So we tend to think of things like abortion and social issues the Supreme Court and even some of the regulatory issues as more
in the zone of politics or even political philosophy can they affect the business world as well. Yes. So when you step back
and you think about the United States U.S. has a handful of really true competitive advantages. One is rule of law. Second
is demographics. And a third is one market. And buy one market where we're a market of 300 350 million people with essentially
one set of rules. So when a company goes to do business in the United States by and large it's one set of rules for the whole
country. And what the Supreme Court is doing is essentially saying look
the administrative state has become unwieldy. It's taken on too much responsibility. Congress really should do a better job of
writing laws more specifically. And we're going to start to whittle back some of the things that the administrative is
doing. Well on paper that sounds great. And then perhaps will be less regulation. Maybe the laws will be clearer better written.
But the reality is Congress is rife with polarization. It's difficult to get anything done without a supermajority. So the
reality is that there is a vacuum. And so we're going from a from a from a place where we have a clear sense. We may not like
all the regulation but we have a clear sense of the rules to a place where the rules are uncertain. And increasingly the states
are stepping in and making decisions on many of these rules. And what's ended up happening is is an end up with multiple rules
with multiple states and candidly probably written by and by groups or people that aren't as competent as exists in Congress.
And that's worrisome. Take us into your business specifically. You've got a very large advisory business. You've also got a big
asset management business. How did those challenges was perhaps a very diffuse set of rules and regulations laws. How could it
potentially affect your ability to take asset management as an example. That's probably the easier one of the two to to see the
impact. So you have a state that essentially says look we don't want to hire an asset manager that is worried about climate. And
so they will restrict the ability of a state pension fund to invest in their manager. Another state may say you know what. We
will only invest in managers that take into account climate. Now if it's a small state with very little population and very
little assets under management in their state pension funds maybe it
doesn't matter that much. When we start having big states doodling on this it's a real problem. Well we're starting to see
it like this in states like Texas and Florida and California and New York just to pick four and seem to have different attitudes
to these things. Are you seeing it affect your business so far. Or is this more on the horizon. It's I would say it's on the
horizon but it's worrisome. And you sort of think about it. You have an industry like insurance which has 50 different
regulators in 50 different states. That's a complex industry but that's a real exception in the U.S. economy. Most of the U.S.
economy is dominated by companies or driven by companies that are able to operate in all 50 states without a concern. And this
is something that I think really runs the risk of upsetting one of the true competitive advantages of the United States. Is
there another factor here with the Supreme Court which we sell so there's less term where they're changing their mind they're
overturning precedent. That's been on the books for a long time. And there's a reason for what we call a legal base starry
decisis. Right. So there is a predictability for business. OK. So go back to what I thought were the three or four competitive
advantages of U.S. unified big unified market demographics. And the third one is rule of law and rule of law
when you really think it through is really about predictability certainty conservatism. In that sense the idea that you can
predict what's going to happen you have an idea of what the rules are. This is kind of upsetting the apple cart when you go
back and you you shift. And what does that do to the competitors of the United States over against Europe on the one hand or
China on the other. I mean China certainly has had issues with some of that unpredictability in recent days. Yeah. So look this
is not overnight going to upset the competitiveness of the U.S. versus Europe and China but it's headed in the wrong direction.
China the advantage China has compared to almost any other market is it's a billion two billion three of people with one
market. And in many respects that is the advantage that a lot of major Chinese companies have is a very big unified market. And
so that's that's the risk. Talk about your business right now because we've got a very strong dollar as I understand that may
have affected your business to some extent. We also have a slowdown. We've seen just this week we saw the GDP numbers. How
is it affecting your business. So on one end of the spectrum it's it's highly resilient. The advisory business had strong
first half and the outlook for the second half seems seems pretty strong to us right now. The question for the advisory
business is going to. What happens in 2023. What's the build like a backlog
the build of assignments and such into the latter part of this year. And that largely depends on what happens in the credit
markets over the course of the next couple of months or so. The asset management business is obviously been subject to the
turbulence of markets globally. But performance has really improved dramatically as we would hope it would. In an
environment where quality and value should be performing the challenge in our business just compared to many of our pierces.
We are global. We're in international business with the asset management business a high exposure non dollar assets and in the
advisory business a very significant significant business outside the United States. So the impact of the move of the euro
and the impact you can see it on the Bloomberg dollar index and move the dollar against virtually every currency in the world
has has negatively affected us. But but at this point it looks like there's been a 30 percent move in the dollar against
Bloomberg in DAX and against the euro over the course of the last couple of years. I would guess that there's probably
another not another 30 percent to go. So maybe the worst is over. I'm not sure I'm calling a recovery yet and a weakening of
the dollar but I think probably the worst is over. Come back to the uncertainty we were talking about. We were talking with the
Supreme Court but there's all sorts of uncertainties uncertain in the marketplace right now. Don't know exactly where the
economy's going. We don't know where a lot of geopolitics are going. Things like that. Is that causing people to sit on their
money essentially. Particularly the advisory business. Do you have CEOs saying you know what I think it's not right a move
right now. I think it's everywhere because what's happened is we've gone from just taking the economy as an example. You know
three months ago everybody was focused on highly focused on inflation as they should be today. Inflation's in the rearview
mirror at least with regard to the bond market. And now everybody is focused on recession. And so the question now is
where's where's inflation. And it's clearly going to come down from where it was 9 or 10 percent as it level out at 4 or 5 or 2
or 3. There's a big debate about that. But in addition to that we now have the question of recession.
How deep how long. And until there is a what I'd say a new consensus a new set of convictions people are going to be
cautious about putting money to work. People are to be cautious about making big decisions. And I think that's going to unfold
over the course of the fall. Ken finally on the inflation front you take a long term view for your business. Are there some
structural factors that suggest we're going to have a higher level inflation. We have the past whether it's demographics
whether it's not a D globalization but something of a pulling back from some of the globalization some of the frictions
between the states and China for example. Well the one friction that is clear is we all got spoiled by Justin. Justin time
economy where everything was minutes away or pretty predictable. Supply chains have been interrupted. Logistics have been
interrupted. Part of it is Covid. Part of it is a shift in wages. China's become a more expensive place to do business so
the supply chains shift as well to places that are perhaps less reliable. And as a result of that we're not in just a time
economy anymore. And there's there's probably more friction than there used to be. And that probably is something we're gonna
have to live with.