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Speaker 1: Welcome to the Bloomberg Penel Podcast. I'm Paul swing you.

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Speaker 1: Along with my co host Lisa Brahma Waits. Each day

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Speaker 1: we bring you the most noteworthy and useful interviews for

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Speaker 1: you and your money. Whether at the grocery store or

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Speaker 1: the trading floor. Find a Bloomberg Penl podcast on Apple

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Speaker 1: podcast or wherever you listen to podcasts, as well as

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Speaker 1: at Bloomberg dot com. There is a question, if you

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Speaker 1: have a lot of money at this point in the

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Speaker 1: credit cycle and the economic cycle, what do you do

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Speaker 1: with it to get returns? What kind of returns are

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Speaker 1: you expecting? Joining us now, Christopher Wolf, chief investment officer

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Speaker 1: at First Republic Private Wealth Management, which overseas about a

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Speaker 1: hundred and forty billion dollars in assets under administration, joining

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Speaker 1: us here in our Bloomberg Interactive Broker Studios. So, Christopher,

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Speaker 1: I want to start with when you have your wealth management,

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Speaker 1: when you have your clients wealthy individuals, they have money,

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Speaker 1: where do you start in terms of the returns that

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Speaker 1: they should shoot for, in terms of their expectations. So

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Speaker 1: that's a great question. I think expectation management often becomes

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Speaker 1: the heart of the initial discussion that you have with

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Speaker 1: the client um and where we start with them isn't

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Speaker 1: all about the numbers, because you often get on the

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Speaker 1: lges You're only gonna get two percent in bonds or

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Speaker 1: maybe six percent in stocks, and that sounds kind of

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Speaker 1: scary for a couple of reasons, which I'll get into,

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Speaker 1: But it actually starts with the goals. What's important to

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Speaker 1: you and how do you want to get there? And uh,

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Speaker 1: that's a different conversation than what can I get for

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Speaker 1: a return? Because the second question I just raised, which

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Speaker 1: a client when they ask it often means they start

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Speaker 1: to chase things. I want to get that return and

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Speaker 1: that becomes more important, and well, what's the purpose of

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Speaker 1: your money? So I'm gonna leave the purpose out because

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Speaker 1: that's individualized for everybody. It then becomes a job of

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Speaker 1: a wealth manager or someone else in a professional in

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Speaker 1: the business to think about how am I going to

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Speaker 1: manage the risks to get from A to B. So

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Speaker 1: if A is I have let's say two million dollars

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Speaker 1: and I need to have three million and you know,

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Speaker 1: seven years to make my goal whatever it is, how

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Speaker 1: am I going to get there with the least amount

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Speaker 1: of risk possible? Now, the big judgment is what's the

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Speaker 1: return number, And kind of simply put our views that

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Speaker 1: returns are going to be a lot lower than they

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Speaker 1: have been in the past. Past numbers I think is

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Speaker 1: everyone knows from famous studies like if It's in and

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Speaker 1: the like, or equities are more north of nine, ten eleven,

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Speaker 1: depending on what time period you pick. We think it's

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Speaker 1: closer to six um. And that's important because two big

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Speaker 1: things have changed in our view. One is population growth

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Speaker 1: has actually come down quite a bit and is set

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Speaker 1: to decline as unless immigration changes a lot in the

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Speaker 1: United States. And two is productivity growth looks like it's

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Speaker 1: stagnant a bit, so kind of the drivers of economic

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Speaker 1: growth over a long period look like they're a lot

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Speaker 1: lower number one. Number two is we're maxed out in

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Speaker 1: some ways in our view around the margin story. So

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Speaker 1: if you're thinking about the premium you get from equities,

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Speaker 1: it's still good relative to bonds in a low inflation world.

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Speaker 1: But wow, it's not a high nominal number like nine,

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Speaker 1: so it's more like six. But here's the good news.

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Speaker 1: If inflation is like two, six is still better than two. Right,

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Speaker 1: So if if the expectation is coming down for say stocks,

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Speaker 1: and bonds. Are you finding that your clients are more

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Speaker 1: willing to go out on the risk profile, whether it's

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Speaker 1: alternative investments or emerging markets. Are they willing to take

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Speaker 1: on more risk that maybe try to chase that return. Yeah,

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Speaker 1: we have a slightly different view around that. I think

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Speaker 1: a legacy of a lot of the thinking around where

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Speaker 1: demographics as destiny and I have to invest where populations

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Speaker 1: are growing. Lad most people to just run right into

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Speaker 1: emerging markets and I need an allocation or some other

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Speaker 1: kind of Patinko machine fill it out, you know approach.

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Speaker 1: Our view is that there are some structural changes going

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Speaker 1: on in markets that represent meaningful opportunities for clients. Here's

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Speaker 1: two big ones, and then it leads to an answer

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Speaker 1: to your question. The first is there's a lot less

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Speaker 1: public stocks these days. There's about three thousand you can

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Speaker 1: really invest in, and maybe two or three hundred that

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Speaker 1: clients really recognize. A lot of M and A and

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Speaker 1: other things have really brought down the number of opportunities

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Speaker 1: in the U S. It's actually gone up outside the US.

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Speaker 1: But the second big thing that's changed is you've seen,

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Speaker 1: with the cost of money being so low, a collapse

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Speaker 1: are really emerging evaluations between public and private markets. So

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Speaker 1: if you're public companies dominated by machine trading, a lot

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Speaker 1: of private companies well funded now means that those valuation

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Speaker 1: multiples are likely to stay close together and until the

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Speaker 1: meaning a private company might trade it a similar valuation

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Speaker 1: multiple pe or enterprise value to EBA dah. And we

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Speaker 1: see that, and a lot of private folks are saying, well,

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Speaker 1: this is just super expensive, and we get it. Private

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Speaker 1: companies are now more highly rated than they have been

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Speaker 1: in the past. But that makes sense. The cost of money,

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Speaker 1: the cost of financing these companies is now so low,

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Speaker 1: and if there are a fewer public market opportunities, then

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Speaker 1: it looks to us like the private set is actually

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Speaker 1: kind of very interesting. Here's the big trade. I think

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Speaker 1: over the next couple of years there's north of eight

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Speaker 1: trillion in our view of refinancings and the credit market

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Speaker 1: that's likely to happen. And you can't capture that just

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Speaker 1: by buying long fixed income as an example. You've got

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Speaker 1: to do something different. You have to be thinking about

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Speaker 1: long or short or distress debt or some kind of

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Speaker 1: restructuring approach in our view to capture some of those

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Speaker 1: refinancings and restructutions that we think are coming. So that's

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Speaker 1: a private answer. That's where we go. I guess when

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Speaker 1: when we look at the risk part of the pendulum. Though,

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Speaker 1: in response to what you're saying about private markets, a

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Speaker 1: lot of investors are saying this. In fact, you're seeing

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Speaker 1: record amounts of money going into private markets debt and equity,

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Speaker 1: and I'm wondering, at what point, uh, this is all

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Speaker 1: chasing a return earn and ends up having a sad

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Speaker 1: ending in terms of these companies having unsustainable businesses that

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Speaker 1: are being kept afloat by a rush of cash seeking

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Speaker 1: the promise of higher yields. Uh, and somewhere just to

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Speaker 1: sit totally agree that what happens when the cost of

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Speaker 1: money is zero is you're gonna have fund things that

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Speaker 1: should have never been funded in the first and first place,

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Speaker 1: or even yeah, you're gonna keep funding things that should

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Speaker 1: stop being funded. Would be kind of one way to

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Speaker 1: think about it. I guess our perspective is that, you know,

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Speaker 1: the big driver here is interest rates. The cost of

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Speaker 1: money is zero, cost of capitals close to zero. It's

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Speaker 1: very low space. And if you don't have a lot

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Speaker 1: of public market opportunities. The liquefication of the private markets

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Speaker 1: as well underway in the United States. It's going to

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Speaker 1: be very hard to reverse that our judgment, you're I'm sorry,

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Speaker 1: we need like a little ding ding ding. The liquefication

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Speaker 1: of private markets. I love it, go on, carry on,

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Speaker 1: So I like it. I like that. This is great.

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Speaker 1: The rally here is two big things are happening in

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Speaker 1: private markets, and our view one is the growth in

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Speaker 1: things like secondaries. So secondaries are when a firm comes

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Speaker 1: in and buys a limited partnership interest from you. So

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Speaker 1: when you buy a private investment, you're often if you're

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Speaker 1: qualified and meet all the regulations, you have to buy

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Speaker 1: a limited partnership or a limited liability company. You can't

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Speaker 1: really trade it. But trading systems are now being built

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Speaker 1: up as a lot of firms are looking to do

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Speaker 1: with all their extra capital, well maybe I can buy

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Speaker 1: an interest from somebody. You can now get a little

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Speaker 1: bit more liquidity and private markets than you've had in

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Speaker 1: the past. You still pay a price for it, but

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Speaker 1: fifteen years ago was almost zero. Now post two thousand

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Speaker 1: and eight, there's a lot of excess money looking to

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Speaker 1: buy some of these interesting things. I think the second

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Speaker 1: big thing that's happened is that we started to see

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Speaker 1: a greater concentration of private capital in some of the

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Speaker 1: bigger hands. It's much harder, I think for some of

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Speaker 1: the smaller shops to to start up. So bigger pools

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Speaker 1: a capital often means a lot of liquidity goes with that.

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Speaker 1: So our view is that this trend is going to

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Speaker 1: continue for a while. And the real barometer here is

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Speaker 1: just simple interest rates staying low. On the floor of Chairman,

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Speaker 1: Powell said, that's likely to be the case. This trend

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Speaker 1: continues for as long as rates stay very low, the

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Speaker 1: cost of capital stays very low. In our view, as

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Speaker 1: long as the real cost of capital is close to zero,

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Speaker 1: it's going to keep funding these private markets. So Chris,

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Speaker 1: just about twenty seconds, real quick. You every recession in

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Speaker 1: your outlook, we do. We think it's uh, you know,

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Speaker 1: decent probability next year, um, but it's not fifty. It's

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Speaker 1: not overwhelming. So we're in a place where we think

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Speaker 1: the low and slow story is still the central one.

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Speaker 1: Just gonna feel really bumpy. It might feel like a

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Speaker 1: recession in certain parts of the stock market, for example,

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Speaker 1: but bond markets a little over reaction. They're kind of

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Speaker 1: telling you the story that it's really slowing down. At

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Speaker 1: this point, things like optimism are a little bit lagging indicators.

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Speaker 1: Bottom line is we think you can still position well

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Speaker 1: for a low and slow environment, low and slow environment.

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Speaker 1: Chris Wolf, thanks so much for joining us. Chris as

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Speaker 1: a chief investment officer for First Republic Private Wealth Management,

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Speaker 1: joining us here in our Bloomberg Interactive Broker studio. So

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Speaker 1: that's the liquefication of private markets, that's all I can think.

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Speaker 1: It's just great. But honestly, this it's It's true. There

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Speaker 1: is an you know, flood of cash it's gone into

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Speaker 1: private markets, and people are trying to create more of

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Speaker 1: a public overlay for these markets to allow people to

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Speaker 1: get in and out with a similar sort of liquidity

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Speaker 1: as public markets offer. So at what point what's the

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Speaker 1: difference between public and private? I don't know. And we

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Speaker 1: will take a look at reworks and take a look

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Speaker 1: at we Works. Maybe maybe there is a golf there.

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Speaker 1: T MT Tech, Media, telecom. There is a lot going

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Speaker 1: on in the TMT space every day, which is why

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Speaker 1: we're happy to have John Butler here. John covers telecommunication

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Speaker 1: services and equipment for Bloomberg Intelligency joins us here in

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Speaker 1: our Bloomberg Interactive Broker studio and John a lot of

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Speaker 1: stuff going on in your world. Let's start with a

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Speaker 1: T and T. Boy, they have an activist investor in

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Speaker 1: their Elliott Management, pushing for change. What is Elliott Management

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Speaker 1: really looking for? I think in a word, they're looking

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Speaker 1: for divestitures. They're looking for a T and T two

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Speaker 1: get more focused. And if you read their letter, they

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Speaker 1: talk a lot about how A T and T has

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Speaker 1: since they first announced the acquisition, a Time Warner has

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Speaker 1: changed strategy multiple times as the market itself has changed.

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Speaker 1: In fairness to a T and T. But I think

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Speaker 1: Elliott's point is they don't really have a handle on

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Speaker 1: what the strategy is with Time Warner yet. And you know,

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Speaker 1: and again I'll defend A T and T on this one,

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Speaker 1: the linear media market is changing rapidly, and so it's

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Speaker 1: hard for them to really skate to where the puck

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Speaker 1: is going to be, so to speak, if they don't

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Speaker 1: know where it is now. Okay, but even aside from

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Speaker 1: A T and T and Time Warner and whether that

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Speaker 1: tie up was a good idea or how exactly they're

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Speaker 1: controlling that. They're these other businesses to like a home

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Speaker 1: security business, which who knew. Then there's direct TV of course,

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Speaker 1: the Mexican in wireless operation who knew? Uh? And part

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Speaker 1: of its wire line footprints. So basically focus really is

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Speaker 1: the issue here, right that Ellie is trying to bring here.

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Speaker 1: How do they how are they going to identify which assets? So,

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Speaker 1: just to answer your question, A T and T has

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Speaker 1: sort of taken a conglomerate approach to the answer of

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Speaker 1: what do you do as wireless slows and it has

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Speaker 1: been slowing, it's going to continue to slow. It's a

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Speaker 1: commodity market. Do you do what Verizon has done, which

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Speaker 1: is you lay your bets on the next generation of

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Speaker 1: wireless and do that better and try and get some

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Speaker 1: profit out of that. Or do you tap an jacent

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Speaker 1: market or markets for growth, which is what A T

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Speaker 1: and T has chosen to do. Elliott is arguing there's

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Speaker 1: some stuff that A T. T has purchased over the

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Speaker 1: years that should go like the satellite business, direct TV

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Speaker 1: and as you meant in the Mexican wireless operations, which

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Speaker 1: frankly I agree with. I never quite understood what the

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Speaker 1: rational was there. Other than two create a cross border

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Speaker 1: network with an adjacent country. But frankly, I'm not again

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Speaker 1: sure if they know what they're doing in Mexico. It's

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Speaker 1: a very tough market, and that is a commodity market

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Speaker 1: dominated by the low end prepaid business. So I think

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Speaker 1: Elliott is looking at it saying, you know, let's think

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Speaker 1: about lopping that off and lopping off the satellite business

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Speaker 1: in order to become more focused and therefore more profitable.

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Speaker 1: So when you look at the media business, they've spent

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Speaker 1: over a hundred billion dollars buying a direct TV now

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Speaker 1: buying Time Warner. One of the concerns I would have

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Speaker 1: if I were a shareholder is, boy, that's really a

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Speaker 1: people intensive business. I need some creative people and they're

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Speaker 1: really driving the business forward. And what we've observed is

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Speaker 1: a defection of a lot of the senior people from Turner,

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Speaker 1: from HBO, from the studio. How concerning is that to

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Speaker 1: shareholders that you know, really need the content people to

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Speaker 1: drive the business. That is a big concern. And um,

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Speaker 1: you know, I've watched that defection process you were talking about,

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Speaker 1: you know, one after another, um leaving Warner, And so

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Speaker 1: the question becomes can telecom people competently run a media business.

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Speaker 1: You know, you and I were talking before the segment

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Speaker 1: about how different those cultures are. I worked at HBO,

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Speaker 1: and I've I've really seen the difference in cultures between companies.

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Speaker 1: You know, Telecoms are very utility like it's a high

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Speaker 1: fixed cost business. Uh, it's much easier to budget, I think,

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Speaker 1: and media is high variable. The microphone goes on and

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Speaker 1: he just tones it down completely. We were talking about

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Speaker 1: hanging from hanging from the chandeliers at h are a

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Speaker 1: kin drop in the cubicles at A T and T.

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Speaker 1: But it is interesting right now A T and T

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Speaker 1: shares up two point three percent, So clearly there are

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Speaker 1: plenty of people who agree with Elliott's sort of push

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Speaker 1: here now on one thing before we move on. In

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Speaker 1: fairness to A T and T. They have not had

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Speaker 1: a lot of time owning time Warner to make changes,

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Speaker 1: and there always are management affections in the wake of acquisitions,

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Speaker 1: So I think things will settle out from here a bit.

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Speaker 1: All right, Well, we now get to Apple releasing phones,

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Speaker 1: and we have a minute left, so we're gonna give

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Speaker 1: it its due. Should we really care about the new

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Speaker 1: launch of the latest edition of the iPhone in this

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Speaker 1: manufactured holiday that Apple is so good at. Well, we

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Speaker 1: should care in the sense that we're going to get

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Speaker 1: a big camera up upgrade, and smartphones really are now

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Speaker 1: digital cameras with voice capability. In many ways, everything that

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Speaker 1: people are doing on smartphones is video oriented or picture

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Speaker 1: oriented's app Chat, Instagram, FaceTime, etcetera. And so I think

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Speaker 1: a camera upgrade is important, but it's not a big

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Speaker 1: year in terms of a wholesale change in the look

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Speaker 1: and feel of the iPhone like we saw with the

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Speaker 1: iPhone Tan or the iPhone Sex. Sorry, I was just

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Speaker 1: taking a selfie. John Butler, thank you so much for

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Speaker 1: being with us. John Butler, senior Telecom Services and Equipment analyst,

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Speaker 1: joining us here in our bloombergerta active broker studios. He

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Speaker 1: hails from Bloomberg Intelligence. Of course, uh, doing wonderful work there.

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Speaker 1: I love that we left a minute talk about the

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Speaker 1: new iPhone, which basically you should have because honestly, it

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Speaker 1: is really ultimately a camera and cameras are incredibly important,

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Speaker 1: but it's not a huge ce change in the way

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Speaker 1: that we experience the iPhone. Gold is really hot these days,

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Speaker 1: even though I sort of come off. It's high as

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Speaker 1: that we saw in the past few weeks. We have

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Speaker 1: City Group out today saying that they expect the price

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Speaker 1: of one ounce of gold to go to two thousand dollars,

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Speaker 1: a record high, up from a little bit more than

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Speaker 1: four dollars. Currently joining us now not to talk about

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Speaker 1: the price, but to talk about the process of trading gold.

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Speaker 1: I'm so clear pleased to say, is Sequila Mears. She's

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Speaker 1: senior director of the London Bullion Market Association. She's joining

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Speaker 1: us here in our Bloombergada Active Broker Studios. Sequila, let's

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Speaker 1: just start with the trading of gold and precious metals.

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Speaker 1: How do most investors trade these days? I mean, how

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Speaker 1: much are people still trading the physical commodity versus some

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Speaker 1: other sort of derivative. Well, thank you for this opportunity

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Speaker 1: to talk about the pressures metals market. And actually it's

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Speaker 1: quite a time any question, because since November two thou

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Speaker 1: the LBMA has been on a journey whereby we've been

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Speaker 1: collecting data on a voluntary basis from the banks and

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Speaker 1: I actually can tell you the London market currently is

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Speaker 1: trading fifteen billion US dollars worth of gold um, which

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Speaker 1: just gives you an idea in terms of liquidity and

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Speaker 1: how popular this asset class really is. Are you talking

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Speaker 1: about that I have a chunk of gold and I

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Speaker 1: give it to you and we've traded. Are you talking

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Speaker 1: about derivatives or you know, futures contracts? So it's spot,

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Speaker 1: it's options, it's uh, And obviously in terms of the

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Speaker 1: exchange traded party side, it's it's a variety of products

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Speaker 1: making up the gold trading number. Okay, my knowledge of

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Speaker 1: gold and trading is limited, but I do know some

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Speaker 1: a term called the gold fix, the pricing fix, that

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Speaker 1: it's done daily. That's about the extent of it. End.

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Speaker 1: But I read here that it's the anniversary of the

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Speaker 1: price fixing. So a couple of things. One, congratulations, Uh,

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Speaker 1: explain how gold is actually priced, because I don't understand

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Speaker 1: is that priced daily by you guys? Are by banks

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Speaker 1: or by How's that work? Sure? If I may just

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Speaker 1: for to firstly correct the term price fix, it's no

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Speaker 1: longer the price fix, while historically that's exactly what it

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Speaker 1: was referred to. Since two thousand and fourteen we now

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Speaker 1: refer to as a price auction. So it's an auction

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Speaker 1: platform and Basically what's changed over the years is enhanced transparency,

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Speaker 1: independent governance, and actually giving you an electronic platform to

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Speaker 1: allow banks to trade and put in real, live trades.

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Speaker 1: So it is an auction process. What you have are

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Speaker 1: the bias on one side, sellers on the other side,

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Speaker 1: and the intention is for there to be an equilibrium.

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Speaker 1: So you try a price every round, and we're at

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Speaker 1: to specific a point an equilibrium has been reached between

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Speaker 1: the buy side and the cell side, that is the

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Speaker 1: price for that day. So as we talk about the

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Speaker 1: incredible volume of trading in precious metals right now that

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Speaker 1: you've been tracking collecting from banks, there is a question

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Speaker 1: of how much money banks have to hold when they

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Speaker 1: do trade gold, for example, and right now the standard

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Speaker 1: is for them to hold I believe, I believe of

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Speaker 1: the capital required to match the total value of the

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Speaker 1: amount being executed. Is that correct, That's but it's still

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Speaker 1: a very high number because one of the main things

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Speaker 1: that the l b m A has been lobbying against

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Speaker 1: that it's the wrong number for gold. Gold is a

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Speaker 1: liquid asset, as we've just shown and demonstrated through the

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Speaker 1: voluntary trade reporting regime, fifteen billion U s dollars is

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Speaker 1: a lot, So it is a liquid asset. And because

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Speaker 1: it's a liquid asset, there is no need to be

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Speaker 1: holding that much capital to back your balance sheet. Well,

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Speaker 1: how does that compare in terms of the amount of

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Speaker 1: capital the banks are being required to hold for gold

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Speaker 1: versus say, instruments that are recognized as being more liquid. So,

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Speaker 1: I mean gold has been grouped with commodities generally. So

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Speaker 1: what we're trying to explain that gold is, well, it's yes,

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Speaker 1: it behaves like a commodity given that there's a real

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Speaker 1: tangible but it also behaves like a currency. So actually,

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Speaker 1: and we all agree and we all know and understand

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Speaker 1: that currency is a liquid asset class. So what we're

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Speaker 1: trying to explain to the authorities is gold is a

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Speaker 1: unique asset class, specifically because it is a safe haven

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Speaker 1: when there is a crisis, when there is issues in

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Speaker 1: the terms of the currency prices, gold tends to do well,

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Speaker 1: as we are seeing in the recent times. So because

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Speaker 1: of that, we believe that is the wrong number. It

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Speaker 1: should be zero percent um And actually, if the rules

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Speaker 1: go ahead, it could impact that trading and it could

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Speaker 1: impact the banks being in the market within the gold space.

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Speaker 1: So secular just in thirty seconds. What's the counter argument

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Speaker 1: to that? Why are why is the number eight? Well,

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Speaker 1: I mean we're still trying to understand that. Um as

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Speaker 1: far as we're concerned, what we understand is that the

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Speaker 1: authorities saw gold as a commodity put it with the

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Speaker 1: comodities because has been allocated. When we try and understand

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Speaker 1: and ask the rationale behind, we haven't quite been given

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Speaker 1: a clear answer. Is it my guess, is it just

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Speaker 1: something around liquidity? Anythink? No, it's it's it's the idea

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Speaker 1: that there have traditionally been some serious losses incurred on

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Speaker 1: commodity trading desks from time to time, and they're trying

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Speaker 1: to make sure that that it doesn't happen, right, I mean,

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Speaker 1: that's sort of the idea exactly. And I think from

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Speaker 1: our perspective is again to explain that gold isn't just

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Speaker 1: your typical commodity, it's a it's a hybrid between a

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Speaker 1: commodity and for example, the FX markets Secular MERSA thank

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Speaker 1: you so much for joining us. Sequila is executive Board

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Speaker 1: Director in General Council for the London Bullion Market Association.

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Speaker 1: Well billionaires such as Jeff Bezos, Bill Gates and Warren

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Speaker 1: Buffett could have collectively lost hundreds of billions of dollars

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Speaker 1: in net worth over decades. Presidential candidate Elizabeth Warren's wealth

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Speaker 1: tax had been in effect. To get some of the

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Speaker 1: details behind us, we welcome Rich Miller Riches, an economics

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Speaker 1: reporter for Bloomberg News. He's down in Bloomberg studio in Washington,

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Speaker 1: d C. So Rich, thanks for joining us. What's behind

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Speaker 1: the math here? Well, behind the math is is they

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Speaker 1: take a look at what seemingly on its face is

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Speaker 1: a small tax proposed by a senator war and you know,

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Speaker 1: two percent on wealth over fifty million dollars and three

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Speaker 1: percent on wealth over a billion dollars. But thanks to

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Speaker 1: the cumulative you know, the the the impact of compounding, uh,

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Speaker 1: that amounts to a huge amount of money over time.

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Speaker 1: So the top fifteen richest Americans have wealth, according to

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Speaker 1: Forbes magazine in two thousand eighteen, approaching a trillion dollars. Now,

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Speaker 1: if this tax had been in effect since nine two,

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Speaker 1: when Forbes started started UH listing the rich richest Americans,

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Speaker 1: that that wealth would have been reduced to like more

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Speaker 1: than half to two billions. Still a nice piece of change.

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Speaker 1: But it shows you how how big an impact this

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Speaker 1: tax potentially could have. So which angle to this study?

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Speaker 1: Have the angle of look what this could have done

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Speaker 1: decimate the wealth of these individuals who are entrepreneurs in

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Speaker 1: our nation, or is it look at how much money

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Speaker 1: it could have redistributed and sort of evened out the

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Speaker 1: gap between the wealthy and the and the lower the

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Speaker 1: lower income very much the latter. I mean these two economists,

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Speaker 1: Manuel Says and Gabriel Zuckman, they're both at both French economists,

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Speaker 1: but they're both now at the University California at Berkeley.

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Speaker 1: Helped Senator Warren put together her plan, and there the

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Speaker 1: argument is very much why we need this sort of tax,

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Speaker 1: this huge disparity and wealth, and and how we can

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Speaker 1: make it work. So they're trying to make it. I'm

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Speaker 1: I don't want to say that they're trying to make

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Speaker 1: it a bigger number, but there is sort of you know,

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Speaker 1: a gold sort of have this headline number of that

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Speaker 1: that's that sort of hits you over the head. I'm

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Speaker 1: saying this only because I was reading through and struck

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Speaker 1: by the idea that the assumption is that these individuals

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Speaker 1: would take no action to reduce those tax bills. And

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Speaker 1: we know that everyone gets an accountant who has a

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Speaker 1: certain income over a certain point, and they find every

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Speaker 1: loophole and then some well these guys with these guys

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Speaker 1: would probably have ten, ten or twenty accountants, right, the

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Speaker 1: entire accounting firm, right exactly. Now, I agree, it's it's

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Speaker 1: it's it's it's, it's it's they make some assumptions, and

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Speaker 1: but I think, I mean, the point is that this

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Speaker 1: is a debate that the Democrats are having and probably

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Speaker 1: the country is having. You know, what do we do

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Speaker 1: about this huge disparity? Uh? You know, here we have

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Speaker 1: top fifteen people and the country have close to a

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Speaker 1: trillion dollars worth of assets, and we have the top

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Speaker 1: zero point one richest have like twelve trillion dollars. You

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Speaker 1: know what, what if anything, should we do about that?

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Speaker 1: So this, I mean this, this underscores what, you know,

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Speaker 1: how you could try to do something about it, and

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Speaker 1: what impact it would have on on potentially on individuals.

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Speaker 1: And I agree with you that you know, obviously these

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Speaker 1: guys would take all sorts of legal actions to you know,

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Speaker 1: and including like you know, increasing consumption, you buy more votes,

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Speaker 1: right exactly, So Rich. How much support, you know, bipartisan

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Speaker 1: support is there in d C for these types of plans,

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Speaker 1: you know, that really are intended to kind of redistribute

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Speaker 1: wealth across the US. I think well, on the Democratic side,

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Speaker 1: I think you can see you know, from uh, both

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Speaker 1: Bernie Sanders and Elizabeth Warren, you know, two of the

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Speaker 1: top three vote getters according to the polls in among

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Speaker 1: the presidential contending field. You know, they both very much

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Speaker 1: zeroed in on wealth and income inequality and what you

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Speaker 1: know their respective administrations would do if they can't got

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Speaker 1: the presidency to to address it. So at least on

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Speaker 1: the Democratic side, it's it's a it's a it's a

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Speaker 1: it's a pretty big issue. You know, whether it would

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Speaker 1: be addressed through maybe changes in the capital gains tax

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Speaker 1: would be another way you could try to get at that,

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Speaker 1: or you know, changes in the progressivity of the income

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Speaker 1: tax or this wealth tax. You know, I don't think

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Speaker 1: there's any sort of agreement on that, but I think

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Speaker 1: there's at least among the progressives on the Democratic side,

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Speaker 1: where obviously there's a lot of energy um in the

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Speaker 1: primaries pre primaries, you know, there is a lot of

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Speaker 1: focus on this kind of issue. Rich Miller, thank you

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Speaker 1: so much for being with us. Rich Miller is an

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Speaker 1: economics reporter for Bloomberg News, joining us from our night

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Speaker 1: now in studio in Washington, d C. It's a really

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Speaker 1: interesting issue and one that I'm sure we'll be hearing

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Speaker 1: a lot more about as we head into the elections.

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Speaker 1: Thanks for listening to the Bloomberg pen L podcast. You

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00:26:03,240 --> 00:26:05,919
Speaker 1: can subscribe and listen to interviews at Apple Podcasts or

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00:26:05,920 --> 00:26:08,960
Speaker 1: whatever podcast platform you prefer. I'm Paul Sweeney. I'm on

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Speaker 1: Twitter at pt Sweeney. I'm Lisa Abramloyits. I'm on Twitter

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Speaker 1: at Lisa Abramloits. One before the podcast, you can always

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Speaker 1: catch us worldwide. I'm Bloomberg Radio