Speaker 1: You're listening to the Bloomberg Opinion podcast counts Saturdays at
Speaker 1: one in seven pm Eastern on Bloomberg dot Com, the
Speaker 1: iHeartRadio app, and the Bloomberg Business App, or listen on
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Speaker 2: Welcome to Bloomberg Opinion. I'm Amy Morris. This week, we
Speaker 2: are looking at the blockade in the Senate that hamstrung
Speaker 2: military promotions and how that has exposed flaws in how
Speaker 2: the Senate conducts its business. Also, is Miami the next
Speaker 2: Silicon Valley? For a while it looked like that might
Speaker 2: be the case, but was it all hype? And we'll
Speaker 2: learn how artificial intelligence might be able to help scientists
Speaker 2: track down the causes of diseases. But we begin with
Speaker 2: labor activity. And while some contracts are resolved and others
Speaker 2: are still being debated, there is more concern now that
Speaker 2: more labor strife is coming to the US economy and
Speaker 2: it's not cheap. Judy Ansel is the retired director of
Speaker 2: the Institute for Labor Studies. She predicted the impact of
Speaker 2: the UAW strike.
Speaker 3: It will cause a shortage of cars, and so if
Speaker 3: somebody wants to buy a car, it's going to be
Speaker 3: more difficult to do that. It's going to lower.
Speaker 4: Spending, consumer spending as people tighten their belts.
Speaker 2: And we're pleased to welcome Betsy Stevenson to the show.
Speaker 2: She is a Bloomberg View columnist and an associate professor
Speaker 2: of public policy and economics at the University of Michigan. Now.
Speaker 2: She was on the President's Council of Economic Advisors and
Speaker 2: was chief economist at the US Department of Labor, and
Speaker 2: we are very happy to welcome her to the show.
Speaker 2: Doctor Stevenson, thank you so much for joining us. And
Speaker 2: as you explain in your column on the Bloomberg terminal
Speaker 2: labor strikes, they are not cheap. They idle equipment. You've
Speaker 2: got lost wages, lost shareholder profits, all of this impacting
Speaker 2: economic growth and inflation. But we've seen so much of
Speaker 2: this action of late. Why has this been happening if
Speaker 2: it's so expensive.
Speaker 4: It is worth keeping in mind that in the United
Speaker 4: States we actually rarely see these kind of labor actions
Speaker 4: compared to Europe. So we're thinking, wow, we're seeing a lot,
Speaker 4: but it's not a lot compared to other countries, but
Speaker 4: it is a lot for us. And in fact, the
Speaker 4: number of labor actions was up fifty percent and twenty
Speaker 4: twenty two over twenty twenty one, and we're actually already
Speaker 4: have as many labor actions in twenty twenty three as
Speaker 4: we had in twenty twenty two, so clearly we're going
Speaker 4: to see it up again this year. Why are American workers,
Speaker 4: who usually are able to negotiate deals striking And I
Speaker 4: think the reason is that we're just in a very
Speaker 4: uncertain labor market right now. There's been a lot of
Speaker 4: change over the last twenty years. Workers have lost bargaining power.
Speaker 4: We've seen a shift in wages towards people who would
Speaker 4: economists would call the owners of capital, the people who
Speaker 4: own the equipment, what normal people would call things like shareholders.
Speaker 4: So shareholders are getting these and CEOs are getting great pay,
Speaker 4: but the workers pay as a share of the earnings.
Speaker 4: It's gotten smaller and smaller. That actually turned around a
Speaker 4: little bit during COVID, and it led to a lot
Speaker 4: of people saying that this was a new period where
Speaker 4: workers had a lot of bargaining power. And I think
Speaker 4: that in this uncertain environment, everybody wants to test, well,
Speaker 4: how much can we possibly get as a union unionized workforce,
Speaker 4: and employers are a little reluctant to give because they're
Speaker 4: not sure how much they do need to give, because
Speaker 4: they're looking at twenty years of workers not having a
Speaker 4: lot of bargaining power and wondering did they really have
Speaker 4: a lot of bargaining power right now? I know, unemployments
Speaker 4: really low, but you know, it seems like the labor
Speaker 4: market slowing. So I think it's that uncertainty, no one
Speaker 4: really knowing how much they should give up, that is
Speaker 4: leading to all these labor actions.
Speaker 2: Isn't it funny that some people think, oh, I know,
Speaker 2: I don't know how much I should give up, so
Speaker 2: I should push harder in this uncertainty, whereas there are
Speaker 2: others who would think I can't push harder because of
Speaker 2: the uncertainty. It seems like that would have been a
Speaker 2: flip side of that coin.
Speaker 4: Not necessarily. If you think that this is your one
Speaker 4: chance to actually claw back, Let's take the UAW. They
Speaker 4: make huge concessions in two thousand and eight, when it
Speaker 4: looked like the American auto industry was on the verge
Speaker 4: of collapse. This might be their only opportunity, this opportunity
Speaker 4: to get some of those concessions back. It's not clear
Speaker 4: whether they'll be able to and how much they'll be
Speaker 4: able to. That's what I mean by uncertainty. But if
Speaker 4: now's your best shot, you ought to make a run
Speaker 4: at it, because otherwise you may never get those concent
Speaker 4: shionts back.
Speaker 2: So with that overlay, you do anticipate more labor action
Speaker 2: coming into this year and maybe next year as well.
Speaker 3: You know.
Speaker 4: The the analogy here is to think about, you know,
Speaker 4: when somebody has been accused of a crime, when is
Speaker 4: their lawyer going to suggest that they take a plea deal? Well,
Speaker 4: when it's pretty obvious that they're going to be convicted,
Speaker 4: and you know, you might as well reduce the risk
Speaker 4: by and the cost and the expense of a long
Speaker 4: trial by just coming to an agreement and negotiating a
Speaker 4: plea deal. Similarly, when we see, you know, unions have
Speaker 4: to negotiate their contract with their employers, if everybody sort
Speaker 4: of understands what the outcome is going to be, why
Speaker 4: have all the cost of a strike or a labor
Speaker 4: action just negotiate the deal. What the problem is right now?
Speaker 4: I think it's that environment where it's just not clear
Speaker 4: that I think helps fuel makes it harder to come
Speaker 4: to agreement. And then what we're doing with unions is
Speaker 4: we're layering on a really pivotal time for unions. We're
Speaker 4: hearing that Americans are supporting unions more than they have,
Speaker 4: you know, in fifty years, and so that public approval
Speaker 4: of labor unions remains near highs last seen in the
Speaker 4: mid nineteen sixties. But at the same time, the unionization rate,
Speaker 4: the share of workers in the US economy that are
Speaker 4: members of unions, hid an all time low last year.
Speaker 4: So if unions are going to play an important role
Speaker 4: in the American labor market, they need some big wins
Speaker 4: this year. They need to show that they're there playing
Speaker 4: an important role preserving wages, setting a reasonable standard of living,
Speaker 4: helping to set hours. They want to prove themselves in
Speaker 4: this moment so that they can continue with that public
Speaker 4: approval and then hopefully actually bring more union and members
Speaker 4: on board. Because only six percent of private sector workers
Speaker 4: belong to a union, that's why strikes are not part
Speaker 4: of the everyday economy in the United States is we
Speaker 4: just don't have that many workers who are in unions
Speaker 4: who could potentially strike. What we're seeing is the small
Speaker 4: share of American workers who belong to unions trying to
Speaker 4: flex as much power as they can to prove their
Speaker 4: role in the economy as well as to try to
Speaker 4: halt some of the slide and wages for middle class
Speaker 4: workers that's been going on for decades.
Speaker 2: And we are talking with Professor Betsy Stevenson, former member
Speaker 2: of the President's Council of Economic Advisors and Chief Economists
Speaker 2: at the Department of Labor. I want to boil this
Speaker 2: all down to a cause, if that's possible. You were
Speaker 2: talking about bargaining power and what workers feel like they
Speaker 2: may be able to do and how they can push
Speaker 2: back is part of this because of the pandemic and
Speaker 2: the shutdown.
Speaker 4: What we saw coming out of the pandemic was just
Speaker 4: enormous change in the labor market. The way people do
Speaker 4: their work changed, so lots of people were all of
Speaker 4: a sudden able to work from home. Of course, people
Speaker 4: who work on the factory floor are not able to
Speaker 4: work from home, So now there's a greater schism between
Speaker 4: people who do office jobs where they can now do
Speaker 4: them at least partially from home, and people who need
Speaker 4: to do in person jobs. There was also just a
Speaker 4: change in how American consumers buy things with a shift
Speaker 4: towards goods and away from services. That also really changed
Speaker 4: the demand for workers, and people's preferences for the type
Speaker 4: of work they wanted to do were shaped by the pandemic.
Speaker 4: So coming out of the pandemic, we had a lot
Speaker 4: of change underway in the labor market. And one of
Speaker 4: the other things we saw coming out of the pandemic
Speaker 4: was demand came back faster than supply. That's the best
Speaker 4: way to to explain why we had inflation. People wanted
Speaker 4: to buy things before really sellers were able to fully
Speaker 4: meet the supply of the things people wanted to buy.
Speaker 4: That ended up pushing up prices. And the result of
Speaker 4: inflation is that some people made more money and some
Speaker 4: people didn't. And that's one of the problems with inflation.
Speaker 4: You know, inflation is a generalized rise in prices, so
Speaker 4: it means that wages are going up too, but not
Speaker 4: everybody's wages are going up equally. And one of the
Speaker 4: things we saw with unionized workers was that their wages
Speaker 4: did not rise as rapidly as non unionized workers. And
Speaker 4: as a result, there are a lot of unionized workers
Speaker 4: for whom, you know, in terms of the stuff they
Speaker 4: can buy what economists call real wages. They're earning less
Speaker 4: today than they were in twenty nineteen, and so obviously
Speaker 4: that's a fight worth having. A lot of unionized workers
Speaker 4: they've been you know, particularly if you're talking about a
Speaker 4: big union like the auto industry. You know, they're often
Speaker 4: multi generational auto workers, so they don't really want to
Speaker 4: change jobs, but they do want to make sure that
Speaker 4: they're not getting left behind. Because the people who have
Speaker 4: been changing jobs in this economy, their real wages have
Speaker 4: been growing. They can buy more stuff today with their
Speaker 4: earnings than they could buy in twenty nineteen. That's not
Speaker 4: true for workers who haven't changed jobs. And that's why
Speaker 4: if you're in a job that you've been in for
Speaker 4: a long time, are probably going to push really hard
Speaker 4: for a wage increase so that you're not falling behind.
Speaker 2: Betsy Stevenson, a Bloomberg View columnist and Associate professor of
Speaker 2: public policy and economics at the University of Michigan. It
Speaker 2: has been a pleasure. Thank you so much for taking
Speaker 2: the time with us.
Speaker 4: It's great talking with you.
Speaker 1: Now.
Speaker 2: Coming up, we're going to look at how a blockade
Speaker 2: by a Republican senator exposed some flaws in how lawmakers negotiate.
Speaker 2: You're listening to Bloomberg Opinion.
Speaker 1: You're listening to the Bloomberg Opinion podcast. Catch us Saturdays
Speaker 1: at one and seven pm Eastern on Bloomberg dot Com,
Speaker 1: the iHeartRadio app and the Bloomberg Business app, or listen
Speaker 1: on demand wherever you get your podcasts.
Speaker 2: You're listening to Bloomberg Opinion. I'm Amy Morris. After weeks
Speaker 2: of a blockade by Senator Tommy Turboville of Alabama, the
Speaker 2: Senate finally was able to approve some military promotions, three
Speaker 2: very important ones, including the Chairman of the Joint Chiefs
Speaker 2: of Staff. Now that's a victory for the Pentagon, but
Speaker 2: the way it happened is really a defeat for the Senate.
Speaker 2: Even after those promotions were approved, Senator Tommy Turberville, who
Speaker 2: was behind those blocks, doubled down on the blocks and
Speaker 2: the filibusters.
Speaker 5: Oh remaining place. The Pentagon's illegal abortion policy remains in place.
Speaker 5: If the Pentagon lifts the policy, then I will lift
Speaker 5: my hole as easy as that.
Speaker 2: So the Senator, they're saying that those holds will continue,
Speaker 2: and you can bet that's going to have larger implications
Speaker 2: let's talk about it with Bloomberg opinion columnist Jonathan Bernstein.
Speaker 2: He covers politics and policy and joins us. Now, Jonathan,
Speaker 2: what does this tell us about how the Senate operates?
Speaker 6: Well, the nominations process really has sort of broken down.
Speaker 6: You know, putting a hole on something that is a
Speaker 6: senator essentially threatening to filibuster or filibustering by threatening to
Speaker 6: filibuster is a time honored Senate tradition goes back fifty
Speaker 6: years or so, and then other ways goes back more
Speaker 6: than that, and it allows individual senators to really have
Speaker 6: a say, which is potentially a very good thing. But
Speaker 6: what's happening now is that there's a basically a hold
Speaker 6: on everything. That's been true of executive branch and judicial
Speaker 6: nominations for some time now. But at least there's only
Speaker 6: there's enough time to get to process all of those
Speaker 6: one by one. There are hundreds of these military promotions
Speaker 6: that have to get done. They're normally all done in
Speaker 6: one batch.
Speaker 1: You know.
Speaker 6: The chairman of the committee comes and says, you know,
Speaker 6: I want, you know, as consent to consider on block
Speaker 6: the following nominations, and they list the numbers they get
Speaker 6: numbered by and they'll say, you know, eleven thirty five
Speaker 6: through twelve seventy four, and everybody will give their consent
Speaker 6: and that's it. It's done. Instead, Tuberville is making them
Speaker 6: go one by one, and that's what they did on
Speaker 6: these three exceptions. They it took them two days. I'll
Speaker 6: sendate time to consider the chairman and joy to staff
Speaker 6: and two others. You can't do hundreds of military promotions
Speaker 6: taking you know, taking up sent a time like that.
Speaker 6: So there's stopped. There's no real means for the Senate
Speaker 6: to do it unless they change procedures.
Speaker 2: Now, you had mentioned that this is a tried and
Speaker 2: true sort of technique that the Senate has used before
Speaker 2: a procedural move, and usually a member uses it to
Speaker 2: influence policy or make a point or what have you.
Speaker 2: But this feels different. How is it different?
Speaker 6: Well, it's different because there's a few things. One is
Speaker 6: that it's that he's using military promotions that's been done before,
Speaker 6: but very rarely and usually temporarily. Typically, you put a
Speaker 6: hold on a nominee to you know, in this case,
Speaker 6: you could do a civilian Department of Defense position and
Speaker 6: say I'm going to put a hold on the assistant
Speaker 6: Secretary of whatever until you consider my point. The second
Speaker 6: thing is that usually it's bargaining for some sort of
Speaker 6: deal that can be made. So you know, often it's
Speaker 6: something for your home state, and you know, this national
Speaker 6: policy treats my state really unfairly. Let's make a deal
Speaker 6: to do something about it. That's a positive thing for
Speaker 6: US democracy. In my view. It sometimes means that your senator,
Speaker 6: you know, if you get their attention, you get special
Speaker 6: treatment for the state. But that's not unreasonable, and then
Speaker 6: they get a deal and they take off the whole.
Speaker 3: You know.
Speaker 6: Also, it's usually something which because it's something small and
Speaker 6: that most people don't care about, typically you can make
Speaker 6: a deal. This is something which is a policy that
Speaker 6: Tuberville is in the minority of. You know, we have
Speaker 6: a democratic majority in the Senate. There's probably fifty three
Speaker 6: or more senators who approve of the DoD policy on
Speaker 6: abortion and or on military travel for to be able
Speaker 6: to give him abortion. And so he's saying, well, I
Speaker 6: don't care that I'm the minority on this and that
Speaker 6: people on the other side feel as strongly as I do.
Speaker 6: I'm going to just shut down this whole process because
Speaker 6: I want because I can't. And the problem with that
Speaker 6: is that the other side can do the same thing
Speaker 6: and then you just nothing happens, and that's not a
Speaker 6: healthy process.
Speaker 2: And as you alluded to just now, Republicans oppose the
Speaker 2: way he is doing this and with whom he is
Speaker 2: doing this. And what I mean is Republicans aren't usually
Speaker 2: the ones who are going to go head to head
Speaker 2: with the Pentagon, right, They're not usually the ones who
Speaker 2: don't sign onto any kind of military spending, support promotions,
Speaker 2: that sort of thing. They're usually in lockstep. So a
Speaker 2: lot of them don't like a stretch, but why are
Speaker 2: they going along with it?
Speaker 6: Generally? The problem is that to do anything about this,
Speaker 6: there's two ways, you knew it. They could pressure him
Speaker 6: within the party and perhaps make him back down, but
Speaker 6: you know, it's not the same Republican party that we
Speaker 6: had ten or twenty or thirty years ago. A lot
Speaker 6: of Republicans now are perfectly happy with bashing the Pentagon.
Speaker 6: The other piece of it is that to change you
Speaker 6: could just change of procedures. You could say, well, we're
Speaker 6: going to make it a rule or a procedure that
Speaker 6: without asking for consent, you can consider all of these
Speaker 6: all these promotions together. But the problem with that is
Speaker 6: that it means that individual senators would be would be
Speaker 6: voting to take away their future rights. And senators don't
Speaker 6: like taking away their individual rights. They're very proud of
Speaker 6: there and jealous of their status as US senators. It's
Speaker 6: possible that we're going to move to a place where
Speaker 6: the Senate just can't work that way anymore. That seems
Speaker 6: to be what's happened with nominations, and you know they're
Speaker 6: losing something if they do it. I know people think, well,
Speaker 6: those individual centers should be able to block things like this,
Speaker 6: but there really is a good reason for it if
Speaker 6: it works, but the Senate, individual senators have to show
Speaker 6: some restraint, and that's just not happening.
Speaker 2: And we're talking with Bloomberg opinion columnist Jonathan Bernstein about
Speaker 2: how the Pentagon and this blocking process has exposed some
Speaker 2: flaws and how the Senate conducts its business. A shifting
Speaker 2: gear is just a little bit from one side to
Speaker 2: the other. You make the point in your column that
Speaker 2: the whole point of the confirmation process not the ability
Speaker 2: to fill a buster or put a hold on something,
Speaker 2: but the confirmation process itself is to restrict the authority
Speaker 2: of the president and empower the Senate, and this tactic,
Speaker 2: when not used the way it was intended, may undermine that.
Speaker 6: How So, yeah, you know one of the things, well, okay,
Speaker 6: so we have these hundreds of promotions, you can't do
Speaker 6: them individually on the Senate floor. You have to do
Speaker 6: them in bulked. If that can't work because individual senators
Speaker 6: won't do it, then what's going to happen is eventually
Speaker 6: that's going to go away, and and you know, you'll
Speaker 6: there'll be a rule that you'll have to have the
Speaker 6: promotions done. It's it's happens all the time, or suggests
Speaker 6: I'll have for executive branch nominations, especially. You know, we
Speaker 6: have way more political people in our executive branch agencies
Speaker 6: and departments than comparable democracies do. And it's a real
Speaker 6: democratic strength in my view, because it means that the
Speaker 6: executive branch isn't just the tool of the presidency, and
Speaker 6: it's also not just permanent bureaucracy. Congress has a role
Speaker 6: in it too. But if Congress can't do the the job,
Speaker 6: then what you're going to get is calls for fewer
Speaker 6: and fewer Senate confirmed people which is either going to
Speaker 6: mean the president appoints them or that they'll be part
Speaker 6: of the permanent bureacracy themselves. And neither of those is
Speaker 6: really good for US democracy, because instead of Congress and
Speaker 6: the President and the bureaucracy all constraining each other, Congress
Speaker 6: will be cut out of it to a larger extent.
Speaker 2: The already is Bloomberg Opinion columnist Jonathan Bernstein, and coming
Speaker 2: up we'll learn how Miami could have been the next
Speaker 2: silicon valley. In fact, it may still hold some promise
Speaker 2: for becoming the next big tech sector. Don't forget. We're
Speaker 2: available as a podcast on Apple, Spotify or your favorite
Speaker 2: podcast platform. This is Bloomberg Opinion.
Speaker 1: You're listening to the Bloomberg Opinion podcast. Can't just Saturdays
Speaker 1: at one in seven pm Eastern on Bloomberg dot Com,
Speaker 1: the iHeartRadio app and the Bloomberg Business app, or listen
Speaker 1: on demand wherever you get your podcasts.
Speaker 2: This is Bloomberg Opinion. I may need more. Where As
Speaker 2: the Miami area has always been prone to hype cycles,
Speaker 2: and the great tech boom of recent years is the
Speaker 2: latest example. Now, for months, you may recall there was
Speaker 2: this popular narrative that the region could become a viable
Speaker 2: alternative to say Silicon Valley. That's mostly fizzled, but there
Speaker 2: appears to be some lingering promise. Let's talk about it now.
Speaker 2: Bloomberg opinion columnist Jonathan Levin has served as the Miami
Speaker 2: bureau gy for Bloomberg in the past, and he joins
Speaker 2: us now. He knows the area quite well. Jonathan, was
Speaker 2: all of that talk about replacing or at least supplementing
Speaker 2: Silicon Valley puffery? Or was there something there?
Speaker 7: Yeah? Kind of sort of. So all of this is
Speaker 7: started during the COVID nineteen pandemic when City of Miami
Speaker 7: Mayor Francis Suarez got on social media and started talking
Speaker 7: about how you venture capitalists, tech entrepreneurs should move from
Speaker 7: San Francisco to Miami, you know. And I think part
Speaker 7: of it was always a little bit political, quite Frankly,
Speaker 7: Francis is a Republican. Of course, he ran for the
Speaker 7: Republican and nomination for president very briefly, and there was this,
Speaker 7: you know, pervasive narrative that they were all trying to
Speaker 7: push like kind of come to the Free State of Florida.
Speaker 1: You know.
Speaker 7: San Francisco is such a disaster. So there was a
Speaker 7: lot of politics, and they tried to convince us that
Speaker 7: it was also an economic narrative. But all that was
Speaker 7: happening and then suddenly the number the VC investment numbers
Speaker 7: in South Florida actually start to go up a lot,
Speaker 7: and so you said, wait a minute, maybe is there
Speaker 7: actually something to this. Right, So the magnitude I'm talking
Speaker 7: about is like South Florida has always been like a
Speaker 7: third tier VC market, So on a trailing twelve month
Speaker 7: basis before the pandemic, they were doing something on the
Speaker 7: order of like two billion dollars for twelve month period
Speaker 7: in terms of VC capital injected. It jumped all the
Speaker 7: way up. At the peak this is sort of early
Speaker 7: to mid twenty twenty two to eight billion dollars, so quadrupling.
Speaker 7: So you say, maybe there was actually something going on there.
Speaker 7: But you take a step back and you realize that
Speaker 7: some of the development officials and politicians were maybe playing
Speaker 7: with the numbers a little bit to their advantage. So
Speaker 7: part of the story is VC boomed everywhere, right, and
Speaker 7: tons of cities were beneficiars of this. At the same
Speaker 7: time the VC was booming everywhere, you also had the
Speaker 7: COVID work from anywhere phenomenon which made beneficiaries of a
Speaker 7: lot of cities, not just Miami, but also some cities
Speaker 7: that I think you would say are quite counter narrative
Speaker 7: to this. You know, liberal cities are a mess. Come
Speaker 7: to the free State of Florida narrative. Chicago, for instance,
Speaker 7: big boom during that period. You can also look at
Speaker 7: like Boulder, Colorado, Philly, Seattle.
Speaker 1: You know.
Speaker 7: So this was happening in a lot of places, and
Speaker 7: part of it, I don't want to totally dismiss it,
Speaker 7: but part of it was Miami was the best at
Speaker 7: just seizing the narrative. We are a place that is
Speaker 7: great at hype cycles.
Speaker 2: If there is something behind the hype cycle. Often you
Speaker 2: find a hype cycle that has a kernel of reality,
Speaker 2: some sort of solid molten core of truth, surrounded by
Speaker 2: the dance right, surrounded by the hype. And I'm just
Speaker 2: wondering if the VC's bought into that, or if they
Speaker 2: found that kernel of truth that made it viable and
Speaker 2: made it worth their while in investing.
Speaker 7: Yeah, so as I look into the data, I think
Speaker 7: what is what is encouraging is again there are there
Speaker 7: are big macro trends that that sort of you know,
Speaker 7: rising tides lift all boats, So you want to step
Speaker 7: back and really focus on something like market share. Right,
Speaker 7: So when I look at market share for Miami on
Speaker 7: a dollars basis, market share sort of shot up during
Speaker 7: that pandemic period and it's basically it's come back down
Speaker 7: a lot. A more encouraging way to look at it
Speaker 7: is number of deals, which takes sort of ticket size
Speaker 7: out of the equation, right, And by number of deals,
Speaker 7: Miami's market share in the VC space shot up during
Speaker 7: this pandemic era, and it's come back down a little bit,
Speaker 7: but it's holding on to a lot of those games.
Speaker 7: And so I actually find that pretty encouraging, and I
Speaker 7: think that that might sort of spell out a path
Speaker 7: for for this market. I think it was always a
Speaker 7: little bit hyperbolic, I mean a lot bit hyperbolic to
Speaker 7: say that Miami was going to replace San Francisco and
Speaker 7: Silicon Valley. I mean, come on, but it is objectively
Speaker 7: still a less expensive place to live than a lot
Speaker 7: of those West Coast cities and New York City. So
Speaker 7: maybe there's a space for us in early stage startup.
Speaker 7: Maybe this is a place and we've seen some examples
Speaker 7: of this. Maybe this is a place, you know, where young,
Speaker 7: smart entrepreneurial people come and they get their idea started,
Speaker 7: they get their idea funded because there is a lot
Speaker 7: of capital here. There are a lot of rich people
Speaker 7: in South Florida. They get the ball rolling, and maybe
Speaker 7: they move on and they do those late stage rounds
Speaker 7: out in the West Coast, they take their company public.
Speaker 7: But maybe we really carve out a niche for ourselves
Speaker 7: in that early stage space.
Speaker 2: Okay, well let me get into that a little bit.
Speaker 2: What does Miami offer? You mentioned less expensive, You mentioned
Speaker 2: lots of capital. The first thing I think is, you know,
Speaker 2: you're never going to shovel snow in Miami. You never
Speaker 2: have to worry about that. But that's probably less important
Speaker 2: to the tech industry. What is else do they have
Speaker 2: to offer?
Speaker 7: Yeah, so I basically think of several pillars. So we
Speaker 7: talked about deep pockets. You can you can find and
Speaker 7: meet with a lot of a lot of investors here,
Speaker 7: favorable quality of life, less expensive than the maybe of
Speaker 7: the many of the dominant tech and finance centers. Although
Speaker 7: I should know that if you're talking like the urban
Speaker 7: core in Miami, that spread has been closing a little bit,
Speaker 7: so we'll have to watch that. But the sort of
Speaker 7: fourth pillar is our connection to Latin America, which is
Speaker 7: really something totally unique and kind of extraordinary about South Florida.
Speaker 5: Right.
Speaker 7: You have this huge cultural connection, something like, you know,
Speaker 7: two thirds of households speak a language other than English
Speaker 7: at home to some extent. Oftentimes we're talking about Spanish,
Speaker 7: but Portuguese is widely spoken here Haitian creole. So there's
Speaker 7: a cultural connection to Latin America. There's a deep pool
Speaker 7: of Latin America wealth. You can get direct flights to
Speaker 7: anywhere in Latin America, and it's kind of just the
Speaker 7: perfect place. If you wanted to create a Capital of
Speaker 7: Latin America VC, I think this is where you would
Speaker 7: put it. These are cultures and economies that are kind
Speaker 7: of siloed in their own way, especially like Brazil and
Speaker 7: the rest of Latin So if you wanted to create
Speaker 7: this pan Latin American VC hub, I think, and there's
Speaker 7: some evidence to this, there really is no better place
Speaker 7: than Miami.
Speaker 2: Climate change does that factor in at all. You know, Miami,
Speaker 2: low lying area South Florida, lots of beaches, lots of
Speaker 2: potential for issues with hurricanes, severe weather flooding in the future.
Speaker 2: How does that or does it factor into this?
Speaker 7: I think it absolutely factors into it. You know, you
Speaker 7: have Miami Dade County already negotiating with the Army Corps
Speaker 7: of Engineers in terms of are they going to do
Speaker 7: a sea wall? Are they going to use natural barriers
Speaker 7: to protect this area for the long haul. I think
Speaker 7: it's absolutely going to be a challenge. You already see
Speaker 7: rising property insurance rates cutting into some of the affordability
Speaker 7: that we talked about earlier, and so it's something it's
Speaker 7: something to look at. I think, in a weird way,
Speaker 7: South Florida is going to continue to lure wealth for
Speaker 7: a long time, and wealthy people are going to continue
Speaker 7: to put thirty million dollar mansions right in some of
Speaker 7: the most vulnerable real estate and barrier barrier island communities
Speaker 7: on the beach. But what we often forget is those
Speaker 7: transactions go through because those people can afford to lose that.
Speaker 7: And I think that that's really the core of it.
Speaker 7: And you're absolutely right. As we look ten twenty thirty
Speaker 7: years into the future, there's no talking about economic development
Speaker 7: without first talking about sustainable solutions to the climate issue.
Speaker 2: Jonathan Levin is a Bloomberg Opinion columnist covering markets, finance,
Speaker 2: and M and A. You're listening to Bloomberg Opinion, I,
Speaker 2: Ami Morris. Scientists are only just scratching the surface of
Speaker 2: what artificial intelligence can teach us about human biology and disease.
Speaker 2: Let's dig into this now. Bloomberg Opinion columnist Lisa Jarvis
Speaker 2: covers biotech, healthcare, and the pharmaceutical industry and joins us Now, Lisa,
Speaker 2: when I first read your column on the Bloomberg terminal,
Speaker 2: my first thought was, Oh, no, my doctor is going
Speaker 2: to be a robot. That is not what this is about.
Speaker 3: No, No robot doctors yet, not yet.
Speaker 7: No.
Speaker 3: This is basically about the idea that scientists are learning
Speaker 3: how to take our genetic code, you know, this very
Speaker 3: long string of letters and turn it into information that's
Speaker 3: useful in a way that they haven't been able to
Speaker 3: do before.
Speaker 2: You've been following this, what are you seeing? Any examples are?
Speaker 2: For instance, last.
Speaker 3: Year, basically there was a to me kind of mind
Speaker 3: blowing breakthrough where they could take the string of letters
Speaker 3: that apply to a particular protein and a computer could
Speaker 3: turn that into an image. This is something scientists have
Speaker 3: been trying to do for years, figure out how to
Speaker 3: go from you know, that sort of two dimensional code
Speaker 3: into a three dimensional picture that is close to what
Speaker 3: we know is the reality. It's super useful because they
Speaker 3: use that to help develop drugs to understand disease better.
Speaker 3: And you know they did this Google deep Mind, the
Speaker 3: artificial intelligence unit of alphabet was able to do that
Speaker 3: for every protein in existence, two hundred and fourteen million
Speaker 3: of them. So it's that it sounds so wonky, but
Speaker 3: it's actually a really big deal to be able to
Speaker 3: do that. They're not perfect, it's a prediction, but a
Speaker 3: lot of them are close enough that it's really helpful.
Speaker 3: And now there's this kind of next phase, which I'm
Speaker 3: happy to talk about too.
Speaker 2: Yes, please do what's the next phase?
Speaker 3: So we're learning about all the different things that one
Speaker 3: could use that information for. But what DeepMind did was
Speaker 3: shift to a different project where they used kind of
Speaker 3: the foundation of this program called Alpha fold that predicts
Speaker 3: the structures of proteins, and they gave it a different
Speaker 3: problem to solve. They taught it how to solve a
Speaker 3: different problem, which is, how do we know which of
Speaker 3: the thousands of tiny mutations each of us carry are
Speaker 3: actually harmful, and so which one and which ones are
Speaker 3: benign because there's a lot of All of us have
Speaker 3: all these mutations in our body, but they don't kill us, right,
Speaker 3: they don't even all cause disease, and we don't necessarily
Speaker 3: have a good way to distinguish between those two. Experiment
Speaker 3: has taught us that, and so they've created this long list,
Speaker 3: exhaustive list basically predicting which things might be a problem
Speaker 3: and which not. Which is Again, it sounds so wonky,
Speaker 3: but it could be very helpful filter for doctors who
Speaker 3: are trying to understand why someone is sick like it
Speaker 3: has a very rare genetic disease. They get back their
Speaker 3: gene sequencing results and they look through all of them,
Speaker 3: and they don't necessarily know what the problem is, which
Speaker 3: one is the cause. Deepbine was really careful and stressing
Speaker 3: that this isn't a diagnostic tool. You know, you want
Speaker 3: to layer that onto other information that we've spent years accumulated,
Speaker 3: decades accumulating. I think the obviously are going to be
Speaker 3: other areas of healthcare where I think there could be
Speaker 3: some problems with AI or just tendency. Some of that
Speaker 3: is around patient privacy, you know. Some of it again
Speaker 3: is around thinking that the computer might know better than
Speaker 3: a doctor's you know, intuition and years of seeing patients,
Speaker 3: and instead of integrating those two things together for something better,
Speaker 3: relying on one.
Speaker 2: Or the other.
Speaker 3: So those are the things that I would be worried
Speaker 3: about when it comes. But on balance, I have been
Speaker 3: a little skeptical of AI when it comes to drug
Speaker 3: discovery and diagnosis. I'm pretty excited about the things that
Speaker 3: Deep Mind is doing. I think none of our proteins
Speaker 3: live in isolation. There have partners. They, you know, interact
Speaker 3: with each other inside our body. And trying to get
Speaker 3: to a point where we understand what those interactions and
Speaker 3: predict what those interactions look like would be so important
Speaker 3: when it comes to trying to stop disease. So that
Speaker 3: to me is like a much tougher problem that could
Speaker 3: be the next frontier. I would hope that someone someday
Speaker 3: can solve that.
Speaker 2: All right, Bloomberg Opinion columnist Lisa Jarvis, And that does
Speaker 2: it for this week's Bloomberg Opinion. We are produced by
Speaker 2: Eric Molow, and you can find all of these columns
Speaker 2: on the Bloomberg Terminal. We're also available as a podcast
Speaker 2: on Apple, Spotify, or your favorite podcast platform. Stay with us.
Speaker 2: Today's top stories and global business headlines are just ahead.
Speaker 2: I'm Mammy Morris, and this is Bloomberg.