTUALLY UNDERSTANDS THE LOCAL ECONOMY AND WHO IS WILLING TO
GET ANOTHER BUSINESS THAT WANTS TO BORROW THAT MONEY.
AND SEES THAT AS THEIR JOB IN BANKING.
THAT IS NOT WHERE THE GIANTS ARE. THEY DON'T DO THE SMALL
BUSINESS LENDING. THAT IS THE CONCERN I HAVE
ABOUT CONCENTRATION.
>> WE KNOW YOU HAVE CONCERNS ABOUT CONCENTRATION AND OTHER
THINGS THAT WE WANT TO GET WITH YOU.
BUT YOU HAVE SOME CONCERNS ABOUT SENATOR TOMMY TURBERVILLE.
GIVEN THE CONCERNS ABOUT HOW THAT AFFECTS MILITARY
READINESS, WHAT YOU THINK YOU CAN DO TO BLUNT THAT IMPACT?
WHAT WORKAROUNDS DO YOU SEE?
>> THIS IS THE PROBLEM WE HAVE RIGHT NOW. I AM THE CHAIR OF THE
SUBCOMMITTEE ON PERSONNEL ON THE SENATE ARMED SERVICES
COMMITTEE. I AM ON THE FRONT LINES HEARING
FROM THE FAMILIES WHO ARE NOW IN A POSITION SAYING WHERE DID
WE REGISTER OUR KIDS FOR SCHOOL? WE ALREADY SOLD OUR HOUSE
BECAUSE WE THOUGHT WE WERE MOVING THIS SUMMER SO THAT OUR
ACTIVE DUTY SERVICE MEMBER WAS GOING TO BE DEPLOYED SOMEWHERE
ELSE AROUND THE COUNTRY OR AROUND THE WORLD.
PROFOUND IMPACT ON FAMILIES. PROFOUND IMPACT ON OUR MILITARY
READINESS.
OUR FORMER SECRETARIES OF DEFENSE ARE CURRENT SECRETARY
OF DEFENSE, OUR FORMER SECRETARY OF DEFENSE WHO ARE
REPUBLICAN APPOINTEES HAVE ALL SAID THIS UNDERMINES MILITARY
READINESS. HERE'S THE PROBLEM.
THE DEMOCRATS CAN'T STOP TOMMY TABULA FROM WHAT HE IS DOING.
THE REPUBLICANS DIDN'T SAY YOU ARE A MEMBER OF OUR PARTY, YOU
ARE PUTTING NATIONAL SECURITY AT RISK, YOUR INSULTING
UNDERMINING MILITARY FAMILIES IN THIS COUNTRY, CUT IT OUT.
THAT IS THE ONLY WAY WE CAN UNLOCK THIS HOLD AND ACTUALLY
MOVE THROUGH WHAT IS LITERALLY HUNDREDS OF MILITARY PROMOTIONS
AND ASSIGNMENTS THAT ARE JUST DEAD IN THE WATER AT THIS POINT.
>> WE WOULD LIKE TO STAY IN TOUCH WITH YOU ON THAT STORY.
IT IS IMPORTANT TO US AND OUR VIEWERS AND LISTENERS, I WANTED
TO ASK YOU ABOUT SOMETHING AND SOME NEWS YOU AND YOUR
COLLEAGUES ARE MAKING TODAY. RELEASING A REPORT AND CALLING
ON FEDERAL OFFICIALS TO INVESTIGATE TECH GIANTS AND
MAINLY META-, THE COMPANY BEHIND FACEBOOK FOR SOMEHOW
COLLUDING, MAYBE YOU CAN BE MORE SPECIFIC THEN I WITH THE
MAJOR TAX PREPARERS LIKE H&R BLOCK TAKING MILLIONS OF
PEOPLE'S PERSONAL AND PRIVATE INFORMATION AND GIVING IT TO
FACEBOOK PRESUMABLY TO SELL ADS. IF THIS IS TRUE, THIS IS
OUTRAGEOUS, WE WILL GO TO JAIL FOR THIS?
>> YOU ASKED EXACTLY THE RIGHT QUESTION.
PEOPLE WANT TO TAXPAYERS. AND THEY PAY THEM TO PREPARE
THEIR TAXES AND THEN IT TURNS OUT THE TAX PREPARERS GAVE
ACCESS TO ALL OF THIS PRIVATE INFORMATION ABOUT NAMES AND
DEPENDENCE AND WHETHER OR NOT YOU HAD MEDICAL EXPENSES, ALL
KINDS OF INFORMATION TO COMPANIES LIKE META.
WE DID THE INDEPENDENT INVESTIGATION.
I DID THIS WITH OTHER SENATORS AND WE SENT THIS OVER TO THE
DEPARTMENT OF JUSTICE. THERE IS FEDERAL LAW THAT NO
ONE IS PERMITTED TO SHARE TAX INFORMATION WITHOUT THE
PERMISSION OF THE TAXPAYER. I FEEL PRETTY CLEAR THAT THESE
TAX COMPANIES DID NOT GET THAT PERMISSION BUT I WANT TO TAKE
THIS ONE RETURN IF I CAN. THESE ARE THE SAME TAX
PREPARERS WHO RIGHT NOW ARE LOBBYING FOR HERE IN WASHINGTON
TRYING TO MAKE SURE THE IRS -- IF YOU HAVE PRETTY SIMPLE
TAXES, FILL IT OUT ON THE WEBSITE AND INSTANTANEOUSLY,
YOU ARE DONE. LETTING PEOPLE DO THAT, THE TAX
PREPARERS ARE TRYING TO BLOCK THE IRS FROM DOING THAT. WHY?
BECAUSE THEY RAKE IN THE MONEY EVERY TIME SO HE HAS TO SPEND
$200 OR $400 OR $600 TO GET ONE OF THEM TO PREPARE THE TAXES.
THIS REALLY IS BACK TO THAT FUNDAMENTAL QUESTION, WHOSE
SIDE IS GOVERNMENT ON AND THE TAXPAYERS WANT GOVERNMENT ON
THEIR SIDE? NO. WE ARE TRYING TO GET THE
GOVERNMENT ON THE SIDE OF THE TAXPAYERS SO THEY CAN DO FREE
FILING AND NOT HAVE TO WORRY ABOUT THESE COMPANIES THAT ARE
GIVING THEIR DATA AWAY TO OUTFITS LIKE META.
>> AS WE TALK ABOUT THESE LARGE TECHNOLOGY COMPANIES, OTHER
NEWS CAME THIS WEEK.
ARE YOU CONCERNED THAT THE COURT'S ARE GOING TO STYMIE THE
EFFORTS OF COMPETITION REGULATORS IN THE U.S.?
>> I THINK THIS IS A BAD DECISION.
AT THE END OF THE DAY, THE JUDGE BELIEVED META WHEN THEY
SAID WE ARE GOING TO DO JUST FINE AND MADE A BUNCH OF
PROMISES DOWN THE LINE FOR WHAT THEY ARE GOING TO DO.
THAT DOES NOT CHANGE THE FACT THAT THE MERGER ITSELF IS NOT
LEGAL. BUT WE HAVE AN OPINION FROM THE
JUDGE. I WANT TO COMMEND THE FTC FOR
TAKING ON HARD CASES. TAKING ON BIG COMPANIES, TAKING
ON CASES THAT IN THE PAST OFTEN JUST SLID THROUGH CLEAR
VIOLATIONS OF THE LAW. I APPLAUD WHAT THE FTC HAS DONE
AND I SAY STAY AFTER IT. THEIR JOB IS TO GET OUT THERE
AND ENFORCE THE LAWS. IF SOMETIMES A PORT JUST WANT
TO HEAD IN A DIFFERENT DIRECTION, HE DOES NOT CHANGE
THE FACT THAT THE FTC IS RIGHT TO PROMOTE COMPETITION AND TO
ENFORCE THE LAW AS IT IS WRITTEN.
>> LASTLY THEN, MAYBE WE WILL TAKE IT IN ANOTHER STEP EVEN
FURTHER FROM THERE, AS WE TALK ABOUT THE IDEA OF TECH
COMPANIES WHETHER IT IS THE DEFENSE BASED OR ANYTHING ELSE,
IS ANYONE TALKING ABOUT BREAKING UP BIG TECH?
WHETHER IT IS GOOGLE OR ANY OTHER COMPANY YOU MIGHT HAVE IN
MIND?
>> I THINK ABOUT TALKING ABOUT BREAKING OF THESE COMPANIES IS
RIGHT. PARTICULARLY BREAKING UP PIECES
OF THIS COMPANY. MY FAVORITE EXAMPLE IS AMAZON.
LOOK AT WHAT AMAZON DOES. IT RUNS THE PLATFORM ON WHICH
BUYERS AND SELLERS COME TOGETHER. IT COULD >> ALL THAT
INFORMATION AND THEN BECOMES A COMPETITOR ON THE PLATFORM.
THAT RUNS ITS OWN AMAZON BUSINESSES.
SOMETIMES UNDER THE M'S LABEL AND SOMETIMES UNDER LABELS
NOBODY WOULD EVER FIGURE OUT THAT THAT IS AMAZON.
TO ME, IT IS LIKE YOU COULD BE AN EMPIRE IN BASEBALL OR YOU
CAN HAVE A TEAM BUT YOU DON'T GET TO DO BOTH AT THE SAME TIME.
SO THERE IS AN EXAMPLE FOR ME. THOSE TWO SHOULD BE BROKEN
APART. CONCENTRATION AND INDUSTRY
AFTER INDUSTRY AFTER INDUSTRY IS A THREAT TO OUR ECONOMY.
I THREAT INNOVATION AND ULTIMATELY, IT OFTEN LEADS TO
PRICE GOUGING. WHETHER IT IS CONSUMERS OR THE
GOVERNMENT. HE MENTIONED THE DEFENSE
INDUSTRY. OVER THE SPACE OF 20 YEARS IN
AMERICA WE HAVE GONE FROM HAVING 55 COMPETITORS FOR THE
DEFENSE CONTRACT DOWN TO FIVE. DO YOU KNOW WHAT THEY ARE
LOOKING FOR? EVEN MORE CONSOLIDATION.
WHEN A LITTLE BUSINESS START UP, THEY DO ONE OF TWO THINGS,
THEY EITHER SMASH IT OR BUY IT UP AND PUT IT THERE.
THAT IS HOW IT IS AT THE UNIT -- WHEN THE UNITED STATES
GOVERNMENT ENDS UP PAYING 300 AND $85 FOR SOME INVOLVE --
SOME VALVE THAT COSTS $300 OFF THE SHELF.
WE PAY THROUGH THE NOSE FOR CONCENTRATION IN THE DEFENSE
INDUSTRY, IN BIG TECH, IN BIG PHARMA, SEEING THE FTC, THE
D.O.B. ANTITRUST DIVISION AND WHAT WE
SHOULD BE DOING IN CONGRESS IS PROMOTING COMPETITION.
I BELIEVE IN MARKETS, THE POWER OF MARKETS BUT THEY ONLY WORK
IF WE ENFORCE THE RULES THAT KEEP COMPETITORS GOING RATHER
THAN MONOPOLISTS.
>> IS UNLIKE YOU MAY HAVE A RINGSIDE SEAT TO THE ELON MUSK
CZAR -- MARK ZUCKERBERG CAGE MATCH.
>> I AM READY.
>> ELIZABETH WARREN, THANK YOU FOR BEING SO GENEROUS AND
SPENDING TIME WITH US HERE ON BLOOMBERG RADIO.
WE WILL BE JOINED BY YOUR