1 00:00:00,280 --> 00:00:02,559 Speaker 1: This is Bloomberg Wall Street Week. 2 00:00:02,680 --> 00:00:07,040 Speaker 2: The global push into infrastructure, breaking the IPO logjam in text, 3 00:00:07,160 --> 00:00:10,600 Speaker 2: the financial stories that shape our work, Cutting inflation without 4 00:00:10,640 --> 00:00:13,240 Speaker 2: losing jobs. Do we need rate cuts and if so, 5 00:00:13,400 --> 00:00:16,360 Speaker 2: how many? Investing in the time of geopolitical turmoil? Through 6 00:00:16,400 --> 00:00:20,000 Speaker 2: the eyes of the most influential voices. Ten Roguoff Economists 7 00:00:20,000 --> 00:00:24,160 Speaker 2: of Harvard, former FDIC had Shila Beert ge CEO, Larry Kulp, 8 00:00:24,239 --> 00:00:27,680 Speaker 2: San Francisco FED President Mary Daily. Bloomberg Wall Street Week 9 00:00:27,800 --> 00:00:31,880 Speaker 2: with David Weston from Bloomberg Radio One. Trump legal drama 10 00:00:31,960 --> 00:00:34,839 Speaker 2: draws to a close, TikTok's legal drama gets put on 11 00:00:34,880 --> 00:00:38,880 Speaker 2: a fast track, and the wrestling match among inflation rates 12 00:00:38,920 --> 00:00:41,680 Speaker 2: and the markets enters a new round. This is Bloomberg 13 00:00:41,720 --> 00:00:45,880 Speaker 2: Wall Street Week. I'm David Weston. This week Neil Ferguson 14 00:00:45,880 --> 00:00:47,920 Speaker 2: of the Hoover Institution on what it means if we 15 00:00:48,080 --> 00:00:49,040 Speaker 2: run out of people. 16 00:00:49,440 --> 00:00:53,760 Speaker 3: We'll get to the maximum population, probably some way before 17 00:00:54,400 --> 00:00:58,480 Speaker 3: below the ten billion walk and after that population is 18 00:00:58,520 --> 00:00:59,360 Speaker 3: going to decline. 19 00:00:59,480 --> 00:01:01,680 Speaker 1: And I'm pretty seatly. 20 00:01:01,800 --> 00:01:04,800 Speaker 2: And Jennifer Huddleson of the Cato Institute on the legal 21 00:01:04,840 --> 00:01:07,160 Speaker 2: battle over who gets to own TikTok. 22 00:01:07,560 --> 00:01:10,680 Speaker 4: How much intervention would that allow the government to have 23 00:01:10,880 --> 00:01:12,360 Speaker 4: into the social media market? 24 00:01:12,680 --> 00:01:28,120 Speaker 2: More generally, we begin with the markets, and in particular 25 00:01:28,200 --> 00:01:30,880 Speaker 2: the credit markets, which appear to be staring down a 26 00:01:30,920 --> 00:01:33,640 Speaker 2: five hundred basis point FED raid hike without much of 27 00:01:33,640 --> 00:01:34,679 Speaker 2: a hiccup, at least. 28 00:01:34,560 --> 00:01:35,200 Speaker 5: For so far. 29 00:01:35,680 --> 00:01:38,280 Speaker 2: We welcome back now Glenn August. He's founder and CEO 30 00:01:38,280 --> 00:01:41,199 Speaker 2: of ok Kill Advisors, a significant player in the credit market, 31 00:01:41,280 --> 00:01:43,839 Speaker 2: especially when it comes to private and distress credit. So Glenn, 32 00:01:43,840 --> 00:01:46,080 Speaker 2: great to have you back with us about six months 33 00:01:46,120 --> 00:01:49,200 Speaker 2: ago that we were together. Tell me what's happened here. 34 00:01:49,240 --> 00:01:51,520 Speaker 2: How could the credit market stare down as they say 35 00:01:51,520 --> 00:01:53,360 Speaker 2: that five hundred basis points they seem to have just 36 00:01:53,360 --> 00:01:54,200 Speaker 2: absorbed it and go out. 37 00:01:54,200 --> 00:01:58,160 Speaker 6: How about the equity markets? Fifteen percent also true? So look, 38 00:01:58,280 --> 00:02:02,720 Speaker 6: the market SA, the economy is doing better than people expected. 39 00:02:02,840 --> 00:02:07,480 Speaker 6: And the big adjustment has been that inflation hasn't gone away, 40 00:02:08,080 --> 00:02:11,440 Speaker 6: and that reversed the markets expectations of six FED cuts 41 00:02:11,440 --> 00:02:13,840 Speaker 6: down to one one or two this year. And so 42 00:02:13,919 --> 00:02:17,760 Speaker 6: when you have a resilient economy, it's good for equities 43 00:02:17,800 --> 00:02:18,440 Speaker 6: and it's very. 44 00:02:18,280 --> 00:02:19,079 Speaker 5: Good for credit too. 45 00:02:20,040 --> 00:02:22,280 Speaker 2: And when we talked last time, you were talking about 46 00:02:22,280 --> 00:02:24,600 Speaker 2: something like a trillion dollars and that that was going 47 00:02:24,639 --> 00:02:27,240 Speaker 2: to have to be refinanced at a different interest rate 48 00:02:27,280 --> 00:02:28,359 Speaker 2: than we'd seen before. 49 00:02:29,000 --> 00:02:29,840 Speaker 5: What happened to that? 50 00:02:29,960 --> 00:02:32,000 Speaker 2: It doesn't seem to have happened yet. Are they just 51 00:02:32,120 --> 00:02:34,520 Speaker 2: extending the time? Are they fixing it? What's going on? 52 00:02:34,639 --> 00:02:38,919 Speaker 6: So, I'd say the biggest development in the markets has 53 00:02:39,080 --> 00:02:43,600 Speaker 6: been the reopening of the syndicated markets. Again, we as 54 00:02:43,639 --> 00:02:47,720 Speaker 6: a firm do syndicated markets, private credit, stressed and distressed 55 00:02:47,760 --> 00:02:51,640 Speaker 6: and structure credit. And what happened is the cost of 56 00:02:51,720 --> 00:02:55,760 Speaker 6: financing for what's called clos, these clauteralized loan obligations, which 57 00:02:55,760 --> 00:02:58,440 Speaker 6: are the biggest buyers of leverge loans. It's not the 58 00:02:58,520 --> 00:03:01,639 Speaker 6: banks who buy leverage loans, it's the clos that by 59 00:03:01,680 --> 00:03:05,240 Speaker 6: lever zone seventy plus percent. The cost of financing has 60 00:03:05,280 --> 00:03:07,880 Speaker 6: come down fifty basis points in the last six months. 61 00:03:08,520 --> 00:03:10,040 Speaker 5: And with that cost. 62 00:03:09,760 --> 00:03:15,480 Speaker 6: Coming down, and with a positive economic backdrop, there's been 63 00:03:15,680 --> 00:03:19,560 Speaker 6: and with very limited m and a private equity activity, 64 00:03:19,600 --> 00:03:23,080 Speaker 6: you've had demand pickup. Because the clos have low cost 65 00:03:23,080 --> 00:03:26,880 Speaker 6: of capital, you've had limited supply of new deals. And 66 00:03:26,919 --> 00:03:30,880 Speaker 6: guess what happens pricing goes up, spreads come down, and 67 00:03:30,960 --> 00:03:35,000 Speaker 6: you have this very brilliant refinancing market. So there's been 68 00:03:35,000 --> 00:03:39,240 Speaker 6: a lot of refinancings in the syndicated market, principally because 69 00:03:39,280 --> 00:03:40,760 Speaker 6: of clos So we've. 70 00:03:40,600 --> 00:03:43,120 Speaker 5: Taken a dent out of that wall, but there's. 71 00:03:42,920 --> 00:03:45,040 Speaker 6: Still a trillion plus of debt coming doe and that's 72 00:03:45,040 --> 00:03:46,800 Speaker 6: something we're going to have to deal with and something 73 00:03:46,800 --> 00:03:48,000 Speaker 6: that we're quite excited about. 74 00:03:48,200 --> 00:03:50,920 Speaker 2: So more creativity is going on as well. I hear 75 00:03:50,960 --> 00:03:54,680 Speaker 2: things about things like liability management exercises or transaction. I 76 00:03:54,720 --> 00:03:58,080 Speaker 2: hear about payments in kind. Are these ways that creditors 77 00:03:58,120 --> 00:04:01,440 Speaker 2: are finding to really restructure their capital stack so they 78 00:04:01,440 --> 00:04:02,440 Speaker 2: don't have to pay the debt. 79 00:04:02,560 --> 00:04:04,480 Speaker 5: So let's separate the pieces. 80 00:04:04,560 --> 00:04:08,240 Speaker 6: Because pay in kind pick features or something that is 81 00:04:08,760 --> 00:04:10,680 Speaker 6: thirty plus years old, it is. 82 00:04:10,680 --> 00:04:13,280 Speaker 5: Now making a resurgence. I'll come back to that in 83 00:04:13,320 --> 00:04:13,840 Speaker 5: a minute. 84 00:04:14,600 --> 00:04:19,640 Speaker 6: Liability management exercises are essentially when companies have debt coming 85 00:04:19,760 --> 00:04:24,359 Speaker 6: due in twenty twenty five, twenty six, twenty seven, and 86 00:04:24,480 --> 00:04:28,880 Speaker 6: because of some challenges in the business because of higher 87 00:04:28,880 --> 00:04:33,160 Speaker 6: interest costs, there's a sense that maybe they can't refinance 88 00:04:33,600 --> 00:04:36,719 Speaker 6: at par in a couple of years. And the debt 89 00:04:37,000 --> 00:04:39,919 Speaker 6: is trading at discount today. Now again, the distress ratio, 90 00:04:40,320 --> 00:04:42,359 Speaker 6: which is a percentage of the high yal market that 91 00:04:42,440 --> 00:04:46,640 Speaker 6: trades a thousand based points over the ten year treasure 92 00:04:46,680 --> 00:04:47,880 Speaker 6: over the relevant treasure. 93 00:04:47,680 --> 00:04:49,880 Speaker 5: Five year treasury, is only six percent. 94 00:04:49,920 --> 00:04:52,919 Speaker 6: So there's not a lot of stressed and distressed out there, 95 00:04:53,040 --> 00:04:55,880 Speaker 6: but where there is. What companies are doing is the 96 00:04:56,000 --> 00:05:01,240 Speaker 6: so called liability management exercises where they're going to. 97 00:05:00,560 --> 00:05:03,120 Speaker 5: The debt holders and say, hey, we'll. 98 00:05:02,800 --> 00:05:06,120 Speaker 6: Swap you into something that's coming do something that was 99 00:05:06,160 --> 00:05:09,000 Speaker 6: coming to in twenty six and we'll ask you to 100 00:05:09,040 --> 00:05:13,159 Speaker 6: extend your maturity. If the debt might be trading at sixty, 101 00:05:13,200 --> 00:05:14,800 Speaker 6: we'll offer you an eighty cent. 102 00:05:15,080 --> 00:05:17,680 Speaker 5: We'll offer you eighty cents of recovery. 103 00:05:18,120 --> 00:05:21,240 Speaker 6: Is something that people perceive to be money good, so 104 00:05:21,279 --> 00:05:24,200 Speaker 6: they can take their existing paper from sixty to eighty. 105 00:05:24,680 --> 00:05:27,280 Speaker 6: Now they are leaving twenty cents on the table because 106 00:05:27,279 --> 00:05:31,120 Speaker 6: they have a park claim. And so the liability management 107 00:05:31,760 --> 00:05:34,000 Speaker 6: business is a very complex business. 108 00:05:34,240 --> 00:05:35,279 Speaker 5: It's super exciting. 109 00:05:35,320 --> 00:05:38,320 Speaker 6: We're incredibly active in it, and I do believe that 110 00:05:38,520 --> 00:05:42,960 Speaker 6: is the next wave of stressed and distressed credit. On 111 00:05:43,000 --> 00:05:46,320 Speaker 6: the payment and kind or pick features what you're seeing 112 00:05:46,480 --> 00:05:47,960 Speaker 6: is that you. 113 00:05:47,960 --> 00:05:50,400 Speaker 5: Hadn't seen that much pick issuance. 114 00:05:51,080 --> 00:05:53,680 Speaker 6: Where you're now starting to see, and it's emerging in 115 00:05:53,760 --> 00:05:58,000 Speaker 6: private credit, is companies are looking at their businesses and 116 00:05:58,480 --> 00:06:02,320 Speaker 6: they may buy a business for or two billion dollars, 117 00:06:03,680 --> 00:06:06,120 Speaker 6: and it may be a very high growth business, and 118 00:06:06,200 --> 00:06:09,880 Speaker 6: they want to do a billion dollars of debt issuance 119 00:06:10,040 --> 00:06:16,080 Speaker 6: and rather then pay out cash interest, they'd rather have 120 00:06:16,240 --> 00:06:20,760 Speaker 6: the debt a crew in kind. That's not necessarily a 121 00:06:20,920 --> 00:06:24,839 Speaker 6: bad thing, nor is it necessarily a good thing if 122 00:06:24,880 --> 00:06:27,880 Speaker 6: you can if you invest in that company and you 123 00:06:28,000 --> 00:06:30,960 Speaker 6: believe that company is absolutely worth two billion dollars, and 124 00:06:31,000 --> 00:06:33,960 Speaker 6: you're investing, let's make it eight hundred million dollar a billion, 125 00:06:34,400 --> 00:06:37,960 Speaker 6: and you pick on a small portion, you're compounding at 126 00:06:38,000 --> 00:06:40,320 Speaker 6: that rate, which today would be the neighborhood of ten 127 00:06:40,360 --> 00:06:43,400 Speaker 6: to eleven percent, and it gives the company extra cashlow. 128 00:06:43,680 --> 00:06:47,320 Speaker 6: Where pick is a little bit more concerning is where 129 00:06:47,520 --> 00:06:49,960 Speaker 6: companies are more challenged and they don't have the cash 130 00:06:50,279 --> 00:06:53,240 Speaker 6: at all. I think picks and new deals are really 131 00:06:53,240 --> 00:06:57,520 Speaker 6: about financing growth as opposed to remedying more challenge situations. 132 00:06:58,080 --> 00:07:00,000 Speaker 2: So if you look at markets recently, you'd sort of 133 00:07:00,080 --> 00:07:02,600 Speaker 2: conclude they only go one direction. There has to be 134 00:07:02,640 --> 00:07:05,080 Speaker 2: a stop to this. How do you interpret what we're saying. 135 00:07:05,680 --> 00:07:10,600 Speaker 6: Look, there there's the macro, there's the micro. Then there's 136 00:07:10,640 --> 00:07:13,280 Speaker 6: the risks that are out there. And so from a 137 00:07:13,360 --> 00:07:18,080 Speaker 6: macro standpoint, what is clear is that the broader economy 138 00:07:18,200 --> 00:07:23,239 Speaker 6: and corporates have been able to weather this meaningful increase 139 00:07:23,280 --> 00:07:28,320 Speaker 6: in rates. And as I said earlier, the FED decided 140 00:07:28,480 --> 00:07:31,680 Speaker 6: not to cut rates thus far this year because inflation 141 00:07:31,800 --> 00:07:34,280 Speaker 6: is real. And you've heard Kashkari this week and others 142 00:07:34,280 --> 00:07:37,200 Speaker 6: say we've got to see more data. But I think 143 00:07:37,240 --> 00:07:40,280 Speaker 6: that speaks to the resilience of the economy today. Now, 144 00:07:40,800 --> 00:07:44,440 Speaker 6: my own personal view is that what we're benefiting from 145 00:07:44,800 --> 00:07:48,240 Speaker 6: still today is the stimulus of a couple of years ago, 146 00:07:48,800 --> 00:07:52,920 Speaker 6: and that stimulus is working its way through the system, 147 00:07:53,320 --> 00:07:57,760 Speaker 6: and we're also still working through post COVID. I mean again, 148 00:07:57,800 --> 00:08:01,920 Speaker 6: it is certainly this point ye years ago, four years ago, 149 00:08:02,120 --> 00:08:07,800 Speaker 6: this spring, but behaviors have changed, Consumption has changed, and 150 00:08:07,880 --> 00:08:10,720 Speaker 6: so the real question is when do the effects of 151 00:08:10,800 --> 00:08:14,720 Speaker 6: stimulus and changes to consumption change. 152 00:08:15,280 --> 00:08:18,720 Speaker 5: My sense is there is a reasonable chance. 153 00:08:18,560 --> 00:08:22,840 Speaker 6: We start to see some modest slow down in twenty 154 00:08:22,960 --> 00:08:25,920 Speaker 6: twenty five Obviously it's a big political year, so we'll 155 00:08:25,920 --> 00:08:30,440 Speaker 6: see what happens with fiscal policy. But I think for 156 00:08:30,560 --> 00:08:34,800 Speaker 6: the near term we see a reasonably solid economy where 157 00:08:34,840 --> 00:08:38,440 Speaker 6: we see weaknesses on the very low end of the consumer. 158 00:08:38,040 --> 00:08:41,800 Speaker 5: Side, but that's it. 159 00:08:41,920 --> 00:08:44,400 Speaker 6: You see a little bit of delinquencies picking up. And 160 00:08:44,440 --> 00:08:47,600 Speaker 6: so when we look at our portfolio again where credit 161 00:08:47,679 --> 00:08:52,520 Speaker 6: investors not equity investors alot. Our philosophy is to buy 162 00:08:52,559 --> 00:08:54,640 Speaker 6: the company as our mentality is. 163 00:08:55,040 --> 00:08:56,960 Speaker 5: This is all about owning companies. 164 00:08:57,480 --> 00:08:59,760 Speaker 6: But with the amount of cushion we have, again, I 165 00:08:59,760 --> 00:09:03,320 Speaker 6: think we can weather some softening. And again I think 166 00:09:03,360 --> 00:09:04,880 Speaker 6: we were in if you go back to the two 167 00:09:04,920 --> 00:09:08,000 Speaker 6: thousand and eight to two thousand and nine to twenty 168 00:09:08,120 --> 00:09:12,600 Speaker 6: nineteen period, we were able to grow at low growth. 169 00:09:12,280 --> 00:09:13,800 Speaker 5: And low inflation for a long time. 170 00:09:14,160 --> 00:09:17,839 Speaker 6: The question is will some of this wage inflation start 171 00:09:17,920 --> 00:09:22,120 Speaker 6: to temper, Where will our immigration policy be, Where will 172 00:09:22,160 --> 00:09:27,520 Speaker 6: the post COVID mentality on work, Will it revert back 173 00:09:27,600 --> 00:09:29,920 Speaker 6: or will it stay the same. And so it's a 174 00:09:29,960 --> 00:09:33,600 Speaker 6: delicate balancing act. But I think from a macro standpoint. 175 00:09:33,200 --> 00:09:33,720 Speaker 5: We're okay. 176 00:09:34,360 --> 00:09:36,760 Speaker 2: Part of it is the stimulus that was injected for 177 00:09:36,800 --> 00:09:39,079 Speaker 2: the during the Great Financial crisis to get us out 178 00:09:39,080 --> 00:09:40,880 Speaker 2: of that, and then of the pandemic. As you say, 179 00:09:41,080 --> 00:09:43,320 Speaker 2: we've had a series of crises, but how much it 180 00:09:43,360 --> 00:09:45,760 Speaker 2: also is psychological At this point the markets and people 181 00:09:45,800 --> 00:09:48,440 Speaker 2: in the markets basically assume Daddy's going to bail us 182 00:09:48,440 --> 00:09:49,800 Speaker 2: out no matter what happens. 183 00:09:50,080 --> 00:09:53,000 Speaker 6: Well, I don't know if it's Daddy's bailing us out, 184 00:09:53,120 --> 00:09:56,080 Speaker 6: because if you look at it, you know, the COVID 185 00:09:56,679 --> 00:09:59,959 Speaker 6: distress cycle was about two weeks. 186 00:10:00,120 --> 00:10:02,680 Speaker 5: It wasn't even you know, wait, it took six months. 187 00:10:04,360 --> 00:10:08,280 Speaker 6: I think there is if you look at the breadth 188 00:10:08,320 --> 00:10:14,120 Speaker 6: of the market. Clearly NASDAC, anything that has AI has exploded. 189 00:10:14,880 --> 00:10:17,760 Speaker 6: And one of my partners at our recent annual meetings said, 190 00:10:17,960 --> 00:10:20,840 Speaker 6: if credit people are talking about AI, you know it's real. 191 00:10:22,480 --> 00:10:27,040 Speaker 5: But there is definitely a sense that there is. 192 00:10:27,200 --> 00:10:30,800 Speaker 6: We're on the in the earlier stages of an extraordinary 193 00:10:30,840 --> 00:10:33,560 Speaker 6: growth wave where AI and what that does. Now, again, 194 00:10:33,960 --> 00:10:38,920 Speaker 6: there could be ripples to that that could hurt employment. Certainly, 195 00:10:38,920 --> 00:10:41,679 Speaker 6: there's lots of commentary on what it could do longer 196 00:10:41,760 --> 00:10:44,640 Speaker 6: term to unemployment, and maybe there'll there'll be some interesting 197 00:10:44,679 --> 00:10:47,440 Speaker 6: impacts to slowing down inflation at. 198 00:10:47,360 --> 00:10:49,960 Speaker 5: That point in time. So I don't look. 199 00:10:50,120 --> 00:10:55,400 Speaker 6: I look at equities and they certainly their trajectory has 200 00:10:55,400 --> 00:10:59,600 Speaker 6: surprised me, especially given where rates are. But this growth 201 00:10:59,640 --> 00:11:02,560 Speaker 6: trajectory in people's fear of missing out the fomo that's 202 00:11:02,600 --> 00:11:06,719 Speaker 6: in the equity markets. In credit, again, I think spreads 203 00:11:06,760 --> 00:11:09,880 Speaker 6: have come in some but as I commented earlier, when 204 00:11:09,920 --> 00:11:14,160 Speaker 6: you adjust for the quality change, it's actually reasonable. And 205 00:11:14,240 --> 00:11:16,640 Speaker 6: certainly in private credit, when I look at the opportunity 206 00:11:16,679 --> 00:11:20,320 Speaker 6: to make ten plus percent unleveraged in multi billion dollar 207 00:11:20,400 --> 00:11:23,520 Speaker 6: companies at a forty to fifty percent loan to value, 208 00:11:23,559 --> 00:11:26,680 Speaker 6: that feels really good to me. Still, even though spreads 209 00:11:26,880 --> 00:11:28,720 Speaker 6: have come in one hundred basis points. 210 00:11:28,559 --> 00:11:31,079 Speaker 2: We rely on prices to actually indicate where we should 211 00:11:31,080 --> 00:11:34,960 Speaker 2: be investing our capital as individuals, as a society, where's 212 00:11:34,960 --> 00:11:36,800 Speaker 2: the most efficient place you have it? By the way, 213 00:11:36,920 --> 00:11:39,200 Speaker 2: CEO's use it for that purpose as well. Is there 214 00:11:39,240 --> 00:11:42,640 Speaker 2: a danger of undermining the reliability of prices as a 215 00:11:42,640 --> 00:11:45,440 Speaker 2: way of elecating capital when the government's playing in the game. 216 00:11:45,520 --> 00:11:46,720 Speaker 2: The extenuation that's been. 217 00:11:46,720 --> 00:11:50,160 Speaker 6: The government has always played in the game. Again, I 218 00:11:50,280 --> 00:11:53,240 Speaker 6: do think that part of the reason why M and 219 00:11:53,280 --> 00:11:59,640 Speaker 6: A deal activity buyout activity is down forty plus percent 220 00:11:59,720 --> 00:12:01,120 Speaker 6: from a couple of years ago. 221 00:12:01,600 --> 00:12:02,840 Speaker 5: Is because rates are higher. 222 00:12:03,160 --> 00:12:06,640 Speaker 6: I mean the price of money and how one thinks 223 00:12:06,679 --> 00:12:11,760 Speaker 6: about discounting future cash flows is fundamental. And yes, the 224 00:12:11,800 --> 00:12:15,840 Speaker 6: government plays a role in setting the short term rate, 225 00:12:16,360 --> 00:12:19,640 Speaker 6: the markets play the role in setting the medium and 226 00:12:19,720 --> 00:12:20,520 Speaker 6: longer term rates. 227 00:12:20,600 --> 00:12:22,320 Speaker 2: Thank you so much, guys, it's really a delight to 228 00:12:22,360 --> 00:12:22,880 Speaker 2: have you with us. 229 00:12:22,880 --> 00:12:27,880 Speaker 5: Thank you. It's Glenn August of oh Kill Advisors coming up. 230 00:12:28,000 --> 00:12:30,800 Speaker 2: The legal drama surrounding TikTok heated up this week in 231 00:12:30,800 --> 00:12:33,600 Speaker 2: a Washington court. We'll go over the state of play 232 00:12:33,679 --> 00:12:36,440 Speaker 2: with Jennifer Huddleston of the Cato Institute. 233 00:12:37,080 --> 00:12:41,079 Speaker 4: It's still a bit unclear what the primary national security 234 00:12:41,160 --> 00:12:44,240 Speaker 4: claim that proponents of this bill that the government, as 235 00:12:44,240 --> 00:12:46,680 Speaker 4: it's defending it in court, will seek to make. 236 00:12:47,920 --> 00:12:52,360 Speaker 2: That's next on Wall Street Week on Bloomberg and the 237 00:12:52,400 --> 00:12:55,840 Speaker 2: Washington DC Court hearing the case this week, ordered oral 238 00:12:55,920 --> 00:12:59,280 Speaker 2: arguments in September, setting up a possible Supreme Court ruling 239 00:12:59,320 --> 00:13:01,120 Speaker 2: by the end of the year to take us through 240 00:13:01,120 --> 00:13:04,280 Speaker 2: what Congress has said and the challenges to it. Welcome now, 241 00:13:04,360 --> 00:13:09,160 Speaker 2: Jennifer Huddleson, Cato Institute's Senior Fellow in Technology Policy, So, Jennifer, 242 00:13:09,160 --> 00:13:11,240 Speaker 2: thank you so much for joining us. First of all, 243 00:13:11,440 --> 00:13:13,800 Speaker 2: take us into the challenges we understand it. What I've read, 244 00:13:13,840 --> 00:13:16,560 Speaker 2: at least in the coverage is it's principally a First 245 00:13:16,600 --> 00:13:20,840 Speaker 2: Amendment challenge whose First Amendment rights are being really invoked here. 246 00:13:21,920 --> 00:13:23,920 Speaker 4: Thank you so much for having me. As you mentioned, 247 00:13:23,960 --> 00:13:26,040 Speaker 4: what's really at the heart of this debate and at 248 00:13:26,040 --> 00:13:28,000 Speaker 4: the heart of the debate over this law is this 249 00:13:28,120 --> 00:13:31,720 Speaker 4: kind of question of free speech and First Amendment rights 250 00:13:32,120 --> 00:13:36,840 Speaker 4: versus alleged national security concerns. So, as you mentioned, TikTok 251 00:13:36,840 --> 00:13:40,080 Speaker 4: has filed a legal challenge to the divest or ban 252 00:13:40,600 --> 00:13:43,440 Speaker 4: elements that were in the Foreign Aid package where it 253 00:13:43,520 --> 00:13:47,040 Speaker 4: is explicitly named in that portion of the law, and 254 00:13:47,120 --> 00:13:50,240 Speaker 4: part of that challenge is on the First Amendment grounds, 255 00:13:50,520 --> 00:13:52,360 Speaker 4: both as it relates to the app as well as 256 00:13:52,360 --> 00:13:55,520 Speaker 4: as it relates to the app to users. There's also 257 00:13:55,559 --> 00:13:59,199 Speaker 4: a separate challenge brought by a group of TikTok users 258 00:13:59,360 --> 00:14:03,720 Speaker 4: or content creators that is about the user's speech rights, 259 00:14:03,920 --> 00:14:06,520 Speaker 4: separate from some of the other issues that may come 260 00:14:06,600 --> 00:14:08,680 Speaker 4: up in the case involving TikTok itself. 261 00:14:09,240 --> 00:14:11,200 Speaker 2: So, as far as you can tell, Jennifer, looking at 262 00:14:11,280 --> 00:14:14,040 Speaker 2: what Congress did what it said it was doing. Is 263 00:14:14,080 --> 00:14:17,719 Speaker 2: this a matter of concern about what the expression is 264 00:14:17,800 --> 00:14:21,040 Speaker 2: on TikTok or access to the data about who's using TikTok, 265 00:14:21,040 --> 00:14:24,080 Speaker 2: because I've heard both invoked during the discussion in Congress. 266 00:14:24,920 --> 00:14:28,960 Speaker 4: It's still a bit unclear what the primary national security 267 00:14:29,000 --> 00:14:32,120 Speaker 4: claim that proponents of this bill, that the government, as 268 00:14:32,120 --> 00:14:35,000 Speaker 4: it's defending it in court will seek to make, because 269 00:14:35,080 --> 00:14:38,800 Speaker 4: during the debate there have been several different elements expressed. 270 00:14:39,120 --> 00:14:42,960 Speaker 4: Some are about questions with regards to Americans data security, 271 00:14:43,000 --> 00:14:46,280 Speaker 4: which would have one set of potential solutions to weigh 272 00:14:46,320 --> 00:14:50,520 Speaker 4: against a divestor ban. Others are more about TikTok's algorithm 273 00:14:50,520 --> 00:14:53,240 Speaker 4: and the potential that it could be used for some 274 00:14:53,440 --> 00:14:56,600 Speaker 4: form of foreign influence, or even just about the type 275 00:14:56,600 --> 00:14:59,720 Speaker 4: of content that's on TikTok, And in those cases we're 276 00:14:59,720 --> 00:15:04,080 Speaker 4: getting much more to a traditional First Amendment analysis that 277 00:15:04,080 --> 00:15:07,080 Speaker 4: we've seen play out before, a lot of questions about 278 00:15:07,320 --> 00:15:10,040 Speaker 4: content neutrality and whether or not this is a prior 279 00:15:10,120 --> 00:15:13,600 Speaker 4: restraint on the speech of the American users of TikTok. 280 00:15:13,960 --> 00:15:16,240 Speaker 2: Well, as you suggest, I mean, there are different levels 281 00:15:16,240 --> 00:15:19,720 Speaker 2: of scrutiny depending on First moment, whether it's content neutral 282 00:15:19,800 --> 00:15:22,320 Speaker 2: or not. If it's not content neutral, it's a strict 283 00:15:22,320 --> 00:15:27,680 Speaker 2: scrutiny standard. It could national security trump a strict scrutiny standard. 284 00:15:28,840 --> 00:15:31,320 Speaker 4: Based on what we've seen so far, the government will 285 00:15:31,320 --> 00:15:33,640 Speaker 4: have to make a really compelling case that lays out 286 00:15:33,680 --> 00:15:37,920 Speaker 4: a very strong national security argument if that's to be 287 00:15:38,080 --> 00:15:38,880 Speaker 4: something that it's. 288 00:15:38,760 --> 00:15:39,720 Speaker 1: Able to overcome. 289 00:15:40,000 --> 00:15:42,640 Speaker 4: When we look at the case involving the Montana ban 290 00:15:42,760 --> 00:15:45,520 Speaker 4: of TikTok, which was a straight ban as opposed to 291 00:15:45,960 --> 00:15:49,800 Speaker 4: a divestor band bill. At the preliminary injunction stage, what 292 00:15:49,880 --> 00:15:53,160 Speaker 4: the court found was that that particular law would not 293 00:15:53,400 --> 00:15:58,480 Speaker 4: even pass intermediate scrutiny, let alone strict scrutiny. Now that 294 00:15:58,640 --> 00:16:00,800 Speaker 4: was a state level challenge as a post to a 295 00:16:00,840 --> 00:16:03,560 Speaker 4: federal law. It was a flat out ban as opposed 296 00:16:03,600 --> 00:16:06,560 Speaker 4: to a divestor ban. But that's probably the most similar 297 00:16:06,600 --> 00:16:09,840 Speaker 4: case that we've seen in the court so far, which 298 00:16:09,840 --> 00:16:12,400 Speaker 4: would seem to indicate that you would have a lot 299 00:16:12,400 --> 00:16:15,480 Speaker 4: of skepticism and a really strong need to prove any 300 00:16:15,520 --> 00:16:19,040 Speaker 4: case when weighing it against the First Amendment rights involved 301 00:16:19,080 --> 00:16:19,880 Speaker 4: in this scenario. 302 00:16:19,920 --> 00:16:22,080 Speaker 2: I'm glad you raised the Montanic situation that was a 303 00:16:22,160 --> 00:16:24,600 Speaker 2: state of restrictions understands there was also an attempt at 304 00:16:24,640 --> 00:16:27,520 Speaker 2: executive order at the federal level. TikTok so far has 305 00:16:27,560 --> 00:16:30,200 Speaker 2: done all right in these challenges. Does that truck recer 306 00:16:30,280 --> 00:16:32,720 Speaker 2: to indicate anything about how it might fare in the 307 00:16:32,760 --> 00:16:33,480 Speaker 2: DC circuit? 308 00:16:34,440 --> 00:16:36,920 Speaker 4: I think it indicates that we have strong First Amendment 309 00:16:37,000 --> 00:16:40,400 Speaker 4: precedents when it comes to the rights of American users 310 00:16:40,440 --> 00:16:42,680 Speaker 4: of this app. The fact that this would be the 311 00:16:42,720 --> 00:16:46,440 Speaker 4: government potentially for closing a venue for speech that millions 312 00:16:46,480 --> 00:16:49,920 Speaker 4: of Americans have chosen to access when there could be 313 00:16:50,080 --> 00:16:54,760 Speaker 4: less restrictive means to consider if there are national security concerns. 314 00:16:55,120 --> 00:17:00,640 Speaker 4: We've seen, for example, requirements around removing TikTok from government 315 00:17:00,760 --> 00:17:04,080 Speaker 4: devices or government networks, both at a state and a 316 00:17:04,080 --> 00:17:06,960 Speaker 4: federal level, that have seemed to not face the same 317 00:17:06,960 --> 00:17:09,400 Speaker 4: degree of legal scrutiny as something more like a ban 318 00:17:09,960 --> 00:17:13,160 Speaker 4: or divestor ban. There are also other questions around, you know, 319 00:17:13,200 --> 00:17:16,720 Speaker 4: could there be some element of disclosure or mandatory audits 320 00:17:17,000 --> 00:17:19,760 Speaker 4: that would resolve some of these concerns if they're valid, 321 00:17:20,080 --> 00:17:22,880 Speaker 4: short of going to a step that would have such 322 00:17:22,880 --> 00:17:26,440 Speaker 4: an impact on American speech rights as something that could 323 00:17:26,440 --> 00:17:28,720 Speaker 4: potentially take away this venue. 324 00:17:28,480 --> 00:17:31,639 Speaker 2: Jennifer, You're a specialist in technology policy, and I wonder 325 00:17:31,680 --> 00:17:34,200 Speaker 2: what the possible ramifications could be of a decision here 326 00:17:34,240 --> 00:17:38,119 Speaker 2: in the DC Circuit for other regulation of social media companies. 327 00:17:38,320 --> 00:17:40,200 Speaker 2: I mean, for example, if the d C Circuit and 328 00:17:40,200 --> 00:17:43,199 Speaker 2: we're actually just strike this down, might it limit the 329 00:17:43,200 --> 00:17:47,040 Speaker 2: government's ability to have other regulations for other social media outlets. 330 00:17:48,400 --> 00:17:50,960 Speaker 4: I think there's more of a question of what happens 331 00:17:51,000 --> 00:17:55,000 Speaker 4: if the DC Circuit upholds this, how much intervention would 332 00:17:55,080 --> 00:17:58,160 Speaker 4: that allow the government to have into the social media market. 333 00:17:58,400 --> 00:18:02,720 Speaker 4: More generally, While the bill explicitly named TikTok, it also 334 00:18:02,840 --> 00:18:05,520 Speaker 4: opens the door to the government being able to regulate 335 00:18:05,920 --> 00:18:10,560 Speaker 4: other companies that may be seen as having ties to Russia, China, 336 00:18:11,040 --> 00:18:14,320 Speaker 4: North Korea, or Iran. Notably, some other companies that have 337 00:18:14,359 --> 00:18:19,080 Speaker 4: been brought up in this discussion include e commerce platforms 338 00:18:19,119 --> 00:18:22,719 Speaker 4: like Shian and Timu that have been incredibly popular. There 339 00:18:22,720 --> 00:18:25,480 Speaker 4: are also messaging apps and video game apps that may 340 00:18:25,520 --> 00:18:28,760 Speaker 4: have some degree of ties, and it's unclear what do 341 00:18:28,880 --> 00:18:32,720 Speaker 4: process rights a company has or how tenuous those ties 342 00:18:32,760 --> 00:18:36,320 Speaker 4: can be for the government to establish that it falls 343 00:18:36,400 --> 00:18:39,639 Speaker 4: under this kind of element. So while we're seeing a 344 00:18:39,720 --> 00:18:43,439 Speaker 4: broader debate around online speech, both in Congress and in 345 00:18:43,440 --> 00:18:46,720 Speaker 4: the courts, with things like the net choice cases also 346 00:18:46,800 --> 00:18:50,119 Speaker 4: moving forward. I think the more interesting question here is 347 00:18:50,200 --> 00:18:53,280 Speaker 4: how far could this law extend? How much could this 348 00:18:53,320 --> 00:18:57,359 Speaker 4: allow the government to intervene into social media or app 349 00:18:57,359 --> 00:19:01,080 Speaker 4: stores more generally, and into American speed were it to 350 00:19:01,160 --> 00:19:02,119 Speaker 4: fail in the courts. 351 00:19:02,440 --> 00:19:04,520 Speaker 2: Jennifer, thank you so very much for being with us today. 352 00:19:04,520 --> 00:19:09,280 Speaker 2: As Jennifer Huddleson of the Cato Institute, new US tariffs 353 00:19:09,320 --> 00:19:13,359 Speaker 2: on imports from China and Western concerns with Chinese overcapacity 354 00:19:13,600 --> 00:19:17,280 Speaker 2: underscore the fraud relations with the world's second largest economy. 355 00:19:17,480 --> 00:19:20,439 Speaker 2: Neil Ferguson of the Hoover Institution continues to analyze what 356 00:19:20,480 --> 00:19:23,159 Speaker 2: he calls the Second Cold War in a series of 357 00:19:23,200 --> 00:19:26,280 Speaker 2: columns for Bloomberg Opinion. And we're welcoming back now to 358 00:19:26,280 --> 00:19:28,120 Speaker 2: Wall Street Week. Neil, thank you so much for being 359 00:19:28,119 --> 00:19:30,320 Speaker 2: back with us. Let's talk about this second Cold War. 360 00:19:30,600 --> 00:19:32,600 Speaker 2: And I guess a broad question I have is what 361 00:19:32,960 --> 00:19:35,760 Speaker 2: should US policy for no matter Western politici, a US 362 00:19:35,800 --> 00:19:38,920 Speaker 2: policy be towards China in this second Cold War. 363 00:19:39,880 --> 00:19:43,160 Speaker 3: Well, I've been arguing that we're in Cold War two 364 00:19:43,320 --> 00:19:46,840 Speaker 3: since twenty eighteen and at the time when I first 365 00:19:47,280 --> 00:19:49,560 Speaker 3: said it, there was a good deal of skepticism. 366 00:19:49,640 --> 00:19:50,840 Speaker 1: There's a lot less now. 367 00:19:50,920 --> 00:19:53,520 Speaker 3: In fact, there are no books appearing with the title 368 00:19:53,960 --> 00:19:56,400 Speaker 3: Cold War Too. Actually get some royalties out of those. 369 00:19:56,480 --> 00:20:00,240 Speaker 3: But the key point is that in many ways there's 370 00:20:00,280 --> 00:20:03,439 Speaker 3: a big difference between Cold War One, which was with 371 00:20:03,520 --> 00:20:06,800 Speaker 3: the Soviet Union from the late forties to the mid eighties, 372 00:20:07,000 --> 00:20:09,719 Speaker 3: and Cold War Two, which is primarily with the People's 373 00:20:09,760 --> 00:20:13,040 Speaker 3: Republic of China. And the key point is that the 374 00:20:13,160 --> 00:20:16,520 Speaker 3: Chinese economy is much larger in relative terms than the 375 00:20:16,560 --> 00:20:19,480 Speaker 3: Soviet economy ever was. I mean, the Soviets barely got 376 00:20:19,520 --> 00:20:23,919 Speaker 3: to forty two percent of US GDP at peak. The 377 00:20:23,960 --> 00:20:26,520 Speaker 3: second and related point is that we do a hell 378 00:20:26,520 --> 00:20:29,560 Speaker 3: of a lot more trade with China than we ever 379 00:20:29,600 --> 00:20:32,920 Speaker 3: did with the Soviets, and so there is this intertwining 380 00:20:32,960 --> 00:20:35,480 Speaker 3: of the economies that really wasn't a feature of Cold 381 00:20:35,480 --> 00:20:38,240 Speaker 3: War One, and that means that we have to approach 382 00:20:38,600 --> 00:20:42,960 Speaker 3: the challenges of Cold War two somewhat differently, and I think, 383 00:20:43,400 --> 00:20:48,400 Speaker 3: to give them their due, the Biden administration has understood this, 384 00:20:49,119 --> 00:20:53,680 Speaker 3: and they have been pursuing a primarily economic or technological 385 00:20:53,760 --> 00:20:57,600 Speaker 3: containment strategy it's containment as in Cold War One, but 386 00:20:57,720 --> 00:21:01,280 Speaker 3: the emphasis is on the technological rather than the military, 387 00:21:01,280 --> 00:21:04,920 Speaker 3: and I think that's warranted, considering that a military showdown 388 00:21:05,000 --> 00:21:09,200 Speaker 3: with China would be extraordinarily dangerous, and I think, particularly 389 00:21:09,600 --> 00:21:12,520 Speaker 3: at this time, it's to be avoided at all costs. 390 00:21:13,040 --> 00:21:15,920 Speaker 2: Is it possible, neil to have a bifurcated strategy, which 391 00:21:15,960 --> 00:21:18,720 Speaker 2: is containment when it comes to technology, But now they're 392 00:21:18,720 --> 00:21:21,560 Speaker 2: starting to trade. I mean, we had this time about disengagement. 393 00:21:21,600 --> 00:21:23,960 Speaker 2: People backed off of that, and it was this de 394 00:21:24,200 --> 00:21:26,919 Speaker 2: risking right because we have to be involved in so 395 00:21:26,920 --> 00:21:29,680 Speaker 2: any extent. For the reason you said the Soviet Union 396 00:21:29,760 --> 00:21:32,440 Speaker 2: was not that major a player in the global economy. 397 00:21:33,000 --> 00:21:36,959 Speaker 3: I mean, we had to of course restrict technology transfers 398 00:21:37,280 --> 00:21:40,960 Speaker 3: to the Soviet Union if we could, But the sobjects 399 00:21:41,000 --> 00:21:42,560 Speaker 3: were pretty good at. 400 00:21:42,400 --> 00:21:45,719 Speaker 1: Stealing, say the keys to nuclear fission. 401 00:21:46,080 --> 00:21:49,919 Speaker 3: So there was some element of economic or technological containment 402 00:21:50,000 --> 00:21:52,920 Speaker 3: in Cold War One. But I think what's been striking 403 00:21:53,119 --> 00:21:56,640 Speaker 3: about the last decade or so has been the shift. 404 00:21:56,359 --> 00:21:57,520 Speaker 1: In American attitudes. 405 00:21:57,560 --> 00:22:00,760 Speaker 3: If you go back to the late Obama years, there 406 00:22:00,800 --> 00:22:04,600 Speaker 3: was almost an acquiescence in China's rise. The last National 407 00:22:04,600 --> 00:22:10,879 Speaker 3: security strategy of President Obama's second term effectively recognized that 408 00:22:10,920 --> 00:22:14,000 Speaker 3: there was no stopping China's economic rise, and that all 409 00:22:14,080 --> 00:22:18,640 Speaker 3: changed in twenty seventeen when Donald Trump's National Security advisor 410 00:22:18,880 --> 00:22:24,720 Speaker 3: Hrcmaster redrafted the US national security strategy and emphasized that 411 00:22:24,840 --> 00:22:28,679 Speaker 3: China was now a rival, a competitor, and needed to 412 00:22:28,720 --> 00:22:32,400 Speaker 3: be seen as such and treated as such. Trump himself 413 00:22:32,440 --> 00:22:35,240 Speaker 3: favored tariffs as a tool, and I think the tariffs 414 00:22:35,280 --> 00:22:39,359 Speaker 3: that Trump imposed did something to check China's growth that 415 00:22:39,480 --> 00:22:43,199 Speaker 3: they remained highly controversial amongst economists, But what proved to 416 00:22:43,240 --> 00:22:46,920 Speaker 3: be more important were the technological measures that began by 417 00:22:46,960 --> 00:22:50,120 Speaker 3: targeting Huawei, which was on the point of taking. 418 00:22:49,840 --> 00:22:51,719 Speaker 1: Over global five G networks. 419 00:22:52,200 --> 00:22:57,639 Speaker 3: Interestingly, Joe Biden's administration did not radically change tack on China, 420 00:22:57,800 --> 00:23:01,200 Speaker 3: basically took Trump's policies and developed them. They didn't lift 421 00:23:01,200 --> 00:23:05,600 Speaker 3: the tariffs, and on the technology front, the Biden administration 422 00:23:06,000 --> 00:23:10,640 Speaker 3: and under Jake Sullivan's direction, I think, proved even more 423 00:23:10,640 --> 00:23:15,760 Speaker 3: effective at applying technological containment to China, most obviously with 424 00:23:15,840 --> 00:23:17,080 Speaker 3: respect to semiconductors. 425 00:23:17,800 --> 00:23:19,800 Speaker 2: Neil it strikes me as the president she has from 426 00:23:19,800 --> 00:23:22,440 Speaker 2: time to time accused the United States policy of basically 427 00:23:22,440 --> 00:23:26,239 Speaker 2: being to prevent them from growth. As I listened to you, 428 00:23:26,320 --> 00:23:28,679 Speaker 2: it sounds like that actually should be our strategy to 429 00:23:28,720 --> 00:23:31,240 Speaker 2: as much as possible prevent them from further growth. 430 00:23:32,119 --> 00:23:35,280 Speaker 3: Well, I don't think it's quite that, because, if anything, 431 00:23:35,440 --> 00:23:38,760 Speaker 3: it's been presidentcy of his policy it's of somewhat slowed 432 00:23:39,119 --> 00:23:39,879 Speaker 3: China's growth. 433 00:23:39,960 --> 00:23:41,879 Speaker 1: Remember he cracked. 434 00:23:41,480 --> 00:23:43,880 Speaker 3: Down on the real estate sector, He kind of beat 435 00:23:43,960 --> 00:23:47,600 Speaker 3: up on the tech sector, even on the private education sector, 436 00:23:47,600 --> 00:23:48,840 Speaker 3: and all of those things. 437 00:23:48,680 --> 00:23:51,399 Speaker 1: I think have had a negative impact. 438 00:23:50,920 --> 00:23:53,919 Speaker 3: On the private sector in China. It's not that the 439 00:23:54,040 --> 00:23:57,480 Speaker 3: US wants China to stop growing. It's more that the 440 00:23:57,600 --> 00:24:02,159 Speaker 3: US wants to prevent China acquiring technologies that could pose 441 00:24:02,240 --> 00:24:05,280 Speaker 3: a real threat to US national security. And I don't 442 00:24:05,280 --> 00:24:08,959 Speaker 3: think there's any question that artificial intelligence has powerful and 443 00:24:09,000 --> 00:24:14,040 Speaker 3: potentially very dangerous applications in the military domain. So this 444 00:24:14,119 --> 00:24:17,280 Speaker 3: is a technological containment that I would say is intended 445 00:24:17,320 --> 00:24:22,479 Speaker 3: to prevent China establishing parity or even leading the United 446 00:24:22,520 --> 00:24:26,320 Speaker 3: States in areas such as artificial intelligence or for that matter, 447 00:24:26,680 --> 00:24:29,520 Speaker 3: quant and computing. I don't think the US would mind 448 00:24:29,560 --> 00:24:33,800 Speaker 3: at all if China's policymaker has decided to grow Chinese 449 00:24:33,880 --> 00:24:38,240 Speaker 3: domestic consumption and allow Chinese households to enjoy more of 450 00:24:38,280 --> 00:24:41,000 Speaker 3: the fruits of their laborers. But that's not Chinese policy. 451 00:24:41,040 --> 00:24:43,879 Speaker 3: As you know, David, Chinese policy has pivoted in the 452 00:24:43,960 --> 00:24:49,480 Speaker 3: last year towards a new manufacturing export drive that threatens 453 00:24:49,480 --> 00:24:54,280 Speaker 3: to overwhelm the world in electric vehicles, batteries, and solar 454 00:24:54,400 --> 00:24:58,080 Speaker 3: cells that the Chinese can manufacture much more cheaply than 455 00:24:58,119 --> 00:25:02,680 Speaker 3: anybody else. It's not really a policy with which most 456 00:25:02,720 --> 00:25:05,320 Speaker 3: Western policy makers are comfortable it. 457 00:25:06,080 --> 00:25:08,160 Speaker 2: Neil Ferguson will stay with us as we turn from 458 00:25:08,160 --> 00:25:10,760 Speaker 2: problems with China to a problem the world faces with 459 00:25:11,000 --> 00:25:16,200 Speaker 2: China as the global population moves toward its peak. That's 460 00:25:16,280 --> 00:25:21,040 Speaker 2: next on Wall Street Week on Bloomberg. This is Bloomberg 461 00:25:21,119 --> 00:25:31,520 Speaker 2: Wall Street Week with David Weston from Bloomberg Radio. This 462 00:25:31,600 --> 00:25:33,840 Speaker 2: is Wall Street Week. I'm David Western. Neil Ferguson of 463 00:25:33,840 --> 00:25:36,480 Speaker 2: the Hoover Institution has remained with us. Neil, you wrote 464 00:25:36,520 --> 00:25:39,879 Speaker 2: a short while ago a piece for Bloomberg Opinion on 465 00:25:40,040 --> 00:25:43,280 Speaker 2: the peaking of the global population and the consequence of that. 466 00:25:43,520 --> 00:25:45,640 Speaker 2: I have heard from various people in and around Wall 467 00:25:45,640 --> 00:25:48,480 Speaker 2: Street that that has been a very influential piece. People 468 00:25:48,520 --> 00:25:48,960 Speaker 2: are very. 469 00:25:48,840 --> 00:25:50,320 Speaker 1: Concerned about that over the long run. 470 00:25:50,440 --> 00:25:52,159 Speaker 2: First of all, give us the facts of where we 471 00:25:52,160 --> 00:25:54,240 Speaker 2: think we are now, where we're headed in terms of 472 00:25:54,240 --> 00:25:55,080 Speaker 2: population growth. 473 00:25:55,480 --> 00:25:58,359 Speaker 3: Well, David, when you and I were young, the world 474 00:25:58,480 --> 00:26:01,639 Speaker 3: worried about a population bomb. There was going to be 475 00:26:01,680 --> 00:26:06,240 Speaker 3: a Malthusian crisis, named after the great eighteenth century political 476 00:26:06,280 --> 00:26:09,760 Speaker 3: economist Thomas Malthus, where overpopulation would. 477 00:26:09,600 --> 00:26:12,080 Speaker 1: Lead to famine and disaster. 478 00:26:12,240 --> 00:26:14,960 Speaker 3: And it was those ideas back in the sixties and 479 00:26:14,960 --> 00:26:18,320 Speaker 3: seventies that led to some pretty drastic population policies, not 480 00:26:18,480 --> 00:26:21,920 Speaker 3: least the one child policy in China. Well, fast forward 481 00:26:22,000 --> 00:26:24,560 Speaker 3: to the twenty twenties and it turns out that the 482 00:26:24,640 --> 00:26:28,840 Speaker 3: law of unintended consequences has struck again, and we now 483 00:26:28,960 --> 00:26:34,280 Speaker 3: are facing significant population declines, not only in Asian countries 484 00:26:34,359 --> 00:26:38,199 Speaker 3: that drastically reduced family size, but right across the globe 485 00:26:38,359 --> 00:26:39,840 Speaker 3: except in Africa. 486 00:26:40,280 --> 00:26:41,600 Speaker 1: And it looks as if. 487 00:26:41,480 --> 00:26:46,320 Speaker 3: Although you can debate the exact timing, humanity will peak 488 00:26:46,600 --> 00:26:50,320 Speaker 3: in the twenty sixties, we'll get to the maximum population, 489 00:26:50,680 --> 00:26:54,679 Speaker 3: probably some way before below the ten billion mark, and 490 00:26:54,760 --> 00:26:59,840 Speaker 3: after that population is going to decline and decline pretty steeply. 491 00:27:00,560 --> 00:27:03,080 Speaker 3: This is most easy to illustrate with the case of China, 492 00:27:03,119 --> 00:27:07,240 Speaker 3: where the population is forecast to decline by half by 493 00:27:07,320 --> 00:27:09,720 Speaker 3: fifty percent between now and the end of the century. 494 00:27:09,760 --> 00:27:12,639 Speaker 3: But it's not just a Chinese story. Ultimately, it's a 495 00:27:12,680 --> 00:27:15,280 Speaker 3: global story. And this is one of these trends that 496 00:27:15,320 --> 00:27:18,359 Speaker 3: I think most people haven't fully grasped because there's just 497 00:27:18,400 --> 00:27:20,800 Speaker 3: a little bit out of the average person's planning horizon 498 00:27:20,840 --> 00:27:21,720 Speaker 3: the twenty sixties. 499 00:27:22,119 --> 00:27:23,240 Speaker 5: So what happened. 500 00:27:23,480 --> 00:27:25,600 Speaker 2: Why is it that we have, in fact, the fertility's 501 00:27:25,680 --> 00:27:27,919 Speaker 2: going down the way they are in so many countries 502 00:27:27,960 --> 00:27:28,920 Speaker 2: around the world. 503 00:27:29,359 --> 00:27:32,679 Speaker 3: Well, that's not the easiest question I've been asked today, 504 00:27:32,840 --> 00:27:38,080 Speaker 3: because explaining why in all kinds of different contexts, couples 505 00:27:38,119 --> 00:27:41,160 Speaker 3: have chosen to reduce the number of children that they 506 00:27:41,240 --> 00:27:45,280 Speaker 3: have below the replacement rate. Now, it's typically said that 507 00:27:45,440 --> 00:27:48,760 Speaker 3: the average couple has to have two point one children. Yes, 508 00:27:48,800 --> 00:27:50,399 Speaker 3: I know there's no such thing as point one of 509 00:27:50,480 --> 00:27:56,719 Speaker 3: a child, but just above two for us to maintain population, 510 00:27:57,040 --> 00:28:01,560 Speaker 3: because obviously there are some people who die prematurely, perhaps 511 00:28:01,640 --> 00:28:04,680 Speaker 3: even in childhood. So the replacement rates two point one 512 00:28:04,760 --> 00:28:08,159 Speaker 3: per couple, But all over the world, couples have taken 513 00:28:08,200 --> 00:28:12,679 Speaker 3: that number down below to Indeed, in countries like South Korea, 514 00:28:13,359 --> 00:28:16,919 Speaker 3: the fertility rate is below one on average, and so 515 00:28:17,000 --> 00:28:20,280 Speaker 3: the one child family has become pretty much the norm 516 00:28:21,200 --> 00:28:24,960 Speaker 3: in East Asia and it's rapidly spreading around the world. 517 00:28:26,040 --> 00:28:29,240 Speaker 3: Population in the United States has continued to grow only 518 00:28:29,280 --> 00:28:32,960 Speaker 3: because of immigration. It's not because of natural increase, because 519 00:28:33,280 --> 00:28:37,040 Speaker 3: in the United States, as in most western countries, the 520 00:28:37,119 --> 00:28:43,400 Speaker 3: average fertility rate fell some time ago below two point one. 521 00:28:43,720 --> 00:28:46,200 Speaker 3: Now why is that, I mean, there are all kinds 522 00:28:46,240 --> 00:28:50,200 Speaker 3: of explanations that you can advance. Maybe the attitudes of 523 00:28:50,520 --> 00:28:53,760 Speaker 3: women change to family size because women began to pursue 524 00:28:54,400 --> 00:28:56,440 Speaker 3: more ambitious careers. 525 00:28:56,440 --> 00:28:58,080 Speaker 1: In the wake of feminism. 526 00:28:58,560 --> 00:29:01,320 Speaker 3: Or maybe it's just that as society has become more 527 00:29:01,320 --> 00:29:05,600 Speaker 3: economically advanced, people decide to spend their resources not on 528 00:29:05,640 --> 00:29:09,560 Speaker 3: having more children, but on having more vacations, are acquiring 529 00:29:09,640 --> 00:29:12,920 Speaker 3: yachts and McMansions. There are a bunch of different explanations 530 00:29:13,160 --> 00:29:15,800 Speaker 3: at work here. I was drilling down into the South 531 00:29:15,840 --> 00:29:18,240 Speaker 3: Korean case, and the answer that I got from the 532 00:29:18,280 --> 00:29:20,680 Speaker 3: South Koreans I talked to was, well, it's just so 533 00:29:20,760 --> 00:29:24,760 Speaker 3: expensive to raise kids and soul these days. We spend 534 00:29:24,800 --> 00:29:27,600 Speaker 3: a fortune on educating our one kid. We just can't 535 00:29:27,640 --> 00:29:30,280 Speaker 3: imagine doing it for two. And you know, you have 536 00:29:30,360 --> 00:29:34,000 Speaker 3: to ask yourself what the rationale is for a society 537 00:29:34,120 --> 00:29:38,480 Speaker 3: that invests so heavily in education that the fertility rate 538 00:29:38,560 --> 00:29:41,000 Speaker 3: falls to below one. I mean, that's a society that's 539 00:29:41,040 --> 00:29:43,920 Speaker 3: going to be very highly educated until it goes extinct, 540 00:29:44,200 --> 00:29:46,959 Speaker 3: which happens, you know, pretty quickly. If you reduce your 541 00:29:47,880 --> 00:29:50,280 Speaker 3: fertility rate down to point five or point six. 542 00:29:50,680 --> 00:29:53,240 Speaker 2: It begs the question of quite if anything governments, through 543 00:29:53,280 --> 00:29:55,320 Speaker 2: their policies can do to affect this. Obviously, we have 544 00:29:55,360 --> 00:29:57,160 Speaker 2: the one child policy in China and they're trying to 545 00:29:57,440 --> 00:30:00,280 Speaker 2: change that. Not so easy, but we hear f in 546 00:30:00,320 --> 00:30:02,920 Speaker 2: the United States. So the suggestions that things are like 547 00:30:03,040 --> 00:30:08,080 Speaker 2: child tax credits, subsidizing working more and flexible may in 548 00:30:08,120 --> 00:30:10,520 Speaker 2: fact encourage more vertus. Do we have any evidence to 549 00:30:10,600 --> 00:30:12,320 Speaker 2: effect those things might be effective? 550 00:30:12,640 --> 00:30:13,720 Speaker 1: Pretty much none. 551 00:30:13,920 --> 00:30:16,400 Speaker 3: I mean, governments have been trying to do this since 552 00:30:16,760 --> 00:30:19,720 Speaker 3: nearly one hundred years ago. Was Mussolini when he was 553 00:30:19,760 --> 00:30:22,600 Speaker 3: the Italian dictator who talks about a battle for births 554 00:30:22,960 --> 00:30:27,160 Speaker 3: and all kinds of incentives were created by the tatalitarian 555 00:30:27,240 --> 00:30:30,720 Speaker 3: regimes of the mid twentieth century to increase the birth rate. 556 00:30:30,800 --> 00:30:31,760 Speaker 1: None of it works. 557 00:30:31,920 --> 00:30:34,000 Speaker 3: It would seem that once people have got down to 558 00:30:34,080 --> 00:30:36,800 Speaker 3: two children, it's extremely hard to get them back up 559 00:30:36,840 --> 00:30:38,760 Speaker 3: to three. When they're down to one, it's hard to 560 00:30:38,760 --> 00:30:40,880 Speaker 3: get them back up to two. So I think it's 561 00:30:41,000 --> 00:30:44,400 Speaker 3: very hard to find any evidence of a successful economic 562 00:30:44,480 --> 00:30:49,280 Speaker 3: policy that changes the decision making that couples make about 563 00:30:49,320 --> 00:30:50,040 Speaker 3: family size. 564 00:30:50,080 --> 00:30:50,959 Speaker 1: And this is a big problem. 565 00:30:51,000 --> 00:30:54,440 Speaker 3: If you're cejenping and you're staring at this dramatic decline 566 00:30:54,440 --> 00:30:57,000 Speaker 3: in population, it's already begun. I mean, the workforce is 567 00:30:57,040 --> 00:31:00,400 Speaker 3: already shrinking. And so the one child policy, which was 568 00:31:00,680 --> 00:31:03,800 Speaker 3: one of the more dramatic interventions the Chinese Communist Party 569 00:31:03,840 --> 00:31:06,960 Speaker 3: did back in the days of Dungsilpeng, has been replaced 570 00:31:06,960 --> 00:31:09,280 Speaker 3: by a three child policy. But I can assure you 571 00:31:09,320 --> 00:31:12,240 Speaker 3: the number of Chinese couples I know who are planning 572 00:31:12,480 --> 00:31:16,240 Speaker 3: to have three children is tiny, and it's highly unlikely 573 00:31:16,280 --> 00:31:19,120 Speaker 3: in my view, that China will be able to increase 574 00:31:19,200 --> 00:31:22,160 Speaker 3: the fertility rate back above two. 575 00:31:23,200 --> 00:31:25,800 Speaker 1: If you assume that the fertility rate stays. 576 00:31:25,480 --> 00:31:27,920 Speaker 3: Where it is in a country like China, then actually 577 00:31:27,960 --> 00:31:31,800 Speaker 3: the population will fall even faster than fifty percent between 578 00:31:31,840 --> 00:31:33,120 Speaker 3: now and the end of the century. 579 00:31:33,480 --> 00:31:35,200 Speaker 1: And the thing that's really striking, David. 580 00:31:35,120 --> 00:31:38,240 Speaker 3: Is if you look beyond twenty one hundred into the 581 00:31:38,280 --> 00:31:42,680 Speaker 3: next century, what's really amazing to me is how quickly 582 00:31:42,840 --> 00:31:45,320 Speaker 3: global population could decline. 583 00:31:45,480 --> 00:31:49,720 Speaker 1: We shot off from two billion back in the early. 584 00:31:49,520 --> 00:31:53,640 Speaker 3: Nineteen twenties to where we are today with astonishing speed, 585 00:31:53,680 --> 00:31:56,360 Speaker 3: and indeed the last hundred years was one of those 586 00:31:56,400 --> 00:32:00,320 Speaker 3: periods of population explosion. You can see why people in 587 00:32:00,360 --> 00:32:02,720 Speaker 3: the nineteen seventies started to panic about it. 588 00:32:03,000 --> 00:32:03,600 Speaker 1: We'll get this. 589 00:32:03,760 --> 00:32:06,680 Speaker 3: If you fix that from them so much that fertility 590 00:32:06,720 --> 00:32:10,160 Speaker 3: falls well below the replacement rate, then the population of 591 00:32:10,200 --> 00:32:13,000 Speaker 3: the world could fall with almost comparable speed. 592 00:32:13,640 --> 00:32:16,240 Speaker 1: Certainly, between there and the end of the century, nearly 593 00:32:16,400 --> 00:32:19,040 Speaker 1: all the increase in population in the world is going to. 594 00:32:18,960 --> 00:32:22,160 Speaker 3: Come from Sub Saharan Africa, and after they bring their 595 00:32:22,200 --> 00:32:25,240 Speaker 3: family size down, which is highly likely they will, there 596 00:32:25,280 --> 00:32:28,640 Speaker 3: just won't be any sources of additional population, and that 597 00:32:28,680 --> 00:32:32,120 Speaker 3: means the immigration option will no longer really be available for. 598 00:32:32,120 --> 00:32:33,960 Speaker 1: Countries that want to continue to grow. 599 00:32:34,600 --> 00:32:37,200 Speaker 2: What does this mean for immigration policy in places like 600 00:32:37,240 --> 00:32:39,240 Speaker 2: the United States and other Western countries. 601 00:32:39,320 --> 00:32:42,240 Speaker 3: Well, it's relatively easy if you can just get the 602 00:32:42,280 --> 00:32:46,520 Speaker 3: politics rise because there's obviously a competition for talent in 603 00:32:46,560 --> 00:32:50,360 Speaker 3: the world, and the talent that's in relatively poor, relatively 604 00:32:50,440 --> 00:32:54,240 Speaker 3: crowded countries wants and you can tell there's from opinion 605 00:32:54,280 --> 00:32:56,240 Speaker 3: polls to come to the United States and if it 606 00:32:56,320 --> 00:32:59,040 Speaker 3: can't make it to the United States, to Western. 607 00:32:58,680 --> 00:32:59,720 Speaker 1: Europe or the UK. 608 00:33:00,560 --> 00:33:03,400 Speaker 3: But the United States has taken the rather odd decision 609 00:33:03,480 --> 00:33:07,040 Speaker 3: to make it really difficult to migrate to the United 610 00:33:07,120 --> 00:33:10,080 Speaker 3: States legally. I mean, all the kind of legal channels 611 00:33:10,120 --> 00:33:12,440 Speaker 3: are more or less blocked at the moment or extremely 612 00:33:12,480 --> 00:33:15,160 Speaker 3: hard to navigate, and so we've ended up with this 613 00:33:15,240 --> 00:33:20,200 Speaker 3: curious strategy of allowing illegal immigration across the southern border, 614 00:33:20,240 --> 00:33:22,160 Speaker 3: which is now pretty much. 615 00:33:22,960 --> 00:33:24,080 Speaker 1: A scene of chaos. 616 00:33:25,160 --> 00:33:27,680 Speaker 3: The Canadians must be looking at this with a smile, 617 00:33:27,800 --> 00:33:32,320 Speaker 3: because their immigration policy is much more targeted on attracting 618 00:33:32,400 --> 00:33:36,240 Speaker 3: talent and making sure that the immigrants are likely to 619 00:33:36,360 --> 00:33:39,800 Speaker 3: add to economic growth and not to be a cost 620 00:33:40,400 --> 00:33:44,720 Speaker 3: of some kind. So I think for Western countries there's 621 00:33:44,760 --> 00:33:49,280 Speaker 3: an obvious argument for immigration reform that aims at attracting 622 00:33:49,680 --> 00:33:52,360 Speaker 3: the right kind of people with the right kind of 623 00:33:52,400 --> 00:33:55,440 Speaker 3: talents and doing it through legal channels rather than just 624 00:33:55,480 --> 00:33:58,600 Speaker 3: having a free for all on your border. 625 00:34:00,200 --> 00:34:01,440 Speaker 1: That's the critical issue. 626 00:34:01,520 --> 00:34:04,120 Speaker 3: But we have to understand that this is not something 627 00:34:04,320 --> 00:34:07,840 Speaker 3: a gift if you like that will keep on giving indefinitely. 628 00:34:08,520 --> 00:34:13,040 Speaker 3: Sometime around the twenty sixties, the supply of immigrants, of 629 00:34:13,120 --> 00:34:16,120 Speaker 3: potential immigrants, is going to look like it's declining, and 630 00:34:16,160 --> 00:34:19,759 Speaker 3: I think they'll become an increasingly heated competition for the 631 00:34:19,800 --> 00:34:24,520 Speaker 3: people with the talent, the entrepreneurship between countries that still 632 00:34:24,719 --> 00:34:26,080 Speaker 3: want to attract immigrants. 633 00:34:26,320 --> 00:34:28,120 Speaker 1: Remember, not everybody wants to do this. 634 00:34:28,480 --> 00:34:31,680 Speaker 3: China does not have a policy of attracting immigrants, so 635 00:34:31,840 --> 00:34:34,920 Speaker 3: relatively few, if any, people choose to migrate to the 636 00:34:34,920 --> 00:34:36,400 Speaker 3: People's Republic of China. 637 00:34:36,520 --> 00:34:36,960 Speaker 1: So what are the. 638 00:34:36,960 --> 00:34:39,759 Speaker 3: Chinese going to do if they don't do immigration and 639 00:34:39,800 --> 00:34:43,160 Speaker 3: their population is heading towards dramatic contraction. 640 00:34:43,640 --> 00:34:46,239 Speaker 1: The answer may be robots. And Neil, thank you so much. 641 00:34:46,360 --> 00:34:48,640 Speaker 2: Is a really important issue. Really thank you for bringing 642 00:34:48,680 --> 00:34:51,640 Speaker 2: it to us. As Neil Ferguson of the Hoover Institution 643 00:34:52,640 --> 00:34:55,840 Speaker 2: the question statesman in Diplomat Auto von Bismarck said that 644 00:34:55,920 --> 00:34:58,960 Speaker 2: people never lie so much as after a hunt, during 645 00:34:58,960 --> 00:35:01,799 Speaker 2: a war or before an election. We're going to put 646 00:35:01,840 --> 00:35:04,720 Speaker 2: Prince von Bismarck's epigram to the test, and a series 647 00:35:04,760 --> 00:35:07,040 Speaker 2: of elections over the next month or so in different 648 00:35:07,080 --> 00:35:10,799 Speaker 2: places and in different contexts all around the world. First off, 649 00:35:10,920 --> 00:35:13,880 Speaker 2: Exxon Mobil held its annual general meeting this week in 650 00:35:13,880 --> 00:35:16,880 Speaker 2: a fight with some shareholders over a proposal to speed 651 00:35:16,960 --> 00:35:19,920 Speaker 2: up the move towards zero emissions. The company didn't just 652 00:35:19,960 --> 00:35:23,520 Speaker 2: oppose the request, it sued the activist shareholders behind it, 653 00:35:23,600 --> 00:35:26,320 Speaker 2: saying it was a governance issue, not really about climate. 654 00:35:26,400 --> 00:35:30,000 Speaker 2: But some big shareholders like Kelper's sided with the activists. 655 00:35:30,320 --> 00:35:32,400 Speaker 1: It was obvious we were not going to reach agreement 656 00:35:32,440 --> 00:35:34,960 Speaker 1: on this litigation. It's an absolute governance failure by the 657 00:35:35,000 --> 00:35:37,360 Speaker 1: Exon board, which is why our vote is against the 658 00:35:37,480 --> 00:35:40,000 Speaker 1: entire board, including the CEO, Darren Woods. 659 00:35:40,239 --> 00:35:43,040 Speaker 2: In the end, the board won reelection and things went 660 00:35:43,080 --> 00:35:45,880 Speaker 2: on as usual, at least for now. We're about to 661 00:35:45,880 --> 00:35:48,160 Speaker 2: have another election in the corporate world, but this one 662 00:35:48,239 --> 00:35:50,920 Speaker 2: isn't so much about climate for the planet as it 663 00:35:50,960 --> 00:35:54,360 Speaker 2: is for Elon Musk's personal ecosphere. As he puts before 664 00:35:54,400 --> 00:35:57,520 Speaker 2: Tesla shareholders next month, his request for a forty six 665 00:35:57,640 --> 00:36:01,080 Speaker 2: billion dollar pay day, refusing to accept the no answer 666 00:36:01,160 --> 00:36:03,680 Speaker 2: that's already come from the Delaware Chancery Court. 667 00:36:03,840 --> 00:36:08,080 Speaker 7: Did he accomplish really incredible things that were sort of 668 00:36:08,120 --> 00:36:11,239 Speaker 7: laid out in this pay package and this award? Absolutely, 669 00:36:11,840 --> 00:36:14,280 Speaker 7: but has he really sort of shot himself in the foot? 670 00:36:14,360 --> 00:36:16,680 Speaker 2: In the political world, we moved closer to a final 671 00:36:16,719 --> 00:36:19,880 Speaker 2: result in the lengthy India elections, with a final answer 672 00:36:19,960 --> 00:36:22,839 Speaker 2: due on June four. As things have played out over 673 00:36:22,880 --> 00:36:25,759 Speaker 2: the last month, Prime Minister Modi's apparent lock on an 674 00:36:25,840 --> 00:36:29,600 Speaker 2: historic win looks ever so slightly less certain, and surprisingly, 675 00:36:29,719 --> 00:36:32,640 Speaker 2: although temperatures during the election have reached toward one hundred 676 00:36:32,640 --> 00:36:36,320 Speaker 2: and twenty two degrees fahrenheit, climate issues have been conspicuously 677 00:36:36,360 --> 00:36:39,319 Speaker 2: absent in the campaigning. Instead, it's been much more about 678 00:36:39,320 --> 00:36:41,919 Speaker 2: the economy, and the former head of India's Central Bank 679 00:36:41,960 --> 00:36:45,319 Speaker 2: says economic policy likely won't change much no matter what 680 00:36:45,440 --> 00:36:46,040 Speaker 2: the outcome. 681 00:36:46,239 --> 00:36:49,839 Speaker 6: What if a government comes in will take a lot 682 00:36:49,920 --> 00:36:52,319 Speaker 6: of the good stuff that's been done and continue it. 683 00:36:52,680 --> 00:36:55,239 Speaker 2: In the meantime, we have two notable elections coming up 684 00:36:55,280 --> 00:36:58,200 Speaker 2: where there are only women on the ticket. In Tokyo 685 00:36:58,320 --> 00:37:01,480 Speaker 2: this July, a prominent female opposition leader will challenge the 686 00:37:01,520 --> 00:37:05,000 Speaker 2: female incumbent mayor in one of the highest profile positions 687 00:37:05,000 --> 00:37:08,960 Speaker 2: in Japanese politics, and of course, on Sunday, Mexico will 688 00:37:08,960 --> 00:37:11,799 Speaker 2: hold it to national elections where an estimated ninety eight 689 00:37:11,880 --> 00:37:15,000 Speaker 2: million people are expected to vote. Their choice will be 690 00:37:15,040 --> 00:37:19,360 Speaker 2: between a former climate scientist, Claudia Schinbaum and opposition candidate 691 00:37:19,440 --> 00:37:23,160 Speaker 2: so Chill Gomez. Climate will be very much on the ballot, 692 00:37:23,480 --> 00:37:27,120 Speaker 2: quite apart from Miss Shinebam background, as Mexico City tied 693 00:37:27,239 --> 00:37:31,000 Speaker 2: heat records throughout last weekend and both candidates promised to 694 00:37:31,080 --> 00:37:32,799 Speaker 2: make climate a priority. 695 00:37:33,239 --> 00:37:36,280 Speaker 8: Either way, we're getting a woman for the first time 696 00:37:36,480 --> 00:37:41,720 Speaker 8: as the president of Mexico, both of them pro business listeners, 697 00:37:42,120 --> 00:37:45,680 Speaker 8: touching their communities and really caring about their constituents at 698 00:37:45,719 --> 00:37:46,400 Speaker 8: all levels. 699 00:37:46,640 --> 00:37:47,560 Speaker 5: For the sake of the planet. 700 00:37:47,600 --> 00:37:50,439 Speaker 2: We can hope that von Bismarck's wrong and that they're 701 00:37:50,440 --> 00:37:52,080 Speaker 2: telling us the truth this election. 702 00:37:52,360 --> 00:37:55,440 Speaker 1: I'm going to do something really outrageous. I'm going to 703 00:37:55,480 --> 00:37:56,359 Speaker 1: tell the truth. 704 00:37:56,920 --> 00:37:57,320 Speaker 5: That does it. 705 00:37:57,400 --> 00:37:59,640 Speaker 2: For this episode of Wall Street Week, I'm David Weston. 706 00:37:59,719 --> 00:38:00,759 Speaker 2: This is Bloomberg. 707 00:38:00,880 --> 00:38:01,640 Speaker 1: See you next week.