One of the big topics of conversation, a growing topic is that debt ceiling.
You've talked on this program before about how unthinkable it is that the US
would default. And yet it seems like we're getting
closer and closer to that point. What is the right solution?
Is President Biden right in saying we shouldn't be talking about controlling
our spending. We should be talking about controlling
our spending. We should not be talking about anything
in the context of hostage taking and threats that are damaging and
counterproductive for everybody. Look, we do need to have a fundamental
conversation about the future of government finances in our country.
We need it because of increases in national security outlays.
We need it because the price of the things the government buys, whether it's
health care or research services or any other kind of services, are going up
much faster than the price of other goods.
We need it because fairness is clearly a fundamental concern for the American
people. And there are all sorts of tax loopholes
that remain in our system, but we don't need any of that.
None of it in the context of a threat to default on our debt.
Larry, do we need to find a way or do we know the way more or less?
We just don't. We need the political will.
Let me go back to base closings, for example.
Let's go back to Social Security. Back to the Reagan was Reagan.
We had a bipartisan commission get together and then up and down vote in
the Congress. Isn't that the way to do it?
There may be a formula like that, but I tend to think the problem is the
problem, not the precise process. And that if there is a absolute
determination on both sides to get through, the problem away will be found.
And without that, you can find all the commissions and all the political
devices you want and you're not likely to solve the problem.
So I'd rather focus on the need for the key leaders, President Biden, the
majority and minority leadership in the House and the Senate to just recognize
that default is unacceptable. It's not realistic to think that we're
going to produce any kind of meaningful, broad fiscal reform in the context of a
hostage taking rush deadline over the debt limit.
Another subject that's getting some attention this week is what I'm now told
is D dollarization. That is the question about whether the
U.S. has reserve currency is at least losing
market share. There's a report on the Bloomberg that
actually last year it lost market share at 10 times the rate that was the
average of the last 20 years. Should we be concerned about the US
dollars position as the reserve currency for the world?
David, first, with great respect to the Bloomberg organization, losing share at
10 times the previous rate is a classic how to exaggerate with statistics thing.
If it was only losing a share at a tenth or two tenths of a percent a year, then
10 times in the previous year wouldn't prove anything at all.
I think the lesson of history is clear. We might have the dollar or lose its
status, but if we do, it will be the least of our problems.
If the dollar loses its status, it will be because the United States is no
longer respected and strong in the world.
It will be because we've accumulated a set of untenable debts.
It won't be because we were doing everything right and remaining a global
superpower and people just tried to move out of the dollar.
Where are they going to move? Are they really going to hold large
quantities of assets in R and B? There has never been a country where
there was as strong a desire to move as much capital out of the country as we're
seeing in China right now, albeit blocked by controls.
Is that really going to be a place where people are going to decide they want to
hold reserves on a massive scale? I have to say, David, I.
I doubt it. I think we should concentrate and focus
on our fundamentals, our national strategy, and if we're successful, we'll
be OK. With respect to the dollar.
Larry, we heard from your successor has sent Treasury Secretary Janet Yellen
this week in a major address on U.S. China relations in which she talked
about taking steps to protect our national security.
Without intending necessarily to hurt the economic situation.
What did you take away from what she had to say and where that's pointing us in
U.S. relations with China?
I admire Secretary Allen, and I think the tone of her speech was very much
appropriate. There's a phrase in the export control
community, small garden and high walls that I think captures exactly the
philosophy that you need to figure out what absolutely needs to be restricted
and restrict it strongly and not try to go after everything else.
We have renounced new trade agreements as a major tool of strategy.
We have declined to reduce tariffs, even where reducing tariffs would improve the
competitiveness of our exports. And we just aren't providing the
resources to the world on the scale that the Chinese are.
So, Larry, let's wrap up with a short version of long, short something we're
doing here now where you're telling us you're long or short on people and
situations. And first of all, let's start with you
on Mars. He had his record rocket ship go up for
four minutes and then blow up. They're debating whether that's a
setback. Are you long or short on the Elon Musk
making it to Mars? Longer than I am on NASA,
I think he'll get. I think he may well get there and I
suspect if anybody gets there, it will be him.
We also had a very big really a record libel judgment result of settlement
actually with Fox and Dominion this week.
Putting aside the merits of that, are you long or short on fundamental changes
in the news media has gone. As a result of that settlement?
I doubt that's going to be the settlement that's going to produce a
fundamental change. I think the problem is in the news media
are driven by two things. They're driven by technology and they're
driven by what the electorate wants. And I don't think this libel judgment is
going to change either of those. So I think that's going to be a
challenge with us for a long time. And finally, on a sports note.
You've got a couple of Boston teams in the playoffs here.
You get the cell stakes are up to nothing.
You get the Bruins the tied 1 1. Are you long or short on both those
teams making it all the way? I'm long on the prospects for both of
them, though that may be along with my heart as much as with my head.