1 00:00:00,280 --> 00:00:02,599 Speaker 1: This is Bloomberg Wall Street Week. 2 00:00:02,680 --> 00:00:07,280 Speaker 2: The global push into infrastructure, breaking the IPO logjam in text. 3 00:00:07,160 --> 00:00:09,280 Speaker 3: The financial stories that shape. 4 00:00:08,920 --> 00:00:12,040 Speaker 2: Our work, cutting inflation without losing jobs. Do we need 5 00:00:12,119 --> 00:00:14,560 Speaker 2: rate cuts and if so? How many? Investing in the 6 00:00:14,560 --> 00:00:16,120 Speaker 2: time of geopolitical turmoil? 7 00:00:16,200 --> 00:00:18,560 Speaker 1: Through the eyes of the most influential voices. 8 00:00:18,720 --> 00:00:22,480 Speaker 2: Ten Rogueff economists at Harvard, former FDIC had Shiela Bert 9 00:00:22,640 --> 00:00:27,360 Speaker 2: ge CEO, Larry Kulp, San Francisco FED President Mary Daily, Bloomberg. 10 00:00:26,840 --> 00:00:30,240 Speaker 1: Wall Street Week with David Weston from Bloomberg Radio. 11 00:00:30,360 --> 00:00:33,560 Speaker 2: Great Britain gets a snap election, the FED debates whether 12 00:00:33,600 --> 00:00:37,880 Speaker 2: it's gone high enough, and Nvidia shoots the lights out again. 13 00:00:38,520 --> 00:00:42,400 Speaker 2: This is Bloomberg Wall Street Week. I'm David Weston. This week, 14 00:00:42,479 --> 00:00:45,440 Speaker 2: former New Jersey Governor Christine Todd Whitman tells us that 15 00:00:45,520 --> 00:00:48,919 Speaker 2: small nuclear reactors may be the answer for our AI 16 00:00:49,040 --> 00:00:50,360 Speaker 2: data center needs. 17 00:00:50,760 --> 00:00:53,680 Speaker 4: The manas for power of these data centers is in enormous. 18 00:00:54,480 --> 00:00:57,520 Speaker 2: Nobel Prize winning economist Paul Kruman on why he doesn't 19 00:00:57,560 --> 00:00:59,320 Speaker 2: know where interest rates are headed. 20 00:01:00,080 --> 00:01:04,280 Speaker 5: On interest rates, I am fanatically confused. 21 00:01:05,040 --> 00:01:08,240 Speaker 2: And Henry McVay KKR reports on his trip to China 22 00:01:08,560 --> 00:01:10,080 Speaker 2: and what needs to come. 23 00:01:09,920 --> 00:01:12,959 Speaker 6: Next, they can actually encourage more urbanization. 24 00:01:26,080 --> 00:01:28,320 Speaker 2: We start with the week in the markets, where equities 25 00:01:28,400 --> 00:01:31,119 Speaker 2: ended strong after a sag in the middle of the week. 26 00:01:31,280 --> 00:01:33,000 Speaker 3: The S and P five hundred ended up just. 27 00:01:32,959 --> 00:01:35,480 Speaker 2: A bit at fifty three h four, which keep them 28 00:01:35,520 --> 00:01:38,800 Speaker 2: above the Bloomberg Els median year and number of fifty 29 00:01:38,840 --> 00:01:41,880 Speaker 2: two hundred. The Nasdaq added one point four percent for 30 00:01:41,920 --> 00:01:44,000 Speaker 2: the week, while the yield on the tenure was up 31 00:01:44,080 --> 00:01:46,360 Speaker 2: just over four basis points to end the week at 32 00:01:46,400 --> 00:01:48,880 Speaker 2: four point four to six percent. To take us through 33 00:01:48,920 --> 00:01:51,559 Speaker 2: what we've seen this week, welcome back now, Scott Kroner. 34 00:01:51,840 --> 00:01:54,760 Speaker 2: He's City US equity strategist. Scott, always a delight to 35 00:01:54,760 --> 00:01:56,440 Speaker 2: have you with us. So give us a sense of 36 00:01:56,440 --> 00:01:58,480 Speaker 2: what we think you saw this week. As I say, 37 00:01:58,640 --> 00:02:00,560 Speaker 2: it's sagging the length and it came back at the end. 38 00:02:00,560 --> 00:02:02,000 Speaker 3: What's going on? Right? 39 00:02:02,040 --> 00:02:04,440 Speaker 7: So I think what's going on is the market continues 40 00:02:04,480 --> 00:02:08,520 Speaker 7: to navigate where we think we are regarding economic conditions 41 00:02:08,560 --> 00:02:10,440 Speaker 7: and the read through to FED policy. 42 00:02:10,600 --> 00:02:12,160 Speaker 8: Okay, so we're back. 43 00:02:12,000 --> 00:02:15,280 Speaker 7: And forth between stronger economic data which would signal a 44 00:02:15,360 --> 00:02:19,040 Speaker 7: higher for longer FED versus signs of softening and ongoing 45 00:02:19,080 --> 00:02:20,000 Speaker 7: deceleration and. 46 00:02:19,960 --> 00:02:22,880 Speaker 8: Inflation, which gives a little bit more confidence. 47 00:02:22,400 --> 00:02:23,480 Speaker 3: That you get a FED pivot. 48 00:02:23,720 --> 00:02:26,919 Speaker 7: So we're back and forth between this ongoing debate and 49 00:02:27,160 --> 00:02:30,680 Speaker 7: the data. It tends to be supportive on a transitory 50 00:02:30,720 --> 00:02:34,160 Speaker 7: basis on both sides. In the meantime, we continue to 51 00:02:34,160 --> 00:02:37,200 Speaker 7: have this new growth driver in town. We're now a 52 00:02:37,280 --> 00:02:40,960 Speaker 7: year into this generative AI craze, if you will, and 53 00:02:41,000 --> 00:02:44,000 Speaker 7: it was reinforced this week. So a number of things 54 00:02:44,040 --> 00:02:46,079 Speaker 7: going on in both the macro and then let's call 55 00:02:46,120 --> 00:02:50,320 Speaker 7: it the micro and new growth paradigm approach as well. 56 00:02:50,440 --> 00:02:51,720 Speaker 2: Well, Scott, as I listened to you, I wonder if 57 00:02:51,760 --> 00:02:53,680 Speaker 2: that's a little bit of microcosmic with a year so far, 58 00:02:53,720 --> 00:02:55,880 Speaker 2: because we go back and look the first quarter, the 59 00:02:55,880 --> 00:02:57,640 Speaker 2: equies were really on the march off the S and 60 00:02:57,639 --> 00:02:59,400 Speaker 2: P of five hundred. Then it dipped at the beginning 61 00:02:59,360 --> 00:03:01,320 Speaker 2: of the second quarter and it's come back up again. 62 00:03:01,520 --> 00:03:03,480 Speaker 2: Now we went into the year expecting what was it, 63 00:03:03,600 --> 00:03:05,639 Speaker 2: six rakes cuts and now we're down to maybe one 64 00:03:05,680 --> 00:03:06,320 Speaker 2: one and a half. 65 00:03:07,000 --> 00:03:10,240 Speaker 7: Yeah, So it's really interesting the way the market is 66 00:03:10,320 --> 00:03:13,280 Speaker 7: navigating this. The way we tend to think of it, 67 00:03:13,320 --> 00:03:16,320 Speaker 7: and the data tends to show this is that the 68 00:03:16,360 --> 00:03:20,000 Speaker 7: growth profile and the growth influence on equities can often 69 00:03:20,200 --> 00:03:25,040 Speaker 7: outweigh the interest rate influence as it pertains to the 70 00:03:25,120 --> 00:03:30,600 Speaker 7: discounting mechanism and expectations for economic activity. What's been happening 71 00:03:30,720 --> 00:03:33,560 Speaker 7: is that growth has been winning as more and more 72 00:03:33,639 --> 00:03:38,440 Speaker 7: companies are now getting on this generative AI phase and 73 00:03:38,920 --> 00:03:42,680 Speaker 7: really going more aggressively down the path of investing in 74 00:03:43,000 --> 00:03:47,600 Speaker 7: future opportunities that should support longer term growth drivers for 75 00:03:47,680 --> 00:03:50,360 Speaker 7: the broader US equity markets. 76 00:03:50,400 --> 00:03:52,840 Speaker 2: And what about your views, because you are delighted to 77 00:03:52,840 --> 00:03:54,360 Speaker 2: say one of our elves, as we call you, the 78 00:03:54,400 --> 00:03:56,400 Speaker 2: Bloomberg elis here one of the analysts. You set it out 79 00:03:56,400 --> 00:03:58,360 Speaker 2: that year toward the top of the pack of elves, 80 00:03:58,640 --> 00:03:59,400 Speaker 2: and now you're. 81 00:03:59,280 --> 00:04:01,200 Speaker 3: Sort of toward the did you move or did the 82 00:04:01,280 --> 00:04:02,160 Speaker 3: rest of the pack move? 83 00:04:03,000 --> 00:04:05,240 Speaker 7: I say, essentially, what's happening is the rest of the 84 00:04:05,280 --> 00:04:07,640 Speaker 7: pack has been marketing with the market move and is 85 00:04:07,880 --> 00:04:10,880 Speaker 7: leapfrogging us a bit, which is fine. I think the 86 00:04:10,920 --> 00:04:13,320 Speaker 7: way we're looking at it is that we're still expressing 87 00:04:13,320 --> 00:04:17,240 Speaker 7: a very constructive view on the fundamental setup for US 88 00:04:17,279 --> 00:04:20,560 Speaker 7: equities at this point, particularly the S and P five hundred, 89 00:04:20,839 --> 00:04:22,880 Speaker 7: But we do have to recognize it a lot has 90 00:04:22,920 --> 00:04:26,800 Speaker 7: happened pretty quickly from a performance perspective, and more recently, 91 00:04:27,279 --> 00:04:32,400 Speaker 7: our ongoing panic euphoria model is tripped into euphoria, which 92 00:04:32,440 --> 00:04:35,160 Speaker 7: is usually not a great sign for forward performance. 93 00:04:35,480 --> 00:04:39,040 Speaker 8: At the same time, we've seen valuations. 94 00:04:38,279 --> 00:04:42,400 Speaker 7: Move higher to a point where the implied growth expectations 95 00:04:42,680 --> 00:04:46,160 Speaker 7: supporting this market are getting pretty aggressive, so put us 96 00:04:46,200 --> 00:04:50,760 Speaker 7: in an ongoing fundamentally constructive view, but shorter term, we 97 00:04:50,800 --> 00:04:52,960 Speaker 7: think the risk rewards pretty balanced right now. 98 00:04:53,040 --> 00:04:55,159 Speaker 2: David, what about the breadth of the market going into 99 00:04:55,160 --> 00:04:57,320 Speaker 2: the year, We were really concerned it was so narrow. 100 00:04:57,560 --> 00:04:59,719 Speaker 2: There was some hope that we're broadening out. Is it 101 00:04:59,760 --> 00:05:02,360 Speaker 2: brought out from that Magnificent seven or whatever you want 102 00:05:02,360 --> 00:05:02,800 Speaker 2: to call them? 103 00:05:03,440 --> 00:05:05,120 Speaker 7: I think it is, but not in the way that 104 00:05:05,200 --> 00:05:07,960 Speaker 7: many were expecting from a performance perspective. 105 00:05:08,600 --> 00:05:10,240 Speaker 8: Off of the rally that began. 106 00:05:10,160 --> 00:05:14,400 Speaker 7: Last November, we saw areas such as industrials and financials 107 00:05:14,480 --> 00:05:18,080 Speaker 7: participate quite strongly as this year unfolded. 108 00:05:18,440 --> 00:05:20,440 Speaker 8: Then as we hit the middle part. 109 00:05:20,320 --> 00:05:23,880 Speaker 7: Of this year thus far, we began to see other areas. 110 00:05:24,080 --> 00:05:26,600 Speaker 7: Energy kicked in for a period of time, and more 111 00:05:26,640 --> 00:05:30,880 Speaker 7: recently it's been utilities. So while tech communications services are 112 00:05:30,920 --> 00:05:32,599 Speaker 7: still your leading sectors. 113 00:05:32,839 --> 00:05:34,760 Speaker 8: You are seeing different pockets of. 114 00:05:34,760 --> 00:05:37,760 Speaker 7: The market kick in at different times, and it ends 115 00:05:37,839 --> 00:05:39,720 Speaker 7: up supporting this broader index move. 116 00:05:40,040 --> 00:05:42,479 Speaker 2: So, Scott, you mentioned actually a year ago you pointed 117 00:05:42,480 --> 00:05:43,880 Speaker 2: out it was just a year ago that a company, 118 00:05:43,880 --> 00:05:46,279 Speaker 2: I know you don't talk individual companies, I'll name the company, 119 00:05:46,279 --> 00:05:48,680 Speaker 2: and Vidia came out with those blockbuster numbers. We had 120 00:05:48,720 --> 00:05:50,760 Speaker 2: some more this week, but it sped out from Nvidia. 121 00:05:50,800 --> 00:05:52,800 Speaker 2: There are all other companies as well that seem to 122 00:05:52,839 --> 00:05:54,800 Speaker 2: get along for the ride. At the same time, a 123 00:05:54,800 --> 00:05:56,760 Speaker 2: lot of other companies are spending money right now. They're 124 00:05:56,800 --> 00:06:00,240 Speaker 2: investing money, so why does that buttress their stock because 125 00:06:00,240 --> 00:06:01,680 Speaker 2: they actually haven't spent coming in. 126 00:06:01,880 --> 00:06:04,000 Speaker 7: Yeah, So I think the way this is setting up, 127 00:06:04,000 --> 00:06:07,400 Speaker 7: we're spending a lot more time now talking about capital expenditures, 128 00:06:07,560 --> 00:06:10,120 Speaker 7: and I think one of the dynamics that is at 129 00:06:10,160 --> 00:06:12,880 Speaker 7: hand right now is that you're seeing a lot of 130 00:06:12,920 --> 00:06:18,799 Speaker 7: the investment into AI and related applications, and the semiconductor 131 00:06:18,839 --> 00:06:23,280 Speaker 7: comportion component of that feels that quite quite directly, as 132 00:06:23,320 --> 00:06:27,200 Speaker 7: does the software component. But so we're watching this AI 133 00:06:27,520 --> 00:06:30,800 Speaker 7: narrative unfold through two paths. The first is you're going 134 00:06:30,839 --> 00:06:33,839 Speaker 7: to have companies that are directly exposed. These tend to 135 00:06:33,839 --> 00:06:36,839 Speaker 7: be your mag seven or Big seven components, where we're 136 00:06:36,839 --> 00:06:39,919 Speaker 7: going to be measuring them directly on the way AI 137 00:06:40,080 --> 00:06:43,000 Speaker 7: is feeding their fundamentals in the months to come. On 138 00:06:43,040 --> 00:06:46,160 Speaker 7: the other hand, the bigger picture, and perhaps the more 139 00:06:46,240 --> 00:06:50,080 Speaker 7: important longer term picture, is that now as more and 140 00:06:50,120 --> 00:06:53,960 Speaker 7: more companies embrace the opportunity in generator of AI, they're 141 00:06:54,000 --> 00:06:59,680 Speaker 7: putting a lot of effort into establishing their own ways 142 00:06:59,720 --> 00:07:02,680 Speaker 7: of of benefiting from AI. What this is going to 143 00:07:02,760 --> 00:07:06,440 Speaker 7: mean over time is that the investment and spending that's 144 00:07:06,560 --> 00:07:12,280 Speaker 7: unfolding right now should translate into various forms of productivity enhancement, 145 00:07:12,480 --> 00:07:15,840 Speaker 7: perhaps margin improvement, and ultimately what we really want to 146 00:07:15,840 --> 00:07:21,320 Speaker 7: see is profitability enhancement, which in turn leads to higher valuations. 147 00:07:21,720 --> 00:07:24,920 Speaker 7: All told, the setup is very clear right now. It's 148 00:07:24,920 --> 00:07:27,880 Speaker 7: going to play out as I mentioned, months and perhaps 149 00:07:27,960 --> 00:07:30,480 Speaker 7: in some cases over the next couple of years. 150 00:07:30,680 --> 00:07:33,120 Speaker 8: But what it's doing is providing. 151 00:07:32,840 --> 00:07:36,200 Speaker 7: The broader market, as we mentioned at the outset, a 152 00:07:36,360 --> 00:07:41,200 Speaker 7: very compelling longer term growth opportunity that is taking fundamental 153 00:07:41,240 --> 00:07:45,520 Speaker 7: expectations over and above traditional economic sensitivities. 154 00:07:45,560 --> 00:07:48,080 Speaker 2: How much time do we have before they have to 155 00:07:48,160 --> 00:07:49,400 Speaker 2: deliver on that productivity. 156 00:07:50,200 --> 00:07:50,960 Speaker 8: It's going to vary. 157 00:07:51,000 --> 00:07:53,360 Speaker 7: We think for some of the more direct beneficiaries, they 158 00:07:53,440 --> 00:07:56,920 Speaker 7: need to start showing it in the months in quarters 159 00:07:56,920 --> 00:07:59,560 Speaker 7: to come. For companies where it's going to be more 160 00:07:59,600 --> 00:08:02,960 Speaker 7: of a prot activity enhancing application, we're going to be 161 00:08:02,960 --> 00:08:05,520 Speaker 7: watching for that. I think probably is twenty twenty five 162 00:08:05,600 --> 00:08:07,880 Speaker 7: kicks in and beyond, so it's going to be in 163 00:08:07,920 --> 00:08:11,080 Speaker 7: some cases months, quarters and other cases. We have to 164 00:08:11,080 --> 00:08:13,240 Speaker 7: give companies a couple of years to build these these 165 00:08:13,720 --> 00:08:16,040 Speaker 7: products and services in product Tooty, thanks so much. 166 00:08:16,040 --> 00:08:19,760 Speaker 2: Set's got Chronic City US equity strategies. China is on 167 00:08:19,840 --> 00:08:23,040 Speaker 2: everyone's minds right now. Where it's going, where it's the economy, 168 00:08:23,160 --> 00:08:26,280 Speaker 2: is where investment opportunities may be. Henry k Vay, he's 169 00:08:26,280 --> 00:08:28,720 Speaker 2: the CIO of KKR balance Sheet, goes around the world 170 00:08:28,800 --> 00:08:31,600 Speaker 2: and travels to places like China, comes back with reports. 171 00:08:31,600 --> 00:08:33,679 Speaker 2: And he's just come back from China right now. We're 172 00:08:33,679 --> 00:08:35,920 Speaker 2: welcoming back now to Wall Street weeks. So Henry, great 173 00:08:35,920 --> 00:08:38,320 Speaker 2: to have you back with us. We've done different countries 174 00:08:38,400 --> 00:08:40,840 Speaker 2: that Japan, we've done Indian, now let's do China. 175 00:08:41,000 --> 00:08:44,120 Speaker 3: Great just coming back would you learn you know, I'd say. 176 00:08:43,960 --> 00:08:46,840 Speaker 6: On the positive the economy is bottoming. We heard a 177 00:08:46,840 --> 00:08:49,480 Speaker 6: couple of different data points, I think from companies in 178 00:08:49,520 --> 00:08:52,120 Speaker 6: the logistics business that are seeing the US consumer pick 179 00:08:52,200 --> 00:08:54,000 Speaker 6: up a bit, So that was a positive, and I 180 00:08:54,040 --> 00:08:56,559 Speaker 6: do think we're things have bottomed also in Europe and 181 00:08:56,559 --> 00:08:59,600 Speaker 6: there's a little bit more demand. But overall it's still 182 00:08:59,640 --> 00:09:03,679 Speaker 6: a pretty sluggish economy post COVID, with very low inflation. 183 00:09:03,960 --> 00:09:08,079 Speaker 2: And the growth that is there is not evenly distributed. 184 00:09:08,120 --> 00:09:09,840 Speaker 2: There's some areas growing much more than others. 185 00:09:09,880 --> 00:09:12,079 Speaker 6: As I understand it, We've spent a lot of time. 186 00:09:12,120 --> 00:09:14,120 Speaker 6: I've actually been to China four times in the last 187 00:09:14,160 --> 00:09:16,240 Speaker 6: five quarters, so I'll give you how I think the 188 00:09:16,280 --> 00:09:19,160 Speaker 6: evolution of the economy is changing. Really, a lot of 189 00:09:19,200 --> 00:09:22,200 Speaker 6: people focus on fixed investment, they focus on exports. I 190 00:09:22,200 --> 00:09:25,240 Speaker 6: think the Chinese government is really repositioning the economy towards 191 00:09:25,280 --> 00:09:27,960 Speaker 6: a couple of different things. One is this whole idea 192 00:09:28,080 --> 00:09:32,040 Speaker 6: of digitalization, particularly as it relates to the industrial sector. 193 00:09:32,280 --> 00:09:34,920 Speaker 6: They're trying to automate that sector be more effective and 194 00:09:35,000 --> 00:09:37,640 Speaker 6: more competitive globally. In the past, I think a lot 195 00:09:37,679 --> 00:09:40,240 Speaker 6: of people thought about China in terms of e commerce 196 00:09:40,280 --> 00:09:43,640 Speaker 6: Ali Baba, domestic consumption. The focus right now from the 197 00:09:43,679 --> 00:09:47,319 Speaker 6: government really is on industrial automation. China today actually has 198 00:09:47,320 --> 00:09:49,920 Speaker 6: about half the world's robots on the industrial side, which 199 00:09:49,960 --> 00:09:53,160 Speaker 6: is an amazing statistic. The second big driver is around 200 00:09:53,240 --> 00:09:57,360 Speaker 6: the green effort, and they're trying to really dominate batteries, 201 00:09:58,200 --> 00:10:01,480 Speaker 6: evs and solar panel that and they're trying to export 202 00:10:01,520 --> 00:10:05,079 Speaker 6: some of that globally. So those are really the growth drivers. 203 00:10:05,280 --> 00:10:09,640 Speaker 6: The offset, which is still problematic is around housing and 204 00:10:09,720 --> 00:10:11,920 Speaker 6: our estimate as they have somewhere between kind of twenty 205 00:10:11,960 --> 00:10:15,080 Speaker 6: and thirty million too many homes and so they're trying 206 00:10:15,120 --> 00:10:18,400 Speaker 6: to clean that out right now. But that's a disinflationary 207 00:10:18,440 --> 00:10:21,920 Speaker 6: force and it clearly has an impact on domestic psychology 208 00:10:21,920 --> 00:10:22,360 Speaker 6: as well. 209 00:10:22,559 --> 00:10:26,240 Speaker 2: Someone What China is investing in the green transition has 210 00:10:26,280 --> 00:10:28,480 Speaker 2: gotten the attention of places like the United States and Europe, 211 00:10:28,520 --> 00:10:32,240 Speaker 2: whether it's solar panels or batteries or evs, because there's 212 00:10:32,280 --> 00:10:34,720 Speaker 2: a concern of a build of overcapacity. 213 00:10:35,200 --> 00:10:37,319 Speaker 3: Do you see over capacity and what does that do 214 00:10:37,400 --> 00:10:38,000 Speaker 3: to margins? 215 00:10:38,240 --> 00:10:40,360 Speaker 6: I think what's going to happen around the world right 216 00:10:40,400 --> 00:10:42,880 Speaker 6: now is that industries such as autos are going to 217 00:10:42,880 --> 00:10:45,679 Speaker 6: become of national interests. We've already seen that in technology 218 00:10:45,920 --> 00:10:48,960 Speaker 6: could expand into two other sectors, so there's definitely going 219 00:10:49,000 --> 00:10:54,000 Speaker 6: to be sensitivity. You saw President Biden talked about increasing 220 00:10:54,040 --> 00:10:56,760 Speaker 6: the tariff there. Europe, I think is going to do 221 00:10:56,800 --> 00:10:59,920 Speaker 6: a similar a similar type of strategy. So you can 222 00:11:00,080 --> 00:11:02,800 Speaker 6: have capacity. The question is is where can that capacity go. 223 00:11:03,120 --> 00:11:05,160 Speaker 6: I think probably if you're China, you'll see more of 224 00:11:05,200 --> 00:11:08,680 Speaker 6: it go into places such as Latin America, other places 225 00:11:09,080 --> 00:11:12,880 Speaker 6: maybe Eastern Europe or where they have partners that maybe 226 00:11:12,880 --> 00:11:16,720 Speaker 6: there's increasing kind of bilateral trade. That doesn't seem to 227 00:11:16,720 --> 00:11:18,600 Speaker 6: be the case in the US and Europe right now. 228 00:11:18,880 --> 00:11:19,760 Speaker 3: So there is growth. 229 00:11:19,800 --> 00:11:22,040 Speaker 2: You found growth there, as you said, it's bottomed. At 230 00:11:22,080 --> 00:11:24,319 Speaker 2: the same time when you're take into account the disinflation, 231 00:11:24,520 --> 00:11:27,280 Speaker 2: the nominal GDP actually is not growing at the same 232 00:11:27,360 --> 00:11:29,719 Speaker 2: rate as that some other places like Europe and the 233 00:11:29,840 --> 00:11:30,319 Speaker 2: United States. 234 00:11:30,400 --> 00:11:33,280 Speaker 6: If I could give an insight to your viewers, KKR 235 00:11:33,360 --> 00:11:35,920 Speaker 6: typically has one hundred and fifty businesses around the world, 236 00:11:35,960 --> 00:11:38,040 Speaker 6: you know upwards of two hundred now where we operate. 237 00:11:38,320 --> 00:11:41,920 Speaker 6: You've got to focus on nominal revenues. Nominal GDP what 238 00:11:41,960 --> 00:11:45,200 Speaker 6: does that mean? It's real GDP plus inflation. A lot 239 00:11:45,280 --> 00:11:48,160 Speaker 6: of times the cell side focuses on real GDP and 240 00:11:48,200 --> 00:11:50,839 Speaker 6: what you've seen in China. When I started going there 241 00:11:50,880 --> 00:11:53,000 Speaker 6: in nineteen ninety five and when I started at KRE, 242 00:11:53,160 --> 00:11:55,840 Speaker 6: nominal GDP was in the teens and twenty percent. There's 243 00:11:55,880 --> 00:11:57,640 Speaker 6: a lot of growth and a lot of profit that 244 00:11:58,040 --> 00:12:00,560 Speaker 6: comes with that. Today that number is probably about a 245 00:12:00,559 --> 00:12:03,840 Speaker 6: third of that. So really that inflation component has come down. 246 00:12:04,040 --> 00:12:04,960 Speaker 6: And then second thing. 247 00:12:04,840 --> 00:12:05,880 Speaker 3: Is on the real GDP. 248 00:12:06,280 --> 00:12:10,000 Speaker 6: The productivity has come down in concert with slower labor 249 00:12:10,040 --> 00:12:12,400 Speaker 6: force growth, so it is a big deal. At the 250 00:12:12,440 --> 00:12:15,120 Speaker 6: same time, the Western world has put a huge amount 251 00:12:15,160 --> 00:12:18,240 Speaker 6: of fiscal stimulus into the system and that's driving a 252 00:12:18,280 --> 00:12:21,360 Speaker 6: little more inflation, a little more nominal GDP. 253 00:12:21,720 --> 00:12:23,679 Speaker 3: Thank you so much, Henry, Always love having you on. 254 00:12:24,000 --> 00:12:27,559 Speaker 2: That's henryk vay Cio of the KKR balance Sheet. 255 00:12:28,920 --> 00:12:29,400 Speaker 3: Coming up. 256 00:12:29,440 --> 00:12:32,280 Speaker 2: If we're all going to use generative AI, then we're 257 00:12:32,320 --> 00:12:35,040 Speaker 2: going to need a lot more power. We talk with 258 00:12:35,080 --> 00:12:38,760 Speaker 2: former New Jersey governor and EPA administrator Christine Todd Whitman 259 00:12:38,920 --> 00:12:42,000 Speaker 2: about whether nuclear power could be part of the answer. 260 00:12:42,360 --> 00:12:44,760 Speaker 4: But this is where small module reactors can be perfect 261 00:12:44,760 --> 00:12:46,960 Speaker 4: because you just can put them there right next to 262 00:12:47,000 --> 00:12:48,000 Speaker 4: those data centers. 263 00:12:49,240 --> 00:12:51,520 Speaker 3: That's next on Wall Street Week on Bloomberg. 264 00:12:52,640 --> 00:12:56,840 Speaker 1: This is Bloomberg Well Street Week with David Weston from 265 00:12:56,960 --> 00:13:02,720 Speaker 1: Bloomberg Radio. 266 00:13:04,679 --> 00:13:06,400 Speaker 3: This is Wall Street Week. I'm David Weston. 267 00:13:06,480 --> 00:13:09,840 Speaker 2: The sprint toward generative AI has turbocharged the move to 268 00:13:09,840 --> 00:13:12,840 Speaker 2: build data centers, and every one of them needs power, 269 00:13:13,200 --> 00:13:15,880 Speaker 2: lots of it, with some believing they provide a good 270 00:13:16,000 --> 00:13:19,199 Speaker 2: use case for those small modular nuclear reactors we've heard 271 00:13:19,200 --> 00:13:19,720 Speaker 2: so much about. 272 00:13:20,000 --> 00:13:20,600 Speaker 3: To take us through the. 273 00:13:20,600 --> 00:13:24,040 Speaker 2: Possibilities, we welcome now Christine Todd Whitman, co founder and 274 00:13:24,080 --> 00:13:27,000 Speaker 2: co chair of the States United Democracy Center MSSUS. 275 00:13:27,000 --> 00:13:28,319 Speaker 3: Whitner, of course earlier. 276 00:13:28,000 --> 00:13:31,000 Speaker 2: Served as EPA administrator and as Governor of the State 277 00:13:31,040 --> 00:13:33,559 Speaker 2: of New Jersey. So Governor Werner, thank you so much 278 00:13:33,600 --> 00:13:36,280 Speaker 2: for joining us here on Wall Street Week. As you know, 279 00:13:36,400 --> 00:13:38,960 Speaker 2: generative AI is all the rage these days, at least 280 00:13:39,000 --> 00:13:41,640 Speaker 2: on paper, and as we talk about that, we talk 281 00:13:41,679 --> 00:13:43,800 Speaker 2: about a lot of data centers, the need for them 282 00:13:43,800 --> 00:13:46,680 Speaker 2: and the need for power, and that has really spurred 283 00:13:46,679 --> 00:13:49,880 Speaker 2: to the forefront the discussion of those small modular reactors, 284 00:13:49,920 --> 00:13:52,000 Speaker 2: something you've talked about in the past. Is this a 285 00:13:52,080 --> 00:13:55,000 Speaker 2: spur to actually get us going on those SMRs? 286 00:13:56,280 --> 00:13:59,000 Speaker 4: I certainly hope. So, because it is true those data 287 00:13:59,000 --> 00:14:02,920 Speaker 4: centers pull of power, and most people aren't thinking about that. 288 00:14:02,960 --> 00:14:05,960 Speaker 4: They don't know what they're beginning to now to understand 289 00:14:06,040 --> 00:14:09,320 Speaker 4: just how much they draw down on the grid. So 290 00:14:09,400 --> 00:14:11,920 Speaker 4: this is where small modular actors can be perfect because 291 00:14:11,960 --> 00:14:14,079 Speaker 4: you just can put them there, right next to those 292 00:14:14,160 --> 00:14:18,120 Speaker 4: data centers and provide the power for that particular center. 293 00:14:18,640 --> 00:14:20,760 Speaker 4: And it makes a whole bunch of sense when you 294 00:14:20,800 --> 00:14:23,239 Speaker 4: look at the issues that we're facing and the economic 295 00:14:23,600 --> 00:14:26,840 Speaker 4: price we're paying for what's going on with Mother Nature 296 00:14:26,840 --> 00:14:29,760 Speaker 4: and the environment, and it is due to changing climate, 297 00:14:29,840 --> 00:14:32,440 Speaker 4: and I think we all have to recognize that now, 298 00:14:32,920 --> 00:14:34,840 Speaker 4: and so we need to do what makes sense. But 299 00:14:34,920 --> 00:14:38,040 Speaker 4: that doesn't creator our economy, and this certainly wouldn't. We 300 00:14:38,080 --> 00:14:41,120 Speaker 4: can build these things, we can distribute these things, and 301 00:14:41,200 --> 00:14:45,000 Speaker 4: it makes a great deal of sense. They're mutually supportive, so. 302 00:14:44,920 --> 00:14:48,240 Speaker 2: It increases the demand the opportunity for these What are 303 00:14:48,280 --> 00:14:50,120 Speaker 2: the hurdles because as I say, you and I have 304 00:14:50,200 --> 00:14:51,960 Speaker 2: talked about this in the past. You've been an advocate 305 00:14:51,960 --> 00:14:53,960 Speaker 2: for experimenting and using these in the past. 306 00:14:53,920 --> 00:14:54,560 Speaker 3: We haven't gotten there. 307 00:14:54,640 --> 00:14:56,040 Speaker 2: As I under said, there are a lot of plans 308 00:14:56,080 --> 00:14:58,560 Speaker 2: for them, but I'm not sure any have gotten built yet. 309 00:14:58,760 --> 00:15:03,040 Speaker 4: No, they haven't Canada. They're moving forward. It's obviously the 310 00:15:03,200 --> 00:15:05,400 Speaker 4: regulatory hurdles because we want to make sure that they're 311 00:15:05,400 --> 00:15:08,720 Speaker 4: absolutely safe, and not all of those are federal. A 312 00:15:08,720 --> 00:15:14,080 Speaker 4: lot of those regulatory roadblocks, as it were, or things 313 00:15:14,080 --> 00:15:16,280 Speaker 4: that slow it down, which is we all know costs money, 314 00:15:16,760 --> 00:15:20,920 Speaker 4: our local or state regulations and we've got to respect those. 315 00:15:20,960 --> 00:15:23,960 Speaker 4: But I think what we're seeing now is the pressure 316 00:15:24,440 --> 00:15:28,200 Speaker 4: coming that is going to, I believe, as you mentioned, 317 00:15:28,640 --> 00:15:32,280 Speaker 4: perhaps spur an effort to move these things through, not 318 00:15:32,320 --> 00:15:34,440 Speaker 4: to cut may corners, but to make sure that you're 319 00:15:34,560 --> 00:15:39,200 Speaker 4: not holding anything up unnecessarily. Because they have a proven technology, 320 00:15:40,040 --> 00:15:43,280 Speaker 4: they are easier to build, they're much safer to use 321 00:15:43,640 --> 00:15:45,880 Speaker 4: or easier to use, and they can be used in 322 00:15:45,920 --> 00:15:49,440 Speaker 4: discrete ways, such as putting them next to a data 323 00:15:49,480 --> 00:15:53,680 Speaker 4: center and having them supply the power for that data center. 324 00:15:54,360 --> 00:15:56,920 Speaker 2: You're very familiar with the regulatory structure, and it was 325 00:15:56,920 --> 00:15:59,480 Speaker 2: put in place for various reasons with the very large 326 00:15:59,560 --> 00:16:04,000 Speaker 2: nuclear Do those same considerations apply with the small modular reactors. 327 00:16:04,080 --> 00:16:06,720 Speaker 2: Should it be the same regulatory system or should it 328 00:16:06,720 --> 00:16:09,600 Speaker 2: be an entirely different way of approaching regulation. 329 00:16:09,680 --> 00:16:13,320 Speaker 4: It wouldn't be entirely different, but certainly the way these 330 00:16:13,440 --> 00:16:17,600 Speaker 4: things are constructed is entirely different and that needs to 331 00:16:17,600 --> 00:16:22,080 Speaker 4: be regulated, be recognized from the regulatory perspective, so that 332 00:16:22,120 --> 00:16:25,560 Speaker 4: there are vast differences. But because you're talking nuclear and 333 00:16:25,680 --> 00:16:29,120 Speaker 4: people are very concerned, even though our history with nuclear 334 00:16:29,160 --> 00:16:32,440 Speaker 4: has been extremely safe, you have to answer those questions. 335 00:16:32,560 --> 00:16:37,120 Speaker 4: And so the NRC needs to take a step back 336 00:16:37,160 --> 00:16:40,960 Speaker 4: and say, Okay, let's really look at the SMRs, the 337 00:16:40,960 --> 00:16:45,160 Speaker 4: small module reactors, and identify they use a different kind 338 00:16:45,200 --> 00:16:48,400 Speaker 4: of material. Some of them are molten salt reactors. That's 339 00:16:48,480 --> 00:16:52,000 Speaker 4: entirely different way of producing the nuclear power. They're done 340 00:16:52,240 --> 00:16:55,360 Speaker 4: in one place, which again is entirely different. You're not 341 00:16:55,440 --> 00:16:59,080 Speaker 4: moving pieces sequentially to a site. You move the whole 342 00:16:59,120 --> 00:17:01,960 Speaker 4: thing to a site. All those things. It is a 343 00:17:02,000 --> 00:17:04,880 Speaker 4: different process and it does need to be handled differently. 344 00:17:05,240 --> 00:17:07,399 Speaker 4: I'm just not sure that the NRC at the moment, 345 00:17:07,440 --> 00:17:09,760 Speaker 4: and I don't know. I'm not saying they're not looking 346 00:17:09,800 --> 00:17:13,200 Speaker 4: at what they need to do to update the regulations, 347 00:17:13,240 --> 00:17:14,439 Speaker 4: but they certainly should be. 348 00:17:14,880 --> 00:17:16,480 Speaker 2: I'm going to put this in the larger context of 349 00:17:16,520 --> 00:17:18,840 Speaker 2: the climate, something you've been very outspoken on when you 350 00:17:18,840 --> 00:17:20,760 Speaker 2: were governor of New Jersey when you're a mystery of VPA. 351 00:17:20,840 --> 00:17:23,919 Speaker 2: And since then, if we in fact buy build all 352 00:17:23,960 --> 00:17:26,840 Speaker 2: of these data centers and do not use something like 353 00:17:26,920 --> 00:17:29,320 Speaker 2: small moduor reactors, what is the possible risk for the 354 00:17:29,400 --> 00:17:31,640 Speaker 2: environment to respect the use of fossil fuels. 355 00:17:31,840 --> 00:17:34,240 Speaker 4: It's huge because the demand for power of these data 356 00:17:34,240 --> 00:17:37,479 Speaker 4: centers is enormous, and you're going to go to the fastest, 357 00:17:37,560 --> 00:17:40,159 Speaker 4: cheapest power, and that's going to put more pressure on 358 00:17:40,200 --> 00:17:44,919 Speaker 4: opening more coal and not closing coal. And you know 359 00:17:45,000 --> 00:17:46,520 Speaker 4: the thing that I think you and I have talked 360 00:17:46,520 --> 00:17:49,359 Speaker 4: about this, David. The thing that we're missing here is 361 00:17:49,400 --> 00:17:53,760 Speaker 4: the understanding that nuclear can be the bridge if we 362 00:17:53,880 --> 00:18:00,920 Speaker 4: ever get to making the making our renewable power base power. 363 00:18:01,359 --> 00:18:03,360 Speaker 4: It's going to take a long time before we can 364 00:18:03,400 --> 00:18:09,879 Speaker 4: rely solely on whens various forms of green power, and 365 00:18:09,960 --> 00:18:12,680 Speaker 4: so we need a bridge and this is the best 366 00:18:12,720 --> 00:18:15,560 Speaker 4: way to my mind to. 367 00:18:14,960 --> 00:18:16,439 Speaker 9: Do this pretty quickly. 368 00:18:16,800 --> 00:18:19,880 Speaker 2: Many thanks to Christine Todd Whitman of the state's United 369 00:18:19,960 --> 00:18:20,920 Speaker 2: Democracy Center. 370 00:18:21,960 --> 00:18:25,120 Speaker 10: I thought Hamilton had it right. He said a national 371 00:18:25,119 --> 00:18:28,560 Speaker 10: debt could be a national blessing, and the national debt 372 00:18:28,640 --> 00:18:31,800 Speaker 10: having a liquid market there provides a good benchmark for 373 00:18:31,840 --> 00:18:34,960 Speaker 10: the private sector. It probably underpins the role of the 374 00:18:35,000 --> 00:18:38,040 Speaker 10: dollar in the world. It allows the Fed to conduct 375 00:18:38,440 --> 00:18:42,600 Speaker 10: monetary policy easily. I think we have to keep in 376 00:18:42,760 --> 00:18:46,919 Speaker 10: mind the costs of paying down the debt. There is 377 00:18:47,040 --> 00:18:50,359 Speaker 10: among some people a single minded focus on it, but 378 00:18:50,400 --> 00:18:53,200 Speaker 10: there's no free lunch in this world, and eliminating the 379 00:18:53,280 --> 00:18:55,520 Speaker 10: national debt, while it may sound. 380 00:18:55,320 --> 00:18:57,399 Speaker 8: Attractive, has its costs as well. 381 00:18:58,040 --> 00:19:00,440 Speaker 10: The President, by the way, in his program, is paying 382 00:19:00,480 --> 00:19:03,560 Speaker 10: down as much debt as we can retire in the 383 00:19:03,560 --> 00:19:04,479 Speaker 10: next ten years. 384 00:19:04,760 --> 00:19:05,840 Speaker 3: We're moving in that direction. 385 00:19:05,920 --> 00:19:07,800 Speaker 10: But whether we should pay it all off, I think 386 00:19:07,840 --> 00:19:08,879 Speaker 10: this is a more open question. 387 00:19:11,240 --> 00:19:13,919 Speaker 2: That was Larry Lindsay, director of the National Economic Council 388 00:19:13,960 --> 00:19:16,800 Speaker 2: under President George W. Bush, appearing on Wall Street Week 389 00:19:16,840 --> 00:19:19,160 Speaker 2: back in March of two thousand and one, back when 390 00:19:19,200 --> 00:19:22,320 Speaker 2: the concern was about possibly having too little federal debt 391 00:19:22,600 --> 00:19:25,040 Speaker 2: rather than too much to take us through our current 392 00:19:25,160 --> 00:19:28,520 Speaker 2: very different situation. Welcome back now, Nobel Prize winning economists 393 00:19:28,520 --> 00:19:31,359 Speaker 2: and New York Times columnist Paul Krugman of the City 394 00:19:31,480 --> 00:19:33,560 Speaker 2: University of New York. So, doctor Pruy, thank you so 395 00:19:33,640 --> 00:19:35,119 Speaker 2: much for being back with us. As I say, it 396 00:19:35,160 --> 00:19:37,199 Speaker 2: was a very different time then when they thought we 397 00:19:37,240 --> 00:19:39,879 Speaker 2: may eliminate the national debt. But now we're hearing a 398 00:19:39,920 --> 00:19:42,040 Speaker 2: lot from people saying they're concern has gotten to be 399 00:19:42,080 --> 00:19:42,520 Speaker 2: too big? 400 00:19:42,880 --> 00:19:44,800 Speaker 3: Is it too big? Is it a problem for our 401 00:19:44,840 --> 00:19:45,760 Speaker 3: economy right now? 402 00:19:46,680 --> 00:19:49,880 Speaker 9: Okay, So, first of Allen, that was silly even then. 403 00:19:50,040 --> 00:19:54,400 Speaker 5: I mean, there were you know, revenues were temporarily swollen 404 00:19:54,560 --> 00:19:58,040 Speaker 5: by the dot com bubble and all of that, and 405 00:19:58,280 --> 00:20:00,640 Speaker 5: you know, even in two thousand and one, knew that 406 00:20:01,240 --> 00:20:03,680 Speaker 5: people like me were eventually going to hit sixty five 407 00:20:03,760 --> 00:20:07,479 Speaker 5: and start collecting benefits. So you know, it's so that 408 00:20:07,520 --> 00:20:09,959 Speaker 5: was a little bit silly to be concerned about that 409 00:20:10,040 --> 00:20:10,480 Speaker 5: back then. 410 00:20:11,640 --> 00:20:16,879 Speaker 9: Right now, the debt per se is not really a 411 00:20:16,920 --> 00:20:17,760 Speaker 9: serious problem. 412 00:20:17,840 --> 00:20:20,640 Speaker 5: I mean, you know, it's a bay number very four 413 00:20:20,680 --> 00:20:23,720 Speaker 5: trillion dollars or something like that. But if we actually 414 00:20:23,760 --> 00:20:25,520 Speaker 5: look at, you know, what does it cost to service 415 00:20:25,600 --> 00:20:29,919 Speaker 5: that debt, Well, interest rates are still below the economy's 416 00:20:29,920 --> 00:20:34,919 Speaker 5: growth rate, and so as long as other non interest 417 00:20:34,920 --> 00:20:38,240 Speaker 5: spending and tax receipts are more or less in line, 418 00:20:38,600 --> 00:20:42,000 Speaker 5: then the debt is really not you know, it's not 419 00:20:42,080 --> 00:20:45,199 Speaker 5: a problem to continue servicing it. There's no really no 420 00:20:45,320 --> 00:20:48,320 Speaker 5: reason why that should be an issue. But what is 421 00:20:48,320 --> 00:20:52,040 Speaker 5: a problem, of course, is that government spending and tax 422 00:20:52,080 --> 00:20:54,960 Speaker 5: receipts are not in line. And so the fundamental problem 423 00:20:55,040 --> 00:20:57,800 Speaker 5: is not the debt. The fundamental problem is that we 424 00:20:57,920 --> 00:21:02,320 Speaker 5: are not managing to to pay our way. We're not 425 00:21:02,400 --> 00:21:06,640 Speaker 5: actually adjusting our inflow with our outflow. 426 00:21:07,160 --> 00:21:09,480 Speaker 2: Well one we're putting out. Suppose it's not the debt, 427 00:21:09,480 --> 00:21:11,480 Speaker 2: it is the deficit. It's how much we're actually coming 428 00:21:11,520 --> 00:21:13,440 Speaker 2: up short each and every year. And I think last 429 00:21:13,520 --> 00:21:15,520 Speaker 2: year it was something like eight point five eight point 430 00:21:15,560 --> 00:21:18,480 Speaker 2: eight percent of GDP was in deficit. And this is 431 00:21:18,520 --> 00:21:21,240 Speaker 2: a time when unemployment was very low, by the way, 432 00:21:21,840 --> 00:21:23,680 Speaker 2: and the yeah, I some of that was good. 433 00:21:24,680 --> 00:21:27,359 Speaker 5: Yeah, some of that was interest payments, and really should 434 00:21:27,520 --> 00:21:31,679 Speaker 5: it's the primary deficit excluding interest payments, but that is 435 00:21:31,720 --> 00:21:37,280 Speaker 5: a serious problem. We do have an ongoing large primary deficit. 436 00:21:37,760 --> 00:21:40,359 Speaker 5: Some of that there were, you know, the year to 437 00:21:40,400 --> 00:21:47,000 Speaker 5: year fluctuations. There's quirky stuff that can move the deficit around, 438 00:21:47,000 --> 00:21:50,800 Speaker 5: but at a fundamental in a fundamental sense, we're not 439 00:21:50,920 --> 00:21:54,919 Speaker 5: living within our means at the federal level. And that 440 00:21:54,960 --> 00:21:57,720 Speaker 5: doesn't necessarily signal any kind of the media crisis, but 441 00:21:57,800 --> 00:22:00,840 Speaker 5: it does say that, hey, something's going to give. But 442 00:22:00,880 --> 00:22:05,160 Speaker 5: the trouble is you know what's going to give. So yeah, 443 00:22:05,160 --> 00:22:08,760 Speaker 5: that is the real problem is not the numbers. The 444 00:22:08,840 --> 00:22:13,240 Speaker 5: real problem is that we are not politically apparently able 445 00:22:13,359 --> 00:22:17,440 Speaker 5: to reach any kind of agreement on how to live 446 00:22:17,480 --> 00:22:18,240 Speaker 5: within our means. 447 00:22:18,600 --> 00:22:20,200 Speaker 3: Not an immediate crisis, as you say. 448 00:22:20,200 --> 00:22:22,000 Speaker 2: At the same time, I remember back in the early 449 00:22:22,080 --> 00:22:25,040 Speaker 2: nineties when we talked about bond vigilantes, and there was 450 00:22:25,080 --> 00:22:28,199 Speaker 2: the discussion within the Clinton administration actually about the issues 451 00:22:28,200 --> 00:22:31,120 Speaker 2: with the bond market. At what point is it possible 452 00:22:31,119 --> 00:22:33,679 Speaker 2: that the bond market might send a powerful message to us. 453 00:22:33,720 --> 00:22:36,640 Speaker 2: We talked to Paul Ryan recently who said he thinks 454 00:22:36,640 --> 00:22:40,040 Speaker 2: that it's quite possible in the next administration, whoever is president, 455 00:22:40,200 --> 00:22:41,760 Speaker 2: they could be faced with what he would call a 456 00:22:41,800 --> 00:22:42,440 Speaker 2: debt crisis. 457 00:22:42,440 --> 00:22:43,960 Speaker 3: Does that sound reasonable to you? 458 00:22:44,960 --> 00:22:47,400 Speaker 5: Not particularly, And I'm not sure I know why Paul 459 00:22:47,480 --> 00:22:49,879 Speaker 5: Ryan would know this any better than anyone else. But 460 00:22:51,920 --> 00:22:56,199 Speaker 5: the truth is, I've looked at I've actually put in 461 00:22:56,200 --> 00:23:01,240 Speaker 5: a fair bit of work myself on when what's the 462 00:23:01,359 --> 00:23:05,679 Speaker 5: historical record of countries that borrow in their own currency 463 00:23:05,720 --> 00:23:09,240 Speaker 5: experiencing that kind of debt crisis to strike by lenders 464 00:23:09,560 --> 00:23:13,120 Speaker 5: something like that what are the historical examples of that happening? 465 00:23:13,720 --> 00:23:15,760 Speaker 9: And there's almost no examples of that. 466 00:23:16,040 --> 00:23:18,959 Speaker 5: I mean, you start and you end up showing well, 467 00:23:19,040 --> 00:23:22,840 Speaker 5: maybe France in nineteen twenty six. I mean, Japan has 468 00:23:22,960 --> 00:23:28,800 Speaker 5: had huge debt for decades now, huge persistent deficits still 469 00:23:29,400 --> 00:23:34,479 Speaker 5: no crisis. It's actually I think we should focus less 470 00:23:34,720 --> 00:23:39,160 Speaker 5: on what's the risk of a single dramatic event and 471 00:23:39,240 --> 00:23:42,679 Speaker 5: more on the kind of gradual erosion of confidence that 472 00:23:42,800 --> 00:23:44,760 Speaker 5: comes from the fact that we can't seem to get 473 00:23:44,760 --> 00:23:45,399 Speaker 5: interact together. 474 00:23:45,840 --> 00:23:48,080 Speaker 2: There's no doubt that there are a lot of political challenges. 475 00:23:48,080 --> 00:23:50,119 Speaker 2: But before we get to the political challenges, what about 476 00:23:50,119 --> 00:23:52,760 Speaker 2: what the right answer would be if we didn't have 477 00:23:52,760 --> 00:23:54,679 Speaker 2: to worry about the politics. I mean, there were times 478 00:23:54,680 --> 00:23:57,560 Speaker 2: of which we actually did cut the deficit, right under 479 00:23:57,600 --> 00:24:00,320 Speaker 2: George Herbert Walker Bush there was a bipart artists and 480 00:24:00,359 --> 00:24:02,680 Speaker 2: effort that was made Andrews Air Force Base, and then 481 00:24:02,880 --> 00:24:05,880 Speaker 2: under President Clinton it is not bipartisan. Actually, the Democrats 482 00:24:05,920 --> 00:24:08,880 Speaker 2: to themselves they cut back on the deficit. 483 00:24:09,280 --> 00:24:11,280 Speaker 3: What is the right thing to do? Is it more taxes, 484 00:24:11,400 --> 00:24:13,679 Speaker 3: is it less spending, or is it all of the above. 485 00:24:14,040 --> 00:24:15,320 Speaker 9: There is no right answer. 486 00:24:16,800 --> 00:24:22,400 Speaker 5: What we know from cross national comparisons is that it's 487 00:24:22,440 --> 00:24:25,680 Speaker 5: certainly possible to have a thriving economy with a lot 488 00:24:25,720 --> 00:24:29,359 Speaker 5: more taxes than the United States. The United States is 489 00:24:29,480 --> 00:24:31,760 Speaker 5: near the bottom in terms of tax receipts that are 490 00:24:31,800 --> 00:24:34,280 Speaker 5: share of GDP among advanced countries, So we could be 491 00:24:34,359 --> 00:24:37,720 Speaker 5: raising substantially more money and there's no there's no real 492 00:24:37,760 --> 00:24:43,119 Speaker 5: indication that higher tax rates would be a problem for 493 00:24:43,240 --> 00:24:45,800 Speaker 5: US economic growth. On the other hand, we don't have 494 00:24:45,920 --> 00:24:53,199 Speaker 5: to provide essential healthcare to everybody. That's a that's not 495 00:24:53,560 --> 00:24:56,520 Speaker 5: a question of economic rightness or wrongness. 496 00:24:56,560 --> 00:24:57,880 Speaker 9: It's a question of your values. 497 00:24:57,920 --> 00:25:01,919 Speaker 5: We don't have to provide an adequate retirement income to everybody. Again, 498 00:25:02,000 --> 00:25:05,919 Speaker 5: that's not an economic comparative. So you can't actually divorce 499 00:25:05,920 --> 00:25:09,760 Speaker 5: this from politics. This is all about the political decision. 500 00:25:10,480 --> 00:25:13,280 Speaker 9: What are we going to try to close. 501 00:25:13,000 --> 00:25:18,800 Speaker 5: This gap by making mostly the lives of older Americans tougher, 502 00:25:19,640 --> 00:25:22,119 Speaker 5: or are we going to do it by raising taxes? 503 00:25:22,440 --> 00:25:25,880 Speaker 5: But probably, I mean that includes raising taxes on the rich, 504 00:25:25,960 --> 00:25:28,360 Speaker 5: but probably also at least a little bit more taxes 505 00:25:28,440 --> 00:25:29,760 Speaker 5: on the middle class. 506 00:25:30,000 --> 00:25:32,040 Speaker 2: I'm delaighted to say Professor Krugman will be staying with 507 00:25:32,119 --> 00:25:34,120 Speaker 2: us as we turn from the fiscal issues that will 508 00:25:34,160 --> 00:25:36,480 Speaker 2: face whomever is chosen to be the next president. So 509 00:25:36,560 --> 00:25:39,560 Speaker 2: what difference is that choice will make for the economy? 510 00:25:41,400 --> 00:25:43,600 Speaker 2: That's next on Wall Street Week on Bloomberg. 511 00:25:44,840 --> 00:25:49,080 Speaker 1: This is Bloomberg Wall Street Week with David Weston from 512 00:25:49,200 --> 00:25:50,119 Speaker 1: Bloomberg Radio. 513 00:25:56,800 --> 00:25:59,120 Speaker 2: This is Wall Street Week. I'm David Weston. Doctor Paul 514 00:25:59,200 --> 00:26:01,159 Speaker 2: Krugman of the City University of New York and the 515 00:26:01,160 --> 00:26:03,639 Speaker 2: New York Times has remained with us. So doctor Kruman, 516 00:26:03,840 --> 00:26:06,480 Speaker 2: let's look forward to this election we have coming up 517 00:26:06,520 --> 00:26:09,400 Speaker 2: in November, and what economic choices the American people will 518 00:26:09,440 --> 00:26:11,399 Speaker 2: be making as they go to the polls. Give us 519 00:26:11,400 --> 00:26:14,040 Speaker 2: your sense of how different these two people, that is, 520 00:26:14,119 --> 00:26:16,440 Speaker 2: Joe Biden and Donald Trump are in their approaches to 521 00:26:16,440 --> 00:26:17,119 Speaker 2: the economy. 522 00:26:18,480 --> 00:26:21,320 Speaker 5: Okay, so this is one of those cases where if 523 00:26:21,320 --> 00:26:23,960 Speaker 5: you look at past experience, you would say, well, how 524 00:26:24,080 --> 00:26:25,720 Speaker 5: much difference does it make? I mean, in a lot 525 00:26:25,760 --> 00:26:29,359 Speaker 5: of ways, the economy of twenty twenty four looks a 526 00:26:29,400 --> 00:26:34,720 Speaker 5: lot like the economy of twenty nineteen, pre pandemic, full employment, 527 00:26:35,359 --> 00:26:36,400 Speaker 5: fairly low inflation. 528 00:26:36,640 --> 00:26:38,720 Speaker 9: It's you know, worrying a little bit. 529 00:26:38,760 --> 00:26:40,800 Speaker 5: But we were worrying about the difference between two and 530 00:26:40,840 --> 00:26:46,680 Speaker 5: three not not anything major. It's it doesn't look as 531 00:26:46,720 --> 00:26:49,160 Speaker 5: if it has made a whole lot of difference who's 532 00:26:49,200 --> 00:26:52,880 Speaker 5: in the White House. But if there's a Trump too, 533 00:26:54,160 --> 00:26:56,800 Speaker 5: then there's a lot of reasons to believe that it 534 00:26:56,840 --> 00:27:01,520 Speaker 5: could be very different. There were What's amazing if you 535 00:27:01,640 --> 00:27:04,159 Speaker 5: go back and look at Trump's first time in the 536 00:27:04,160 --> 00:27:06,359 Speaker 5: White House was how little he did when all this 537 00:27:06,400 --> 00:27:11,080 Speaker 5: said and done. You know, basically he got a moderate 538 00:27:11,160 --> 00:27:15,119 Speaker 5: sized tax cut through sort of period, end of story. 539 00:27:15,680 --> 00:27:17,480 Speaker 9: There wasn't a lot else that that went on. 540 00:27:18,560 --> 00:27:22,520 Speaker 5: There were that's largely because there were institutional restraints there were. 541 00:27:23,240 --> 00:27:27,000 Speaker 5: They couldn't get stuffed through Congress, couldn't couldn't tell the 542 00:27:27,040 --> 00:27:28,360 Speaker 5: Federal Reserve what to do. 543 00:27:29,040 --> 00:27:29,359 Speaker 3: Uh. 544 00:27:29,520 --> 00:27:31,400 Speaker 9: That could be very very different right now. 545 00:27:31,520 --> 00:27:35,920 Speaker 5: And if you take seriously what the what Trump uh 546 00:27:36,320 --> 00:27:40,480 Speaker 5: former Trump aids are saying, Uh, it would be very 547 00:27:40,560 --> 00:27:42,840 Speaker 5: very drastic name Biden would decontinuity. 548 00:27:42,920 --> 00:27:45,399 Speaker 9: Biden, If you can do it. 549 00:27:45,280 --> 00:27:48,480 Speaker 5: We'll do more, you know, some some further tax increases, 550 00:27:48,600 --> 00:27:52,800 Speaker 5: some more green industrial policy, but probably not enough to 551 00:27:52,880 --> 00:27:55,680 Speaker 5: make a huge difference to the macroeconomic numbers. 552 00:27:56,040 --> 00:27:57,560 Speaker 9: Big differences in other respects. 553 00:27:58,680 --> 00:28:02,800 Speaker 5: Trump well know that one of his former AIDS has 554 00:28:02,800 --> 00:28:07,840 Speaker 5: been talking a lot about rounding up millions of immigrants 555 00:28:09,200 --> 00:28:12,879 Speaker 5: supposedly undocumented, though wouldn't be surprising if a lot of 556 00:28:13,520 --> 00:28:15,640 Speaker 5: legal immigrants got caught up in the net as well 557 00:28:15,680 --> 00:28:20,800 Speaker 5: in deporting huge economic impacts, huge disruptions to the labor force. 558 00:28:21,240 --> 00:28:27,480 Speaker 5: Another Peter Navarro, who's being interviewed from jail, but has 559 00:28:27,560 --> 00:28:31,119 Speaker 5: said that Jay Powell will be fired within one hundred 560 00:28:31,200 --> 00:28:35,479 Speaker 5: days and that we will basically have the politicization. 561 00:28:34,880 --> 00:28:35,920 Speaker 9: Of monetary policy. 562 00:28:35,960 --> 00:28:38,320 Speaker 5: And there's a lot of reasons to think that a 563 00:28:38,360 --> 00:28:42,200 Speaker 5: Trump second term might see him become one of those 564 00:28:43,280 --> 00:28:46,640 Speaker 5: autocrats who demands that you run the printing presses for 565 00:28:46,760 --> 00:28:50,000 Speaker 5: his political gain. I mean, think of Urda and Turkey 566 00:28:50,080 --> 00:28:55,360 Speaker 5: or something like that. So huge uncertainty. But I think 567 00:28:55,400 --> 00:28:58,920 Speaker 5: anyone assuming that a second Trump term would look like 568 00:28:58,960 --> 00:29:02,960 Speaker 5: the first one, with what ended up being fairly conventional, 569 00:29:03,000 --> 00:29:06,000 Speaker 5: like in our policies, nothing and the Federal Reserve keeping 570 00:29:06,000 --> 00:29:09,360 Speaker 5: the lid on things could be very in for a 571 00:29:09,440 --> 00:29:10,240 Speaker 5: very rude shock. 572 00:29:10,960 --> 00:29:14,120 Speaker 2: Picking up on your comment about monetary policy and fed 573 00:29:14,200 --> 00:29:17,360 Speaker 2: SHO J. Powell, we had Ken Rogoff on somebody you 574 00:29:17,440 --> 00:29:19,400 Speaker 2: know well, a fellow economists, and when. 575 00:29:19,240 --> 00:29:20,520 Speaker 3: I asked that question of him. 576 00:29:20,520 --> 00:29:23,360 Speaker 2: He said, the markets would not let president new president 577 00:29:23,400 --> 00:29:26,040 Speaker 2: Trump do that, that they were to react really strong 578 00:29:26,040 --> 00:29:28,600 Speaker 2: in the treasury markets, and he would not have that option. 579 00:29:28,960 --> 00:29:29,760 Speaker 3: Is that plausible. 580 00:29:30,200 --> 00:29:34,920 Speaker 5: The markets would certainly react, we would probably see acceleration 581 00:29:35,040 --> 00:29:36,760 Speaker 5: of inflation, of plunge in the dollar. 582 00:29:37,000 --> 00:29:40,240 Speaker 9: But you know, how does he respond to that. 583 00:29:40,320 --> 00:29:43,920 Speaker 5: I mean, again, if you look at much smaller countries 584 00:29:45,120 --> 00:29:48,280 Speaker 5: that are much more exposed to market pressure, like Turkey, 585 00:29:49,360 --> 00:29:53,400 Speaker 5: authoritarian leaders have a habit of saying, well, the markets 586 00:29:53,400 --> 00:29:56,360 Speaker 5: are wrong, and I'm going to order them to stop. 587 00:29:56,400 --> 00:30:00,600 Speaker 5: But you know, you might be surprised at how much 588 00:30:03,200 --> 00:30:05,400 Speaker 5: you know, socialism or at least in the sense of 589 00:30:08,520 --> 00:30:11,320 Speaker 5: capital controls and other things might happen. You know, Trump 590 00:30:11,960 --> 00:30:16,040 Speaker 5: says to the Fed, I want a booming economy. I 591 00:30:16,080 --> 00:30:19,080 Speaker 5: want you to roll the printing presses, and the markets 592 00:30:19,120 --> 00:30:21,520 Speaker 5: respond by driving the dollar. 593 00:30:21,320 --> 00:30:22,480 Speaker 9: Down, in inflation up. 594 00:30:22,840 --> 00:30:25,400 Speaker 5: He might well then say, well, I'm going to put 595 00:30:25,440 --> 00:30:28,920 Speaker 5: on rules that stop that from happening. Rather than changing 596 00:30:28,960 --> 00:30:32,720 Speaker 5: the policy. Remember, you know, we've had one, you know, 597 00:30:32,760 --> 00:30:35,760 Speaker 5: since the immediate after Matthew World War two, we've had 598 00:30:35,800 --> 00:30:39,440 Speaker 5: only one episode of price controls in America, and it 599 00:30:39,480 --> 00:30:42,640 Speaker 5: was Richard Nixon, not some progressive Democrat who did it. 600 00:30:42,800 --> 00:30:47,640 Speaker 5: So I think you want to be I understand Ken's point. 601 00:30:47,440 --> 00:30:52,640 Speaker 5: He thinks that the bond vigilantes basically would would discipline Trump. 602 00:30:52,680 --> 00:30:54,760 Speaker 9: But I don't think that's a safe bet. 603 00:30:55,240 --> 00:30:58,320 Speaker 2: What about the prospect of inflation. Obviously tariffs tend to 604 00:30:58,320 --> 00:31:01,760 Speaker 2: be inflation area rather than inflationary. At the same time, 605 00:31:01,800 --> 00:31:04,880 Speaker 2: both President Biden and for President Trump seem to like 606 00:31:04,960 --> 00:31:06,719 Speaker 2: tariffs pretty well. 607 00:31:06,880 --> 00:31:09,200 Speaker 5: Well, there's a big difference. I mean, yes, both are 608 00:31:09,240 --> 00:31:13,640 Speaker 5: doing terraffs. And Biden has not rolled back most of 609 00:31:13,680 --> 00:31:19,880 Speaker 5: the Trump tariffs, which is politics, that's uh, you know 610 00:31:20,160 --> 00:31:23,560 Speaker 5: there doesn't want to be accused of being soft on 611 00:31:23,640 --> 00:31:25,560 Speaker 5: China or something like that. But if you look at 612 00:31:25,560 --> 00:31:30,040 Speaker 5: the new proposals, they're actually although they both are proposing TIFFs, 613 00:31:31,280 --> 00:31:34,880 Speaker 5: they're very different in the both in the details and 614 00:31:34,920 --> 00:31:39,760 Speaker 5: in the purpose. So Trump's view is clearly he thinks 615 00:31:39,800 --> 00:31:44,760 Speaker 5: of trade as a zero sum game. If we we 616 00:31:44,800 --> 00:31:47,120 Speaker 5: win if we if other people buy our stuff, we 617 00:31:47,200 --> 00:31:49,320 Speaker 5: lose if we buy other people's stuff. And so he 618 00:31:49,360 --> 00:31:52,000 Speaker 5: wants to put a ring around the collar. He said, 619 00:31:52,040 --> 00:31:56,040 Speaker 5: a ten percent tariff on everything, and the uh and 620 00:31:56,160 --> 00:32:00,400 Speaker 5: maybe more for for some other countries. That's not at 621 00:32:00,440 --> 00:32:03,000 Speaker 5: all what Biden is doing. What Biden is doing is 622 00:32:03,800 --> 00:32:11,720 Speaker 5: some selective tariffs aimed at what he perceives as strategic sectors. 623 00:32:12,320 --> 00:32:15,480 Speaker 2: And if I'm not mistaken, you generally support the notion 624 00:32:15,640 --> 00:32:17,520 Speaker 2: we have to do, whoever the president is something to 625 00:32:17,640 --> 00:32:19,520 Speaker 2: have to do to prevent a second, as you call it, 626 00:32:19,800 --> 00:32:22,600 Speaker 2: China shock, such as we saw early around the time 627 00:32:22,640 --> 00:32:24,920 Speaker 2: of the WTO, in order to basically it protect some 628 00:32:24,960 --> 00:32:25,640 Speaker 2: of our workforce. 629 00:32:26,960 --> 00:32:31,800 Speaker 5: Yeah, it's not so much jobs in the aggregate. Sorry 630 00:32:31,840 --> 00:32:33,640 Speaker 5: it sounding like an ecmmist there, but it's not so 631 00:32:33,720 --> 00:32:36,760 Speaker 5: much the total employment. We're not having a problem at 632 00:32:36,840 --> 00:32:39,000 Speaker 5: least at the moment with overall employment. But what we 633 00:32:39,160 --> 00:32:44,240 Speaker 5: learned rather painfully from the first China Shock was that 634 00:32:45,600 --> 00:32:50,040 Speaker 5: sudden surges of imports can be disruptive in ways that 635 00:32:50,600 --> 00:32:55,760 Speaker 5: a lot of standard economic models don't capture, though non 636 00:32:55,800 --> 00:33:00,440 Speaker 5: standard models do. They can disrupt communities, they can disrupt 637 00:33:00,520 --> 00:33:04,600 Speaker 5: strategic industries, and particularly if you are doing what Biden 638 00:33:04,720 --> 00:33:08,720 Speaker 5: is doing, which is to try to sell climate policy 639 00:33:08,840 --> 00:33:12,120 Speaker 5: in part by saying it also it creates manufacturing jobs, 640 00:33:12,640 --> 00:33:15,920 Speaker 5: the political basis for that is going to be undermined 641 00:33:15,920 --> 00:33:20,560 Speaker 5: if it ends up creating manufacturing jobs in China. So now, 642 00:33:20,840 --> 00:33:24,640 Speaker 5: and this is a pride Look China. I don't think 643 00:33:24,640 --> 00:33:27,680 Speaker 5: the Chinese seem to fully realize, but they they are 644 00:33:28,480 --> 00:33:34,640 Speaker 5: having a situation of grossly inadequate domestic spending and relatives 645 00:33:34,640 --> 00:33:38,520 Speaker 5: to their production capacity, and seem unwilling to boost their 646 00:33:38,560 --> 00:33:42,640 Speaker 5: own demand, and they want to dump both in the 647 00:33:42,680 --> 00:33:46,719 Speaker 5: sort of common language sense and probably in the in 648 00:33:46,760 --> 00:33:49,880 Speaker 5: the illegal sense. They want to dump the excess production 649 00:33:50,120 --> 00:33:51,000 Speaker 5: on the rest. 650 00:33:50,800 --> 00:33:51,320 Speaker 9: Of the world. 651 00:33:51,800 --> 00:33:53,520 Speaker 5: And it's not going to happen. We're not going to 652 00:33:53,560 --> 00:33:56,440 Speaker 5: accept it. The Europeans are not going to accept it. 653 00:33:57,520 --> 00:33:58,840 Speaker 5: So you have to do. 654 00:33:58,840 --> 00:34:01,400 Speaker 3: Something because there's always such a treat to talk to you. 655 00:34:01,480 --> 00:34:04,120 Speaker 2: Thank you so much, many thanks to our Nobil prize 656 00:34:04,120 --> 00:34:09,320 Speaker 2: winging economist Paul Krugman. If opportunity doesn't knock, build a door. 657 00:34:09,920 --> 00:34:12,759 Speaker 2: That was the advice of comedian Milton burrough For the 658 00:34:12,800 --> 00:34:15,600 Speaker 2: last few years, employers have been knocking on the doors 659 00:34:15,600 --> 00:34:17,200 Speaker 2: of job seekers with opportunity. 660 00:34:17,440 --> 00:34:21,480 Speaker 4: Growth is slowed, but our labor market continues to be 661 00:34:21,640 --> 00:34:23,040 Speaker 4: quite strong. 662 00:34:22,719 --> 00:34:24,839 Speaker 2: And there are still firms on the hunt for more 663 00:34:24,880 --> 00:34:28,160 Speaker 2: employees to expand their businesses, like in private credit. 664 00:34:28,280 --> 00:34:31,960 Speaker 11: At ares, our differentiator is our ability to be in 665 00:34:32,000 --> 00:34:37,279 Speaker 11: these local markets developing relationships with companies and assets. So 666 00:34:37,680 --> 00:34:40,440 Speaker 11: by definition, we have to grow our headcount in order 667 00:34:40,560 --> 00:34:42,440 Speaker 11: to support the au M target. 668 00:34:42,520 --> 00:34:45,040 Speaker 2: And generative AI has brought to life a whole new 669 00:34:45,120 --> 00:34:48,520 Speaker 2: job category of something called an AI prompt generator. 670 00:34:48,719 --> 00:34:51,400 Speaker 12: I think that'll be all kinds of jobs that AI 671 00:34:51,880 --> 00:34:54,440 Speaker 12: will create that we don't even know about, Like prompt 672 00:34:54,520 --> 00:34:58,080 Speaker 12: engineer is a new job category. There's already lots of 673 00:34:58,080 --> 00:35:01,560 Speaker 12: prompt engineers. There's going to be many more engineers now that. 674 00:35:01,480 --> 00:35:04,879 Speaker 2: May be changing. Some of those job opportunities are drying up. 675 00:35:05,120 --> 00:35:08,080 Speaker 2: TikTok employees this week learned there will be about one 676 00:35:08,120 --> 00:35:10,960 Speaker 2: thousand less of them in their operations and marketing teams. 677 00:35:11,160 --> 00:35:14,000 Speaker 2: Disney told Pixar that it was laying off fourteen percent 678 00:35:14,040 --> 00:35:17,279 Speaker 2: of the staff that gave us toy story and Ratituwi. 679 00:35:17,400 --> 00:35:18,480 Speaker 9: I need this job. 680 00:35:19,480 --> 00:35:22,240 Speaker 5: I've lost so many I don't know how to cook 681 00:35:22,280 --> 00:35:24,839 Speaker 5: and now I'm actually talking to a rat as if 682 00:35:24,880 --> 00:35:26,120 Speaker 5: you did, you not. 683 00:35:27,719 --> 00:35:28,600 Speaker 9: You understand me? 684 00:35:30,239 --> 00:35:31,120 Speaker 3: And Red Lobster. 685 00:35:31,160 --> 00:35:33,960 Speaker 2: Employees at restaurants across the country showed up for work 686 00:35:34,040 --> 00:35:37,719 Speaker 2: only to find locked doors as the chain went into bankruptcy. 687 00:35:37,960 --> 00:35:40,760 Speaker 12: Now seafood chain Red Lobster has fought for Chapter eleven 688 00:35:40,880 --> 00:35:46,280 Speaker 12: bankruptcy after facing higher costs and a disastrous unlimited shrimp promotion. 689 00:35:46,920 --> 00:35:49,160 Speaker 2: But at this time of year, we're particularly mindful of 690 00:35:49,200 --> 00:35:52,760 Speaker 2: our college graduates, for whom that Milton Borough advice about 691 00:35:52,760 --> 00:35:56,000 Speaker 2: building a door may be all too poignant. Members of 692 00:35:56,000 --> 00:35:58,239 Speaker 2: the class of twenty twenty four have not had it 693 00:35:58,280 --> 00:36:01,279 Speaker 2: easy from the beginning. From high school at the height 694 00:36:01,400 --> 00:36:05,240 Speaker 2: of the pandemic, relegated to virtual graduations with no hope 695 00:36:05,320 --> 00:36:08,279 Speaker 2: of a senior prom or senior prank. Many of them 696 00:36:08,320 --> 00:36:11,560 Speaker 2: started college with remote learning and picking up box meals 697 00:36:11,640 --> 00:36:14,480 Speaker 2: from closed cafeterias to be sure. They got to see 698 00:36:14,520 --> 00:36:18,239 Speaker 2: the COVID vaccine turn things around dramatically, But just as 699 00:36:18,280 --> 00:36:21,360 Speaker 2: they approached their first real graduation one they would be 700 00:36:21,400 --> 00:36:24,600 Speaker 2: able to attend in person, the war in Gaza interrupted 701 00:36:24,680 --> 00:36:28,560 Speaker 2: life on many college campuses, leading to graduation ceremonies that 702 00:36:28,560 --> 00:36:32,120 Speaker 2: have been marred by protests or canceled altogether at places 703 00:36:32,160 --> 00:36:32,920 Speaker 2: like Columbia. 704 00:36:33,080 --> 00:36:36,520 Speaker 5: Columbia University today canceled their main commencement event for this 705 00:36:36,560 --> 00:36:39,719 Speaker 5: school year following protest on campus in reaction to the 706 00:36:39,760 --> 00:36:40,520 Speaker 5: war in Gaza. 707 00:36:40,680 --> 00:36:43,160 Speaker 2: But however they got here, they now, at least most 708 00:36:43,200 --> 00:36:46,240 Speaker 2: of them, have their college diplomas, only to be faced 709 00:36:46,239 --> 00:36:50,040 Speaker 2: with a changed and changing job market, particularly in finance 710 00:36:50,080 --> 00:36:53,239 Speaker 2: and consulting and technology. Firms are cutting back on their 711 00:36:53,280 --> 00:36:56,759 Speaker 2: overall hiring, and those who already have the jobs are 712 00:36:56,800 --> 00:36:59,239 Speaker 2: less likely to give them up. The other question is 713 00:36:59,239 --> 00:37:02,479 Speaker 2: should be re evaluate how we work and how long 714 00:37:02,520 --> 00:37:04,680 Speaker 2: we were. It's easy for those of us at the 715 00:37:04,719 --> 00:37:07,160 Speaker 2: other end of our careers to say to those starting 716 00:37:07,160 --> 00:37:10,880 Speaker 2: out that something better lies around the corner of many disappointments. 717 00:37:11,280 --> 00:37:13,120 Speaker 2: At the beginning of my career, I was working for 718 00:37:13,160 --> 00:37:15,440 Speaker 2: a judge in New York and wanted nothing more than 719 00:37:15,480 --> 00:37:17,879 Speaker 2: to be hired as a law clerk for Supreme Court 720 00:37:18,000 --> 00:37:19,000 Speaker 2: Justice Lewis Powell. 721 00:37:19,520 --> 00:37:20,480 Speaker 3: I knew former. 722 00:37:20,239 --> 00:37:22,840 Speaker 2: Clerks of his had studied his career and his decisions, 723 00:37:22,840 --> 00:37:25,919 Speaker 2: that he was the one justice I dreamed of working for. 724 00:37:26,560 --> 00:37:28,480 Speaker 2: I got an interview at the Court, took the train 725 00:37:28,560 --> 00:37:30,920 Speaker 2: down to Washington, spent time with him and his clerks 726 00:37:30,920 --> 00:37:33,680 Speaker 2: in his chambers. He was a reserved man, and I 727 00:37:33,760 --> 00:37:35,839 Speaker 2: did not get any real sense of whether I had 728 00:37:35,840 --> 00:37:38,440 Speaker 2: a chance or not. So a couple of weeks later, 729 00:37:38,520 --> 00:37:41,240 Speaker 2: I was devastated to learn that he'd extended an offer 730 00:37:41,280 --> 00:37:44,080 Speaker 2: to another clerk on the second circuit. I was certain 731 00:37:44,120 --> 00:37:46,640 Speaker 2: that he wouldn't take two of us from the same court. 732 00:37:47,120 --> 00:37:49,560 Speaker 2: I resigned myself to going in a different direction. 733 00:37:49,960 --> 00:37:50,680 Speaker 3: So you can. 734 00:37:50,560 --> 00:37:53,360 Speaker 2: Imagine my joy when I eventually got a call and 735 00:37:53,560 --> 00:37:56,240 Speaker 2: Justice Powell's longtime assistant Sally Smith asked. 736 00:37:56,080 --> 00:37:57,640 Speaker 3: Me to hold for the Justice. 737 00:37:57,760 --> 00:38:00,319 Speaker 2: It turned out that I got what I'd wanted all along. 738 00:38:00,719 --> 00:38:02,719 Speaker 2: It just took me a bit longer and a bit 739 00:38:02,719 --> 00:38:05,759 Speaker 2: of emotional turmoil to get there. Now, I'm not saying 740 00:38:05,800 --> 00:38:08,640 Speaker 2: it always works out that way. Often it doesn't, but 741 00:38:08,719 --> 00:38:11,080 Speaker 2: I do know that regularly, in the course of a career, 742 00:38:11,160 --> 00:38:14,400 Speaker 2: what seems like a wall turns out to be a door. 743 00:38:14,440 --> 00:38:17,520 Speaker 2: After all, there may be a Sally out there giving 744 00:38:17,640 --> 00:38:19,759 Speaker 2: us a call when we least expect it. 745 00:38:20,400 --> 00:38:20,800 Speaker 3: That does it. 746 00:38:20,880 --> 00:38:23,160 Speaker 2: For this episode of Wall Street Week, I'm David Weston. 747 00:38:23,360 --> 00:38:24,160 Speaker 2: See you next week.