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tv   Bloomberg Markets Balance of Power  Bloomberg  July 1, 2019 12:00pm-1:01pm EDT

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meets the world of business. on the brief today, michael mckee on the trade truce. from brussels, maria tadeo on the european union continuing to struggle for successors, and sophie kamaruddin from hong kong on the drama playing out with protesters occupying the legislative council building. we had our own trauma playing out on saturday with president trump and president xi meeting. what came out of it? michael: what wall street expected. president trump and president xi said we have agreed to continue negotiating. no details on a time frame, just the idea that they will talk again was good enough for wall street. emphasized that is part of the agreement he will allow wall way to buy parts from u.s. manufacturers. he put it is a good thing for american companies, but a lot of politicians up in arms, including some in his own party to say huawei remains a threat
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to national security and they do not like what he did. then he went to japan and made nice with them and said they need to step up in terms of their trade talks. the president pushing on trade. let's go to brussels and maria tadeo. you're talking about continue negotiations. there are continue negotiations there to figure out who runs the place. maria: european leaders were locked in a room for 19 hours, that is a new record, and they had to nominate the head of the european commission, the manner woman who replaced jean-claude juncker. one of the most important political jobs in the european union but they were unable to get the job done. the finger-pointing, the blame falling on angela merkel, the all-powerful german chancellor who was unable to bring in her own christian democrats tobacco deal that would have seen a socialist -- two back a deal
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that would of seen a socialist the thinking is angela merkel has given away the prize in europe. it is unclear if we could see a compromise play out. david: how much of this is politics and how much is on the merits? the candidate from the social democrats has had the deputy job for some time. he is fairly well-respected, isn't he? maria: he is very well-respected and many see him as a progressive voice. many see him as very experienced , someone who knows brussels very well and knows how to work the machine. the problem is you are looking at the christian democrats, the winners of the european elections, the epp who believe this makes no sense. the epp should at least fight to get it and that is the pushback we have seen to angela merkel from her own political group. this is stunning. back in the day this is a woman
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who was powerful and who could make everyone go her way and get everyone in the same line. -- the issue is that many do not understand the rationale behind this. the issue is that until we get a new head of the commission, it is unclear who can replace mario draghi at the helm of the european central bank. you could get a situation where you have an ecb with no european backers. david: and we get to do the whole thing tomorrow. thanks to maria tadeo in brussels. now let's go to hong kong and sophie kamaruddin staying up. i understand the protesters have occupied -- sophie: we had protesters earlier breaking into the lobby and gaining entry to the main chambers of the legislative council building. they have since attempted to disperse of their own volition after the hong kong police in a
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facebook announcement advise they would move into clear the protesters in the building and around the vicinity. we now have right police entering the area, setting up a perimeter around harcourt road brandishing shields. up to this point, access to the area has been relatively unimpeded. we do have hong kong democracy lawmakers demanding and urgency -- demanding an urgent meeting with carrie lam, from whom we have yet to hear an official response. david: even as you're speaking, we are seeing the riot police move in. the people with hardhats on are the protesters. thus far, it feels like the administration has been fairly restrained in their response. do we think that is about to change? beene: they have restrained, and an earlier statement issued by the government they noted the
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procession throughout the day was conducted in a peaceful manner but they did condemn the actions of the radical protesters that broke into the legislative council building. as you noted, it is a fairly restrained response given the intense public scrutiny on carrie lam and the government in the wake of last month's anti-extradition rallies that have led to the demands of this pro-democracy movement to be for an independent inquiry. david: it started with that extradition law that the protesters objected to, but i understand it has gone well beyond that, including the carrie lam herself. do we know what the protesters want? the protesters here, it is unclear exactly what their goal is. some parallels could be drawn with the student led movements in taiwan in 2014 when they were able to occupy taiwan's legislature for several weeks.
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it looks like the administration in hong kong is not going to allow that to happen. when it comes to the wider demand by the human rights front, there are five key demands, among which is the resignation of carrie lam. electoral reform is also something which is being called for by the demonstrators. that was a central issue at the heart of the 2014 occupy movement, whether that will be brought back up for discussion remains to be seen. david: one last question. outsidetching video where the riot police are, and inside the legislative council building. one last question for the moment. traditionally there are demonstrations on this day, which is the anniversary of hong kong going back to the mainland chinese. are these larger than what we have seen in prior years? sophie: this annual protest by the human rights front in years
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past has seen a peak of about 400,000 people gathered into the court. today the official estimates by the chr f numbering 550,000 protesters. the police cap tally -- the police count tally is 150,000. this is the type of discrepancy we have seen for recent rally throughout june, when the organizers saw one million from one rally, 2 million for another, and the police numbers considerably lower than that. david: sophie, thank you so much for your great reporting throughout the day. we will keep watching these pictures. let's go back to michael mckee. we were talking about the trade truce between president trump and president xi. my question is what does it mean for the economy? we will put up a chart that shows pmi, china down, europe down, u.s. just over 50.
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how much of the growth in the world is being driven by trade uncertainty? michael: much of it. the peaks were in the middle of last year and the tariffs were imposed on china and we started to see global manufacturing rollover and move away from the peaks to being in contraction territory. china moving in that over the last segment. teargase are seeing being dispersed by the riot police in hong kong. i am surmising that is what you are seeing. it appears the police are trying to disperse the crowd outside, not clear what is going on inside the legislative council. we are watching this story as it develops. how much of this is just plain uncertainty? the tariffs are not that material in terms of global transactionen the between the united states and china in terms of their economy. michael: that is what we're hearing from u.s. manufacturers,
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they do not want to make any plans because we do not know what the rules will be. export orders have collapsed and we're not seeing exporters make any money. they are on the sidelines. that is creating more uncertainty. the same is true for germany. you see that reflected in the european pmi's. the atlanta fed gdp now number came out at 1.5%. that is half what it was in the first quarter. david: when we heard from chairman powell, he referred to trade a few times in considering the possibility of a cut. we have a meeting in july. how is the truth is when president trump and president xi likely to affect that consideration? michael: at this point we will not have an impact. we heard that from mayor lee daily -- we heard that from merit -- we heard that from italy daily last week -- we heard that from mary daily last week. the numbers from the trade uncertainty are coming in week.
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david: many thanks to michael mckee. now we will go back over to hong kong. president trump came away from the saturday meeting with president xi saying we not expose chinese goods to more imports. right now we're watching demonstrators in hong kong and riot police coming in with tear gas. they've have taken over the legislative council building. we want to bring in from washington, michael pillsbury, hudson institute chinese strategy center. thank you for joining us. we want to talk about trade. we cannot ignore what is going on in the streets of hong kong. dramatic video of tear gas being dispersed. put this in a larger context of china because you understand that story so well. are related,two the demonstrations in hong kong and the promises with the trade talks. the demonstrators point is they do not trust the role of law in china.
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they do not want to lose extradition system where they can be picked up and drag to china, not to mention the 85,000 americans in hong kong. trademe problem with the talks is been the chinese refusal to sign the enforcement mechanism. they say we will abide by the intellectual property rules. please do not have an enforcement mechanism. you see this as a connection between the two. it is a matter of trust. can the chinese government be relied on. it looks like 500,000 to one million people in hong kong are saying no. david: there were a lot of promises made in 1997 when hong kong reverted back to china. at the same time, the situation has changed. hong kong was much larger compared to china that it is today. china has grown a lot. michael: there's a triangle going on. the british got the promise, than the chinese government
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itself had to take various measures to implement the agreement, which they are generally done, which not completely. finally, there is the american side, where our congress passed the hong kong policy act where we hold a weapon over the chinese and hong kong. we can say we will not recognize you as an economist traded entity anymore. david: at the same time, we are recognized as being one country, two systems for some time. it is not something the united states can get directly involved in, correct? michael: we are directly involved. we have a large consulate in hong kong. by law toequired report on the degree to which china is keeping his promise. we have diplomats, economic officers, we keep track of what is going on in hong kong and we can take action against them if this gets out of hand. david: to what extent does this bring pressure to bear on president xi? for a long time we've surmised
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he has the upper hand in negotiations with president trump because he controls his country. now we are watching this dramatic footage live from hong kong. it does not look like he is much in control of hong kong at the moment. sophie: at the moment -- perhaps,at the moment, but president xi remains in charge of the talks. they've not set the date for when they will meet president trump's negotiators. they've not put a time limit on how long this can drag on. the chinese have been heartened by the letters from our business companies exposing -- opposing tariffs. the chinese still look like their control, and they hope to just ride out this kind of demonstration and postpone extradition, but not withdraw it. david: i do not want to put words in your mouth. i take it you said you are in favor of the chinese death of the united states taking a firm line with china to restructure
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our trade agreements. were you disappointed when president trump saturday said no new tariffs and we will go easy on huawei? michael: i was not disappointed. i think the chinese position has gotten tougher. their economy has not been hurt by these tariffs. what we are facing, what president trump had to do is safe enough faced a president xi to get the talks started again and find out how much they will go on with what the agreed to already. this is a. -- this is a period of some limbo. the president has not put much pressure on china. all of the things around china's periphery, they are afraid of what we will do. invite the dalai lama to the white house. sell more weapons to taiwan. there is about 10 pressure points i've read about myself that we can apply to china.
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president trump is not at that point yet. he still thinks we need to see what the chinese cards are at the next round of negotiations. helpstrations in hong kong everybody understand that the chinese government should not be trusted. they have to have an enforcement mechanism for the trade agreement. david: to what extent is president trump limited and the pressure he can bring to bear without damaging our own economy and our own businesses? michael: the is limited by the 2020 presidential election campaign. he does not want to have people in the streets against him. a businessman who writes letters -- there is one of the biggest problems. he has the funds to pay off the farmers. yet the chinese commitment to buy more farm products in the immediate future. the trend is still positive. i'm still optimistic there can be a trade agreement with enforcement, but it will not be
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something we get in just one day whether presidents says boom to the chinese and they immediately surrender. this is a long set of talks. isid: what we're watching right police in hong kong attempting to disperse the crowd. there are a lot of people left in the square. i believe there are still occupying the legislative council building. it is not just the u.s. and china. what messages being sent right now to southeast asia -- to the region around china? michael: the credibility of the chinese government is what is at stake. you remember the chinese hinted they were in favor of the extradition agreement, then they took it back. london ambassador in said we never asked for this. china is trying to have this be a hands-off matter, escape from the obvious point of the demonstrations, that these demonstrators do not trust china. they want to escape from that
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and say this is just a local matter between carrie lam and the demonstrators. david: is it likely that president xi will find the need to be tougher given what is going on? he has to communicate to his own country he is in charge so he cannot appear weak and negotiations with president trump? michael: not quite. the main point for president xi is the allegation about hong kong. foreign, hostile invaders is a term the hawks in china use. they were in -- the americans were involved, they are involved in hong kong. that is wrong. we are not backing these demonstrations in any tangible way. as long as the chinese think that, that is a sign they believe we are out to contain them and start a new cold war. president trump is not doing that, so it does help them with the trade talks. they want to relieve pressure on
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the trade talks. david: to what extent is some of this inevitable? we have a rising number two power that has been growing amazingly fast, challenging a number one power economically and militarily. whenever that happens, you will have conflict, whether rides in the streets of hong kong were an attempt to redo trade relationships between the united states and china? michael: it is an inevitable trend that china is on the rise. president trump has written about before he was elected, he uses an expression called good china, bad china. the good china is the one that does of the rule of law, because of a kind of democracy, has a much more open remarket. what we are getting is some kind of compromise or even moving in the bad direction. that is why the trade talks are so important. that is why the hong kong demonstrations help president trump but i do not advise him to get directly involved or send an
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aircraft carrier or take a side. this is the hong kong people themselves saying we do not trust china's government without enforcement. there's almost no enforcement mechanism for the british-hong kong remain. years, thet 50 british cannot get an enforcement mechanism into the agreement they made with beijing when margaret thatcher negotiated this. president trump once a enforcement mechanism in writing. david: you talked about the move toward an opening for a market in china. when the president first came to power, he made noises about reform. more recently, he is not talk about reform. yes talked increasingly about the communist party. it goes to the heart of what president trump is insisting on, modifying their state owned economy when it comes to things like subsidies for their company. is that a true conflict we will not get past?
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are reformers in china who do not agree with president xi and they say china's growth rate will suffer if they are inefficient subsidies. this is what president trump has said he feels insulted by. he said that china in 2025 plan it says inn 2015 -- the top 10 tech sectors in the world, china must have government share by subsidies. i think the president is quite right. there is part of the trade talks. the problem is the subsidies are secret. there is not a list this as your resolve the subsidies we have. we have to rely on the chinese to confess where the subsidies are and then we have to demand they be reduced. it is back to the demonstrators in hong kong and can we trust the chinese government or not? the demonstrators are saying no. david: thank you so much. no one better to talk about the
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developing situation then michael pillsbury, direction of the hudson institute china strategy center. now we want to go back to sophie kamaruddin in hong kong. where are you in relation to what we're seeing right now with the tear gas? are you in a safe place? sophie: i am in a safe place just opposite the legislative building. we can smell the tear gas that has been deployed by riot police that has pushed back to protesters making their stand. they have been able to gain entry to the building but a pro-democracy lawmaker has told police no protesters remain in the building. it certainly seems there attempting to move away from the tear gas. i can still smell it. david: be careful, and if it gets worse, please get inside. do i understand that they have
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ejected the protesters from the business -- from the building? sophie: i would not characterize it as them having been ejected from the beginning -- from the building. after the police announced on facebook that they would be moving into clear the protesters and use any force necessary, we already saw protesters leaving .he area of their own volition they intended to do so by midnight today. we did have reports of riot police entering the building, but pro-democracy lawmakers have told elise there are no protesters the long as a moment. as far as we know, the protesters left the building. give us a sense of geography. right police patrol in drawback. are they establishing a
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perimeter? sophie: yes. earlier we heard that right police had set up a perimeter around the area along harcourt road. we spoke images of them branding their shields. just in front of the electrical building area. we see some sort of perimeter being set up. there is now a zone that was earlier failed shoulder to shoulder by protesters who were making their stand, attempting to gain entry. now living of their own volition. david: thank you so much. sophie kamaruddin in hong kong. let's turn to mark champion with bloomberg news in london. what can you tell us? unfold,u have seen this the extraordinary footage. i think it is worth bearing in mind as your earlier speaker was
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that one gets caught up in the news and that, of what is happening but there is a much wherer story going on china has very intense interest. it has already told the brits who have been saying there should be no violence, that freedom has to be maintained, that the treaty that was signed in 1997 needs to be upheld, basically telling the u.k. to butt out and it has no business anymore in hong kong and that the treaty is a dead letter. chinese taking a clear stand about where they think power lies in hong kong and i'm sure the demonstrators are very aware it will come to a
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point, as has happened before, where the chinese will have to make tough decisions. aired --st, they have erred on the side of force, not breaking down and making consequences -- making concessions. china was willing to go along with the limited suspension of the immediate cause for the protests, the extradition law. any further request for the resignation of the leader in is obviously chose to the club -- close to the chinese government. that will be difficult. david: it is obvious china has the power to do just about anything they want in hong kong. what constrains the power from the chinese point of view? , what control --
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what holds you back to using your our? power? fuel -- your full marc: there's a consequence to these pictures. if you have it determines that of protesters who will not move and you have to use extreme force and people start to get badly hurt, that is something the chinese would like to avoid if they can. also, one would have to remember country,xt of the one two policies, that idea that hong kong was supposed represent after the 1997 agreement, that was always designed as the model for how things might go with taiwan. a much larger and more strategic concern for china. , theit goes badly wrong more badly wrong it goes the more problematic that is for china.
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it is a complicated question for beijing. it is not a simple one where they will just pull the trigger as soon as they can. there are limits. there will be lines they will not cross. david: five years ago we had the yellow umbrella protests in hong kong. how did they resolve themselves? what are the parallels were differences between then and now? marc: they were also very large protests and it was equally tense. the time is different. oft was the beginning president xi's tenure. this is several years on. we know a lot more about president xi. set of more complicated problems on his plate at the moment with the trade war, with the u.s.
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it is a much more complicated and ultimately more dangerous situation. in 2014 thers, protests were good-natured and it was an optimistic feel right from the beginning -- an optimistic feel. right from the beginning, these of been much more realistic on the part of the protesters. they go in with hardhats and masks to mask their faces and are prepared for tear gas. you are prepared for trouble. it is always the more tense proposition. david: we watch these live pictures in hong kong. the first is for the -- the first question is the safety of the people involved. we also to think about the economics. as you describe the challenges for president xi, he also have -- we got pmi's from
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china that show a continuing trailing off. is hong kong material to the economy of china overall at this point? it is. there is still a lot of capital flows companies that are listed in hong kong, big chinese companies are listed in hong kong. it is a liquid market for ipos and so on. from an important place the chinese point of view, and there is a tension there. of -- many people have said that for the chinese in terms of economic self interest, it makes sense to leave hong law,at the open, rule of relatively democratic space. ambiguity sothe
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you can have the kind of debt in capital market. there is a tension there, clearly president xi is trying to, he is trying to impose a greater political totrol and he is also trying sell a model which is much more clearly socialist, to be proud of the traditions of the communist party, and he is doing that at home. it is a typical message to sell both of those things at the same time. he can use the control he has over chinese media in order to play down the story of what's happening here in hong kong. on will see far less of this chinese tv than elsewhere. nevertheless, there is a limit to how long that tension can last. it will be a difficult one for xi to play out in the end. david: thank you to marc
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champion for joining us from london. we welcome shery ahn, fellow anchor here at bloomberg. tell us your perspective on what we are seeing play out here in hong kong. we continue to see these mass protests go on week after week. we have seen violence breakout. annualay, we had the flag raising ceremony, we saw some right police throw tear at people. spray they withdrew for a time, let the protesters go into the legislative building but now again we are seeing this commotion building again. to me this is fascinating because i saw the protest in 2014 on the ground, covering the movement, the umbrella movement back then. beijing did not back down. faded after a
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couple months of protest. we will see where this goes from here. beijing at the moment does not seem to be backing down. david: clearly, beijing has the power to do what they want in hong kong. clearly, this was not their preferred outcome, they don't want his video going around the world. shery: especially when you have heightened tensions with trade with the u.s. what is becoming one of the key moments for many analysts is the biggest loser out of these protests in hong kong could be president xi jinping. president xi has essentially become president for life in china. tois not in his interest have this violent protest be broadcast all over the world while he is having sensitive trade negotiations with the u.s. very interesting, we have seen carry on over the last few weeks. during that time, many protesters carrying a slogan asking president trump for help.
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targeting thers international community, targeting slogans in different those presidents participating at the g20, asking for help. the president for now has stayed out, saying china and hong kong should be able to work it out. david: you have quite the program coming up. i beg your pardon, you are staying with us. situation whens they had the umbrella movement. this is different. they are coming with hardhats and masks. the protesters are more prepared than before. how did the last one result itself? shery: it didn't resolve itself. it faded into the background. months andd for two beijing did not back down when it came to these officials in place. we are seeing more violence
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erupting, protesters being prepared to go all out in these protests and stay on the streets when they have to. it is really interesting, they having different pieces by analysts, describing how different millennials have way,e, so galvanized, in a becoming extremist in a sense when it comes to these protests. a key difference of what happened in 2014. david: once again, thank you. we will be watching your program later on. let's welcome bill fairies from washington. what is your perspective on this? bill: obviously, very dramatic scenes we have seen over the past day or so. it will raise the pressure on the white house in terms of respondappening here to to the situation. obviously, politically a difficult time for u.s. china relations.
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president trump just returning from the g20 having announced there will be a restart talks over trade. it will be very interesting how, whether, if the u.s. response to this, and how it plays out in the coming hours. certainly, if there is some kind of violence that takes place, it will make it very hard for the u.s. not to weigh in. david: how would the u.s. way in? could mike pompeo say something about it? anything that the united states should or would do? initial reaction will be a comment from the white house or secretary pompeo. probablyhey are all feverishly hoping there is no major violence, no injuries, things like that. however this plays out, it does so without any loss of life. that may allow them some space not to weigh into heavily -- in
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too heavily. david: how is this likely to affect china in asia region in general? this cannot be good for people in the philippines, vietnam watching these images. bill: coming on the anniversary of the handover from the british, it will be seen as a major challenge to xi jinping and his ability, just a year of growth after he took control of the chinese government, how people based on these kinds of ,hallenges in a face-saving way and what doesn't mean for all these countries on the periphery of china, on issues like this south china sea in terms of showing beijing pols willingness to either back down or accommodate other interests and perspectives. thank you so much, bill. for bloomberg first word news,
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because there is other news going on, we turn to mark crumpton. mark: when you are seeing in hong kong definitely dominated world events. protests are escalating as police class when demonstrators, as you look at live pictures. onhorities using tear gas protesters in the streets. demonstrators forced their way into the city's legislative building. protesters are trying to get hong kong's government to withdraw a controversial extradition bill. we will follow the story and give you updates as they become available. president trump says the united states is winning the trade war only one day after reaching a temporary choice with xi jinping. the leaders met at the g20 summit in osaka, japan this weekend. mr. trump also said the fed has not been helpful in the trade war. the fed has not been a help to us at all. despite that, we are winning and
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winning big. we have created an economy that is second to none, greatest in the world. mark: the white house has yet to reveal details of the president's arrangement with xi. a mixed message from a new economic report. less thanctivity fell forecast in june but a measure of new orders fell to the lowest level since the end of 2015, right on the line that divides growth and contraction. is defined european nations that urged it to stick to the terms of the landmark nuclear deal reached in 2015. tehran says it exceeded the cap of stockpiles of enriched uranium set by the agreement. iran has complained europe has not lived up to its pledge of providing an economic lifeline. the deal was designed to prevent iran from building nuclear weapons. global news 24 hours a day, on-air, and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton.
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this is bloomberg. will keepll ahead, we our eyes on the protests in hong kong. also pivot to u.s. politics. from new york, this is bloomberg. ♪
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david: you are watching "balance of power." i'm david westin. keeping our eyes on the situation in hong kong as protests have escalated. right please have come in to push back the crowd. building is evacuated, we understand voluntarily.
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right now, be want to turn to u.s. politics. health featured prominently in the midterm elections last summer and the democrats use the issue to regain the house. it was also much of the subject during the democratic debate in miami. joining us is the president for center for american progress. thank you for being with us. lastruck a number of us, november, president trump said he would take away obamacare. into, are the democrats going to take away health insurance? >> there were a wide variety of views. some supported single-payer health care which would include moving from the employer-based system to a medicaid for everyone, but there were a range of candidates who disagreed with that. only three or four people raise their hand when they said, would
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you give away private insurance? one of them was kamala harris. she revised her remarks pretty shortly after that. there is a wide spectrum of views on this topic. there are many candidates, vice president for example, talked about ensuring you have a public option. other candidates talked about medicare for everyone outside of the employer-based system. there is actually a big divergence of views and the public will be able to choose which one is right for them. david: one place where there was not a divergence, whether we should be providing health care for people that have entered the country without documentation, illegally as it were. people seem to be pretty unanimous on that. it may seem like a good moral thing to do, but what message does that tell the average voter on how we are going to make their life better? >> one question out of many questions. toyou are asking people how
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make their life better, there are many questions about that, wages, investing in the u.s., health care, higher education. i don't think it is fair and it is a little bit of what the president tries to do, which is pit citizens against immigrants. democrats are rejecting that argument. the policies on the border are inhumane. i think there is a wide divergence on this issue. a lot of candidates wednesday night seem to disagree with those policies. candidates on thursday night did not disagree with those policies. i think there's an effort to paint everyone with the same views, but you saw people had a wide range of views. david: one of the jobs you have is to keep me fair. i appreciate that. but whatever you think about president trump's policies, he ran saying on going to get you a job, raise your wages. what is the central message of
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the democrats to the average working person in ohio, michigan, about what they are going to do for them? >> that is a great question, and that will be the central question before the electorate. first,ocrats will argue trump told you that he would make her life better, focus on your wages, stop outsourcing, we would not see jobs flee to mexico, yet that is still happening. wages have not kept up with the kind of economy we should have. people,working-class particularly working-class women , feel the economy is not working for them. they have to have an affirmative agenda. i think you have both on wednesday and thursday night, when people talk about the economy, they talked about raising wages for people, increasing the minimum wage. also, how are you going to give people the tools to have a better job?
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education,es higher but not just for people to go to college. ensuring you have opportunities for people that don't go to college, apprenticeships, and other opportunities. david: finally, talk about the next debate coming up. even more than that, the september 1. upseptember, they ramp substantially. do yound of winnowing expect to happen by september? >> i think there is a concern from wednesday and thursday that some of the candidates polling field trying to move the far to them. what you'll see in september is that the standard for making it onto the debate stage, you have donors, have30,000 at 2% or more, which a
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lot of these candidates are not meeting. you will get a debate stage that is really about 10 people. hopefully, 10 people. there you will see the top contenders. david: thank you so much, always great to have you on. we will have more "balance of power" next. this is bloomberg. ♪
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david: this is "balance of power" on bloomberg television. i'm david westin. often will has provided surprising, and always thoughtful commentary on the american political landscape for over 40 years, running for the washington post, newsweek, syndicated across the country, and winning a pulitzer prize in the process. his latest book is a tour de force of where we are as a nation and wher how we got here.
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his new book is "the conservative sensibility." here today for today's conversation in chief. let's start with the basic thesis, the story of two people from princeton. james madison on the money hand and woodrow wilson on the other. you have a phd from princeton as well. ls contending with each other for the american political conscious. >> james mattis and represents the american political thought which he translated into our ,onstitutional architecture principally congressional supremacy and the separation of powers. woodrow wilson became the first president ever to criticize the american founding which he did thoroughly and candid the, saying the separation of powers was an anachronism we cannot afford. we need to marginalize congress. we need an untethered president so the government can be nimble, 's favoriterow wilson
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adjectives, in order to have a much more expansive government. the progressives have been forthright and remarkably successful in overthrowing the founders vision. i'm trying to rekindle that old flame. david: interesting point to me, both republicans and democrats in recent years have subscribed to what you call the progressive agenda, and expanded federal government. whether republicans or democrats, they have on the same direction. george: they have, indeed. until january, a republican house, and yet we are in the process this year of having a trillion dollar budget deficit at more than full employment and with a reasonably robust economic growth. imagine, david, what will happen when the next recession starts with a trillion dollar deficit. some people may say we have outlawed the business cycle.
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if the current president had done that, his modesty would not have prevented him from mentioning it. david: let's talk about a common criticism of washington from a lot of people, what james madison would call partisanship, and what is done to governance. in your book, i'm learning the james madison thought that partisanship was necessary so that it did not become a tyranny. has it gone too far, what can we do about it? george: factions themselves are not evil. saving thought that ourselves from factions would save us from t-rex: majorities. there would be coalitions of factions. -- tyrannical majorities. when the government become so deeply involved in allocating wealth and opportunity that it becomes a plaything of the factions. elizabeth warren it seems to me
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has a firm grip on half a point. the government has become much too deeply involved in allocating wealth and opportunity and that is why five of the 10 richest counties in the u.s. are in the washington area. then she makes the non sequitur of this we need to cure is to make the government bigger and more involved in allocating what an opportunity. if you want to get the government back down to size and make it less a plaything of factions, you'll say the government should yield to the market in the allocation of wealth and opportunity. david: these are my words, not yours, places where a somewhat activist government is justified. i was fascinated by your chapter on the supreme court and judicial review. you think brown versus the board of education was absolutely the right decision, but you disagree with the remedy of busing. george: david, busing and
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brought whites and blacks together again in their common opposition to busing. about 4% of whites supported it, it percent of african-americans. nobody wanted their children bussed away from their neighborhood schools. ht theirften boug homes to be close to a playcular school, all to to the whims of the judiciary. you, johngree with marshall being the third greatest american, our chief justice of the supreme court. does that stand up today when partisanship has really infiltrated, in my view, the supreme court? look at the confirmation process. george: the confirmation process clearly has been politicized. to give the current chief justices do, i think john
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roberts is working very hard to avoid as many 5-4 decisions as can be avoided, and to be as unpredictable as possible so that you cannot simply project the outcomes by looking at the presidents who appointed particular justices. i think it will succeed. one of the most interesting arguments today is not between aggressive's and conservatives but among conservatives. between those that have the traditional conservative view of -- restraint,gth and those on my side of the argument who believe the judges have not been acted enough in their duty to supervise the excesses of democracy. david: what is the reaction from your fellow conservatives? let's just say, i have stirred a robust debate and i'm
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being paid to complement of dissent. david: you have always stirred a robust debate. thanks so much to george will, syndicated columnist, and author of the new book "the conservative sensibility." as we saw earlier, right police in hong kong. you can see them lined up right now. they have cleared at legco think they are trying to disperse the crowd. legco. they are trying to disperse the crowd. update you as news comes along. live from new york, this is bloomberg. ♪ ♪
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when you're not, you pay for data by the gig. use a little, pay a little. use a lot, just switch to unlimited. get $400 back when you buy the new lg g8. call, visit or click today. mark: mark crumpton with bloomberg first word news. in hong kong are escalating as police clash with demonstrators. police are using tear gas to
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disperse the demonstrators, some of whom have smashed their way into the city's legislative building. pro-democracy lawmaker jeremy tam told police investors were left inside the building. trying to get hong kong to withdraw a controversial extradition bill. mr. tam told police know protesters is my left in the building. protesters were trying to get hong kong's government to withdraw a controversial extradition bill. critics say president trump's meeting with kim jong-un shows how little north korea has conceded on it clear program. mr. trump became the first sitting u.s. president to step foot inside north korea. met at the demilitarized zone and agree to restart nuclear talks. those talks have gone nowhere since the president walked out of a meeting with kim in february. leaders in the european union failed

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