cynical because a lot of promises made have not followed through. so, the republican party needs new leadership. and that is what is going to change the party once again, is a leader. but this republican party will not last another 10-20 years. noted thewe have market has closed. it is a national day of mourning on wednesday, to really revere the life of the 41st president of the united states. we closed higher on the day in the u.s. and has a look at the current world, the reason the markets are higher is because there is optimism that the trade situation we see between china and the u.s. is hopeful. it is notable that we get coming from china today, actually, some comments praising george h.w. bush, saying he established the

u.s. china relations. how are the u.s. chinese relationships today? >> very fragile. fragile.y what we saw in argentina, people are calling it a true cease-fire, but it is more of a punt. we planted the situation down three or four months, but the decision must be made. the idea that we can negotiate structural changes to the chinese economy in 90 days is naive at best. back in thise position in 90 days and the president has a decision to make. joe: the president -- is he right to push the issue? some of these structural issues, particularly related to technology transfer, we went not really see a solution in 90 days, but is the administration right to force that conversation to begin, even if it results in a series of punts? >> absolutely, this is not the

first administration that has noticed this, it is a matter of how you go about it. but that is the tough part, the intellectual property, data localization, and transfer of technology. the state owned enterprises -- that is almost nonnegotiable for the chinese, the structural part. the trade deficit part, which really interests the president more than anything, is probably the least important. so i think it is very fragile. i wonder if the chinese are going to come back and say, we thought we agreed to the following, not 90 days. and because there is also confusion about that. ,ut to your point about markets i am concerned about how quickly the markets rally to news. the markets are at all-time highs. apparent good an meeting or a nice dinner, the

dow was up 400 this morning. and same thing in mexico, the mexican president decides to pay off bonds, decides to pay off debt for the airport and in the market shoots up. so that is also part of the fragility, is how easy this market seems to be ready to be almost manipulated. pointne: we closed 288 higher on the dow, the nasdaq up 1.5%. carlos: in the chinese could come back and say we do not agree to 90 days, so it will go back down. it is a fragile time. scarlet: how do companies respond in the intervening three months? we have 90 days, that provides breathing room, but companies need to make decisions and there is not less uncertainty now. carlos: you are right, companies are moving supply chains out of china already. and the next 90 days only adds uncertainty for another 90 days, because we do not know what will happen afterwards. so the companies that cannot

live with the current state of things are moving to southeast asia. caroline: you, before coming into this commerce role, you owned a large business, kellogg does we know it. how important is this in the trade tensions at the moment and was out of bargaining chips does the u.s. have? carlos: it is, will, for the food companies -- well, the food companies he would find a very low prices, which is what is hurting the farmers. prices are low, crops are rotting. so they mentioned that they would buy soybeans. we need to clarify whether they will buy soybeans with the tariffs on them, but it is off cycle. it is not a light switch. it has to be at the right time and at the right harvest. and it is not going to happen quickly, so yes -- the farmers are going through a tough time. i read the estimate is $40

billion of losses so far. and i think that they will continue, because it is not -- you know, china has found other suppliers. change. -- things change. caroline: and they do. it is great to have you as a leader in washington. thank you very much, carlos. be sure to stick with bloomberg for our finance wheat coverage. kicking off today with responsible investing. now a look at how the markets have closed up today. we are higher on the s&p 500 to the tune of almost 1.1%. nearly every single industry group in the green community the leading force as oil rebounded. and the dow jones also higher for the day, closing up 300 points higher, 110 points higher on the nasdaq. interesting how the tech rally seemed to fade, then carried on again. scarlet: absolutely, the nasdaq leading the way, as you

mentioned and of dow gaining at one point over 400 points. that is risky to equities. and the dollar for the most part is weakening as well. oil rallying. the knee-jerk reaction there. a portion of the u.s. yield curve inverted for the first time in more than a decade, something we have been anticipating and it finally happened. joe: it is the short end. typically we have a look at the two-ten, but this is the three-five. it is notable that on this risk on the day that we continue to see the compression of the yield curve, which might be a yellow light to the federal reserve about how much further the tightening cycle can go. caroline: particularly when you have data such as the manufacturing numbers coming out. so more now, we will bring in our bloomberg intelligence chief equity strategist. and we also have a portfolio manager here. gina, what do you make of today's rally? is it sustainable? >> of a bounce we

started last week. this all started from oversold conditions. early last week, we noted we were likely to see the market rally, just to test the 100 day moving average. think about where we have been over the last couple months. it started with the momentum divergence, continued with what back in language from the fed. and then over the weekend, we got no only -- not only the covers asia between donald trump and xi, but announcements and supply cuts from energy. so some of the things that drags the market lower were certainly trade and risks around trade. also, the fed. so just in they would be hawkish. we remember that speech in september in which chairman powell suggested that we are a long way from neutral. and then the oil prices, which absolutely crashed in october. we have seen action on all three of those points turn a little bit of a corner here, that is what is creating the transition of the market, at least in the short run. joe: in your view, what is the

main excellent nation for the volatility in november and october. and with the fed speak we got last week and the trade hawks from over the weekend, is that enough to start to meaningfully change the sentiment? eddie: i think what really spooked the market during red october was of the comments from jay powell. and i think the reason comments are a nice book end to that. october 3, it is when he said we are a long way from neutral, that set everything going. you see this in the energy sector, and really damage in housing and construction. that pushed up the volatility. interestingly today, i think that we close the above both the 50 day and 200 day moving averages, always volatility is a lot lower when you close above that. i believe the vix today closed below 17 as well. so tainted the second part of the question, yes, i think that

we see a lot of good news to push ourselves higher. we felt good ism report, commodity prices looking good, and i think we will get relief from the federal reserve into 2019. scarlet: we are looking at the vix, it did reach as high as 17.28, but closing below 17 at 16.4. eddy mentioned some technical levels. do the technicals matter more now than they did before, because we have gotten this dead period where we do not know what will happen over the next 90 days? gina: good question, but i am a technician, so technicals always matter. the matter very much. there are certain points in the market cycle in which technicals really provide a good guidepost, when the markets get oversold and overbought for example. they offer some really good clues. i like to look at intermarket trends. when the small caps are not confirming large caps, or vice versa, those types of -- or that

have of information is valuable all the time, and particularly when you're trying to assess whether a turnaround is durable. one thing we are watching now is this rebounded that we've experienced over the last week, really led by the large caps. if they continue to surge and trade above the 50 week moving average, the key longer-term level that has defined markets of the last cycle, these large caps, if they can try to above the 50 week, we want to see small caps confirm the trade. that happened in october, but it was a failed rally. things like that are valuable to sort of assess how durable are the short-term bounces amid the longer-term trends. caroline: any key technical levels, anything you're looking at that the markets should keep an eye on? eddy: i want to see a broader market. amazon made up something like a third of the s&p 500's gain today. i want to see more, more of the equal weighted indexes, and all of the industry groups. i want to see them go higher and then i would feel more confident

about the rally. elfenbein.dy and thank you also to gina martin adams on this day when we saw a rally between the traders between the china -- between china and the u.s. coming up next, the trade pause between president trump and president xi. this is bloomberg. ♪

caroline: from bloomberg's world

headquarters, i'm caroline hyde. romaine: i'm romaine bostick. joe: i'm joe weisenthal. caroline: trade bringing us have come up 1.1% on the dow. is, "would youon miss?" caroline: progress in talks with tariffs between china and the u.s., we speak with a nobel laureate about the road ahead for trade and much more. and marijuana mergers on the mind, reports that -- has been in talks, sending stocks higher. and sitting on the sidelines, apple says it will hold off until 2022 offer an iphone that can connect the next generation 5g networks. ♪ time for instant replay, some of the because voices on bloomberg television today weighing in on the white house's trade truce. immediate focus on reducing auto tariffs.

>> in the very short term, there will be changes in agriculture, so that is probably the easiest thing. >> there are a number that will be challenging, including issues around technology and the chinese subsidization of tech firms. >> the good news for all of us is that there is a truce, and i think if we work with our allies we will have agents. >> obviously come a trade is an important part of the global economy. and i think the u.s. economy right now is in good shape and we can talk about risky scenarios, but the baseline outlook is very solid. joe: for more we want to welcome nobel laureate paul krugman who will join us to talk about trade and the fed, maybe other stuff. what is your reaction to the truce? paul: you know, it is another trump deal where exactly what was agreed is not clear. he says it is great, they say it is ok. that does not actually matchup. so, if anything cools it down,

there is no real urgency or fundamental reason why we have to have a trade war with china right now, it is all about the mind of donald trump. so if we have something that makes him feel like he won something, then we have some months to figure it out. romaine: if you think about this as a nation, do you think there is common ground that xi and a donald trump can reach? paul: it never been clear what the grievances are. there are some real things, the chinese are not good guys. there israel stuff that is a problem, technology and ip, all those things are serious issues, but they would take a lot of time and negotiation. donald trump is fixated on the trade deficit, which is the wrong issue, and nothing can really be done about that with the policy leaders at hand. is this a chance for him to say, ok, i have had my -- i have waved my stick around and i have done something, then to settle down to the actual negotiations

we should have had all along -- nobody really knows that. i have never seen so much about one guy. there is not a constituency for this trade war except for him. caroline: to that and, we just we just heard from the commerce secretary that he is worried about the market move on the back of all of the easing. how much do you think trade will move on the back of all these things, because your fundamental view is, yes, there is a key concern on how much of the tariffs what impact trade, but how much is impacting the overall economy and gdp? paul: for those who have spent a lot of time on trade, when you try to do the numbers on the effect of trade policy they are never as big as you wanted them to be. it is a bad thing to be going protectionist, and really hard to get into large percentages of gdp. part of is part -- so the problem is companies have existed in the -- have invested in the existing structure of trade. in the short run, it might be disrupted. we will see on this. the market come i do not know

the market is assessing this rationally. some people are happy we're not having a trade war tomorrow, but i do not know, it is probably not as big a deal as people think. if we had broken up nafta, that would've been a bigger deal, but this is not on that scale. joe: the bilateral trade deficit, if it is not that big of a deal, but the technology transfer and a structural issues are fairly important, you hear curious,-- i'm historically speaking the type of technology transfer china is accused of, is this a common way that countries have gotten richer over time? how unique is china? paul: everybody does import technology. a biotechnology is not the specific patents, it is actually just seeing what can be done and learning from others. nobody can or should stop that. but china has a habit of basically violating ip writes -- rights, forcing companies to transfer technology on bad

terms. and this is something that is unique. there has never been a player coming up this fast of this scale before. south korea was a fast-growing economy once upon a time, not a big player. japan started at a high level. so this is new. romaine: when you talk about the economic effects, i wonder is there an actual rationale to say that we do not need to resolve this, maybe this is the new world order where china does its thing and the u.s. does their thing? paul: no, we built a trading system and we did it for a reason, because otherwise it becomes constant uncertainty and disruption. you know, we actually gained a lot, but even more the smaller, weaker countries -- the u.s. and china can cope with a trade war, but bangladesh and the maldives, these are not countries -- like, in the middle of a trade war they become casualties. reasont in turn -- the we have a global trade order is

because we think it is good for peace. this is a bad thing to let this breakdown. joe: you kind of i guess answered my question, or the question i was going to go to, but if they direct gdp fx of a trade war -- effects of a trade war are disappointingly small, and the is growing at a pace we've never seen and potentially sort of flouting standards, does that lend credence to the argument that maybe we should press the issue and amp up tariffs? and it will send a message. paul: the tariffs will hit groups -- hurt groups here and in other countries, so the breakdown of the order is not a good thing. it is not good for business. and actually, the weird thing is if you wanted to take china on, this is -- we are not the only people who have a problem with their technology, the europeans have a problem, the japanese have a problem, so we should be making friends with everybody, but instead we are threatening tariffs on everybody, so this undermines the chance of taking

on china on the real issues. caroline: paul krugman sticking with us. more on the fed and the words from jay how. -- powell. that is up next. this is bloomberg. ♪

caroline: the federal reserve had a big week last week with jay powell making a speech, citing more like a tweet, and swinging the financial markets. one voiced his concerns in a speech. and now fed watchers have to wait to hear jay powell's testimony. and we understand that the chair's testimony has been delayed because of it is a day of national mourning on wednesday. nevertheless, when you look at what the federal reserve is doing, do you think it is a more

dovish sentiment being sent out to the market? paul: i read the speech and what he actually said was the fed funds rate is near the bottom of the range of estimates, so it actually -- that is stating a fact, it was not saying much. so, now, fed chairs are supposed to watch their words carefully, but i suspect in this case he was not trying to send a message, he was trying to do economics, which is always a mistake. joe: we have seen over and over again the fed over estimate things like inflation, inflation -- where it was going to go, unemployment continuing to plunge below where they thought, the natural rate of unemployment, and models like the phillips curve not being particularly helpful -- is there a point where you have to throw these models out and say they do not help? paul: at some sense there has to be some point at which unemployment cannot going further. and if you print enough money

and let the economy grow, at some point there is going to be inflation, but we do not know where that point is. do not hike until you see the whites of inflation's eyes, i have said, and we have yet to see that happen. we cannot have, i would guess, we cannot have 2% unemployment, but god knows. so it is not that the entire concept is wrong, but the numbers are extremely uncertain. romaine: what do you think the rationale was for the fed being so aggressive over the past year and continuing on that message? paul: i think that the fed is, it is some thing that comes with being a central banker. something in the food in the fed canteen. or any central bank. you are always worried about inflation. however much of they say it is symmetric, we want to have a target and where it is concerned, they never behave that way. they are allergic to inflation. and somehow the nightmare of the 1970's is always there, the

matter how much we have been through since then. romaine: but we never got to real -- got to a real inflation target. paul: we are floating by various measures either at or a bit below the 2% target. romaine: but why am i supposed to believe they are data dependent, if they are making decisions based on data that has not arrived? paul: the reality is there is a clear bias os -- tof, the real target is like the old ecb target, close or below 2%. caroline: let's talk about the ecb, because the fed have a viewpoint -- does the fed have a viewpoint that they affect other central banks if they pause? paul: i think they are aware of the and they certainly think globally. um, i think that they are probably under the impression that the ecb is a big boy and with the u.s. does does not affect of them that much. joe: just to be clear, if you are -- if you are the fed chair,

you would not be raising rates at this point? paul: i would be pausing, until we have clear -- a sequence of numbers above 2% at the minimum, and not -- i actually think 2% is too low a target. but you say that to the fed and they go crazy. caroline: but what numbers due look at with inflation? paul: certainly 3%. our estimates at the real neutral rate have been drifting down, they are down by about 1.5 percentage points since 2% became orthodoxy. so if you raise the inflation -- caroline: but what is really -- orl: i am a core pce, something like that. you are overly sensitive to the data, dependent on use. joe: do you think the economy is rolling over at all? we see the yield curve flattening, how the data this year has been pretty mediocre in the u.s. how robust, forget the fed, how

robust is the economy right now? paul: it is -- i am not good at this, but for what it is worth we had a tax cut, that gave us some fiscal stimulus, but it is no more after this. if anything, it will fade out. the crowding out effects from the higher interest-rate, those take time. you would expect the economy to slow down. i do not know about rolling over, i do not see that. romaine: from an economist perspective, when you think about the tax cuts, why didn't we see more of that money go from businesses and roll into capex or repatriation overseas -- why didn't we see evidence of that? paul: it was all accounting maneuvers and much of it went to stock buybacks. thefact of the matter is is capital expenditure is not that -- to cost the capital. not like housing. most of the stuff depreciates pretty fast. and that has always been the

case, it does not respond much to interest rates or tax changes, so you should have expected a big yield. joe: what are the important questions that really sort of get that all this, the potential piece of growth, the risks of inflation, how far a conflict -- far unappointed could drop, it is productivity. and there is argument on what causes productivity in the first place, and one argument is that if the economy gets really hogged you have to get business investments and it would release productivity. do you buy that idea of productivity, or what drives it or does not drive it? paul: mostly not. we had a fairly hot economy in 2006-07 in productivity was nothing special. if -- there has oil been a cyclical element of productivity, but i think the truth is that for whatever reason technology is just not doing a lot to boost us right now and that may be a result of economic management, but in the howlow sense it is just,

different is the latest iphone from the last? and that is generalizing from a small thing, but i think that that is really true, we do not see the kind of fundamental -- we talk about transformative technology, but the actual, the way that we do business is not very different from 10 years ago. caroline: a.i. not taking over yet. paul krugman will stick with us and we will have plenty more shortly. now first word news. the nation's capital is preparing for several days of events following the death of former president george h.w. bush. his casket has arrived in washington. it arrived aboard a u.s. military plane. the white house says that president trump will designate wednesday, december 5 as a national day of mourning. he in the first lady will attend the funeral at the national cathedral. flags on federal buildings are flying at half staff for 30 days. ehre are less pictures -- here i

left interest from washington. larry kudlow says the u.s. and china are close to an agreement on stopping intellectual-property theft, calling it "an issue on the front burner." he also said the two countries are nearing a broader trade deal following a weekend meeting at but at themit, pressure is on beijing to move it forward. >> i will say this, they cannot slow walk this, stall this, meander this, their word was immediate. so i expect to see some confirming results. mark: he also called the chemistry between president "remarkable, quote, " and is that this is the furthest along the have gone on trade negotiations. as you saw, space-x today notched its 19th launch of the year, launching small spacecraft

from 34 organizations into low earth herbert -- orbit. one lifted off on california's central coast at about 10:34 a.m. local time. it is the rocket's third successful launch of the year. and israeli technology company today rejected accusation that is surveillance -- its surveillance software led to the killing of jamal khashoggi. a dissident filed suit against the nso group in an israeli court. he said saudi arabia monitored his communications with the journalist using software. the company has faced similar claims in the past about its products were used to stifle dissent in other countries. antonio guterres issued an appeal today to make the threat of -- to take the threat of global warming seriously and to act boldly deliver a catastrophic rise in temperatures before the end of the century. he spoke at the opening of the

u.n. climate conference in poland and called climate change the most important issue we face. >> climate change is moving faster than what we are and we need to reverse of these trends and this is a platform for this reversal to take place. famed naturalist sir attenborough echo the warnings, saying "the collapse of our civilization and extinction of the natural world is on the horizon naturalist sir attenborough echo the if no urgs taken against global warming." global news 24 hours a day, online and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. from the classroom to the web, the online education company master classes offered his first economics class and

they have enlisted our guest, who is teaching economic foundations and applying them the current sociopolitical issues like income equality -- inequality. >> now, it is like, for a twentysomething it is like one for a twentysomething it is like one of those old war movies were a marine sergeant says look to the man to the right, one to the for a twentysomething it is like one of those old war movies were a marine sergeant says look to the man to the right, one to the left, only one of you will make it. that is what an unequal society does. there is a feeling that was not there before. and it is a source of anxiety and of course, if you lose in that race it is -- a bad things happen. joe: and we are back with paul krugman. what is the purpose of the new endeavor? paul: well, first of all i figured it if it was good enough for helen mirren, it is good enough for me. [laughter] paul: one thing that people do not get from most technology courses is a sense that this is interesting, fun stuff. id in my second career here

have spent a lot of time doing dismal political stuff, but i thought, to convey this, this interesting subject -- i had fun. it is returning to my rates. romaine: do you think people are clamoring for this? paul: i have no idea. it is a small web the base. -- web based. joe: the market will decide. caroline: do you decide what you want to hit on? did you want to focus on this? paul: they wanted it, too. i basically supplied the list of topics and the class outline, so -- you know, there is a lot about macroeconomics, a lot about international trade, we talk about economic geography, one of the fields i really love. so i had a blast. i hope it works out. joe: how much -- if we look at income inequality as an economist, how much of it is due to policy choices, decisions

related to tax and trade over the years, versus the more emergent phenomenon related to the rise of the internet or clustering or other things that may not have been a deliberate? paul: as far as i can tell, and i've spent decades on this stuff, while technology you to trade is driving some of it, a lot of it is underlying political choices. there is a strong relationship between inequality and union penetration. and unitization is a political choice. -- unionization is a political choice. we have almost completely taken away unions, but denmark has two thirds unions. so a lot of these things are our choices. and the invisible hand says we must do this, that is something i might have gone along with 25 years ago, but there is evidence now that says there is a lot more power, a lot more setting the rules of the game rather than things that have to happen. romaine: do you worry at all about some of the issues, the potential and that trust issues

-- antitrust issues? in the past, a small number of companies dominated the market and how it affects things? paul: we have had this across the economy as a whole. my colleague is writing about that, and i have done so too. a lot of it is a policy choice. we used to have antitrust, then we let go of the ball and now we look around and we discover we have a monopolized economy. we have a limited number of employers controlling employment. so that explains some of the puzzle. a plot of what we see is not just market competition, but actually increasing monopoly rents. caroline: when we go back to what we are talking about, the china and u.s. divide at the moment, a lot of it is that china stopped supporting its key companies, allowing them to scale and become competitors. so do you think that that element should be stripped away,

venture there be more government activity in the u.s.? paul: remember come even with globalization, something like 70% of the value added in our economy is actually nontradable. so while international trade is a big deal for manufacturing, agriculture, not for services. and we are mainly a service economy. so, i mean, everybody loves to talk global, but in fact most of the things affecting us on that are about things serving domestic markets. joe: speaking of politics, we have seen continued development in europe of what may be characterized as a global populism wave. just this weekend, we saw the escalated rise in france, people complaining about higher gasoline taxes. we saw the far right party is there a regional parliament in spain. how much in your view is this tied it to some of the economic decisions versus more cultural things, like immigration or

other sort of cultural issues that can be easily addressed by increasing say unionization? paul: it is true, we look at a place like denmark, which has relative equality, the have a rough first date beyond the wildest dreams of the progressives here, even so they have a white nationalist movement there. so some of this stuff will come up even if you think you are going completely right. poland, going into the populist of this, they have one of the best -- abyss, they of one of the best economic -- in europe. a lot of the comeau we know what is good for you that you could get away with a dozen years ago you cannot get away with now, and that has opened the door for a lot of bad stuff. everything like including brexit and all of that. laureate paull krugman is a sticking with us. from new york, this is bloomberg. ♪

caroline: free pictures of capitol hill -- bringing you pictures of capitol hill, george h.w. bush has arrived and he will lie in state. wednesday will be a national day of mourning. the markets will be shut down. and this is a president's whose legacy is being discussed, as he oversaw some of the most seismic changes in our history. the disintegration of the soviet union. and we have members of family, friends, leaders who have been filing out to pay their respects. we will certainly see the vice president, speaker of the u.s. house of representatives, all there, along with the majority

leader of the u.s. senate. now, let us return to our conversation with nobel laureate paul krugman who is still with us. and talkative seismic events, i just came back from the united kingdom where the discourse is so focused on the seismic change happening in terms of exiting the european union. this is something that you spent time considering, that the girly the dire consequences -- in particular the dire consequences of leaving the european union. so what do you make of it for starters? i do not understand talk tombers -- you somebody from the bank of england and they try to explain what is going on, so really the boe present is something where the court estimates were kind of on the high side for cost of brexit, but not very different from other people's, but we had these extreme negative scenarios, which it turns out about their fear that on the day

that britain will be totally unprepared. there will not be enough customs inspectors, that the flow of goods will become by 75%, that there will be maybe 30 mile backups on the motorways. thethen they say, well, projections have had that going on for years, which is unreasonable i think, but to say that it is awesome how unprepared but the private sector, but above all the british government is for this thing. joe: do you think that this is different than say raising tariffs? because we were talking about the u.s. trade situation, and your view was moderate, but this is much different? paul: we are talking about not a higher price to be paid, but they just cannot clear step through the ports. there is the question. they say that when all else fails, lower your standards. they are really - -it is a big

difference between changing the tariffs rate, to imposing customs without having the people and machines on the ground. romaine: what do you make of carney's comments that the risks will be more the supply side? paul: that is what he is talking about, that simply there are all these deliveries that one of becoming into britain and exports of that one of the able to get out. apparently committed they are afraid -- they are completely unprepared to end the free trade zone. caroline: in many ways, i think that we should now pause as we are seeing the casket being unloaded of the 41st president of the united states, george h.w. bush, arriving at capitol hill. we want to thank our wonderful guest, paul croghan -- paul krugman, who has been talking about sentiment shifts when it

comes to trade in brexit. now we will focus on the legacy of george h.w. bush as his casket arrives at capitol hill. our policy correspondent, michael mckee. remind us, you are someone who covered this president, you knew him well and received personal letters from him, remind us what you think the legacy is now of him as we start to pay our respects and indeed have a national day of mourning on wednesday. michael: you could say that there are three legacies. one, is foreign policy, which was very successful at the time in managing the disintegration of the soviet union and the iron curtain. also, managing to a reasonable extent what happened in china after the tiananmen massacre, although there is controversy over that. the legacy of his stability and kindness, which certainly has

disappeared from much of the government these days. and his economic legacy, which was not as good. he struggled with the economy, he struggled with the recession. he had -- he was criticized for lacking vision, as they put it. thehe did not ever escape "read my lips, no new taxes." joe: it is pretty remarkable is that anybody raise the taxes at all, because in the current political climate it is hard to imagine any president signing a tax increase on basically anybody. when you think back to the isitical lift that required, that in another aspect of current politics that seems unimaginable, that that could be done again? michael: it has become unimaginable, but george bush probably had a little extra courage in the sense he knew he was breaking his word and he would pay a political price for

it. bill clinton came in without that burden and raised taxes much more into we ended up with a surplus, the famous line of bill clinton, when i die i want to come back as the bond market, because it tells us what to do. that was the last time that you saw anybody do anything like that. and i don't george bush's -- out of george bush's decision to raise taxes, you saw the new new taxes -- no new taxes pledge and rise. -- arise. they got everybody on capitol hill and in the revocable party to sign it -- and the republican party to sign it. it would be hard to do that now it may be because the current president has narrowed the party, but there is certainly not an appetite among current republicans for any kind of tax increase. wouldemocrats definitely like to do that, but whether they have the political courage to follow through or numbers to make it happen, it is still an open question. romaine: i am fascinated how

presidents either get blamed for economic issues, or get credit for economic issues that were not there is -- theirs, and a feeling bush was a victim of that. a plot of prosperity we had under the clinton years kind of rose out of that budget plan that bush brokered in 1990 that people derided him for. and i wonder, when you look at how the coming works, how long does it take for these legislative and regulatory things to really take hold and have an impact? michael: they take a long time because they take a long time to be implemented, that is why fiscal stimulus is difficult to make work for an economy, because by the time you recognize the economy is going down and it needs it, it takes months at best to even get it passed and get the money distributed. and to get out there. so if this goes the most does not work as well, so it is hard for presidents to have a major impact on the economy. they can, donald trump came to

office and passed taxes as soon as he could. the economy did not need it necessarily, but you can see the impact -- it jumped. so fiscal policy can have an impact, but it is timing is that is really hard. joe: when we were speaking with the former carter must -- former commerce secretary, he said to have not been many books written about george h.w. bush. caroline: we will return to the ceremony as we see the arrival of the casket. ["hail to the chief" playing] ♪

[cannons firing]

♪

♪

[instructions] [no audible dialogue] ♪

♪

♪