Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
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Speaker 1: by searching Bloomberg Global News. Every time we approach Job's day,
Speaker 1: I can speak for Carol and myself when we say
Speaker 1: and think, we want to know what Chris Luke thinks
Speaker 1: about all of this, no matter which way it goes.
Speaker 1: He is a senior fellow at the University of Virginia
Speaker 1: Miller Center. Of course, a former Deputary Deputy Secretary of Labor.
Speaker 1: I get that. I sort of trip on that almost
Speaker 1: every time. I'm sorry, Chris for me, former Deputy Secretary
Speaker 1: of Labor under President Obama. He's on the phone with us. Now, Chris,
Speaker 1: how are you. I'm doing good. Thank you for having me.
Speaker 1: All right, well, it's good to have you back. Um.
Speaker 1: So your initial reaction, like your gut reaction to this
Speaker 1: and and maybe more important as you saw it, all
Speaker 1: sort of filter through what do we need to take
Speaker 1: away from this job's report, both monthly and UH and
Speaker 1: then the weekly jobless claims. So there was a lot
Speaker 1: of data today. Gut reaction was good, with a lot
Speaker 1: of caveats. You know, we always tell people the monthly
Speaker 1: jobs data is really kind of looking way back, and
Speaker 1: in this case, it goes back really to the pay
Speaker 1: period that began on June eighth. So in that second
Speaker 1: week of June, the economy clearly was recovering. But when
Speaker 1: you add that with the weekly jobs claims, you started
Speaker 1: get kind of a mixed picture because we're continuing to
Speaker 1: have again, if you add in not only the people
Speaker 1: applying under the normal unemployment program, but the new pandemic
Speaker 1: program for gig workers, it's about two million people applying
Speaker 1: for unemployment every single week, new people applying, um and
Speaker 1: you know total right now, but thirty one million people
Speaker 1: on unemployment, which is not really going down. So if
Speaker 1: you put all of this together, you get a sense
Speaker 1: of an economy that was reopening. By the beginning of June.
Speaker 1: Jobs were coming back, and that recovery may have slowed,
Speaker 1: and we don't really know how much it is slowed.
Speaker 1: And again, as we always say, we're still in the
Speaker 1: middle of a public health crisis. And until you resolve that,
Speaker 1: you really can't get a good sense about where that
Speaker 1: the economy is going. We're still what about nineteen million
Speaker 1: in terms of those who are on unemployment benefits that
Speaker 1: are out of work. Yeah, I mean, if we simply
Speaker 1: look at the number of people who apply the under
Speaker 1: the traditional unemployment program, it was one point four million
Speaker 1: this week, which is more than double the worst week
Speaker 1: we ever had during the Great Recession. So the numbers
Speaker 1: are still elevated. They've come down a lot, but we
Speaker 1: all need to understand that just in the months of
Speaker 1: March and April we lost about twenty two million jobs.
Speaker 1: We've picked up about seven seven to eight millions. We've
Speaker 1: picked back up again. Um, but these numbers, and we
Speaker 1: always say jobs created, uh, and we probably this month
Speaker 1: it's simply need to say jobs were stored to people
Speaker 1: because you know, one of the quirky things about the
Speaker 1: data as you see. You know, just in healthcare employment,
Speaker 1: a hundred and ninety thousand UH dental jobs were created.
Speaker 1: I suspect we didn't have a hundred ninety thousand new
Speaker 1: dentists last months. I think because all dental assises were
Speaker 1: closed they reopened. So again, this is positive with a
Speaker 1: lot of caveats, right, I just look at my own world.
Speaker 1: I mean I went and had a root canal, like like,
Speaker 1: these are things that I had were not do you
Speaker 1: know it's not I'm going to go back to my dentist.
Speaker 1: So like, yeah, I get that it wasn't a brand
Speaker 1: new dentist. It was not a brand new dentist. Yes, no, no, no, hey, Chris,
Speaker 1: I feel like a more constructive conversation at this point.
Speaker 1: I mean, these numbers are going to be what these
Speaker 1: numbers are. I mean, we have shut down our economy.
Speaker 1: We're finding our way back, whether it was a republic
Speaker 1: in the White House or a Democrat like this is
Speaker 1: what you're dealing with. It's really tough. I do wonder though,
Speaker 1: when we get on the other side of this, are
Speaker 1: there companies industries are saying you know what, we really
Speaker 1: don't need those kind of workers anymore, or you know what.
Speaker 1: I know there's that demand side of what the economy
Speaker 1: is like and what's going to be needed. But I
Speaker 1: do wonder if this is going to be a real
Speaker 1: readjustment and kind of the types of jobs that ultimately
Speaker 1: stay with us and those that ultimately go away. Yeah.
Speaker 1: I mean, look, I I'm in Uh, I'm in the
Speaker 1: DC area right now, which is you know, partially reopened.
Speaker 1: I even think in a reopened economy, people just aren't
Speaker 1: going to go to restaurants, uh if they can do
Speaker 1: take out. Uh. You know, we know that people aren't traveling.
Speaker 1: People aren't going overseas because you know, U S systems
Speaker 1: can't leave the country functionally, at least going to Europe.
Speaker 1: So we know that travel will be down. We know
Speaker 1: that a lot of companies have basically said, hey, you
Speaker 1: work remotely for the rest of the year, which has
Speaker 1: been a cascading impact through real estate and through mom
Speaker 1: and pop, delis and all of the other services that
Speaker 1: support companies along the way. Now, there may be other
Speaker 1: other industries that pick up along the way, but I
Speaker 1: suspect those are not the ones that are going to
Speaker 1: be as job intensive and so you know a lot
Speaker 1: of the broader structural changes we've seen in the economy
Speaker 1: will probably be accelerated as a result of this. Like
Speaker 1: what specifically though, Well I think of this. You know,
Speaker 1: I as a person who probably eats more fast food
Speaker 1: than I should. Uh, there is you know, you can
Speaker 1: order online on your mobile app. You can also use
Speaker 1: a touch screen, and I suspect in this environment, uh,
Speaker 1: they're just gonna start to move to that. And it's
Speaker 1: not to say you don't need people, you know, handling
Speaker 1: the food, but it's going to be a lot fewer
Speaker 1: of those people. Um, you know, and I think a
Speaker 1: lot of the companies are going to realize, you know what,
Speaker 1: we just don't need in general this many people around
Speaker 1: the company as much as possible. So you know, we see, um,
Speaker 1: you know, we might end up having a full recovery,
Speaker 1: or you know, we might just kind of be operating
Speaker 1: at this kind of seventy level for the foreseeable future,
Speaker 1: which in many ways I think is the worst outcome
Speaker 1: because you'd have a half open economy. Was still all
Speaker 1: of the increased infections and death. You know, we did
Speaker 1: tease that this week was interesting. I feel like over
Speaker 1: the last week or so that we are now once
Speaker 1: again UM seeing updates on the virus from the White House. UM.
Speaker 1: Vice President Pence is often conducting them. And what's interesting
Speaker 1: is the tone has changed. They seem much more organized,
Speaker 1: and you know, we were kidding that now they're saying, okay,
Speaker 1: wear a mask, you know, but the tone has changed.
Speaker 1: And is it just a case tell us about crisis.
Speaker 1: I mean, you don't have the playbook initially when the
Speaker 1: crisis hits, and you do learn as things go along.
Speaker 1: What do you make of the progression in terms of
Speaker 1: how the administration has handled the pandemic? Well, I really
Speaker 1: think it's been the tale of two administrations. I mean
Speaker 1: you've got even this week, while you had the Vice
Speaker 1: President UM encouraging mask wearing, you had Secretary asar Uh
Speaker 1: test on TV last weekend expressing concerns. Obviously Dr Fauci
Speaker 1: this week testifying too. And then you have the President who,
Speaker 1: while yesterday he said, you know, he's encouraging people to
Speaker 1: wear masks, he again said that he thought this would disappear.
Speaker 1: And I think that's kind of the challenge. I mean,
Speaker 1: you know, UM, below the president, you've got the wheels
Speaker 1: of government that are moving, um, that are ensuring that
Speaker 1: you know, states get ventilators and PPEs and trying to
Speaker 1: issue guidelines. But ultimately, the president has the biggest bully
Speaker 1: pulpit um and I think the kind of lack of
Speaker 1: consistent messages coming from him, I think have undermined a
Speaker 1: lot of what you know, other people in his administration
Speaker 1: are trying to do. I mean, you continue to see
Speaker 1: a fairly significant number of people in this country who
Speaker 1: you know, are not wearing masks right now. You've got
Speaker 1: a lot of states which you know, while encouraging masks
Speaker 1: that got and there's encouraging masks, are not mandating them
Speaker 1: as well. And we know that's you know, one of
Speaker 1: the simplest things you can do. And so um, yeah,
Speaker 1: there certainly has been an increased, a ramped up level
Speaker 1: of concern and engagement this week, but I think it
Speaker 1: would be a lot more effective if the president got
Speaker 1: on board as well. And so, Chris, we love talking
Speaker 1: to you about all branches of government because you've worked
Speaker 1: in all of them, and I wonder what you make
Speaker 1: of Congress's response at this point, either from a stimulus
Speaker 1: perspective or for a stimulus slash rescue perspective, or from
Speaker 1: the perspective of sort of setting the political and and
Speaker 1: the tone around this. Yeah, I mean it's interesting. Um.
Speaker 1: You know again, just on this mask wearing issue, I mean,
Speaker 1: Speaker Pelosi has been, you know, very open about her
Speaker 1: wearing a mask and is basically now requiring that if
Speaker 1: you show up at a committee room as a House member,
Speaker 1: you have to wear a mask or you'll get kicked out.
Speaker 1: So she's trying to set that, um example of leadership.
Speaker 1: I do think on the stimulus may think this is
Speaker 1: gonna be problematic, and I think you know what I
Speaker 1: hope does not come out of today's jobs numbers is
Speaker 1: that people read it and say, you know what, mission accomplished.
Speaker 1: We don't need to do anything else. I mean, we
Speaker 1: know that these extended unemployment benefits are expiring at the
Speaker 1: end of July. Fortunately, the Senate this week extended UM
Speaker 1: the PPE program or the PPP program for small businesses.
Speaker 1: That's a good thing. But again we continue to talk
Speaker 1: about this next wave of layoffs that might come from
Speaker 1: state and local governments that are just strapped right now,
Speaker 1: and unless Washington provide some help, we're gonna start to
Speaker 1: see layoffs. I mean, even this week we saw Mayor
Speaker 1: Deblasio saying, you know, he might be furloughing workers in
Speaker 1: New York. In Maryland, yesterday, Governor Hogan uh Is announced
Speaker 1: he's cutting four million dollars from the state budgetal impact
Speaker 1: services and employees as well. So, um, we are not
Speaker 1: out of the woods and and so. And I think
Speaker 1: that's sort of the problematic aspect of today's positive job numbers.
Speaker 1: I think people will read it in the wrong way. Well,
Speaker 1: I think your point is so smart, Chris, and that
Speaker 1: this whole idea of that you've got to go the distance,
Speaker 1: right And you can see certainly with the president, and
Speaker 1: I'm not being critical, it's just obvious that he has
Speaker 1: moved on to running his campaign. And at the same time,
Speaker 1: like I think about the financial crisis, it wasn't like
Speaker 1: one program and we were fixed. We still, you know,
Speaker 1: to some does some extent you know, are thinking about
Speaker 1: that and still dealing with it, like you have to
Speaker 1: continue to be on it. Yeah, I mean, look, the
Speaker 1: lesson we learned from the Great Recession is that we
Speaker 1: did not put enough stimulus into um into the country,
Speaker 1: and we we kind of backed off way too quickly.
Speaker 1: And you know this past week you had the said
Speaker 1: Chairman J. Powell saying to Congress, don't get complacent, uh,
Speaker 1: you know, in your in your economic response. And I
Speaker 1: feel like we're getting a little complacent right now. And
Speaker 1: the irony about the president's you know, kind of quote
Speaker 1: unquote transition to greatness is that actually more stimulus would
Speaker 1: help the economy and probably would help his re election prospects.
Speaker 1: You Unfortunately, you know, there's this dynamic obviously with Senate
Speaker 1: Republicans concerned about debt. Obviously, how Democrats have a pretty
Speaker 1: expensive bill out there. So I'm hoping when they get
Speaker 1: back from July four, um, cooler heads prevail and they
Speaker 1: find some kind of compromise because we need that stimulus
Speaker 1: in the economy. Absolutely, all right. Always great to catch
Speaker 1: up with you. Never enough time. I feel like we
Speaker 1: always have fifty eight more questions for you. But we
Speaker 1: appreciate you coming with us on this day, as you
Speaker 1: do most jobs, stays Chris Lew Senior Fellow, University of
Speaker 1: Virginia Miller Center, former Deputy's Victory of labor under President Obama.
Speaker 1: Johnnius on the phone from the DC area, This is
Speaker 1: Bloomberg Business Week with Carol Masser and Jason Kelly on
Speaker 1: Bloomberg Radio. I defy anyone to listen to this sentence
Speaker 1: and not want to read this story. Sean Murphy was
Speaker 1: an epic weed smoker, a devoted Tom Brady fan, and
Speaker 1: the best cat Burglar that Lynn, Massachusetts had ever seen.
Speaker 1: I mean, it's irresistible, it is you're in, it is
Speaker 1: coming to a theater near you. Let's just put that
Speaker 1: out there. Absolutely, and to boot the stories written by
Speaker 1: one of our all time favorite writers at Bloomberg Business Week,
Speaker 1: Zeke Fox, finance reporter for Bloomberg. He joins us on
Speaker 1: the phone and Zeke, this story is incredible. How did
Speaker 1: you find out about this? Well? I was I had
Speaker 1: read a little bit about the about the case. It
Speaker 1: was made the papers when the rings were stolen there
Speaker 1: when they were recovered, and uh, these are we should
Speaker 1: point out sorry, these are super Bowl rings. These are
Speaker 1: um New England Patriots or excuse me, New York Giants
Speaker 1: super Bowl rings stolen by a Patriots fan. Yis yeah,
Speaker 1: So after the infamous helmet catch super Bowl Super Bowl
Speaker 1: forty two and two thousand and eight, when the Patriots,
Speaker 1: who were on their way to an undefeated season and
Speaker 1: we're upset by Uli Manning and the Giants. Uh, this
Speaker 1: kapt burglar slash furniture mover from Lynn, Massachusetts stole the
Speaker 1: Giants Super Bowl rings and spoiler alert. I wrote to
Speaker 1: him in prison and said, you know, I had heard
Speaker 1: a little about your about this story. By any chance,
Speaker 1: are you Patriots fan like me? Would you like to
Speaker 1: talk about it? And over the course of the last
Speaker 1: year or so, he's he's been telling me his story,
Speaker 1: and the true story of what happened is, you know,
Speaker 1: crazier than I even imagine. Well, this is a guy.
Speaker 1: I mean, the stealing of the rings is one thing,
Speaker 1: but he is quite a character right and has been,
Speaker 1: you know, stealing things for a long time. So he's
Speaker 1: from Lynn, which is a suburb on Boston's North Shore,
Speaker 1: and when he was growing up it was a pretty
Speaker 1: down and out place, and burglary was like a career
Speaker 1: path that a lot of or at least a good
Speaker 1: number of young people actually pursued and got taught by
Speaker 1: older generations of burglars. And burglars and lymb specialized in
Speaker 1: trying open the doors to pharmacies and stealing the pills
Speaker 1: to resell. It's a pretty easy thing that could be done,
Speaker 1: you know, in the cover of night, and you know,
Speaker 1: you could often get away with it. And Murphy was
Speaker 1: introduced to this world in middle school, I believe at
Speaker 1: Christmas time sleep over at his aunt's house. His cousin
Speaker 1: taught him how to do it. But before long he
Speaker 1: had moved on to much bigger scores. And so what's
Speaker 1: he I mean in your correspondence, like how would you
Speaker 1: describe You do a nice job describing him the story
Speaker 1: of but like how would you describe him to to folksy?
Speaker 1: So he really is like a typical Boston character. He
Speaker 1: loved the Patriots. He worked money through Friday at his
Speaker 1: real moving company, which really did move future people's furniture.
Speaker 1: He drove muscle cars. He liked to work on his Camaro,
Speaker 1: which had a custom red vul or interior um. He
Speaker 1: liked Motley Crue and other hair metal A lot of
Speaker 1: the times. He had a mullet and a biker mustache
Speaker 1: um and he liked He didn't really do drugs, which
Speaker 1: was the downfall of a lot of his contemporaries among
Speaker 1: Blend's burglars. But he really liked smoking weed and coming
Speaker 1: up with complex heists. I mean it's remarkable, you know.
Speaker 1: First of all, it's it's so well written. It's such
Speaker 1: a great read. And I'm not kidding that I could see,
Speaker 1: you know, certainly here we are working from home and
Speaker 1: we've all binged on Tiger King like this is I
Speaker 1: could see in a multi part series um on one
Speaker 1: of the streaming services. Because it's almost too good to
Speaker 1: be true, but it is true, um. And it's just
Speaker 1: this fascinating character, right who It was just a way
Speaker 1: of life for him, right in terms of where he
Speaker 1: was born and and and you know what he did,
Speaker 1: and as you said, he kind of builds up to
Speaker 1: his crimes. I mean ultimately though, and I'm going to
Speaker 1: say there's some interesting personal life stuff that went on too,
Speaker 1: in terms of girlfriends and and how he went about that.
Speaker 1: But I mean, ultimately he was caught, right, Yes, So Murphy,
Speaker 1: if you talk to him, he'll say he's never really
Speaker 1: been caught because he doesn't consider it being caught unless
Speaker 1: he's caught in the act. The problem is that quite
Speaker 1: a few times he has been caught. He's spent almost
Speaker 1: i think even more than half his life in prison
Speaker 1: because the ways that the police work is not so
Speaker 1: much to catch people in the act, but to find
Speaker 1: out about things that happened, talk to people who might
Speaker 1: know about it, and prosecute the guilty party once they've
Speaker 1: identified them. It's kind of like a myth that they
Speaker 1: would catch a burglar in the act so much. Um so,
Speaker 1: he's frequently throughout his career, I guess I'll call it
Speaker 1: has been uh sold out by people who you know,
Speaker 1: had worked with him or who knew him. In the
Speaker 1: Super Bowl, Uh, theft was really no was they worked
Speaker 1: out like that too? Yeah, I mean it's really I
Speaker 1: mean there's also for for Patriots fans, and everything's turned
Speaker 1: out just fine for Patriots fans. Let's not le let's
Speaker 1: not shed any tears for for the Pats fans. But
Speaker 1: it does take you back to a really a really
Speaker 1: sort of pivotal time. And I mean that rivalry, and
Speaker 1: I mean I remember watching that game and he mentioned,
Speaker 1: you know, the helmet catch and and that was Peate
Speaker 1: Eli man uh in many ways, and so it's just
Speaker 1: it's a tail that really resonates in in time for
Speaker 1: a lot of sports fans more than as much as anything, well, yeah,
Speaker 1: I hope that it's Uh, it's something fun for sports
Speaker 1: fans who haven't had anything to watch for exactly. All right,
Speaker 1: So how do you fit it? Just before we let
Speaker 1: you go, how do you feel about Brady and Tampa?
Speaker 1: Oh well, I'm I'm a past fan myself, so I
Speaker 1: know I hate to see it. I hate to see if,
Speaker 1: but I'll still be rooting for him to do well.
Speaker 1: And Cam Newton, how are you feeling about that? I
Speaker 1: think you know he makes the past super Bowl contenders.
Speaker 1: I'm psyched to see what Belichick comes up with for
Speaker 1: him to do. Yeah, never bet against Belichick. I think
Speaker 1: that's the one. One of the takeaways that we all
Speaker 1: have this story. It's a must read, the perfect long
Speaker 1: weekend read. Carol can't recommend it enough. And love, love,
Speaker 1: love anything. Fox puts his mind to Ben Affleck maybe
Speaker 1: does the movie. Yeah, yeah, checks out. It's just it's
Speaker 1: such a great week and it is just kind of fascinating.
Speaker 1: The guy, like, you know, while I was in in jail,
Speaker 1: like taught himself law, right, I think, so we can
Speaker 1: represent himself and understand the law. Um, so it's just
Speaker 1: a great thing. I'll put it out on Twitter. And
Speaker 1: you guys pick up the magazine or check it out
Speaker 1: at Bloomberg dot com. So really fascinating. Um, Seek Fox,
Speaker 1: what I love talking to him? I could just imagine
Speaker 1: the communication. I mean, that's kind of a side story.
Speaker 1: I mean, maybe that's how you do the movie. Like
Speaker 1: the reporter's perspective of reaching out and getting access to
Speaker 1: seek Fox. We'll have to work on that. I'll have
Speaker 1: to ask seek I don't know want to play him.
Speaker 1: I don't put that on on Twitter. This is Bloomberg
Speaker 1: Business Week with Carol Masser and Jason Kelly on Bloomberg Radio.
Speaker 1: All right, let's do a little business week economics. Now.
Speaker 1: Obviously we've been talking about it all day, the jobs
Speaker 1: report and the is data that have come out. Obviously,
Speaker 1: one of the strongest and most important voices that we
Speaker 1: turned to in the administration's Larry Cutlow, the chief Economic
Speaker 1: Advisor to the President. He caught up with our own
Speaker 1: John Farrow this morning on Blueberg Surveillance to talk about
Speaker 1: the job support. Here he talks about the trend of
Speaker 1: temporary workers getting back to work. Well, look, first of all,
Speaker 1: it's a spectacular number and it helps the overall situation enormously.
Speaker 1: So you know, that's really the key point. We've created
Speaker 1: a lot of jobs in the last couple of months,
Speaker 1: and the trends continue. I want to say one thing
Speaker 1: I was listening to that earlier conversation. I don't think
Speaker 1: people understand that relationship the rescue package that the President
Speaker 1: led with bipartisan support and Congress, and the p p
Speaker 1: P that Secretary manution uh fostered and implemented. It's the
Speaker 1: temporary layoffs, John, It's the furloughs that are coming down.
Speaker 1: We kept people connected their employers. Okay, they did receive assistance,
Speaker 1: but we kept them connected so that as the economy
Speaker 1: reopened and the businesses reopened, roughly a small business reopened.
Speaker 1: So we saw it again today. I mean, sixty three
Speaker 1: and a half percent of unemployed now are temporary workers.
Speaker 1: That number was seventy and was seven point seven million.
Speaker 1: I don't see why that trend can continue. That's the
Speaker 1: point I'm making. I don't I'm not sure. It's like
Speaker 1: an intellectual disconnect why that trend can continue a lot
Speaker 1: of temporary layoffs will go back to work. And certainly
Speaker 1: is Larry Cutler, the chief Economic codpiser to the President Carol. Yeah, absolutely,
Speaker 1: and I guess time will tell Jason right if that
Speaker 1: trend continues. I mean, he's making that point and we'll
Speaker 1: see uh in job reports to come. Certainly, that weekly
Speaker 1: number was a bit troublesome, So let's get more analysis
Speaker 1: of today's data set. Business Week Economics continuing with Bloomberg
Speaker 1: Economics senior US economist Lana shill Chiva joining a sound
Speaker 1: the phone in Long Island. So, Eleen, how did you
Speaker 1: and the Bloomberg Economics team read the data points that
Speaker 1: we got on the jobs market? Right? We got monthly
Speaker 1: jobs numbers backward looking and before we started kind of
Speaker 1: closing down parts of the economy again. And then of
Speaker 1: course we got the weekly numbers absolutely and both are
Speaker 1: very significant. So pay rolls was an upward surprise, and
Speaker 1: it was a positive report all across, once again highlighting
Speaker 1: that economic fundamentals are strong enough for the recovery to
Speaker 1: take place once the health crisis is over. And that's
Speaker 1: a big heavy at though. So because you know, we
Speaker 1: we all listen to the news, we all watch the news,
Speaker 1: and we see the big acceleration in the number of
Speaker 1: COVID nineteen cases, particularly in the Sun Belt States. And
Speaker 1: I would say that the month so July will actually
Speaker 1: help us define the trajectory of the economic growth going
Speaker 1: forward for the remainder of the year. So will we
Speaker 1: see another um round of business closures or we will
Speaker 1: just continue to jog along and and uh, you know
Speaker 1: this uh recent spike in the number of cases will subside. Uh.
Speaker 1: So I think it's it's a lot of questions the
Speaker 1: data telling us, yes, things were looking good in June,
Speaker 1: but well in July already, and a lot of things
Speaker 1: have changed since June. Yeah, I mean a lot of
Speaker 1: things have changed that I think we're already seeing in
Speaker 1: some of the other data, right, Elene, I mean, what
Speaker 1: are you looking at the givets maybe a more realistic
Speaker 1: picture of of current issues, current economic activity beyond the
Speaker 1: job and jobless claims. So you just mentioned one of them, right,
Speaker 1: And this is the number of jobless benefits and jobless
Speaker 1: benefits have been stubbornly, stubbornly elevated. So and that might
Speaker 1: not be surprising given that the re acceleration in COVID
Speaker 1: nineteen cases started right after the payroll survey week for
Speaker 1: the months of June. So the second half of June
Speaker 1: actually already saw uh pick up in cases, and that
Speaker 1: might be telling us that some businesses were ready to reopen,
Speaker 1: but they didn't, so that resulted in a significant in
Speaker 1: high number in jobless claims, or maybe there were some
Speaker 1: new um claimants and uh, this number may in fact rebounds.
Speaker 1: So Jason and I caught up with as we usually
Speaker 1: do on monthly Jobs Days, with Chris Lew, former Deputy
Speaker 1: Secretary of Labor under President Obama. And you know, his
Speaker 1: point is, you know that we learned some things from
Speaker 1: the financial crisis that they didn't put enough stimulus out
Speaker 1: in in the beginning. Right, So the lesson right now
Speaker 1: is he said, you can't be complacent that we're gonna
Speaker 1: probably need more stimulus when those benefits um stop in July. Um,
Speaker 1: is that a given, Elena that in order for us
Speaker 1: to maintain whatever economic recovery is happening right now, we're
Speaker 1: going to need those stimulus checks from the government. Bottom line. Absolutely,
Speaker 1: and uh and unfortunately as well. So I mean listening
Speaker 1: to what Mr Cuddler was saying. He was saying that
Speaker 1: they basically the package helped the companies to keep their
Speaker 1: workers on the payrolls. And this is absolutely true. The
Speaker 1: package was very timely. It was right in size, and
Speaker 1: that's why we see all these numbers that being so strong.
Speaker 1: And you absolutely right, if we if we see this
Speaker 1: UH falling off a cliff, we may see a significant
Speaker 1: decline in economic activity. Is simply due to the fact
Speaker 1: that a wage income remains well below pre crisis level.
Speaker 1: It's it's something like seven point two below that February level.
Speaker 1: We made some progress in kind of closing that gap,
Speaker 1: but it's way below still and going forward it will
Speaker 1: depend on how many jobs we create and how these
Speaker 1: jobs are playing well. The economic applications of all of
Speaker 1: this are are very broad and wide, no doubt about it. Hey, Lena,
Speaker 1: thank you so much. Have a good holiday weekend. You'll
Speaker 1: initially Giva of course of our Bloomberg Economics team joining
Speaker 1: us on the phone from Long Island. This is Bloomberg
Speaker 1: Business Week with Carol Masser and Jason Kelly on Bloomberg Radio.
Speaker 1: The virus. Jason, We've talked about this a lot. It's
Speaker 1: been a big reminder about the inequalities when it comes
Speaker 1: to health care access and those who ultimately suffer the
Speaker 1: most really from it. Dr Shemi uh Sheima excuse me.
Speaker 1: Dr Sheima Hamidi was recently named Bloomberg Assistant Professor of
Speaker 1: American Health and Environmental Challenges and Engineering at Johns Hopkins University,
Speaker 1: the Bloomberg School of Public House supported by Michael R. Bloomberg, founder,
Speaker 1: Bloomberg ALP, and Bloomberg Philanthropies, and Dr Hamidi joins us
Speaker 1: on the phone in Baltimore. Dr Remedy, It's nice to
Speaker 1: have you here with us. We are taking, you know,
Speaker 1: a really hard look at the virus and you know,
Speaker 1: talking a lot more UM how different communities are impacted,
Speaker 1: and that is something that has certainly been front and
Speaker 1: center for you. Thank you for having me um absolutely UM. So,
Speaker 1: you know, there's been a lot of UM research and
Speaker 1: uh many many researchers have been looking at different aspects
Speaker 1: of COVID nineteen pandemic. One aspect that has been less
Speaker 1: studied relatively has been density. UM to what extent we
Speaker 1: see there, you know, any connection between density and the
Speaker 1: COVID nineteen pandemic. What we see from the conversations among practitioners,
Speaker 1: UM in even in the academic context or news media outlets. Uh,
Speaker 1: you know, you see extensive coverage that blaming density urban
Speaker 1: density for the rapid growth of COVID nineteen, particularly in
Speaker 1: New York City, and referring to suburban sprawl as the
Speaker 1: United States secret weapon against Corona virus. UM. So, what
Speaker 1: myself and my team have been trying to do I
Speaker 1: was to look closer at this issue and topic, doing
Speaker 1: a national study looking at nine d and thirteen metropolitan
Speaker 1: counties in the US and really looking at what what
Speaker 1: the data sells us and what does it tell you?
Speaker 1: Because I believe in in your research, Darctor Remitte, you
Speaker 1: have you distinguished between activity density density as being distinct
Speaker 1: from crowding or overcrowding. And I feel like that's a
Speaker 1: real important distinction to help us understand that absolutely, uh,
Speaker 1: this is very very important because these are the two
Speaker 1: UM concepts that are most often confounded with each other,
Speaker 1: density and crowding or overcrowding. Crowding could happen when a
Speaker 1: large number of people gathered closely together UM, and it
Speaker 1: could happen in bars, restaurants, schools, sports events, airports, supermarket
Speaker 1: or even on beaches as you've been UM seeing on
Speaker 1: the news in Florida or or beaches in California. And
Speaker 1: by definition, the crowding could happen even at the very
Speaker 1: low density areas and all of these venues. UM and
Speaker 1: always that they've been trying to distinguish between the two
Speaker 1: crowding and density and see to what extent, Uh, you know,
Speaker 1: when you control for the level of crowding or people's
Speaker 1: level of social distancing, what is the relationship between density,
Speaker 1: UM activity, density and the COVID nineteen spread. Yeah, it's
Speaker 1: you know, something that's just kind of unfortunately a stark reality.
Speaker 1: You know when you look at this, how can we
Speaker 1: do better going forward? Because this is just you know,
Speaker 1: in terms of how people are living and their exposure.
Speaker 1: I feel like it's a reality. But how do we
Speaker 1: change that? So the first thing I want to mention is,
Speaker 1: which is our biggest message, is that density is not
Speaker 1: a factor. Uh. Dense places are not linked to a
Speaker 1: higher infection rates per capital infection rates and mortality rates.
Speaker 1: They quiet the opposite. These places are linked to significantly
Speaker 1: lower death rates. But what is really important is crowding. UM.
Speaker 1: I have done a follow up study that's currently under
Speaker 1: under review by a journal looking at New York cities,
Speaker 1: for example, and different neighborhoods in New York and what
Speaker 1: we've see in of the special disparities of the infection
Speaker 1: rates and built environment. And what I found on these
Speaker 1: twistories and the other one is that, uh, it's it's
Speaker 1: about crowding, crowded housing. UM, it's about crowded businesses um
Speaker 1: as assign mentioned bars, restaurants or other venues where you
Speaker 1: have a large number of people gathered together. UM. And
Speaker 1: it's about um, the social demographic and racial disparities. The
Speaker 1: most significant factor being um, you know being um racial
Speaker 1: disparities or percentage of African Americans who are more vulnerable
Speaker 1: to the pandemic. According to CBC. The other big factor
Speaker 1: is to what extent people are working on job sectors
Speaker 1: that allow them to do social distancing for example, UM,
Speaker 1: you know, um, the the educational attainments and job sectors. UM.
Speaker 1: The other very important factor, particularly in New York City,
Speaker 1: is the extent to be people could actually leave the
Speaker 1: city and emptying out um the city uh to scape
Speaker 1: dependemic and you have you you can see that particularly
Speaker 1: in Manhattan, New York. In Manhattan, part of New York
Speaker 1: City where um the majority of neighborhoods had a significant
Speaker 1: portion of residents leaving the city and by definition, you
Speaker 1: can't get the virus, you know, if you leave the
Speaker 1: city right But you can only do that if you
Speaker 1: can afford to leave rightly in terms of your jobs.
Speaker 1: And that is definitely something we've talked about a lot,
Speaker 1: certainly on our broadcast in fact, just talking about some
Speaker 1: of the closings when it comes to Manhattan real estate
Speaker 1: right now and what's going on. But that that exodus
Speaker 1: is something we've talked about and who can do it?
Speaker 1: Dr Sima Hamdy, she is Bloomberg Assistant Professor of American Health,
Speaker 1: Environmental Challenges and Engineering at Johns Hopkins University, joining us
Speaker 1: on the phone from Baltimore, and all but you let
Speaker 1: me drive? Oh no, no, no no, no, honey, please, I'll
Speaker 1: do the riding drivel. I want to drive. Just drive, baby,
Speaker 1: good questions trying. This is the drive to the Globe community.
Speaker 1: Thanks well, try us on Bloomberg Radio. Well, all right,
Speaker 1: as we drive to the clothes on this Thursday, the
Speaker 1: end of the trading week ahead of the long holiday weekend,
Speaker 1: let's check in with our pal, Alan Zaffron, founding partner
Speaker 1: in co CEO of I e Q Capital. He joins
Speaker 1: us on the phone from Foster City at California, Alan,
Speaker 1: how are you. I'm doing great, seventy three the grades, Johnny,
Speaker 1: no humidity. It is a beautiful day in California. My
Speaker 1: friend good well, I'm glad to hear it. Um. I
Speaker 1: gotta ask you. You know, you get to the end
Speaker 1: of this week, you see the job to report, you
Speaker 1: see the jobless claims to report. You're seeing the headlines
Speaker 1: in California that we are that are pretty scary when
Speaker 1: it comes to what's going on with the virus in
Speaker 1: California and Texas, in Arizona and Florida and elsewhere. How
Speaker 1: do you square it all? You square it all because
Speaker 1: you realize a lot of the capital that the balance
Speaker 1: sheet is expansion. For the sad it's happening is going
Speaker 1: right to the stock market. It's not connected to people
Speaker 1: working in the leisure and hospitality industry are out here
Speaker 1: in southern California's the motion picture and sound recording industry.
Speaker 1: Those people have lost jobs and it's not clear they're
Speaker 1: coming back. So there's clearly a disconnect between the current
Speaker 1: status of the financial markets in the main economy and
Speaker 1: it's it's difficult because patients is going to play out
Speaker 1: that probably this was the right thing to do, is
Speaker 1: goose up the economy, and it's very hard to swallow
Speaker 1: if you don't have a job right now, you watch
Speaker 1: the market go up and you feel like you're not participating.
Speaker 1: It's a very difficult visceral thing to experien because you're
Speaker 1: not participating. I think that's the one thing to alan
Speaker 1: that I do get a little concerned that folks in
Speaker 1: Washington the administration are focusing maybe too much as are
Speaker 1: on the stock market as an indicator of us bouncing
Speaker 1: back from the virus. When we know that a large
Speaker 1: part of Americans don't participate in the equity markets. Well
Speaker 1: that's right. You know something close to six Americans have
Speaker 1: less than twenty five thousand dollars of safet. Do you
Speaker 1: wonder why there's a gap that says it right there?
Speaker 1: And unfortunately think COVID has accelerated a lot of trends,
Speaker 1: one of which is the widening gap between the rich
Speaker 1: and report. If you have a balance sheet, you're actually
Speaker 1: benishiting as we bounced back. If you live you know
Speaker 1: day to day, Um, you may have lost that job
Speaker 1: and you don't have any savings. The benefit here, um,
Speaker 1: it is incredibly difficult um to message properly. But you know,
Speaker 1: I look at the Sandilis said, President of Buller just
Speaker 1: came out and he said, we're keeping the balot a
Speaker 1: sheet loose for a long while because we are worried
Speaker 1: about a potential wave of bankruptcies if the health crisis
Speaker 1: gets out of control. It's not our base case, but
Speaker 1: we have to be ready in advance. We can't react
Speaker 1: after the fact that the consequence of that if you
Speaker 1: get an expansion the FED balance sheet, and if you
Speaker 1: believe Morgan Stanley and Jeffreys, somewhere between seventy the balance
Speaker 1: sheet expansion flows right through the stocks. And so we asked,
Speaker 1: why are we bouncing up right now? The belief is
Speaker 1: the Fed is going to expand the balance sheet kind
Speaker 1: of around ten trillion dollars. Well, we've already expanded six trillions.
Speaker 1: And so you say to yourself, you know what does
Speaker 1: that mean? Well, put it in context. So follow the
Speaker 1: math the market right now, the SMP five hundreds worth
Speaker 1: about twenty seven trillion. Every one trillion dollars a stimulus
Speaker 1: adds so quickly. And if you go back to Europe,
Speaker 1: in Japan, their balance sheets in the Central Bank are
Speaker 1: a hundred percent of ep R GDP is twenty trillion.
Speaker 1: Instead of going from six to ten trillion, we go
Speaker 1: from six to twenty trillion. Bearing in mind that slows
Speaker 1: through the stocks. You're gonna see a huge move up
Speaker 1: on the stock market. And that's why you don't fight
Speaker 1: the fact if money is flowing right into the stock most,
Speaker 1: and that's that's a really hard bill to swallow. If
Speaker 1: you were working in the motion theater industry or a
Speaker 1: sight seeing industry, or some kind of transiitent ground transportation,
Speaker 1: those are all the jobs have been lost, and it's
Speaker 1: really tough to swallow. And so um the fat has
Speaker 1: to play that loose because and then we've gotta wave
Speaker 1: a bankruptcy. There's got to be a mechanism to take
Speaker 1: care of those people who don't have the jobs. So
Speaker 1: Alan talk to me about real estate because it's something
Speaker 1: that I know you think about. We think about it
Speaker 1: here on the East Coast. I think if you're in
Speaker 1: one of these like highly or very expensive areas, both
Speaker 1: from a commercial and a residential perspective, you sort of
Speaker 1: wonder what the future is. You wonder where the other
Speaker 1: shoote ops if it does when it comes to real estate,
Speaker 1: how do you think about real estate in this environment?
Speaker 1: Real estate is really challenged because I don't know what
Speaker 1: the rules are regarding poor bearance. So um, I think
Speaker 1: all you can do is recognized the banks don't want
Speaker 1: to take possessions of buildings if you're a landlords. Landlords
Speaker 1: like they're getting stuck with the fact that they have
Speaker 1: to deal with people differing the rent payments. The reality
Speaker 1: of a lot of people differing the rent payments can't
Speaker 1: afford to make the payments. I'm not sure everyone's game
Speaker 1: playing the system. I think it is difficult to be
Speaker 1: an investor in real estate in the short run, in
Speaker 1: that you don't know what your cash flows are going
Speaker 1: to be from people renting apartments, store owners in office buildings.
Speaker 1: I think the assurances if you're it's like everything else,
Speaker 1: if you're in the right location with the right type
Speaker 1: of property, Um, you can recognize today this is still
Speaker 1: going to be a somewhat temporary, uh situation of diminished
Speaker 1: cash flow as long as in the white property. If
Speaker 1: you're in a tertiary property in an office building, good luck.
Speaker 1: So I think this whole crisis reinforces real esty comes
Speaker 1: down to a quality of property, and even if you
Speaker 1: think there's a modest diminishment of cash flow in the
Speaker 1: next three to twelve months, um, that property is going
Speaker 1: to hold during value long one. We will get through
Speaker 1: this eventually, and there will still be people eventually working
Speaker 1: out of office buildings, and people will still be paying
Speaker 1: the rent, paying the rent because they will still mostly
Speaker 1: be employed. It says to me, though, alan the building
Speaker 1: boom that we've seen in so many different cities, you know,
Speaker 1: out of the Great Recession, and certainly in the last
Speaker 1: few years, you know it's going to ultimately they'll mean
Speaker 1: that we've done some overbuilding here. We've done a lot
Speaker 1: of overbuilding, particularly in retails. You're gonna see retail, by
Speaker 1: the way, is going to get repurposed um in the
Speaker 1: forms of things life apartment buildings, or in the thing
Speaker 1: that hip and cool office going forward, but with more
Speaker 1: square foot per employee, which may make it a little
Speaker 1: less attractive cash flow perspectives. But the reality is we
Speaker 1: are over retailed, we are overbuilt selectively. The flip side
Speaker 1: of that is you're going to see renewed demand for housing,
Speaker 1: suburban housing. You're going to see a whole new wave
Speaker 1: of interest either in high quality apartment or in single
Speaker 1: family residential away from the city and more towards the suburbs. Interesting. Yeah,
Speaker 1: I mean I feel like there's a lot left to
Speaker 1: be figured out and written and said about this. Allen Zaffron,
Speaker 1: Always good to catch up with you, so thoughtful as always,
Speaker 1: Joining us from Foster City, California. Allen Zaffron, founding partner
Speaker 1: and co CEO of I e Q Capital. Thanks so
Speaker 1: much for listening to Bloomberg Business Week. Download the podcast
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