 Right now, does the U.S. look to you in the wake of all this? So let's sort two points of view. One is the point of view of the research team in Bank of America, Merrill Lynch, and they have 2019 at basically 2.5% U.S. GDP growth in 2020 at 1.9%. They peeled that down just a little bit over the last period of time here. But they expected 18 to finish at 3%. The thing that I'd say that we also then have is a perspective of what we see in our system and our customers. So on a given year, our consumers will consume cash, make payments, consumer only, of $3 trillion. And that grew at 8.5% of 18 over 17, which was about 6% over 17 over 16. So it was accelerating. It's still strong so far in January. But you have the first few weeks and we'll see how it ends up. It's still strong, running strong. So U.S. consumer spending, credit is strong in U.S. consumer. And our business customers are still optimistic. They're not quite as optimistic for a lot of the issues we'll get into. And I won't start citing them all because it's obvious. But they're not as optimistic as maybe at the high point. But the optimism in their current environment is higher than it would have been two or three years ago in terms of their views of what they can do and what the future can bring. And so I think you got from both the experts that spend all the time looking at this and thinking about this. And then you've got the actual consumer activity. It looks like it's a solid year for U.S. but a less growth than last year. And therein lies the great debate, which is is a slowdown, never feels as good as a speed up. And that's what we're all here in Davis to talk about. Yeah. And Stacey, how does the markets, how do the markets feel to you right now with the volatility after December? And they're still more active even though they've come. They are. And I think if you look at the volatility profile over the past couple of years, actually, it's been more interesting, I think, early on, prior to October, because there was no volatility in the market. And that, frankly, was very unusual. There were a lot of, the market typically doesn't like uncertainty and there was a lot of uncertainty in the market. There were a lot of open questions. And yet the markets were pretty calm until October. And so really October, November, December, we saw volatility really pick up pretty dramatically. And it's calmed down a little bit in January. So it's certainly quiet. I mean, the end of the year of December, with that, you see market volumes increase, too, because there's a lot of activity. Typically, when the markets are volatile, it's usually on the way down. And that's when there's a lot more concern and investor confidence is at risk. Do you think there's a certain higher level of sort of volatility and uncertainty that's just going to be with us for a while, even if it's calm? I think we will see a little bit more than we had seen historically through that period of time. I mean, it feels a little bit more normal. We have to put things in a perspective. The numbers are a lot bigger. You know, when you're looking at a Dow at this level, it's certainly, you see a thousand-point swing. It's pretty dramatic, but a 2%, 3% swing is not unheard of in the market. So there is a reaction that it's a lot worse than it actually is, although there are a number of factors that contribute to what we saw with volatility. I mean, there is certainly something to the fact that markets are more automated and that there is more reaction in an automated fashion to news that then trickles down through a lot of mechanisms. And it's not just quant traders, which I know Secretary Mnuchin had spoken out on the volatility in the market and what's going on there and is that a shift in dynamic? But when people are reacting with technology, it typically reacts more quickly and frankly, the markets are much more fragmented than they ever had been, which I think does have more of an impact when markets are volatile than when they're not volatile. Just the fixed income piece of that was so Stacy and the equities is, you know, you also have a market structure. People confuse market structure with sort of the types of things Stacy talked about. Also, the fund flows into funds that were doing high yield and buying. There were one-way buyers and one-way sellers was pretty impactful in the last quarter. The last quarter, but really, frankly, after Thanksgiving, the end of year where their flows dried up, they had outflows and they have to sell. That's when you saw spreads and high yield blow out a little bit. You've seen this settle back down, but people forget there's two types of market structure. One is sort of where the equity balance and how they run and algorithms and all that stuff. There's another one which is who owns the assets and what's their position, give them a quote. I wanna go to David because you saw Jay Powell last week. How do you think the Fed's reading this and reacting to this? Yeah, I had a chance to interview him at the Economic Club of Washington and Jay Powell's a person who had worked at my firm for a number of years so I've known him quite a long time. And I think his main message was that the earlier view that the Fed was likely to increase interest rates perhaps twice in the early part for six months of this year was probably not now accurate. Fed's speak is not something he normally talks in. He's a lawyer by training not a PhD in economics, not that being a PhD in economics is a bad thing, but he talks in, he tries to talk in a very down-to-earth way and I think he felt that some people had misinterpreted his earlier views and he tried to clarify and I think it's now clarified. Let me just step back for a minute to answer your question the way you phrased it. In June of 2009, the National Bureau of Economic Research which is the entity that we have in the United States that determines whether you're in or out of a recession. United States government doesn't wanna be blamed for saying we're in a recession or out of a recession so they outsourced it to National Bureau of Economic Research which is in Cambridge, Massachusetts and they said in June of 2009 the recession's over. Now if you didn't have your job back you didn't agree with that but that was generally the view. In June of 2019 we will be out of a recession for 10 years. Now that is a very long time historically just about the longest since World War II. So for the last year or two people have been saying wait a second this is a very long growth period something's gotta go wrong at some point because people just are nervous and because of that they've been looking for things that could go wrong. The principal things that could go wrong and put us back into recession were a war with China, let's say a trade war or some other kind of economic war. Secondly the US deficit and debt got out of control entitlements are out of control we just can't control our spending. Brexit, interest rate increases those things have all come along forward. I think now Brexit is still a great issue of uncertainty people don't know how it's gonna come out so people are jittery about that. They're not as jittery right now as I think they should be more jittery about US deficit and debt. Whatever the reason people don't obsess over that the way they probably should with $21 trillion of federal debt and $1.2 trillion of annual deficit but that's not a concern. I think the trade war with China people generally think we will resolve that in the next two or three months mostly because the American government recognizes that it's not helpful to the economy and I think the Chinese government recognizes they need to get a deal done they can't just say we're not gonna do anything much longer because this administration is gonna do something about it. So the principal issue that people are now focused on is not the trade deficit or the deficit with China or the war with China and not interest rates. It's really Brexit whether Brexit can really impair the entire European economy and in fact of the United States but also the shutdown. We've never had a shutdown this long in the United States government. I don't know of any other country in the world that operates this way. I think any of you have been in negotiations from some time you play hard for a while and you think the other side has weaker ability to negotiate against you than you realize they do. The result is you sometimes find you're at loggerheads and that's what happened now. The Democrats and Republicans have themselves in a position they don't really want to be in. They want to get out of this they don't know it's not helpful they know they're gonna be both be blamed for it it's not gonna be good for any incumbent office order. I do think in the next short period of time something will get worked out because both sides know they have to get it done but if it doesn't get worked out soon the impact on the US economy will be significant and I don't think we know exactly how significant because we've never had econometric models that can model exactly what the impact is but just think about this. If you are trying to get a permit from the federal government you're trying to get a tax refund from the federal government you're trying to get some kind of a regulatory approval from the federal government. You can't get that. Well that's gonna impact the economy and it's not just a matter of paying the workers back so they get their back pay it's the effects on the entire economy and it's gonna be felt even if their shutdown is over it's gonna be felt for I'd say a month or two after that so I think that's a big big worry. If it can be resolved as I think it can be I think this year will not be in a year of recession but I think if we don't resolve that in the reasonable future it can really impair the economy in the United States. That's a good segue Liz for you because you know look we did have a year of big wage growth which had been sort of the thing we hadn't seen enough in the recovery last year. We do see unemployment low but we are in the middle of the shutdown. How do things feel in your view for workers and average consumers right now? Well I'm here bringing the perspective of 12 and a half million working men and women in the United States and I think we're not alone in terms of a worker perspective on how things are going in the economy in the US it's globally people are feeling very insecure and very unsteady and right now immediately we have 800,000 working men and women in our government that are on furlough and many are working without a paycheck it's just astounding. And I think folks think well why do I raise that? What does that have to do with anything? Well it is a political crisis and most people think of it in those terms but it is a crisis in terms of work and the power imbalance that we are seeing between workers and employers in our country and our ability for workers to really get their fair share of the wealth that they create in our country and we're seeing uprisings right now in the US and across the globe of workers who are just saying we've had enough we just had a teacher strike in Los Angeles 30,000 teachers walking the picket line yes for more pay but also for smaller class sizes to say we shouldn't have to teach with 40 kids in a classroom we shouldn't have to go without nurses and counselors in our schools. So that is the crisis point that workers are feeling and I think it's not as I said just in the US but certainly the US has always led in terms of making sure that we have a fair shake for working people and so with the sectors like Amazon and Uber who are trying to look to a different model of employment we're seeing very similar results where workers are saying hey wait a second we thought if we worked a fair days pay we get a fair days wage and the ability to access good high quality healthcare and retirement security but that is not the case we're seeing a race to the bottom and we believe that the US needs to be a leader the US needs to show the world our values and promote fair trade and democracy and workers rights through the ability to come together collectively and raise wages and raise standards for working people. So it doesn't sound like in your view workers are feeling that happy right now. Workers are not happy. So can I put it in perspective from your view of the outlook right now and some of the risk factors one we haven't talked about that I'd like to hear your thoughts on is the China slow down numbers or what impact that might have on the US but do things look fairly sanguine to you right now or do you have concerns? I would echo what David ended with which is the shutdown if it continues I think will be very problematic normally when we look at a government shutdown lasting a week it's very painful but it's like a localized natural disaster if it lasts two weeks it's like you had one in one place and a slightly worse one in another place but if it goes on that you have a worse one every week and it goes on for weeks and weeks and months and months we don't even know what the effect would be so I don't think Kevin Hassett's estimate of zero growth if it's still going through March is crazy at all I think China's in more fundamental issues more fundamental problems than the United States China's experiencing more fundamental problems I realize the Chinese here don't agree with that and they've been amazing for a long time but fundamentally if you centralize power and you want to decentralize the economy to have a more innovative economy that has not been a prescription for growth in the long run and I think they're starting to feel that along with a number of other things it's radiating out I think that is actually a significant piece of what Europe's feeling we feel it through the financial markets initially but over time there are many other ways it could affect us Okay so that's a good thing also on the shutdown I'm sorry I just had a call last night about the aviation system and people aren't experiencing the shutdown personally quite yet but if you were to hear what I heard from air traffic controllers and pilots you would probably not be leaving this meeting on an airplane right now to head back to the US because these mechanical systems that normally are inspected you know the equipment could have failures that normally would be prevented by inspectors that are on the job and the fact that we are stretching people's capacity to endure this stress is going to have an immediate effect on us and our families and that's when I think finally people will have to say an end to the shutdown when they are really feeling it at home You suggest we stay here until it's resolved everybody can think it over I won't say that explicitly but you get the message That was scary Yeah so that's what it is That's a segue when Ken said to David that's a segue to you So you know we're two years into the Trump administration here with those of us who have been here a few times didn't imagine that there would be a time when we were two years in it was such a shock for so many people here Look you come from a different political party than the president you've got a record here now where they gave a big tax break that business wanted a long time we did see growth go ahead last year we are seeing a loosening of regulation we are seeing low unemployment the economy grew for 3% for the first time in a decade we do see continued government dysfunction of course as we're just discussing What kind of credit or blame do you give the president for the record in the state? First I did work in for President Carter in about 40 years ago and I managed to get inflation to 19% I haven't been invited back the government since then I am actually I don't give money to any political party or political candidate ever I'm the chairman of the Kennedy Center and the Library of Congress Board and the Smithsonian I think it's best to stay out of politics I'm registered as an independent so I'm not for or against any party I try to do the best I can working with both of them To answer your question I think that the administration deserves some credit for getting a tax bill through it's not a perfect tax bill but I do think it helped stimulate the economy a bit I do think it could have been improved in many ways but it has some pluses to it I do think that the deregulatory effort of the administration has had some pluses to it I do think that the international order that grew up after World War II can be questioned I mean NATO is not perfect UN is not perfect WTO is not perfect World Bank is not perfect IMF is not perfect All those organizations were largely put in place after World War II and they can be modified and improved like any organization nobody's perfect so I think some of the questioning while may not have been as articulate or as eloquent as William Shakespeare would have done had he proposed some of these changes I think nonetheless some changes might be appropriate I do think the president communicates in ways that are different than other presidents have done and there's no doubt that other presidents will no doubt follow him I don't think Abraham Lincoln is in danger of being overlooked as an eloquent person but I do think that if Abraham Lincoln were around today he might be tweeting as well it's a very effective way to get your message out and you think about it how many of you tweet to people and how many of you follow people that are tweeting and it's a very effective way to get your message out and I think the president found a good way to do that he says some things that I don't agree with and some things that I think have some merit but generally I think the president will get blamed for the shutdown more than he would like if it doesn't get resolved soon and I think the final point we have to remember is that generally when presidents get their recessions out of the way early and they have their economic growth towards the latter part of the first term they get re-elected Jimmy Carter had a recession towards the end that wasn't good George Herbert Walker Bush had a recession toward the end, it wasn't good Ronald Reagan got his recession out of the way early that was good for him so I think the danger that you have if you artificially keep an economy going in ways that maybe it shouldn't be and then you just can't you run out of steam towards the re-election period of time and there's a re-elect and then there's a recession you're gonna get blamed for so you have to make sure that you're not propping up the economy artificially and at some point some bad thing comes along all of a sudden you're in a recession when you're running for re-election and that's his biggest risk in re-election in terms of recession Brian you were vocally supportive of the tax cut bill last year you described a pretty benign scenario with your outlook how much credit do you give the administration for where we're at? The tax bill, there's focus on the rate but the piece that got lost in a lot of dimension is the territorial methodology which is really the really difficult thing for the United States and it led to really the strange stuff and so I think those two pieces together if you were here last year what surprised me going around Davos was that the amount of foreign institutions the foreign companies that said I'm coming to the US because you have all this good stuff which we all can talk about but what I wouldn't do before is the tax rate was so far out of line and so that's been interesting for our company the core tax benefits spent a total of $500 million because we took a big charge and then have been earning it back so a lot of people saying oh my God you're buying back stock from the tax bill we're buying back stock from the earnings factory you earned $20 billion last year it has nothing to do with the tax bill and it would have had nothing to do with the tax bill even a normal thing so you're gonna see those benefits actually be interesting in the next year how they mature into the system and then we shared we shared it with our employees we did two rounds we did a billion dollars of extra value to everybody at the top for five percent of the employees two tranches one last year, one this year a billion dollars above everything else so we tried to share the benefits there increased our philanthropic commitment for this year from two to $250 million per year in cash philanthropy we did a lot of things so I think that stuff is still coming through the system but the core benefit rate which had to get the point was competitive where people were starting to shift globalization being a big issue that we're all discussing here and at the end of the day multinational companies have something different in this demand today than they had for generations which is ability to both access materials produce goods and sell in the final demand that is worldwide that's the difference then 20, 30, 40 years ago with most of the demand was still in a few so I mean that's pretty completely changes the name so you have to be competitive for the tax waiter else they're gonna just move over and make money there you agree with that Stacey do you think companies are getting what they had hoped for and wanted here I think so but I just want to take one step back for a second and just touch on something that David mentioned when he talked about communication style and Twitter I actually think that that's really a significant shift for a lot of reasons we've spent a lot of time here this week talking about the divide and that people feel disconnected from government and unprotected and Liz mentioned too that shift in the balance of power and that's why I think the social media has been so effective because the everyday person feels like they're getting direct communication to them and they feel part of that and I think we shouldn't underestimate the power that President Trump recognized in using that as a tool and I think that that's really important and that's probably why it will be copied right he has on his following how many Twitter files you have 50 some million I mean who has the most drake or somebody has 150 million but I'm not on Twitter I don't I don't get a swab I think I think this is like a Klaus Schwab I think he has the most he deserves the most I'm not on it because I'm afraid I don't have one or two followers and it's embarrassing if you only have one or two followers so I don't do it I'm not David you can actually buy Twitter followers maybe I should do that I one of the things I've always wondered about is Twitter stock price should be 10 times higher than it is because there's so many people use it but you know I don't want to make shares in it I might just want to comment on the deficit and debt for a moment because the tax bill more or less I would was said to be increasing the federal deficit over a 10 year period of time or debt by about 1.2 to 1.5 trillion depending on economic assumptions and we kind of tolerated that because it was over 10 years and so forth but we do have to remember we have in the United States roughly 21 to 22 trillion dollars of total indebtedness about 18 or so that is maybe external debt and the rest is probably internal debt for accounting purposes and it's a serious amount of debt we have a budget in the United States of roughly 4.2 trillion dollars a year 4.2 trillion dollars and we borrow about a trillion or a trillion two of that so we really have revenues about 3 trillion dollars or so we can't sustain this for very long there's only five ways to solve this problem one is you default on your debt that's not a good answer two you go to the IMF or bailout the IMF cannot really afford to bail us out I don't think three you can inflate your way out of this as I tried to do when I was in government a lot of inflation but it needs a lot of inflation to do that so you really have only two other ways to do it you grow your way out of it with enormous amount of economic growth but that's probably unrealistic to grow it four and five percent given the size of our economy so you have to really cut you have to really cut spending a bit and increase taxes somewhat in some ways that's the only way you're going to solve this problem at some point the markets are going to wake up and say we can't tolerate this anymore and we've been able to tolerate it because interest rates have been so low when interest rates go higher as they eventually will the debt is going to cost us not 350 or 400 billion dollars a year but 600, 700 billion dollars a year it'll squeeze out the rest of the federal government programs so luckily we have a debt specialist on this panel how worried are you about what you see Ken right now well I think the fact is the global interest rates keep going down and down and down and advanced country debts keep going up and up and up and private debt and corporate debt and it's definitely a medium term long-term problem medium term meaning when you say medium term you know ten years eventually something will happen we finance our debt very short term compared to say the United Kingdom and other countries I mean the real problem is that there are a lot of people who just believe it doesn't matter and Dick Cheney famously said deficits don't matter and I think Republicans believe deficits don't matter but it's a tax cut and Democrats believe deficits don't matter if it's a government spending hike and you know you just keep spiring there don't seem to be a lot of voices in either party right now for restraining spending well I mean it makes sense as interest rates get lower and lower surprisingly to react to that they're lower than expected and to react to that can I just comment on how much credit should Trump get yeah yeah so first of all I want to say I don't give money to either political party either although I don't think either one cares compared to David whether they got money but I think that you know obviously he inherited a very benign environment growth was very good I believe that recovering from a financial crisis takes a long time and we have been doing that we're continuing to heal and it's surprising how many people are still coming into the labor force but it has been very benign and my greatest concern frankly I was just realizing I was supposed to I was told I was replacing Steve Mnuchin at the last moment although he was an actor in the movie rules don't apply and I guess that now he's living that and but my greatest concern is that in during the first two years of the Trump presidency the only crisis the United States has faced has been the Trump presidency and what if there really is something you know when you need grown-ups in the room and I respect the Federal Reserve but it really worries me and by the way we could go over to the UK and save and worse well can I go over to you Liz for another thought of the administration a lot of people think if we if we have a crisis that it would be with China of course well Trump promised to tear up the trade agreements that they were very unfair to America a lot of workers agreed with him a lot of your members agreed with him understanding how you feel about the shutdown right now and the damage of that but he did tear up the he tore up NAFTA he's got a new trade agreement he's in the middle of trade negotiations with China is he delivering in the way that whether you remember or agreed with him or not in a particular case there was a lot of frustration with those deals isn't he delivering and changing the paradigm a little bit well I think the new NAFTA of course you know they've made progress in some areas we think the labor standards and a number of other chapters need work there's still time you know and of course the enforcement piece is going to be the big question but there's still still time but are you are you inclined to want to back this and have Congress support this deal we want fair trade and we want strong labor protections and if there is an administration willing to work with us on that that's what we're going to do and just to be clear do you think you're going to be able to make the progress that you're talking about as it stands now we are not endorsing this deal but as I said we believe there's still time and the enforcement piece of course has to go to Congress and so we'll continue in that conversation but I think what you're touching on is the fact that working people had an expectation in the election during Trump's campaign he was essentially taking a page out of our playbook which was talking about how the trade rules haven't worked for working people the devastation that we'd seen all across the country particularly in the Midwest with factories shuttered the outsourcing people losing their jobs working people wanted that message and they clung to it and in some cases you know upwards of I think high 20s almost 30% of working people in the labor movement that message appealed to them and so after the election how has his popularity fared I think working people have seen no results empty words in terms of the promises kept in delivering on huge priorities that we thought would put people back to work infrastructure is one big priority that was talked about on the campaign trail we have a what 3.2 trillion dollar deficit in terms of investment in infrastructure and that was gonna promise big job growth and it has not moved so I think it is time and I wanted to respond to what David said earlier about our options we know that we have a consumer driven economy and the inequality that we've seen with these tax cuts going to the wealthiest to corporations and the wealthiest in our country that consumers don't have money in their pockets because wages have not been steadily rising over the decades where we've been flat so if you don't have money in your pocket as a consumer you're not investing in that virtuous cycle of growth that we so desperately wanna contribute to and that is also preventing companies from making those investments for those who are not American who may not understand the NAFTA agreement could have stayed in effect the new agreement has to be approved by Congress and if it's not approved by Congress NAFTA unless the President gets out of it and he can legally get out of it would stay in effect it's not clear that the Democrats in Congress wanna give a victory to President Trump so it's not really clear that that will ever be approved by the Democrats in the House so it's unclear one of the advantages of the negotiation with China is that it almost is certainly the case that it'll be structured in a way that doesn't have to be approved by Congress because once again it's not likely that the Democrats in the House are gonna give President Trump a big victory by approving his agreement, whatever it might be so because it doesn't have to be approved by Congress I think it's a pretty good chance that it will go into effect when it does get negotiated. Quickly Brian. That's the point I was gonna say David is that having this explained by the people in Congress it actually probably increases the pace at which a China resolution can happen because if you don't have it go through Congress you don't have a full trade deal it's much easier to cut a series of transactions and I think that's the common wisdom is that should happen fairly quickly. I wanna move on to a slightly broader thing but before I do, if I can I just want one word answers from everybody is the US position in the world economically stronger or weaker than it was two years ago right now? You wanna start? Relatively stronger. Stronger. Relatively stronger is two words I would say, would you speak as quickly as David? One word David. That's why I'm using inflection. Did you hear my inflection? I would say improving. Also we're improving. Improving. Getting weaker. Sorry. Getting weaker. Stronger. Let's talk a little bit more broadly then. So the political situation remains volatile obviously in the United States right now. Like elsewhere in the world we're polarized, the parties are going more to extremes. You heard Liz talk a little bit about the appeal that Trump had for many of her members who would traditionally be Democrats. But as we head into the election we have I think at this moment 45 or 50 Democrats have declared for office back home probably more this week as we're going. David are we possibly headed for a much more leftward swing in the political direction of the US? There's no doubt that's the Democrats who got elected in this term, the first term members in the House of Representatives are more liberal than the people they've replaced. That's obvious. Joe Crowley was defeated, replaced by somebody who's much more liberal. Alexandria O'Crow, OCA. Who also has the Twitter gift that you were talking about earlier. So I think that's the case and I think Nancy Pelosi is in a difficult position because she's got a party that's much more left leaning than it was before. So I suspect you will see some drift to the left. Right now we don't know what the exact consequences are gonna be. It's not likely that any major legislation could get passed that's leftward leaning out of the House and become law because it's unlikely the Senate is gonna approve anything. But when you look ahead to 2020 and you see this process is only beginning it's obviously it's way too early to make a prediction but the energy's on the left and the Democrats for sure. The thing I would just point out is that if you go back to last 10 presidential elections think about each of them in your head. Last 10, two years in advance who do you thought was gonna be president? You would have been wrong in almost every single case. You wouldn't have predicted two years in advance Donald Trump, Barack Obama, George W. Bush, Jimmy Carter, John F. Kennedy, you wouldn't have predicted them. So it's hard to say what will happen two years in advance. There are too many uncertainties. It's clear though that the Democratic Party right now feels its oaths from being more left leaning than it probably was a number of months ago. Whether they can get anything through the Congress I'm skeptical of at the moment though. Liz you're nodding your head though. Do you feel the energy going that way in your membership? I do. And if you look at who got elected in this last cycle there are more women, more people of color, more working class people. And in fact the labor movement has made it a priority to invest in working family candidates from our own ranks. And we had I think over 800 union members elected at various levels of government. But I think they were ushered in this last cycle based on a working person's economic message. And that is what we have been missing previously in the Democratic Party is that message that says, hey, I know what working people are going through. I know what we need to do to create jobs in this country. Good paying jobs that have benefits and security. We do not want to see this race to the bottom and have working people bear the brunt of what's happening in the economy. And so I do see the rise of more worker, we call them working family friendly candidates because of the way the policies have been so broken and the laws have been so broken. This is a problem. When you get to be an old white male I've spent my whole life trying to be an old white male with power and now that I am an old white male with some power they tell me it's not good to be an old white male anymore. So it's disappointing, but nothing I can do. I think the other thing about it, just to note, is that increasingly there are more and more people frustrated with both parties. And I think that's a sentiment. Independence, independence. Independence. I mean, certainly we're not going to head in that direction in a meaningful way. But I think what actions we actually see come from the government, to the extent they're influenced by centrists who actually are disappointed with what we're seeing on both ends. Brian, what's your read when you hear it? I mean, from the perspective of the company, but also from all of your customers out there, do you think the political landscape is going to shift again? And what would that mean? I 100% agree with David. And I do it in formal polls with my manager team and my board and say, when we have meetings, leading up to elections, give me your thoughts. And you could not find some of the people who are present 24 months before. So we don't know. There'll be a lot of here between here and there. David's view about when does a slowdown hit what happens of these things. But clearly, it needs to be a good discussion in both parties about what they stand for, and neither party has had it. So I think what Speaker Pelosi will face is not just analogous to what Speaker Boehner faced when he had the wave come in and everybody thought, well, you have this all. And he couldn't control. He couldn't get the votes through his own party before he had to deal with what else was going on. So I think there's a battle about these parties that you'll see play out. We as citizens, I don't have any special perspective, because we as citizens in the United States are going to have to make decisions in both parties. But do you think business particularly, which obviously has a big interest in this, do you think everybody, everywhere will listen to business at this point? Because one of the things about Trump, you're nodding your head no, Stacey, why aren't you? Because one of the appeals, I think, and it was clear for a lot of big people in business with the president, they may not have liked him. They may not have voted for him. They feel he's got their ear. Are there alternatives to a Donald Trump Republican party for companies right now? I mean, I think when you talk about companies, like, yes. And I never really got to answer in the question the first part about the actions that the administration had taken. And I do think that what we hear from companies, and we have global companies, right? But in the US, where some of the actions are certainly more impactful, they're relatively optimistic, right, the new tax bill. And they've seen that benefit from them throughout their organizations. But there's a lot of uncertainty that's been created at the same time. And so that optimism is really dependent on resolution, on all these other topics that we're talking about. So I think there's a good dialogue with business and the president, but I don't think that the general population feels like business at this point in time has their interest in part. And I think that's what we need to change. So you see business, how business would relate with President Warren, for instance. I think they would feel like they got hit by a ton of bricks if that happened. Can I take you into one other area? Because it's fun to talk politics for doing it. But really, many ways, maybe the biggest topic in the era at Davos, I think, this year might be about the US and China and where they're at. And one thing I think that's true in the political dynamic in the US right now is the left and the right, both share awareness of China and the future of the relationship with China, maybe for the first time with this kind of common thinking in quite some time. So how does the US-China dynamic evolve in the next decade? Is it inevitable that China is just gonna outpace the US in the size of its economy, or we're gonna have to learn to live with that? What do you see taking place here going forward and the debate looking like? One thing that's probably inevitable, that China outpaces the United States, but will it be 40 years, 400 years? I don't know. I mean, I think that's unclear. And you're absolutely right that in many ways, these very aggressive trade policies don't, the way they're expressed, David said, it's not like he's talking Shakespeare, but there's a lot of consensus in Washington. Positions are really hardened around China, where I think there's a disagreement is what is it we don't like about it? And President Trump says it's the trade imbalance, which I, except for his economic advisor, Peter Navarro, I don't think you can find anyone who agrees with the economists, who agrees with that. That's really benign. We're borrowing the money and that's gonna be their tough luck if we don't pay it. But on the other hand, the intellectual property rights, the forced transfer of intellectual property rights. I mean, these are big issues. And I think something had to happen because there are certainly people feeling in the United States, we might wake up some day and go, oh no, what have we done? Are they right to feel that? Or is there just, is there a real concern or more kind of a unnecessary anxiety that's built up? I mean, I tend to have a benign view of it that we in the United States didn't respect Britain's intellectual property rights in the 1800s. And then when we started to be the innovator, suddenly we thought it was a great idea to have intellectual property rights. And I think it's a fair chance we'll see a similar dynamic. Do you think there's a risk of some broader decoupling or that the US and China could really disengage in big ways? Well, I think my impression of the mood at Davos is that it's somewhat muted. And I think there, I can't put my finger on why it is, but certainly the concern over the trade war just seeming a lot more real than the rhetoric over globalization that we've heard until now. Nobody's quite sure how bad it will be, how it will play out, what unintended consequences will be. That's certainly something on everybody's mind. Brian, you wanted to jump in on that. I was going to switch the focus to Davos just to hear, but David, you wanted to say that John Kenneth Galbraith, a famous Harvard economist, once said, the conventional wisdom is almost always wrong. So the conventional wisdom in Davos is always X or Y or Z. And it turns out a year later it's almost always wrong, as it was last year. But that's OK. It makes life interesting. Let me just talk about the China situation. What happens to people who may not be followed as much, maybe just get my perspective. The Chinese government for a long time heard American politicians rail against their various trade practices and intellectual property practices. And then when these people got elected, nothing really got done. So when Trump said these things in the campaign, I don't think the Chinese government took it that much more seriously than when other people had said it. When he came in and actually did some things that they thought he was not likely to do, because of the good relationship he had established on a personal rapport with Xi Jinping, they were surprised. They then realized that he was serious and they had to do something about it. They also realized that he represents at least 40% to 45% of the American people, if not more. And that if he were to die tomorrow, whoever his successor would be would likely have similar, if not identical policies. So they decided they had to do something about it and actually come to an agreement. Their problem was they didn't know who to negotiate with because there were several different negotiators and they didn't know exactly what President Trump wanted because he hadn't yet defined exactly what he wanted. Now that Bob Lighthizer has been given the mandate to be the principal negotiator and he's a very skilled negotiator and a very knowledgeable person. He's a special trade representative in the United States. He I think is gonna bring together a deal because I think that Chinese really want a deal. They think it's not gonna solve all their problems and it's not gonna have the Americans be quiet on everything they do in China but they think a deal will be helpful and I think the president realizes he's being hurt in some parts of the economy and particularly in the agricultural sector by the tariffs and so forth. So he wants a deal. So I think a deal will get done within the next two or three months, maybe four months. But even with a deal, we're still gonna be engaged for a long time. Well, forever. In the history of the world, you've never had the two biggest economies always say, hey, we're great friends. We're always gonna do things together. Well, you always have a headbutting between the two biggest economies and nothing is gonna go away in that regard. Stacey, you wanna do trade? I think it's just interesting also if you take that down a level, obviously while the trade conversations are going on and you look at other people within the countries are trying to forge partnerships at sort of in spite of all the dialogue that's happening. And so we see, we have a lot of conversations both with Chinese regulators and others who are looking to say, let's not let this noise distract us from our day-to-day work and hopefully we can sort of push things up as well in partnership-wise. And we didn't see a slowdown on the companies that show us to come public in the US from China at the end of the year there. But let me ask one question that there, should US companies be worried about the competition from Chinese companies over time? I mean, is that an issue facing US companies in terms of our agenda? So the interesting question is that we get a lot of questions in America about the concentration of banking market share and things like that. So if you look at the top burning bank in the fourth quarter, America will be us and JP will be a little behind us and Wells will be a little behind that. But when you end up stacking up your earnings from the Chinese banks unless something goes wrong will be somewhere either third and fifth or fourth and fifth out of the top five banks. And it's those institutions are already much bigger, much bigger scale, earning $40 billion a year. The only company I think it out earns the biggest Chinese bank in the United States might be Apple is probably Apple and stuff. So there's powerful franchises coming around the world. And when they decide to come, they're gonna come. So they've already done it. And so I think the competition from China is gonna be real. And the structure of that those in the United States that'd be one enterprise because the government owns 60% of all the different banks. But when they come, they're gonna come hard. Did you agree with that? Are you? I mean, there's competition and that's no surprise. You know, I don't think that I certainly think that business leaders here in the US are aware of the competition that exists. Are they doing what is necessary? Do you think it is? Does the US government can? And I ask that because we were talking about, we were talking in one way we're in very good shape. But we've got half as many public companies in the US today as we did 20 years ago. We've got a lot more moving into, we've had a lot more capital move into the private markets. Small business is coming out back, but we took it on the chin. Do you feel we're in a healthy corporate environment? No, I think that's a totally different topic though. You know, in many ways, I think the number of public companies is down by half over a 20 year period. The average company is six times the size what it was before. We've created a landscape that works well for very large companies and large investors. And the large investors can go play in the private markets. And I do think that contributes to the dialogue we've been having here this week about the divide of wealth because we're denying the everyday investor from being able to take advantage of the serious growth trajectories that come. The principal problem that China has right now among other things is they can't invest very much in the United States because of CFIUS and other rules. So what China has done smartly is say, we'll invest in Europe, we'll invest in Africa, we'll invest in Latin America, Southeast Asia, and they are beginning to be much more significant investors in these countries, particularly our technologies, than the United States is. And if the United States doesn't recognize that soon, our companies don't compete in these other areas, at soon you'll have technology in Africa that's Chinese more than is American. And that's not to the benefit of Americans. So I do think we have to recognize that Chinese are frustrated, they can't invest in the United States, so they're gonna invest elsewhere and that's gonna continue for quite a while. That'll affect global power. Okay, I do wanna go for questions. Sorry, Liz. Can I do three very quick lightning things, yes or no? Or can I start with you to put you on the spot? I'm gonna ask three questions that I just wanna know yes or no. Recession in the US within two years. No. Liz. Possible. David. Don't know. No. No. Okay, trade deal with China on the deadline, Ken. I said yes or no by those of what we're supposed to say. Yeah, well, or no. Trade deal with I on the deadline? No. No. No. Yes. Yes. Not sure what the deadline is, but yes. That was my hesitation. I think you're my bank. That makes me worried. Now, okay, last one and then we'll go to the audience for questions. President Trump, two terms or one? Oh, this is pan fault. So that's not necessarily yes or no questions. 50, 50. Oh, come on. One term. If not half a term, I'm just kidding. Keep in mind, he could be watching the live stream right now, I'll just point out, go ahead. I think it's too early to say. That's it. Oh. Sorry. I want to be accurate. Two. No idea. No idea. Okay. You don't know. You want to go to questions out here? We've got a couple of mics roaming around. They can find you. There's one there. I see a question over here. Just identify yourself for the audience, please. I'm Nicolasma, this is called for Mexico. Whatever happens in the U.S. affects Mexico. You all know quite well. So what's going on in the U.S.? We like to know and like to have some ideas. For example, the wall, one thing. The migrants coming. The guns control in the U.S. All these issues. I would like to hear your outcome of all these issues because you're affecting us very much. Thank you. Who wants to jump on that? I would say on the wall, just to put it in perspective, this was the president's signature campaign promise. And I think many people in his party said, how can you run for reelection without having honored in a meaningful way your major promise? The Democrats, by contrast, have said, if we let him have his major campaign promise, this will ease his reelection. So they have said under no circumstance are they gonna support the wall. And so you've got these bipolar positions and it doesn't seem any compromise. As we all know, there already is some wall there but it's not called the Trump wall because he hasn't actually put his imprimatur on it yet. I suspect like most things in Washington, it will drag out for some time until after the next election. I think just pull back to the broader question of immigration and policy. There was a bipartisan bill for many years put on a table to have a comprehensive immigration which was worked with labor and business and the states along the borders. And it never progressed under the last administration. I think even though it goes back even before that. But and so at David's point earlier about, just those things aren't gonna get done but what's interesting in the dialogue that goes on now you see pieces of it get thrown out there. And so optimism would say, hey, maybe they will figure this out that this is really the core issue. We have to have population growth in the United States. We're going about half the rate. The way we do that is through immigration. We had 75 million workers 50 years ago. We have 150 million today that came from people coming to this country. That's what we gotta do. That's what makes us interesting and fun. We are a big economy and we grow our population at a pretty decent rate. So I think you hope that happens but I think the reality is and the pragmatist in me is, with the Congress arrayed the way they are and the dynamics David talked about, you don't see it happening. So I think all those issues you talk about are issues but only the things that have to get done to stop a shutdown or the incremental progress is I think all that can be on the table right now. Can I go for another question? I'm sorry, any other questions? You wanna jump in on that one Liz quickly before? Well, I was just gonna say the wall is a political distraction in our opinion. The timing of it during the election was uncanny to really divert people's attention from the real issues which are obviously the economic issues that are happening in our country and the plight of workers who are undocumented in the US is they're working in a shadow economy and until we have comprehensive immigration reform in the US where everyone is treated fairly, can work for a decent wage and not be exploited, it's gonna be a drag on our economy. Questions? Anyone? More, oh, there's one right here, sorry. Michael Yarn from Denmark. I just wanna ask you, how do you assess that Europeans are trying to challenge the American dollar power by establishing a new mechanism so they can work around the Iran sanctions and Russia and China is doing the same trying to establish a trade system outside the dollar? Ken, you wanna do that one? I mean, I think the fact is that the dollar dominance is growing and growing and growing and the euro's just completely flatlined, even started shrinking in its global footprint. Maybe as the European economy recovers, stabilizes, not happening so decisively yet, that will change but there's a natural monopoly. I think the next currency after the dollar will be the reninbi. I don't think the euro's ever gonna be more than a sectionary. Do you see the reninbi? But on your issue about SWIFT, which was what you were asking about, which I think the fact that because the dollar's grown and grown, all the infrastructure, the pipelines of the global financial system now not only dollar, the US controls it because the federal reserve can back it. The Europeans are trying to do something, they should, but they're real economies of scale, they're real problems here, so this may not work at scale that they hope. Right now, a lot of European corporations are actually borrowing in dollars. And the reninbi, which has been talked about probably when I think about Davos' predictions of the past, probably 10 years ago, someone was at Davos saying, the dollar's day is done, that's really going quite slowly. Way in the future, but. The US, for the US, the dollar is our sovereign wealth fund. We don't have a sovereign wealth fund, but by having this printing press and people wanna buy our dollars, it's effectively our sovereign wealth fund because people have to buy these dollars because there's no other currency that's really equivalent, so it enables us to finance everything very, very cheaply. We have another one out there, I think. Hi, I'm Marco Agulironi from Argentina, and I want to highlight Mr. Rubenstein's comment about how the Chinese are frustrated and investing in other places such as Latin America. One could argue that the American economic enterprises have retreated from Latin America and other places, so in the panel's view, do you think that this administration has the political mandate to bring back these American enterprises to engage with other places, and particularly Latin America? I think that the American private equity investors and other investors have been burned a bit in the last few decades by going into Latin America always at the wrong time. When the prices seem to be good and the economies are good, people rush in and then they go this way. I do think now, I shouldn't say this because I don't want my competition to rush into Latin America, but I do think that there are some terrific opportunities there now because there is relatively little foreign capital coming in, so Brazil, for example, which had a gigantic recession for a long time, now as a new government, I think the economy is coming back there, and it's probably a very good time to invest there. I think Colombia is another place that's very attractive. I think Mexico also is very attractive, Chile as well, among other places, Peru. Argentina, I don't know as well because we haven't invested there, but it's a place where, because you have a new government in effect, I think it's more attractive than it used to be, but I think that Americans have pulled out and other investors have pulled out because there's been so many currency problems. In Brazil, for example, the currency went down 35% against the US dollar, so if you had a good investment, you could still in dollars lose money. So I did think it's a good time to invest, but I don't want my competition to hear what I'm saying. I don't want them to go in, tell them not to come in and let me buy things cheaper. Good thing this is pretty fast, exactly. We've got a question over here, and then back there next. Thank you very much. We heard that there is no... Oh, sorry, remind us who you are? I'm sorry, yeah. I'm Shahmar Moff. I'm CEO of sovereign wealth fund from Azerbaijan. We heard that you said that there is a possibility of, at least some of the people said it's possible. Some people said they don't know all for recession within the next two years. I wonder if there is a recession. Is there enough toolkit, both fiscal and monetary and the political will and capacity to implement them? Do you want to take that one? So our research is just a shade under 2% for 20, so two and a half and 1.9. So that's not a recession and that 1.9 will still be higher than most years other than the last couple. So nobody rejects blue chips somewhere around the same thing. So nobody has it projected. Is there structural ability to... That's one of the reasons why the Fed, by what they said, is they're intent upon continuing to move rates up because they want to take the accommodation out. So in the end of the day, they're not quote propping up the economy and stuff and they've done it. And they're at the bottom range of the neutral rate, I think is exactly the expression they use. And right now there's the market says no hikes next year. We say too in our research because we think the economy's stronger. So there'll be room just because we've normalized a bit. Now what they have lost and they talk about a lot is some of the mechanisms that were used in the last crisis. But I think the thing people have to remember is the last crisis in the United States almost can't happen right now because it was a consumer mortgage which is the biggest asset class with the biggest number of people's, what would the right word be, confidence broken. There's 130 men household, 60 million and a half mortgages. You had the grade that those 60 million people were not, you know, because unemployment and other things going on but the worry was they were over borrowed and over leveraged and therefore couldn't pay. That doesn't exist today because of structural reforms that were done. So the question of corporate debt and stuff, leverage, finance, you're talking $2 trillion asset class. It doesn't affect half the households in America and then psychologically affect the rest. So we don't see that kind of setup which would then say if we have some sort of recessionary environment not in the next couple of years obviously but sometime out there it's gonna be more of a, it always affects the consumer more of corporate side and you'll see it but much more shallow. Therefore the tools that we had to have last time are not gonna be needed but there is concern of whether the structural tools have been curtailed to. I don't know if that means the U.S. is a good investment for Azerbaijan but we had another question back there I think. Rebecca Corbin, CEO of Corbin Advisors from the U.S. You know, I just wanna ask a question with regard to the economy. So if we look back in 2015, right? We saw August 2015 China imploded a lot of concern, a lot of volatility in the market. People thought we were going into a recession. It was a year then we went into 2016. Corporations actually lowered expectations. Nader in the market in February and then we started to spike up again. Then Trump was elected and he changed the narrative, right? So instead of recessionary headlines he started talking about spending and making America great again. I do not support any party either. I'm an independent. But we saw a big psychological shift and we also saw a lot of cat-backs come into the market because people felt better about spending. In December of this year we saw kind of the antithesis of that, right? And we track the markets and we've seen some pretty strong degradation in orders, trucking, et cetera, some industrials pullback. I just wanted to get your understanding. Obviously we have economists, we have very powerful business people, you know, president of NYSC, CEOs. I mean really what is it that is going to stop this from fruition? Is it really just tariffs being taken off the table, interest rates kind of normalizing? But when you think about kind of the silver bullets if there are any, you know, what are you looking out since you are very connected in the world? We got two minutes. You want to start with that one? Well, first of all, recessions aren't that easy to predict. I mean, so we often don't know where they're coming from. By the way, we don't know where the next financial crisis is coming from. Most often they are caused by a bit of over-enthusiasm and hiking rates by the Federal Reserve. And so that does seem to have been reduced a bit. But I do think China is a big source of uncertainty. You know, we've talked about the shutdown. By the way, you forced me into, yes, no. I would have said 30 to 40% over the next two years. So I said no, but that was, you know, of a chance of a recession, yeah. Capital spending is predicted to be slower this year than it was last year. It went up and came down. And we'll see how that plays out. But at the end of the day, if you think about structurally in the U.S., if you subscribe to the two-thirds economy as people, what is good as signal is when they slow down their consumption because they're worried about being employed and stuff like that. That you don't see so far. It doesn't mean you can't see it around the corner. But what, but what? You are seeing, accelerate their spending and unemployment, new claims number down below. So in the spot market right now, employment's very strong. Wages are not growing in the ways that we would like to see based on the discussion on equality, that they are growing and unemployment is as strong as it's been. So I'd watch for consumer spending declines and I'd watch for, as you said, you know, sort of capital commitment declines. Right now it might slow down, but you don't see people stop it. Stacey? And that's confidence. And that's going to come from confidence. Yeah, I agree. What I was going to add is confidence is really important. So I think we just need to make sure that we can preserve investor confidence. And some of the issues that are creating anxiety, if they get resolved pretty quickly, I think that's the best case scenario. Liz, do you have any other thoughts on that? We need wage-led growth and people are working two and three jobs. The quality of jobs has gone down. They're piecing things together to make ends meet. I believe that insecurity is, threatens our competitiveness. Dave, I'm going to give you the last word on this. I think what the world needs is more gatherings of people to talk about the problems of the economy. And I think that's the most important thing we can do is talk more about the economy. And I think that maybe that'll make the economy feel good and maybe it'll get to be strong. And with that, this conversation is over. Thank you all very much.