WEBVTT - Sallie Krawcheck Says We're 100 Years From Gender Pay Parity 0:00:00.120 --> 0:00:02.920 Brought you by Bank of America, Mary Lynch. Investing in 0:00:03.000 --> 0:00:07.840 local communities, economies and a sustainable future. That's a power 0:00:08.080 --> 0:00:12.360 of global connections, Mary Lynch, Pierce Fenner and Smith Incorporated 0:00:12.760 --> 0:00:27.400 Member s I p C. Welcome to the Bloomberg Surveillance Podcast. 0:00:27.840 --> 0:00:31.520 I'm Tom Keene with David Gura. Daily we bring you 0:00:31.560 --> 0:00:36.600 insight from the best in economics, finance, investment, and international relations. 0:00:37.040 --> 0:00:41.600 Find Bloomberg Surveillance on iTunes, SoundCloud, Bloomberg dot Com, and 0:00:41.680 --> 0:00:49.680 of course on the Bloomberg Sally craw Chuck is with us, 0:00:49.680 --> 0:00:52.160 and she is of course an historic place on Wall 0:00:52.200 --> 0:00:56.280 Street delivering first order securities analysis for Sanford Bernstein where 0:00:56.280 --> 0:00:59.320 she broke original ground, and then her executive work in 0:00:59.440 --> 0:01:03.560 financial management and now running Elvis is on. The book 0:01:04.160 --> 0:01:07.080 is own it and it's not another touchy feely g 0:01:07.280 --> 0:01:11.000 Gali book here. This is the real thing and it's 0:01:11.040 --> 0:01:13.960 hard hitting. Let's start with diversity councils. You go right 0:01:14.040 --> 0:01:17.440 after diversity councils say no, no, no, help me here. Well, 0:01:17.480 --> 0:01:19.280 here's what I would say, Tom is and I think 0:01:19.319 --> 0:01:24.200 we've seen it in diversity has stalled gender progress. We 0:01:24.240 --> 0:01:27.440 certainly have seen it in politics, but in business as well. 0:01:27.520 --> 0:01:31.040 For all the discussion and debate about the power of diversity, 0:01:31.200 --> 0:01:33.280 it's stalled in on Wall Street. You know, it's gone 0:01:33.280 --> 0:01:35.679 backwards over the past acts going backwards. And what is 0:01:35.720 --> 0:01:38.560 your prescription to get away from the happy talk of 0:01:38.600 --> 0:01:42.000 the recent decade. Well, for CEOs, start to just do 0:01:42.040 --> 0:01:46.000 it because the impact of not doing it has been theoretical. 0:01:46.080 --> 0:01:48.720 You won't get the higher return return on equities, you 0:01:48.760 --> 0:01:51.560 won't get the greater innovation. But at some point it's 0:01:51.560 --> 0:01:54.280 going to become actual because the number one reason millennial 0:01:54.360 --> 0:01:57.040 women leave their jobs today is to make more money. 0:01:57.040 --> 0:01:58.640 Can you look at a guy like Mark Benoff who 0:01:58.680 --> 0:02:02.000 we interviewed Davos and he goes back starting with three 0:02:02.040 --> 0:02:04.280 guys in an apartment and he's, I guess made a 0:02:04.360 --> 0:02:07.240 success of himself. And Benoff says, come on, if you 0:02:07.280 --> 0:02:11.000 actually do this livid day to day, it's not that hard. 0:02:11.440 --> 0:02:15.280 What's holding up the rest of corporate America. Well, it's 0:02:15.520 --> 0:02:18.000 because they think it is that hard. It is so 0:02:18.080 --> 0:02:21.960 much easier to bring in diverse individuals and treat them 0:02:21.960 --> 0:02:26.160 like middle aged white guys. Be confident, make your case, 0:02:26.400 --> 0:02:29.880 raise your hand for the P and L responsibility as 0:02:29.919 --> 0:02:32.840 supposed to really pulling out of everybody the different things 0:02:32.880 --> 0:02:37.240 they bring to work to drive the power of diversity, right, 0:02:37.240 --> 0:02:40.040 Sally do We just need more transparency. More transparency in 0:02:40.040 --> 0:02:42.760 the workforce means that you know how much everyone is paid, 0:02:42.800 --> 0:02:45.519 you know how many people are employed. And it's certainly 0:02:45.560 --> 0:02:48.520 through transparency that people can actually fight for diversity. I 0:02:48.520 --> 0:02:51.480 can want to fight for diversity, but it's very difficult 0:02:51.480 --> 0:02:54.160 for me to see where I should be fighting. For example. Well, 0:02:54.320 --> 0:02:57.840 I think that's a great point. And on today's trajectory, 0:02:58.000 --> 0:03:01.200 we are either a hundred years, fifty years, a hundred 0:03:01.200 --> 0:03:04.320 eighty years away from gender pay parity longer if you're 0:03:04.320 --> 0:03:07.079 a woman of color, so way away. But all of 0:03:07.120 --> 0:03:10.760 a sudden, they're these resources such as paste get get 0:03:10.840 --> 0:03:15.200 raised comparably hired, where we can go in and see 0:03:15.320 --> 0:03:17.440 about how much we should be paying. So back in 0:03:17.520 --> 0:03:20.480 my day, a couple of years ago, when I would 0:03:20.480 --> 0:03:22.000 go in for a raise, it was please give me 0:03:22.040 --> 0:03:24.919 a raise. Today it's this is how much I should 0:03:24.919 --> 0:03:27.320 be making, and I can see it, and so I'd 0:03:27.320 --> 0:03:30.880 like that raise. The power is shifting, right, What is 0:03:30.880 --> 0:03:33.600 the one thing, what is the one common misconception on 0:03:33.680 --> 0:03:37.120 boards on how to treat diversity and actually how to 0:03:37.160 --> 0:03:40.320 be more inclusive. Well, look, I think boards just haven't 0:03:40.360 --> 0:03:42.600 really taken the bull by the horns. I mean, everybody 0:03:42.640 --> 0:03:45.520 says this is an important to do, but when your 0:03:45.560 --> 0:03:48.360 CEO shows up and says, yeah, I know, and I 0:03:48.360 --> 0:03:52.040 would love to put Susie in that role, but Jim, 0:03:52.160 --> 0:03:54.640 Jim is such as Jim, and gosh, she reminds me 0:03:54.720 --> 0:03:57.280 so much of me. The board finds it difficult to 0:03:57.320 --> 0:04:01.600 reach into the company and question those individuals decisions despite 0:04:01.600 --> 0:04:04.320 what the research indicates. Okay, let's look here at the video. 0:04:04.640 --> 0:04:07.880 We did a research project. Sally's gagging here this morning, 0:04:07.880 --> 0:04:10.640 off the level, off the lousy savannas. Go bring up 0:04:10.640 --> 0:04:13.240 the video this weekend. And this is extraordinary. But I 0:04:13.240 --> 0:04:15.360 want to tie this into own it as well. You've 0:04:15.400 --> 0:04:18.280 got four million women marching. I get it, it's a 0:04:18.360 --> 0:04:22.240 huge deal, but how many of those women took triggonometry. 0:04:22.279 --> 0:04:24.680 You go right to it on page one thirty two 0:04:24.720 --> 0:04:27.279 of your book and you say, this carnard that women 0:04:27.360 --> 0:04:31.800 can't do math is just belogning. And what people don't know, folks, 0:04:31.880 --> 0:04:34.960 is Crawchuck invented this on Wall Street with your work 0:04:34.960 --> 0:04:38.880 at Sanford Bernstein, are you seeing more women say screw 0:04:38.960 --> 0:04:42.760 the stereotype. I'm doing trigg Well I did. I didn't 0:04:42.760 --> 0:04:46.000 invent trigonometry, though I do appreciate the compliment. But here's 0:04:46.000 --> 0:04:48.000 what I would say. We're now starting to talk about 0:04:48.000 --> 0:04:50.960 the gender money gaps and women. There are several gender 0:04:50.960 --> 0:04:53.440 money gaps we have which cost us millions over the 0:04:53.440 --> 0:04:56.000 course of our lives. Women can go to the elivest 0:04:56.040 --> 0:04:58.080 website and they can see we put together a whole 0:04:58.120 --> 0:05:01.120 guide book on this. The one I'm very focused on 0:05:01.200 --> 0:05:04.479 with eLabs is a gender investing gap which costs women 0:05:04.560 --> 0:05:08.040 hundreds of thousands or millions, and we still buy the 0:05:08.080 --> 0:05:12.600 Ozzie and Harriet math is for guys. Guys are better 0:05:12.640 --> 0:05:16.480 investors than women. That is, neither of those things are true. 0:05:16.600 --> 0:05:19.000 I'm trying to think of the percentage of our audience 0:05:19.000 --> 0:05:21.560 that don't know who Azzi Harried is. They don't even 0:05:21.600 --> 0:05:24.919 know that Rick Nelson went to a garden party and 0:05:24.960 --> 0:05:29.640 Harriet it's way back Gillian's Island family. How do we 0:05:29.720 --> 0:05:32.600 get away from the stereotype of Ginger and Tina whatever 0:05:32.600 --> 0:05:34.840 her name was, Well, why not? We need to actively 0:05:34.880 --> 0:05:37.520 move away but this is the place the stereotypes there, 0:05:37.760 --> 0:05:40.560 here's one that drives me nuts. Women need more financial 0:05:40.680 --> 0:05:43.760 education to invest, and we women, because we love getting 0:05:43.760 --> 0:05:46.800 our eyes are like, you're right, I need more financial education, 0:05:47.200 --> 0:05:51.000 except the guys need more to but we invest anyway, 0:05:51.120 --> 0:05:53.640 they invest anyway. So here's the here's the final point 0:05:54.040 --> 0:05:57.360 industry symbol, a bull. Not a lot of women are 0:05:57.400 --> 0:06:00.120 looking at that and saying that's for me. So in 0:06:00.120 --> 0:06:02.760 Sally project now she joins us here in the studio. 0:06:02.800 --> 0:06:04.719 She's the author of a new book, own It, The 0:06:04.720 --> 0:06:06.480 Power of Women at Work, of course, former CEO of 0:06:06.560 --> 0:06:09.120 Smith Barney, now the c and co founder of Elvis. 0:06:09.120 --> 0:06:11.720 Great to have you with us. Let's start at the 0:06:11.760 --> 0:06:14.520 beginning of your book. A great first line here, Well 0:06:14.560 --> 0:06:16.360 here we are you right, but the view looks a 0:06:16.360 --> 0:06:19.520 little different than we expected. Were There a lot of 0:06:19.560 --> 0:06:22.120 revisions here between between the events of November the eighth 0:06:22.160 --> 0:06:27.680 and where we are today. Remarkably few, actually, because diversity 0:06:27.839 --> 0:06:30.960 has stalled in corporate America and for those of your 0:06:31.000 --> 0:06:33.560 listeners on Wall Street has gone backwards on Wall Street 0:06:33.800 --> 0:06:38.640 before the shocking too many election results. So yes, three 0:06:38.720 --> 0:06:40.720 days after the election, I did wake up and call 0:06:40.800 --> 0:06:42.800 my public say, oh my gosh, well, you know, let's 0:06:42.920 --> 0:06:45.520 can I change the first couple of lines, but remarkably 0:06:45.560 --> 0:06:48.480 little because the stalling. There was a piece in Bloomberg 0:06:48.520 --> 0:06:51.400 Business Week about all that Hillary Clinton promised to do 0:06:51.440 --> 0:06:53.200 if she were to be elected for women who work 0:06:53.240 --> 0:06:55.960 in government, particularly at the mid level, and there was 0:06:56.480 --> 0:06:58.799 great despair in Washington that that was going to change 0:06:58.800 --> 0:07:01.080 with the with the President Trump. Your background is in 0:07:01.120 --> 0:07:03.720 Wall Street, not in government. But there are ramifications from 0:07:03.720 --> 0:07:05.600 from the way the election turned out for women in business. 0:07:05.680 --> 0:07:08.840 Absolutely there are Um you know, I was personally hoping 0:07:08.920 --> 0:07:11.760 for mandated parental leave. We're the only developed country in 0:07:11.760 --> 0:07:14.679 the world that doesn't have it, and there's new research 0:07:14.720 --> 0:07:16.800 that shows it pays for itself in the first year 0:07:17.320 --> 0:07:19.640 because women are more likely to come back if they 0:07:19.680 --> 0:07:22.160 have maternal leave and you don't have to replace them 0:07:22.160 --> 0:07:25.160 and train their replacement regardless. One of the points of 0:07:25.160 --> 0:07:29.520 the book before the election is, hey, guys, you know, 0:07:29.920 --> 0:07:32.720 what we've been doing has gotten us so far, but 0:07:32.840 --> 0:07:35.360 no farther. So what are what's going to happen now? 0:07:35.680 --> 0:07:37.480 And the points on the book is, first of all, 0:07:37.960 --> 0:07:41.200 you know, there's so much freaking advice out there that 0:07:41.280 --> 0:07:43.960 tells us to act like men, when in fact, we 0:07:44.000 --> 0:07:46.520 bring so many great qualities to the workforce that are 0:07:46.520 --> 0:07:51.480 becoming more important, such as risk awareness, such as relationship orientation, 0:07:51.920 --> 0:07:54.440 such as long term perspective. I mean, things that are 0:07:54.480 --> 0:07:58.000 important and are becoming more important and drive great results 0:07:58.000 --> 0:08:00.720 in business. The issue is four. If there wasn't a 0:08:00.720 --> 0:08:02.760 lot we could do about it, if company didn't appreciate it, 0:08:02.760 --> 0:08:05.200 we could go work at another company. Now we have 0:08:05.560 --> 0:08:08.080 much more information, we can figure out we can go 0:08:08.080 --> 0:08:10.440 to websites to figure out our gender pay gap, and 0:08:10.480 --> 0:08:13.280 we can go started on fraggan businesses. All of a sudden, 0:08:13.320 --> 0:08:15.320 you know, the technology is changing things in a way. 0:08:15.320 --> 0:08:18.320 We have so much more power. I'm so interesting that 0:08:18.320 --> 0:08:19.800 you read about that in the book, that the role 0:08:19.840 --> 0:08:22.040 of technology is playing here. Explain that a little bit more, 0:08:22.120 --> 0:08:24.760 that the doors that changing technology is opening for women 0:08:24.760 --> 0:08:27.760 in business. And it's not perfect, right. Venture capitalists don't 0:08:27.760 --> 0:08:29.960 get it, But you know what do we get like 0:08:30.680 --> 0:08:33.520 three or six or seven percent of venture capital dollars. 0:08:33.520 --> 0:08:37.240 But most businesses are not venture capital funded. And today 0:08:37.360 --> 0:08:39.440 the cost of technology is coming down. You don't have 0:08:39.520 --> 0:08:41.880 to buy servers, you you rent space in the cloud. 0:08:42.280 --> 0:08:45.440 But it's not just technology that's taking down the cost 0:08:45.480 --> 0:08:48.319 of starting businesses. It's we works as opposed to long 0:08:48.440 --> 0:08:51.360 term releases. It's benefits as opposed to an HR department. 0:08:51.840 --> 0:08:55.360 You know, it's it's video conference as opposed to business travel. 0:08:55.840 --> 0:08:58.440 That you're able now to start businesses to a degree 0:08:58.440 --> 0:09:00.920 you couldn't before. And there's so many more role models. 0:09:00.960 --> 0:09:03.880 I go through a hunking list of them there of 0:09:03.920 --> 0:09:06.480 women who were starting their own businesses and in part, 0:09:07.400 --> 0:09:09.560 in part, actually, the number one reason women get for 0:09:09.559 --> 0:09:11.800 starting their own businesses is because they want to build 0:09:11.800 --> 0:09:14.400 the business at which they want to work, and corporate 0:09:14.400 --> 0:09:17.160 America isn't working for so many of them. So for 0:09:17.240 --> 0:09:20.480 big companies that don't get it, there wasn't much penalty before, 0:09:21.200 --> 0:09:24.400 I believe going forward as women recognize that these places 0:09:24.440 --> 0:09:27.000 can be hollowed out. Talking with Sally Crotchick, the author 0:09:27.000 --> 0:09:30.439 of Own It, The Power of Women at Work, picking 0:09:30.480 --> 0:09:32.360 up on what you were just saying, how has mentorship 0:09:32.480 --> 0:09:34.880 changed The notion of mentorship changed here since you've got 0:09:34.880 --> 0:09:38.080 into the business. Well, mentorship it's it's very nice, it's 0:09:38.200 --> 0:09:40.439 very good stuff. It's Hey, I have a question for you, Hey, 0:09:40.440 --> 0:09:42.960 I've an answer for you. Women have and I'm gonna 0:09:42.960 --> 0:09:45.280 get these numbers wrong, but three times as many mentors 0:09:45.280 --> 0:09:47.520 as men, but we have about a third as many 0:09:47.559 --> 0:09:50.959 sponsors as men. What's a sponsor? This person in the 0:09:51.080 --> 0:09:54.520 room who says promote her or promote him or I'm 0:09:54.520 --> 0:09:56.800 going to put my political capital on the line for 0:09:56.960 --> 0:10:00.520 him or her and really pull you along, And we 0:10:00.600 --> 0:10:02.920 just don't have as many of them. In fact, even 0:10:02.960 --> 0:10:04.679 we think we have more than we do, and then 0:10:04.720 --> 0:10:07.079 when we question about it, we're like, no, no, don't 0:10:07.120 --> 0:10:10.080 have them. UM, So that's an important in fact what 0:10:10.120 --> 0:10:12.280 I would say. You know, we talked about the book 0:10:12.320 --> 0:10:15.840 in a geeky way, but there's a lot of action 0:10:16.040 --> 0:10:20.720 oriented advice based on my almost thirty years in the 0:10:20.800 --> 0:10:24.400 business UM as well as a lot of Wall Street anecdotes, 0:10:24.440 --> 0:10:25.880 some of which I think, you know, you're gonna be 0:10:25.920 --> 0:10:29.280 like what happened? I can't believe it? And I figure 0:10:29.280 --> 0:10:31.120 if I can sort of give the advice on how 0:10:31.160 --> 0:10:34.760 I navigated through this most mail of businesses, it should 0:10:34.760 --> 0:10:37.760 be relevant for for other businesses as well. You write 0:10:37.760 --> 0:10:41.000 about group think on Wall Street, especially among the executive ranks, 0:10:41.400 --> 0:10:43.760 talk a bit about navigating that and how much that 0:10:43.760 --> 0:10:47.000 continues to persist today. Well, I got fired because of it. Essentially, 0:10:47.200 --> 0:10:52.040 so um Wall Street, the business I love, went into 0:10:52.120 --> 0:10:54.559 the downturn white mail and middle aged, and it came 0:10:54.559 --> 0:10:57.280 out whier mailer and middle aged her, which is really 0:10:57.280 --> 0:11:00.240 sort of surprising. And one of the points I make 0:11:00.320 --> 0:11:02.240 is that while we talk about greed as a driver 0:11:02.400 --> 0:11:07.160 the downturn, okay, leverage, absolutely, but one thing we don't 0:11:07.200 --> 0:11:10.800 talk about a group thinking. What I saw were individuals 0:11:10.800 --> 0:11:13.079 who had the same types of backgrounds, the same type 0:11:13.080 --> 0:11:17.520 of training, same training programs, all friends who fought the 0:11:17.600 --> 0:11:20.319 same way. And so as we went into the downturn, 0:11:20.360 --> 0:11:23.000 there was a it's going to be okay, remember we 0:11:23.040 --> 0:11:25.520 saw this, Oh yeah, I remember the last time we 0:11:25.720 --> 0:11:27.880 Oh remember that one felt and I'm like, what are 0:11:27.880 --> 0:11:31.640 we talking about? You're finishing each other's sentences, And so 0:11:31.720 --> 0:11:35.520 there wasn't that outside. Hey, guys, I have a vastly 0:11:35.559 --> 0:11:41.280 different background, perspective, orientation, way of approaching problems. How about this? 0:11:41.880 --> 0:11:44.760 And without more, without more of that, we drove straight 0:11:44.800 --> 0:11:47.200 over the cliff. You had this career on Wall Street, 0:11:47.240 --> 0:11:49.720 you leave to start this company. Are the regrets that 0:11:49.720 --> 0:11:51.480 you didn't do that sooner. As women are weighing whether 0:11:51.559 --> 0:11:53.680 or not to state the firms they're at or start 0:11:53.720 --> 0:11:56.720 thrown businesses, what would you say about timing well, you know, 0:11:56.880 --> 0:12:01.720 for l Vest, which is a digital investment platform for women. UM, 0:12:01.760 --> 0:12:03.760 I'm not sure I could have started any sooner because 0:12:03.760 --> 0:12:06.520 the technology had to catch up with the idea. I mean, 0:12:06.520 --> 0:12:10.640 we're providing a to my mind, really sophisticated offering for women. 0:12:10.679 --> 0:12:13.920 It's true goals based investing. It's not about beating the 0:12:13.960 --> 0:12:17.600 market when the euro this versus the end, but investing 0:12:17.720 --> 0:12:21.920 highly customized investment portfolios to reach your goals by house, 0:12:21.960 --> 0:12:25.000 have a baby, start a business, retire well. Um. And 0:12:25.040 --> 0:12:28.840 the technology UM had to come pretty far for for 0:12:28.920 --> 0:12:31.800 it to be feasible for us to build the business. 0:12:31.840 --> 0:12:35.200 So do I wish I'd skipped a few chapters. Oh yeah, 0:12:35.200 --> 0:12:37.480 oh yeah, you know that that getting re orged out 0:12:37.480 --> 0:12:39.000 of Bank of America. I could have actually had a 0:12:39.080 --> 0:12:42.120 dream last week, Brian Mornahan wants to see you. I'm like, 0:12:42.200 --> 0:12:45.199 not again. I'm gonna get re orged out again, even 0:12:45.240 --> 0:12:47.480 though my results are better than you know, even though 0:12:47.480 --> 0:12:50.000 we're beating Black No, and in my dream, I thought, 0:12:50.040 --> 0:12:52.600 if I just escaped from the office, maybe they won't 0:12:52.600 --> 0:12:57.440 find me. Yeah, But then I woke up. You equival 0:12:57.559 --> 0:12:59.599 with you take issue with the term empowerment? What is 0:12:59.640 --> 0:13:01.400 it about that, that word that you don't like? I've 0:13:01.600 --> 0:13:04.360 always hated it, and I thought it was because it 0:13:04.400 --> 0:13:07.720 was trite, and you know, let me. I've always hated 0:13:07.720 --> 0:13:11.240 it because I thought it was overused. Um. I then 0:13:11.440 --> 0:13:14.680 finally finally looked it up in the dictionary and empowerment 0:13:14.720 --> 0:13:19.160 means to be given power. Wait a minute, we women 0:13:19.200 --> 0:13:22.840 have got loads of power. We control five trillion dollars 0:13:22.840 --> 0:13:25.560 of investable assets we jointly control with our partners another 0:13:25.720 --> 0:13:29.680 six we direct of consumer spending. We're more than half 0:13:29.679 --> 0:13:33.840 the workforce. That's power. We haven't had the means to 0:13:34.000 --> 0:13:37.000 use it before. How would you know which company to 0:13:37.040 --> 0:13:39.000 buy from? Well, all of a sudden, their startups that 0:13:39.040 --> 0:13:40.920 will tell you, you know, when you go to the 0:13:40.920 --> 0:13:43.200 grocery store, buy up index will tell you the gender 0:13:43.240 --> 0:13:46.280 makeup the senior leadership team of the company you're buying from. 0:13:46.320 --> 0:13:48.640 So all of us or you know we've done good, 0:13:48.640 --> 0:13:51.400 will tell you about how companies are treating the environment. 0:13:51.800 --> 0:13:54.680 So all of a sudden, we have, whether it's who 0:13:54.720 --> 0:13:58.040 we buy from, who we invest in, asking for the raise. 0:13:58.360 --> 0:14:00.360 Never knew how much to ask for before, but they're 0:14:00.400 --> 0:14:02.400 all these sites that tell you how much money should 0:14:02.400 --> 0:14:07.280 be making now, um pay scale, get raised, etcetera. So 0:14:07.320 --> 0:14:10.920 we have this power and now we're beginning to have 0:14:11.040 --> 0:14:13.240 the means to use it. So I think it's changing, 0:14:13.240 --> 0:14:15.160 and I think it can change pretty rapidly. And I 0:14:15.200 --> 0:14:19.000 think the timing is so fascinating. As we have women 0:14:19.040 --> 0:14:21.800 take to the streets in Washington and New York and 0:14:21.960 --> 0:14:25.520 all over the world. What we're hearing from women again 0:14:25.560 --> 0:14:28.400 and again is I want to take some action. What 0:14:28.440 --> 0:14:31.760 we were doing before stalled out. We need to do 0:14:31.840 --> 0:14:34.520 something different. Sally, thank you very much for coming into 0:14:34.520 --> 0:14:36.360 short a time to hope we can have you back again, 0:14:36.360 --> 0:14:38.840 maybe during March madness. I don't know more fervent U 0:14:38.920 --> 0:14:41.520 n c A fan than I here we have feltorio 0:14:41.600 --> 0:14:45.080 any day Sally Project series this year. She's the CEO 0:14:45.080 --> 0:14:47.360 and co founder LS, the author of Owned The Power 0:14:47.520 --> 0:15:02.080 of Women. Edward David Garraty and New York Tom Keene 0:15:02.120 --> 0:15:04.000 is off today. Kevin Logan joins US now. He's the 0:15:04.040 --> 0:15:07.080 chief US Economists at HS at BC. Like many of us, 0:15:07.120 --> 0:15:08.560 he lent an ear to what the president, like the 0:15:08.600 --> 0:15:11.080 then president elect, had to say on Friday. And let's 0:15:11.080 --> 0:15:14.120 start there, Kevin. We focus with an arcual address on 0:15:14.160 --> 0:15:17.360 the sweeping rhetoric. It was sixteen minutes worth of that. 0:15:17.960 --> 0:15:21.120 Did you expect much granular detail to be sprinkled over? 0:15:21.240 --> 0:15:23.080 What did you hear when the president spoke, especially when 0:15:23.080 --> 0:15:26.680 it came to trade. Well, he he had two main themes, 0:15:26.760 --> 0:15:30.280 populism and protectionism. He talked about the people. He was 0:15:30.320 --> 0:15:33.640 anti establishment. He says, there's a new sheriff in town. 0:15:33.720 --> 0:15:35.400 Things are going to change. We're not going to do 0:15:35.560 --> 0:15:38.720 things the way they were done before, and particularly on trade. 0:15:39.480 --> 0:15:43.520 Previous administrations had been focused on multilateral deals, the rule 0:15:43.600 --> 0:15:46.080 of law. Everyone abide him by the same agreement. And 0:15:46.240 --> 0:15:49.280 Mr Trump has a completely different approach. He's going to 0:15:50.120 --> 0:15:53.640 approach things on a unilateral basis, one on one trade 0:15:53.720 --> 0:15:57.000 deals and as he put it, America first, not a 0:15:57.160 --> 0:16:00.560 multilateral deal in which many countries benefit and there's even take, 0:16:00.880 --> 0:16:04.960 but rather now things that clearly benefit in his view, UH, 0:16:05.080 --> 0:16:07.080 deals that will benefit the United States. So that is 0:16:07.120 --> 0:16:09.720 a complete break with the past, and it's a new direction. 0:16:10.000 --> 0:16:12.440 What's your sense of the the effectiveness of the meetings 0:16:12.760 --> 0:16:14.760 he has been holding at the White House thus far. 0:16:14.800 --> 0:16:17.120 He's going to meet with auto executives this morning. Yesterday 0:16:17.160 --> 0:16:20.560 he met with UH leaders of industrial companies, among others. 0:16:20.760 --> 0:16:24.240 Elon Musk was there from Tesla and Solar City. UM. 0:16:24.760 --> 0:16:26.600 How effective can a meeting like that be when he 0:16:26.680 --> 0:16:28.800 tries to pursue this this new kind of trade policy, 0:16:28.800 --> 0:16:31.720 I suppose well. I think image is very very important 0:16:31.880 --> 0:16:34.960 for Trump, and it's very important for any administration. When 0:16:35.040 --> 0:16:38.600 it first comes in. Everyone understands the auto industry. Everyone 0:16:38.680 --> 0:16:40.720 knows that a lot of jobs have moved to Mexico, 0:16:40.800 --> 0:16:45.080 for example, where a lot of parts are manufactured and 0:16:45.120 --> 0:16:47.440 then ship back to the United States. And so going 0:16:47.600 --> 0:16:51.640 straight to the automobile industry has a great optical appeal 0:16:51.800 --> 0:16:55.440 to people throughout the country. And he may get some victories, 0:16:55.480 --> 0:16:58.320 their small victories, some more production in the US, and 0:16:58.360 --> 0:17:01.400 it might involve a few thousand jobs. More importantly, I think, 0:17:01.720 --> 0:17:03.440 is what is the grand plan? What is the big 0:17:03.520 --> 0:17:07.159 plan that's going to change incentives for US manufacturers or 0:17:07.520 --> 0:17:10.399 any company UH to produce more in the United States 0:17:10.880 --> 0:17:15.679 and to reverse the outflow of UH production. That's been 0:17:15.720 --> 0:17:18.040 going on for several decades. The U S tax system 0:17:18.680 --> 0:17:22.879 UH basically encourages UH firms to move production out of 0:17:22.880 --> 0:17:25.280 the US. Not that it's just the U. S tax system, 0:17:25.640 --> 0:17:29.399 it's also the tax system compared with other countries. If 0:17:29.480 --> 0:17:33.119 other countries have value added tax system v a T 0:17:33.400 --> 0:17:37.760 system that taxes consumption but not so much production, whereas 0:17:37.760 --> 0:17:41.359 the US has a system of taxes production and not consumption, well, 0:17:41.400 --> 0:17:43.159 of course production is going to move where is more 0:17:43.240 --> 0:17:45.600 likely taxed, and that's been going on for some time. 0:17:45.920 --> 0:17:48.200 The question now is what will the Trump administration do 0:17:48.800 --> 0:17:53.360 to provide new incentives for corporations to locate their production 0:17:53.440 --> 0:17:55.840 in the US rather than in other countries. That's what 0:17:55.960 --> 0:17:58.159 we'll be watching for in coming months. There was a 0:17:58.240 --> 0:18:00.720 moment of the press briefing yesterday Sean Spicer was talking 0:18:00.760 --> 0:18:03.360 with reporters. One asked about the unemployment rate. She said, 0:18:03.359 --> 0:18:05.040 what is the unemployment rate? And there was some hemming 0:18:05.040 --> 0:18:07.480 and hawing about what he in the administration things it 0:18:07.600 --> 0:18:10.200 is UH, and a line after that stood out to me. 0:18:10.280 --> 0:18:12.960 He said that we've been focusing too much on statistics 0:18:13.000 --> 0:18:14.560 and I want to just draw that more broadly to 0:18:14.600 --> 0:18:18.000 talk about trade. You have the President signing an executive 0:18:18.080 --> 0:18:21.719 order yesterday rejecting the TPP, the Transpacific Partnership. By all reports, 0:18:21.760 --> 0:18:23.240 he's going to do the same thing with NAFTA. He's 0:18:23.240 --> 0:18:25.280 going to call for a rewrite of that later in 0:18:25.320 --> 0:18:28.120 the week. Are you convinced that there is enough attention 0:18:28.200 --> 0:18:31.080 being paid to the economic case for for reevaluating these 0:18:31.119 --> 0:18:33.800 trade deals or is this uh, you know, sort of 0:18:33.800 --> 0:18:37.880 statistics be damned. We're looking at at policy exclusive of that. Well, yes, 0:18:38.280 --> 0:18:43.080 it's not only statistics be damned, but conventional economic theory down. Uh. 0:18:43.400 --> 0:18:45.880 Most trade theorist would say they are great benefits from trade. 0:18:45.920 --> 0:18:48.560 Look at all the inexpensive goods that are important into 0:18:48.560 --> 0:18:52.000 the United States. Its benefits everyone, It increases people's standard 0:18:52.040 --> 0:18:54.639 of living. But that's not what the Trump administration is about. 0:18:54.880 --> 0:18:58.280 So those general gains are dwarfed in their minds by 0:18:58.359 --> 0:19:00.920 low losses that have occurred for people who are in 0:19:01.040 --> 0:19:04.960 those sectors which a lost employment, lost production because of trade, 0:19:05.119 --> 0:19:07.800 and that's what they want to reverse. So the overall 0:19:08.000 --> 0:19:11.560 theory of their overall statistics, Yes, those statistics and theories 0:19:11.600 --> 0:19:14.840 can be damned. Because the people who supported Donald Trump 0:19:14.960 --> 0:19:18.320 to a large degree see themselves as being disadvantaged in 0:19:18.480 --> 0:19:21.879 the by conventional trade theory, and that there should be 0:19:22.280 --> 0:19:25.119 a reversal of that. So that's why we're headed in 0:19:25.200 --> 0:19:28.040 this new direction. Let me ask you lastly here about 0:19:28.040 --> 0:19:30.399 a different topic entirely. Steven Manuch in the pick T B. 0:19:30.440 --> 0:19:32.840 Treasury Secretary, was testified Capital Hill, and he talked about 0:19:33.520 --> 0:19:36.320 the strength of the dollar. The president tweeted about the 0:19:36.320 --> 0:19:39.040 strength of the dollar, saying he hoped it would be weaker. 0:19:39.600 --> 0:19:42.359 This is unprecedented to have a president doing that. Are 0:19:42.440 --> 0:19:44.359 we seeing the end of the strong dollar policy? Was 0:19:44.440 --> 0:19:45.960 that was that the pivot was at the turn there 0:19:46.000 --> 0:19:48.560 When that tweet came out, it certainly sounded as if 0:19:48.600 --> 0:19:52.320 it was a pivot and change. Back in the nineties 0:19:52.400 --> 0:19:55.879 when Bill Clinton was president, the strong dollar policy was 0:19:55.880 --> 0:19:58.800 adopted because there was concerned about capital flows into the 0:19:58.920 --> 0:20:02.120 United States. Interest rates were higher. There was a concerned 0:20:02.119 --> 0:20:06.639 that foreign investors were discouraged by the progress of the 0:20:06.680 --> 0:20:10.120 American economy and if the capital wasn't invested in the US, 0:20:10.400 --> 0:20:12.879 interest rates would remain high. It would be difficult for 0:20:13.720 --> 0:20:16.760 uh the U S economy to grow. Adopting a strong 0:20:17.359 --> 0:20:20.800 dollar policy sort of put a safety net underneath the 0:20:20.920 --> 0:20:24.840 value of uh U S assets for foreign investors. By 0:20:24.880 --> 0:20:26.640 the time we got to the end of that decade, 0:20:26.640 --> 0:20:29.000 the economy was strong, the U S deficit was shrinking, 0:20:29.600 --> 0:20:33.000 moved into a surplus. The rationale for a strong dollar 0:20:33.119 --> 0:20:36.720 policy had gone, but the policy had its own inertia 0:20:36.760 --> 0:20:39.800 and just continued not anymore. I think that's new era 0:20:40.280 --> 0:20:43.080 and a new approach to the dollars that we're about 0:20:43.119 --> 0:20:44.760 to see. Kevin Love and always right to speaking in 0:20:44.760 --> 0:20:46.920 the chief us Ecnoms of HSBC, join us here in 0:20:46.960 --> 0:20:58.040 New York. This is Bloomberg Surveillance on Bloomberg Radio, brought 0:20:58.080 --> 0:21:01.719