Speaker 1: Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane.
Speaker 1: Daily we bring you insight from the best in economics, finance, investment,
Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,
Speaker 1: Bloomberg dot Com, and of course, on the Bloomberg. We
Speaker 1: begin bloom Bag Surveillance with the President's State of the
Speaker 1: Union address, where Donald Trump sought to connect his presidency
Speaker 1: to the nation's prosperity. The state of our Union is
Speaker 1: strong because our people are strong. This, in fact, is
Speaker 1: our new American moment. There has never been a better
Speaker 1: time to start living the American dream. America has also
Speaker 1: finally turned the age on decades of unfair trade deals
Speaker 1: that sacrificed our prosperity and shipped away our companies, our jobs,
Speaker 1: and our wealth. Under the current broken system, a single
Speaker 1: immigrant can bring in virtually unlimited numbers of distant relatives.
Speaker 1: Under our plan, we focus on the immediate family by
Speaker 1: limiting sponsorships, two spouses and minor children. I am extending
Speaker 1: an open hand to work with members of both parties,
Speaker 1: Democrats and Republicans to protect our citizens of every background, color, religion,
Speaker 1: and creed. That was the President of the United States
Speaker 1: Donald Trump in its first State of the Unit address,
Speaker 1: and I get to say good morning to Tom Kane
Speaker 1: for what it's been like. What tomp over a week,
Speaker 1: two weeks since you and I've been together. Yeah, we
Speaker 1: missed an he throw by twenty minutes, we actually did.
Speaker 1: You were going to a work. That's right. That was
Speaker 1: an interesting um So I really like that string of
Speaker 1: highlights from the speech. We can talk later about the
Speaker 1: one one paragraph that alluded to maybe the Department of
Speaker 1: Justice in the uproar over Mr Mueller. But away from that,
Speaker 1: the clear consensus John I got from experts this morning
Speaker 1: was there was very little policy within the speech that
Speaker 1: they've I don't want to say they've run out of ideas,
Speaker 1: but usually in a modern State of the Union speech
Speaker 1: there's idea one, idea too, the idea three. I didn't
Speaker 1: hear that last night. There were themes without policy specifics.
Speaker 1: You can pick up on trade, he talked about the
Speaker 1: theft of intellectual property and now follow up on the
Speaker 1: policy specifics. A lot of talk about infrastructure. Over the
Speaker 1: last couple of weeks time we heard that again, this
Speaker 1: idea of we can do something in fact to lou Aller,
Speaker 1: an Apra of Blimberg, did this great highlight reel of
Speaker 1: of the amount of times they mentioned we, more than
Speaker 1: a hundred times. The President mentioned we just thirty times
Speaker 1: he mentioned I can we can that get things done? No,
Speaker 1: I think it's very stylistic and and all that has
Speaker 1: become a a moment for us. But but there it
Speaker 1: is joining us this morning. Martin Feldstine Baker, Professor Harvard,
Speaker 1: who has heard too many state unions. Were you in
Speaker 1: the room for any of the Reagan state of the unions?
Speaker 1: Were you one of the people down there? Yes? I was.
Speaker 1: You were not a designated survivor? No, I go although
Speaker 1: you are the designated survivor, and I have survived. I
Speaker 1: have survived. I don't think a laundry list of specific
Speaker 1: proposals is the right thing for the state. Then what
Speaker 1: do you want to hear? You've got a large, large audience.
Speaker 1: They don't want technical details. So I think, and I
Speaker 1: think it's wrong to say that there's no new policies
Speaker 1: in this. It's just that the President announced his new
Speaker 1: policies in Davos. So the will go back to to
Speaker 1: the We'll go back to the uh E p p UM.
Speaker 1: That's a big change, and that was that was a
Speaker 1: real item in Davos. It was we will open a
Speaker 1: path to citizenship for uh the Dreamers, for the kids
Speaker 1: born in the United brought into the United States as
Speaker 1: young children. That's a major change. So, UH, I don't
Speaker 1: understand why there's a sense that there's no specifics in
Speaker 1: this talk. So what were the specifics on tride in
Speaker 1: the stud of the Union was nine? There were no
Speaker 1: specifics on on trade. And but again the awkward problem
Speaker 1: is what do we do about uh so called voluntary
Speaker 1: transfers of technology where American companies are told that if
Speaker 1: they want to do business in China, they have to
Speaker 1: transfer their technology and they say, well, one point three
Speaker 1: billion people in China, I've got to be there. So
Speaker 1: if they want to know the seek it formula for
Speaker 1: how we make donuts, will give it to them. Well, professor, voluntary,
Speaker 1: of course, is an interesting word that we can debate
Speaker 1: because for some companies in the United States they were said,
Speaker 1: there's nothing voluntarily about it. They want to be in
Speaker 1: that market. And isn't this the President's ultimate problem with
Speaker 1: countries like China, that the entrance to get into this
Speaker 1: market is very very small, and before you go through
Speaker 1: that entrance, you have to give up some of what
Speaker 1: you've felt exactly right. So but again the public doesn't
Speaker 1: want to know that the strategy that the administration will
Speaker 1: use to try to get the Chinese to back off
Speaker 1: that so called voluntary transfer of technology. Uh. The President
Speaker 1: Obama met with President she to talk about the the
Speaker 1: use of cyberspace stealing of American technology, and that got
Speaker 1: the Chinese to cut back on that. So we're gonna
Speaker 1: have to have a similar thing to deal with this
Speaker 1: not really truly voluntary transfer, just joining us. Martin Feldsteine
Speaker 1: with us for a nice amount of time this morning,
Speaker 1: throw that he could be with us. Paul Krugman always
Speaker 1: up edding UH talks about trumpfrastructure, which I think is
Speaker 1: a very fair idea, and that every president has their
Speaker 1: own view of how you do infrastructure. You've seen infrastructure occur.
Speaker 1: You certainly have a vintage to remember Eisenhower in the
Speaker 1: Interstate highway system. How do we actually do infrastructure in
Speaker 1: America so we can have airports and roads like John
Speaker 1: Farrell has it Heathrow and in scene at Coventry, remember
Speaker 1: Hea throw the British airport is not a government private
Speaker 1: it's a private airport. So that's one part. Do we
Speaker 1: need to do more privately? Do more privatization of infrastructure?
Speaker 1: But I think that when President Obama said we have
Speaker 1: shovel ready projects to stimulate economy, there weren't any shovel
Speaker 1: ready projects. So what we need now is an inventory,
Speaker 1: a a a book of of designs, of specifications so
Speaker 1: that when the economy turns down, we can move I'll
Speaker 1: take your point, but are there's so many rusty bridges
Speaker 1: that we can't wait for the economy that's turn down.
Speaker 1: I don't think. Are we really going to supercharge the
Speaker 1: economy with bridge building it'll help when the economy turns down?
Speaker 1: Why not? Why not? Well, the economy is quite strong now.
Speaker 1: I think it's gonna be hard to persuade the Congress
Speaker 1: to to um add to the deficit in order to
Speaker 1: do a substantial infrastructure. How they do the economy is weak,
Speaker 1: there will be a willingness to move forward. How do
Speaker 1: they do this in England? Mary Old England, Well, it's
Speaker 1: tok of infrastructure bonds funding big project X like high
Speaker 1: spilled rail in the United Kingdom. But there's a big
Speaker 1: debate Thomas to whether actually these big, big spending items
Speaker 1: actually need doing at all in a place like the
Speaker 1: United Kingdom is a very different debate to the United States,
Speaker 1: where there's big bipartisan support for an infrastructure project. My question, Professor,
Speaker 1: it's just how it's going to get paid for. The
Speaker 1: Treasury is going to have a refunding announcement a little
Speaker 1: bit later today, typical every three months expected, but this
Speaker 1: one more interesting because we want to know how these
Speaker 1: tax cuts are gonna be spent for where they're gonna
Speaker 1: wishoot along the curve. Now, if you plug infrastructure into
Speaker 1: the treasury market as well, we're going to see a
Speaker 1: big boom in debt, aren't we. We're going to see
Speaker 1: a boom in debt, and my hope is it will
Speaker 1: come when it's needed for macroeconomic reasons, when the economy
Speaker 1: turns down and the Fed says, well, there's not much
Speaker 1: we can do because our interest rates are still two
Speaker 1: or three percent. I mean, I mean, John, I know
Speaker 1: you've had a hangover on platform three in Coventry before,
Speaker 1: but if you get Platform three in Coventry, you can
Speaker 1: go to Edinburgh in four hours fifty nine minutes. You
Speaker 1: can got a train in there like I'm time London
Speaker 1: Houston in about sixty minutes time, and that's a high
Speaker 1: speed rail line itself. I can't we do what he
Speaker 1: takes for granted in England, for we can do it.
Speaker 1: There's no question that we can do it, but I
Speaker 1: think there's going to be a reluctance to do it.
Speaker 1: Of course, again, a lot of the British rail has
Speaker 1: been privatized, so we're The solution for all these things
Speaker 1: is not more government activities, but I think we will
Speaker 1: need to get the government into this when the economy
Speaker 1: is weak. Martin Fell signed with Harvard University and John
Speaker 1: Ferrell from Platform three in Coventry this morning. Jared Cyberg
Speaker 1: is of Cowen. They do great, great research all sorts
Speaker 1: of areas kind of rumor of course, the legendary and airlines.
Speaker 1: Jared Cyberg looks at a lot of things we could
Speaker 1: do this day of the Union thing, but I think
Speaker 1: we've done it John like eight times this morning, So Jared,
Speaker 1: I want to go to Cyberg currencies. And what I
Speaker 1: learned in Davos is government people are waiting, waiting, waiting, waiting,
Speaker 1: with one exception, and that is I see os Jared Cyberg,
Speaker 1: what is an i c O and does Washington have
Speaker 1: their attention on I c O s? Yeah, sure, so
Speaker 1: great question. Um. I c O s are essentially a
Speaker 1: backdoor way to do an I p O, a way
Speaker 1: to raise money from investors, and uh, you know, Washington
Speaker 1: is not opposed to the plumbing of an i c
Speaker 1: O of of you know, creating a digital coin instead
Speaker 1: of a ship era of stock. What they don't like
Speaker 1: is doing i c O s that are not registered
Speaker 1: with the SEC, where you don't get all the protections.
Speaker 1: Are we going to get to a point where that's
Speaker 1: the toggle switch to whichever way we're going in crypto?
Speaker 1: This crypto that is that going to be the key thing?
Speaker 1: So I really think you need to separate, uh it
Speaker 1: out I c O s versus you know, bitcoin and
Speaker 1: digital currencies. And I think the I c O I
Speaker 1: c O approach is something that's going to survive and
Speaker 1: something that will be useful, but you're not going to
Speaker 1: be able to you know. One of the things we
Speaker 1: always argue is that if you build a better mousetrap,
Speaker 1: but it's all premised on getting around consumer protections and
Speaker 1: other anti money laundering rules. That's not viable. And you
Speaker 1: know I c O s that are designed to do that,
Speaker 1: that's not going to survive. Yeah. I I look at
Speaker 1: I c O s and what happened in Korea, what
Speaker 1: happened in China. That was certainly a huge issue, a
Speaker 1: point of discussion. I should say, in Davos, where is
Speaker 1: Secretary Minusia and this and where is Washington on this?
Speaker 1: Or is it just something removed in the in the
Speaker 1: in the distance. No, actually, I think this is moving
Speaker 1: very quickly from the back of the front. Yeah. And
Speaker 1: we saw a Minusian yesterday. Uh, you know his testimony
Speaker 1: before Senate Banking. He was asked about it, and he
Speaker 1: basically said, you know, our money laundering rules have to apply,
Speaker 1: Our Bank Secrecy Act rules have to apply, and we
Speaker 1: expect other countries to apply their money laundering rules to this.
Speaker 1: And that's a much heavier regulated product than what's existed
Speaker 1: before we even get onto cybercurrency. So I'm already confused
Speaker 1: about the Treasury secretaries current stance on the actual currency
Speaker 1: of the United States of America. I think you to last,
Speaker 1: what's your rate? I think that he is very carefully
Speaker 1: trying to walk back um you know, some of the
Speaker 1: comments that got so much attention and trying to go
Speaker 1: back to a more neutral stance. And uh, you know,
Speaker 1: I think he was asked this yesterday as well, and
Speaker 1: I thought he did a pretty effective tap dance, uh
Speaker 1: to say, oh, I was misunderstood, you know, was out
Speaker 1: of context. I mean all the stuff that you typically
Speaker 1: here when somebody's realized that they may have stepped a
Speaker 1: little too far out of bounce the reaction of the
Speaker 1: rest of the world. Do you think that's what pushed
Speaker 1: him to take a step back, Jared? Or did this
Speaker 1: come from within this administration? I'm not sure that's an
Speaker 1: either or answer. I think it's a both. I think
Speaker 1: that uh, he really he likely realized the gravity of
Speaker 1: the quotes that we were pulled out of that conversation,
Speaker 1: and I'm sure, uh there was pushback from you know,
Speaker 1: Gary Cohene and others within the administration, uh, saying you
Speaker 1: don't want to rattle these markets, and JAREDA maybe outside
Speaker 1: your preview, but we're gonna go to it anyways. Infrastructure, UM,
Speaker 1: I've had three conversations on infrastructure. In the summary of
Speaker 1: all them all different, but the summary simple, nothing's gonna happen.
Speaker 1: Can you explain to our audience why Washington cannot take
Speaker 1: a leadership position on infrastructure. I would just like them
Speaker 1: to fill the potholes on the road outside of my house. So,
Speaker 1: I mean, you know, you know, it's um, it's a
Speaker 1: question of money. You know, you know, the county claims
Speaker 1: they don't have the money, the state doesn't have the money.
Speaker 1: And now the FEDS are basically saying, where are we
Speaker 1: going to get this one point five trillion dollars from?
Speaker 1: And you know, to to kind of circle back to
Speaker 1: where we started, you know, with State of the Union
Speaker 1: a little bit. Uh, there was no talk of deficits,
Speaker 1: of cutting the debt, you know, any any of that.
Speaker 1: And so, you know, you have Republicans who are reluctant
Speaker 1: to spend another one point five trillion. You have a
Speaker 1: president who's not really looking at entitlement reforms are other
Speaker 1: things that maybe could offset that, And so we get stalemate. Jarisy,
Speaker 1: but Accoln Washington Research Group policy analysts joining us on
Speaker 1: the situation in the nation's capital. If stalemate also a
Speaker 1: consequence of the mid terms at the end of this year, Jarrett, Well, sure,
Speaker 1: I mean, although we're not quite at that point yet
Speaker 1: where Washington still can't get stuff done. UM. So, if
Speaker 1: if somebody had a more limited infrastructure plan that could
Speaker 1: be paid for, I still think you could get bipartisan
Speaker 1: support for it. Um. You know, the problem is that
Speaker 1: this White House does not put forward detailed plans, and
Speaker 1: so nothing happened. Jared, Thank you so much. Jared Seedburg
Speaker 1: with some of what we've heard from any number of
Speaker 1: guests today, nothing happens. He's a former chairman of the
Speaker 1: President's Council of Economic Advisor, that would be President Obama.
Speaker 1: Austin Goulsby joins us now from the Boost School Chicago. Austin,
Speaker 1: you've spent a few years looking at public policy, any
Speaker 1: number of smart papers on it. The consumer gains from
Speaker 1: direct broadcast satellites, that was a Barnburn I read every
Speaker 1: word of that evidence on learning and network externalities. Say
Speaker 1: what you on infrastructure? You're in Chicago, you know the
Speaker 1: value of the interstate highway system growing up in Wit.
Speaker 1: Are your caliph for in you? How do we jump
Speaker 1: start infrastructure after we heard Trump infrastructure last night, Well, Tom,
Speaker 1: thanks for having me back. By the way, I was
Speaker 1: a little disappointed by the I like the tone of
Speaker 1: a lot of what President Trump said in the State
Speaker 1: of Union last night. It just seemed like he was
Speaker 1: trying to take a bi part as a note. But
Speaker 1: I was kind of disappointed on the infrastructure part because
Speaker 1: he didn't seem to have much of a plan. A
Speaker 1: plan was I call on you Congress to come up
Speaker 1: with a plan. Um he said one point five trillion dollars.
Speaker 1: What we're gonna have to see now is where's the money?
Speaker 1: I mean, that's always the problem when it comes to
Speaker 1: the infrastructure, is we gotta we gotta wrap our heads around. Uh,
Speaker 1: it does cost money to build this stuff and this stuff,
Speaker 1: but it helps economic growth. Austin, we didn't have that
Speaker 1: problem when tax reforms slash text cuts. When you said
Speaker 1: where's the money? With tax cuts, everybody said, everybody voting
Speaker 1: for it said, you know, a trillionaire, A trillionaire, who's counting?
Speaker 1: I mean, why are we having the same discussion about
Speaker 1: infrastructure when, without question, other than roads to nowhere, it
Speaker 1: benefits all. Look, I agree, And and that's what I
Speaker 1: was saying during the tax reform slash tax bill debate,
Speaker 1: is this is a big number. You know, arguably one
Speaker 1: and a half trillion with a bunch of accounting gimmicks
Speaker 1: that if you don't count the accounting gimmicks, that might
Speaker 1: cost three trillion or more. Imagine how much infrastructure you
Speaker 1: can buy for three trillion dollars. Um Uh. I don't
Speaker 1: see how you know cutting the estate tax for for
Speaker 1: people making more than twenty million, who have a state
Speaker 1: that more than twenty million dollars, that that raises our
Speaker 1: productivity or our growth more than it would fixing our airport.
Speaker 1: It's building out our highways, fixing our ports. I mean,
Speaker 1: this is this should be more of a priority then
Speaker 1: it seems to be. And I don't quite understand why.
Speaker 1: Austin Professor Jonathan, Here's something I don't quite understand is
Speaker 1: what's happened to a massive group of individuals that I
Speaker 1: heard so much from over several years where interest rates
Speaker 1: were record lows, all time loads in the United States
Speaker 1: and across Europe, where these individuals would say, there's the
Speaker 1: opportunity go out there and borrow and do something with
Speaker 1: that cash. And now I don't hear that as much anymore.
Speaker 1: In fact, I hear people complaining. I hear people fearmongering
Speaker 1: about the budget deficit, about what will happen with the
Speaker 1: debt load? Those people were calling for this several years ago.
Speaker 1: So what happened, Well, you know, you've you've hit on
Speaker 1: the new reality of American politics, which is the hypocrisy
Speaker 1: doesn't make any difference anymore. It used to be if
Speaker 1: you said something today that was the exact opposite of
Speaker 1: what you said eighteen months ago, you at least, you know,
Speaker 1: Tim Russard would kind of put that in your faith.
Speaker 1: You at least had to squirm a little, if not
Speaker 1: come up with an explanation of why you thought it
Speaker 1: was different for you know now from them now, I
Speaker 1: will say the Republicans have done that, and now the
Speaker 1: Democrats also are piling on in that. I think the
Speaker 1: problem is the following. When it was President Obama saying
Speaker 1: let's borrow money to build out infrastructure because interest rates
Speaker 1: are historically epically low, now would be the time to
Speaker 1: do it. The Republicans were not going to allow him
Speaker 1: to borrow to do that. And now that it's the
Speaker 1: Republicans in control, the Democrats are not going to allow
Speaker 1: the reverse a half the Republican Party wouldn't before that,
Speaker 1: and so they would need support of the Democrats. And
Speaker 1: the Democrats say, wait a minute. You know you don't
Speaker 1: want to do it the way we that we've historically
Speaker 1: done it. You know, you you want to try to
Speaker 1: turn it over to the private sector. Um So, I
Speaker 1: think that's where they are. Austin. I don't know if
Speaker 1: you've done under. Steve Levitt of freak Adomics has done it.
Speaker 1: But the gas tax is always a third rail, particularly
Speaker 1: across all of rural America. Are we just really back to,
Speaker 1: you know where somebody says in the Oval Office, Mr
Speaker 1: Hassett or others, I'm sorry, Mr President, but you can't
Speaker 1: get a gas text through because it's a third rail
Speaker 1: in Kansas. Is that where we really are? I don't know.
Speaker 1: You know, you saw Senator Cornyn from Texas, which of
Speaker 1: all states you think Texas would be, you know, among
Speaker 1: the most anti gas tex uh talk about the gas tax,
Speaker 1: you know, not in a positive way, but not to
Speaker 1: completely rule it out. But my intuition is is what
Speaker 1: you say, the Kindress is not going to be able
Speaker 1: to agree cross party lines on that constant goes with us.
Speaker 1: A former chairman of the President's Council of Economic I
Speaker 1: know you're not a big fitness guy. But you know
Speaker 1: there is a fitness tracking app called Strava. He's not
Speaker 1: a big fitness guy, he says, I can't imagine I'm
Speaker 1: wearing a no, no, no, but there is a fitness
Speaker 1: tracking please, there's a this is this is connected to
Speaker 1: what we're gonna talk about. There's a fitness tracking app
Speaker 1: called Strava, and it has about a billion activities and
Speaker 1: three trillion points of latitude and so on. Anyway, a
Speaker 1: twenty year old year old Australian university student, Nathan Rousser,
Speaker 1: he noticed that the map showed locations and running routines
Speaker 1: of US military personnel all over the world. That kind
Speaker 1: of technology gets out there and it's very hard to
Speaker 1: put it back in the bottle. And our next guest
Speaker 1: beast car Charter. I'm sorry, chat, I hope I did okay, professor.
Speaker 1: Professor disabused me of my bad pronunciation. You are the
Speaker 1: senior associate in International Business and Finance at Tough University.
Speaker 1: I'm sure that you saw this news report and this
Speaker 1: plays into some research that you've recently done. You've heard
Speaker 1: about this, correct, Yeah, absolutely, yeah. We seem to be
Speaker 1: getting news reports almost on a daily basis of user
Speaker 1: data being compromised in one form of the other. So
Speaker 1: at some point it gets you practically need an app
Speaker 1: to keep track of all these apps that are kind
Speaker 1: of opening us up to all kinds of vulnerabilities. Tell
Speaker 1: us about digital trust and what you discovered? Well, I
Speaker 1: think as we sort of look at where we are
Speaker 1: in our state of relationships, the relationship with the digital economy,
Speaker 1: our dependence has grown, uh, you know, grown to addictive levels.
Speaker 1: Our sense of distrust has also grown and certainly seen
Speaker 1: was in many ways, uh turning point, and essentially that
Speaker 1: there are three things that I believe we are not uniformly,
Speaker 1: but around the world. We're concerned about were concerned about privacy,
Speaker 1: were concerned about security, and we're concerned about reliability. And
Speaker 1: the extent to which these concerns are high or low
Speaker 1: varies depending on where you are in the world. So
Speaker 1: largely speaking, we find that in the developed world we
Speaker 1: are much more concerned than in emerging markets where people
Speaker 1: are still new to this technology and they're excited about it. Okay,
Speaker 1: I want to ask a couple of basic questions, and
Speaker 1: these aren't fancy mckensey questions or anything like that. Are
Speaker 1: our computers at home, are iPads at home our cell phones?
Speaker 1: Where ever? Are they quote unquote safe because that's where
Speaker 1: the ultimate distrust comes uh well quote and it is
Speaker 1: the operative term here, So they're safe as an uh.
Speaker 1: You know, if somebody were to really put their mind
Speaker 1: against getting into your device and uh and peer into
Speaker 1: your day day to day lives, they could potentially do that.
Speaker 1: But you're one among uh you know, three billion people
Speaker 1: who are on the internet. So you know, if I'm
Speaker 1: going to waste my time trying to get into your system,
Speaker 1: I probably would go into you know somebody or not
Speaker 1: that you're not important, but you know there are many others.
Speaker 1: So I think in reality yeah, in reality not, you know,
Speaker 1: it's it's more or less sick. But if somebody could
Speaker 1: want want to get in, they could do it. I'm
Speaker 1: like everybody else. Pay You've got the fancy imach at home,
Speaker 1: and you bring it home and you're unwrap it and
Speaker 1: you throw the perfect box out and you've got that
Speaker 1: lens looking at you on the iMac and you're going,
Speaker 1: who's on the other side of that lens? Well, and
Speaker 1: with the with the pervasiveness of Alexa and these interact
Speaker 1: I don't have the you will someone will I mean,
Speaker 1: whether it's Alexa, whether it's so Nos, whether it is
Speaker 1: someone speaker that well. I mean Apple is also working
Speaker 1: on this, and Professor Chuck Gravorty, I'm wondering if you
Speaker 1: could speak about how this is going to affect business
Speaker 1: because Facebook has come under a lot of criticism because
Speaker 1: it doesn't necessarily police what goes on it's site. Yeah.
Speaker 1: So Facebook, of course has been almost the poster child
Speaker 1: for you know, our concern and also a post a
Speaker 1: child for our total dependence on the digital system. You know,
Speaker 1: two billion people checked their Facebook post every uh, you know,
Speaker 1: every month. Um, I think Facebook has turned the page
Speaker 1: on two thousand and eighteen. Uh. You know, Mark Dacoberg
Speaker 1: came out the gate in the New yeark kind of saying, Okay,
Speaker 1: this is the year when we fix everything. And essentially
Speaker 1: what he has done is he's uh pushed uh the
Speaker 1: buck over to the users and he's said it, I'm
Speaker 1: going to deprioritize third party publishers and make our interactions
Speaker 1: on Facebook more meaningful by prioritizing personal posts. And I'm
Speaker 1: going to ask users to rate media in terms of
Speaker 1: their trustworthiness. And I think that is just, uh, you know,
Speaker 1: not taking responsibility. You know, Facebook needs to come to
Speaker 1: the realization that they're no longer a town square. They
Speaker 1: are the major source of news and information and they
Speaker 1: need to own up to the content. So what is
Speaker 1: your prescription for Mr Zuckerberg to do? They're fighting this
Speaker 1: tooth and nail and they're managing the message, which they've
Speaker 1: always been good at. What does bascars Checkerboti say they
Speaker 1: should do? Yeah, I think there are three things I
Speaker 1: should do. One is recognized that they are a major
Speaker 1: news source. But Americans get their news from Facebook, so
Speaker 1: they need to be able to vet the content that's
Speaker 1: on it, and if they can't vet it, at least
Speaker 1: put a note against it. And uh, they can use
Speaker 1: human in eligence and artificial intelligence to do that. We
Speaker 1: hear every day about how smart everything is getting, So
Speaker 1: why can't Facebook get smart enough in terms of algorithms
Speaker 1: to sort through all the content that's on it. That's
Speaker 1: thing number one. Thing number two is some of the
Speaker 1: biggest risks that we face in terms of what's posted
Speaker 1: on Facebook is not here in the United States, but
Speaker 1: in the developing world where Facebook is growing explosively. So
Speaker 1: countries like Myanmar where ethnic cleansing. A lot of that
Speaker 1: happened on the backs of rumors spread on Facebook. So
Speaker 1: Facebook needs to get on the ground and understand the
Speaker 1: local context of these UH societies that it has spread
Speaker 1: so fast and where people you know. For them, Facebook
Speaker 1: is the Internet, and thing number three is they need
Speaker 1: to get off their total dependence on advertising revenue. They
Speaker 1: need to find other ways in which they can make money.
Speaker 1: So companies like Google, companies like Amazon, companies like Netflix.
Speaker 1: I figured it out. What can't Facebook do that? Mascar's
Speaker 1: check about it, whether with tough as we look at
Speaker 1: distrust on the Internet. You thanks for listening to the
Speaker 1: Bloomberg Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud,
Speaker 1: or whichever podcast platform you prefer. I'm on Twitter at
Speaker 1: Tom Keane before the podcast. You can always catch us worldwide.
Speaker 1: I'm Bloomberg Radio.