Thanks so much for being back on Wall Street. We of course love to be here. So you wrote a terrific op ed piece for The New York
Times this week in which you said these are pretty strong words I must say. You think that this may be one of the best packages
that you can remember Congress giving birth to. So you think it's a good idea for the country. What does it mean for
investors. I think for investors it's basically positive. I think we're making progress on a number of our really important
problems climate being first and foremost among them. That's good for the country. It's ultimately good for investors. I
think prescription drugs may not. Pricing may not be absolute great for every pharma company in America but for the average
American it will eventually give them more spending power and therefore the ability to buy other things. And that helps the
economy. The minimum corporate tax it's just something we needed to do. I think the Trump RTS J was so wildly unfair in terms of
the amount of the business rollbacks that this brought back. I would note that after the mansion proposal was very surprisingly
announced as you know nobody thought this was coming. But after it was announced the stock market the next several days had
several of its best days throughout this difficult period. So obviously investors were not put off by this thing and indeed
even encouraged by the idea of progress in Washington. What are the things Republicans think done. For example Pat Toomey from
Pennsylvania is to say that corporate tax effectively would take some of the benefits away from the expensing of capital
investment will deter capital investment. Corporations ultimately hurt us in terms of investment in terms of growth.
Well the first part of that is right. We are taking some incentives away although we're doing it. We're not really
directly taking them away. We didn't roll back the depreciation provision. We simply put a minimum tax on all of corporate
profits. So that in fact leaves most of the investment incentive in place. But there are those those who felt that that was
simply too much when it was passed the ECJ. Why give companies 100 percent write off upfront. Is that really going to change
investment that much. Is it really the way you want to run tax policy. And I don't think there's a lot of evidence that had
much of an impact on investment. So I don't buy that. I think I think the problem of investment here is there are not enough
profitable opportunities out there not that companies are worried about their tax rate or they don't have the cash or
something like that. One of the aspects of this obviously is the inflation reduction because as I understand it reducing the
deficit actually paying for it having more in revenue than the costs going out. What does that do to investors. Well first on
the inflation thing the Republicans have created I think a false dichotomy the way they have. They made the point or claim this
wouldn't really reduce inflation. And that's not untrue. Its impact on inflation in the first few years is relatively small
gets a bit larger in the out years. But the most important thing is that it is a reversal of policy from the last several
packages we've passed that have been highly inflationary. So I think this is good for investors in that it brings again some
stability to fiscal policy in Washington. And for the first time in a long time a fiscal policy package that actually does at
least lean against inflation even if the total impact is enormous. If this package and again we're assuming for the
moment that it gets enacted if it in fact gets enacted is the benefit to investors mainly sort of the rising tide notion. I
mean it's the macro that everything goes up until we're all better off or are there specific sectors that actually would be
more attractive to investors such as you mentioned the climate and energy. But yes the rising tide is certainly the overarching
part of this. It's not a complicated package. It doesn't have that many provisions in it. So it's really it really is climate
and prescription drugs and then obviously some of the tax stuff. So in climate I don't think anyone yet has really combed through
all the little minutia in this bill. But in the climate section you have to believe there will be an opportunity for investors
and also warning signs for investors about where not to invest. As we go through this energy transition and then we'll have to
get a better understanding on the pharmacy side of what the impact is on that sector. But that's a long phased in program
over I think seven or eight years. And so again no immediate impact. You manage investments around the world not just in the
United States. One of the key questions we always ask is what does this do to the competitiveness of the United States versus
other regions whether it's China Europe wherever. Does this make the United States more competitive in success. Not sure the
difference is that great. I think that you know this is an important bill for the reasons that I wrote in my piece of the
reasons I believe. But I'm not going to sit here and pretend it's going to transform everything.
I think with respect to climate for example it simply gets us closer to meeting the Paris Accord. But we have to understand
that addressing the climate problem costs us money. People who say well you know you couldn't kind of make this a profit
center. It's not a profit center. It's a cost center. It's something it's an extra reality as economists would say a
byproduct of our having been irresponsible for many years. And now we're going to pay the price of cleaning it up. So I would
not pretend it makes us more competitive. I would say that it gets us more in line with some of our partners particularly in
Europe who've done more on climate than we have. And it's time for us to do our share. He's addressing the climate situation
in. Currently inflationary inherently there is a cost to it look I believe and I'm sure
some economists have studied this but if you go back to the early 70s when we had a huge environmental problem and you and I
are old enough to remember when the Cuyahoga River went on fire and that sort of galvanized people to do something. Part of I
think why our economy struggled in those years was because we were paying a huge cost to clean up environmental problems all
over this country. There were costs but not revenues. Costs but not profits. Costs but not really benefits beyond having a
better environment. And I don't think this is as big a deal as that but this is in the same direction. There is a cost for
addressing climate and we shouldn't pretend otherwise. It's part of a larger pattern that we're addressing right now of
inflation. And just while I have you let's talk about that issue. As an investor because there's a back and forth is the
Fed going to go too far. They don't go far enough. The markets are reacting perhaps overreacting to some of the hints we're
seeing right now. How does the Fed raising rates affect you. I mean are you happy with them raising rates. You want them to do
more or less what's best for you as an investor a long term investor I should say. Sure. Well look first of all markets are
not always right. And as we sit here today markets are assuming a path for the Fed and a path to the economy that many of us
feel is completely unrealistic. And if anything that the markets have gotten more optimistic about how far the Fed will have to
go when rates will come down. Over the last several weeks you've seen the 10 year come down you've seen the five year forwards.
All the indicators are the markets become I think irrationally optimistic about what the Fed is going to have to do. High rates
are the enemy the stock market. There's no getting around it. It is the alternative use of capital. It's the so-called risk
premium. You know all that. And and so I have been fairly bearish on the market because rates have to go up and I would
continue to take that posture. I think rates are going to have to continue to go up very substantially. I think we have a kind
of embedded core rate of inflation if you will of between 4 and 5 percent in this economy. So it's not nine but it's still so
far above the Fed's 2 percent. They're going to have to do a lot of work to get it back there.