1 00:00:00,720 --> 00:00:03,720 Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm 2 00:00:03,800 --> 00:00:06,320 Speaker 1: Jason Kelly. We're right here every day bringing you the 3 00:00:06,400 --> 00:00:11,160 Speaker 1: latest news from the world's of business and finance, plus technology, politics, economics, 4 00:00:11,240 --> 00:00:14,280 Speaker 1: all harnessing the power of Business Week reporters and editors, 5 00:00:14,440 --> 00:00:16,439 Speaker 1: and of course Carol that's part of a team of 6 00:00:16,520 --> 00:00:20,439 Speaker 1: twenty seven hundred journalists and analysts more than a hundred 7 00:00:20,480 --> 00:00:23,240 Speaker 1: and twenty countries and Jason. You can download Bloomberg Business 8 00:00:23,280 --> 00:00:26,239 Speaker 1: Week on iTunes, SoundCloud, bl Bloomberg dot com. You can 9 00:00:26,280 --> 00:00:28,640 Speaker 1: also listen to our radio show at two pm Eastern 10 00:00:28,680 --> 00:00:31,560 Speaker 1: on Bloomberg Radio every weekday, or watch us on YouTube 11 00:00:31,600 --> 00:00:36,159 Speaker 1: by searching Bloomberg Global News. The US labor market, as 12 00:00:36,200 --> 00:00:38,519 Speaker 1: you've been hearing from Charlie and others right here at 13 00:00:38,560 --> 00:00:41,720 Speaker 1: Bloomberg continuing to regain some ground in July was at 14 00:00:41,720 --> 00:00:45,320 Speaker 1: a slower pace, indicating the economic rebound still making headway, 15 00:00:45,360 --> 00:00:49,120 Speaker 1: depue a surge in coronavirus infections. Larry Cudlow, the President's 16 00:00:49,200 --> 00:00:52,040 Speaker 1: Chief Economic advisor, ahead of the National Economic Council, weighing 17 00:00:52,360 --> 00:00:55,560 Speaker 1: about the report earlier on Bloomberg Radio and Bloomberg TV. 18 00:00:56,800 --> 00:01:01,680 Speaker 1: This was a hot spot report. This is July eighteen, 19 00:01:02,360 --> 00:01:05,080 Speaker 1: and the surging hotspots in the south and West and 20 00:01:05,200 --> 00:01:08,679 Speaker 1: some other places began in the back end of June 21 00:01:08,760 --> 00:01:11,840 Speaker 1: and lasted through July. You know, there was some pullback 22 00:01:11,920 --> 00:01:15,319 Speaker 1: of reopenings and so forth, and yet and yet we 23 00:01:15,440 --> 00:01:18,520 Speaker 1: still got one point eight million, with a big decline, 24 00:01:18,560 --> 00:01:21,920 Speaker 1: almost a full percentage point drop in the unemployment rate, 25 00:01:22,160 --> 00:01:26,240 Speaker 1: which will move to single digits easily in the summer 26 00:01:26,280 --> 00:01:30,960 Speaker 1: and fall. It seems like just about anybody looking at 27 00:01:31,000 --> 00:01:35,200 Speaker 1: this had the end Yet regardless of what you made 28 00:01:35,200 --> 00:01:37,440 Speaker 1: of it. Let's put it to Chris Lew, Senior fellow 29 00:01:37,520 --> 00:01:41,039 Speaker 1: at University of Virginia's Miller Center. He, of course, is 30 00:01:41,240 --> 00:01:44,479 Speaker 1: former Deputy Secretary of Labor under President Obama. He joins 31 00:01:44,520 --> 00:01:50,120 Speaker 1: us on the phone from in and around the nation's capital. So, Chris, 32 00:01:50,840 --> 00:01:53,080 Speaker 1: as you've had a little bit of time, a few 33 00:01:53,080 --> 00:01:56,120 Speaker 1: hours to digest this, and you know the mechanics of 34 00:01:56,160 --> 00:01:59,040 Speaker 1: this better than anyone. What should we take away from 35 00:01:59,080 --> 00:02:02,680 Speaker 1: this specific jobs report? Well, look, I think the top 36 00:02:02,720 --> 00:02:05,880 Speaker 1: line number one eight million, as well as the drop 37 00:02:05,920 --> 00:02:08,720 Speaker 1: in unemployment or both positive signs. But I think when 38 00:02:08,720 --> 00:02:10,959 Speaker 1: you look beneath this, you know you also have to 39 00:02:11,000 --> 00:02:13,520 Speaker 1: consider the context that we lost about twenty two million 40 00:02:13,639 --> 00:02:17,680 Speaker 1: jobs in the spring, We've are still down about thirteen 41 00:02:17,720 --> 00:02:20,840 Speaker 1: million jobs. Uh, and it and it's pretty obvious that 42 00:02:20,919 --> 00:02:25,040 Speaker 1: the economy or the economic recovery is slowing pretty dramatically 43 00:02:25,080 --> 00:02:28,520 Speaker 1: from what we saw two or three months ago. Um. 44 00:02:28,600 --> 00:02:29,960 Speaker 1: So there are a couple of things that I look at. 45 00:02:30,000 --> 00:02:32,160 Speaker 1: I look at, uh, you know, the five million people 46 00:02:32,200 --> 00:02:35,880 Speaker 1: that have left the workforce. Obviously, we saw yesterday that 47 00:02:36,160 --> 00:02:39,680 Speaker 1: about thirty one million people are unemployment, So we're still 48 00:02:39,720 --> 00:02:43,280 Speaker 1: in a pretty big hole. And you know, again, I 49 00:02:43,320 --> 00:02:45,560 Speaker 1: mean this sort of confirms what we've always known, which 50 00:02:45,560 --> 00:02:49,720 Speaker 1: is we're never going to have a sustained recovery until 51 00:02:49,720 --> 00:02:52,280 Speaker 1: we get our arms around this virus. And you know, 52 00:02:52,400 --> 00:02:54,280 Speaker 1: every time this kind of breaks out in a different 53 00:02:54,280 --> 00:02:57,480 Speaker 1: part of the country, we have these reopenings being paused 54 00:02:57,560 --> 00:03:00,120 Speaker 1: or rolled back again. And that's just a really off 55 00:03:00,200 --> 00:03:02,880 Speaker 1: environment for this economy to get any legs in. So 56 00:03:02,960 --> 00:03:06,480 Speaker 1: then what kind of visibility would you think you might 57 00:03:06,520 --> 00:03:09,480 Speaker 1: be able to feel comfortable talking about Chris in terms 58 00:03:09,520 --> 00:03:12,239 Speaker 1: of the types of labor reports that maybe we should 59 00:03:12,320 --> 00:03:14,400 Speaker 1: all get ready for over the next few months as 60 00:03:14,400 --> 00:03:17,760 Speaker 1: a society, because we know the vaccines coming, but the 61 00:03:17,840 --> 00:03:20,360 Speaker 1: dates are maybe the end of the year, maybe early 62 00:03:20,440 --> 00:03:23,200 Speaker 1: next year. Well, look, I think I think we're going 63 00:03:23,240 --> 00:03:25,560 Speaker 1: to continue to kind of climb out of this hole. 64 00:03:26,240 --> 00:03:28,800 Speaker 1: But I would take issue with where Larry Cudlow is 65 00:03:28,840 --> 00:03:30,880 Speaker 1: as to whether you know, this is really kind of 66 00:03:30,880 --> 00:03:33,079 Speaker 1: a hotspot or a v shape recovery. I think it's 67 00:03:33,120 --> 00:03:35,800 Speaker 1: kind of crawling out of this. And I think what 68 00:03:35,920 --> 00:03:38,720 Speaker 1: we see in among the different data that we've seen 69 00:03:38,720 --> 00:03:41,520 Speaker 1: over the last couple of weeks, you know, some concerns 70 00:03:41,640 --> 00:03:45,120 Speaker 1: whether temporary layoffs or what we thought were temporary are 71 00:03:45,120 --> 00:03:48,280 Speaker 1: now going to become permanent. Um, we continue to have 72 00:03:48,360 --> 00:03:52,280 Speaker 1: this issue about UH state and local government employees and 73 00:03:52,320 --> 00:03:55,160 Speaker 1: whether they're going to faith layoffs if there's no relief 74 00:03:55,200 --> 00:03:57,360 Speaker 1: from Washington as well, and the other thing I just 75 00:03:57,360 --> 00:03:59,040 Speaker 1: started look in this number, I mean, two thirds of 76 00:03:59,120 --> 00:04:05,240 Speaker 1: the gains in these report we're from basically leisure, hospitality, restaurants, 77 00:04:05,280 --> 00:04:08,000 Speaker 1: and retail, and we know that those are kind of 78 00:04:08,040 --> 00:04:10,320 Speaker 1: the industries where it really there's a lot of face 79 00:04:10,440 --> 00:04:13,720 Speaker 1: to face interaction with people, and you do wonder if 80 00:04:13,720 --> 00:04:17,240 Speaker 1: we can't get our arms around this pandemic, um, whether 81 00:04:17,279 --> 00:04:19,880 Speaker 1: the gains just sort of stop at that point, and 82 00:04:19,920 --> 00:04:23,680 Speaker 1: whether people are just going to permanently change their spending habits. Um. 83 00:04:23,760 --> 00:04:26,280 Speaker 1: You know, it's hard to imagine kind of the travel 84 00:04:26,680 --> 00:04:31,719 Speaker 1: and toursm industry going back to normal anytime soon. Alright, So, Chris, 85 00:04:31,800 --> 00:04:35,400 Speaker 1: you mentioned help coming from Washington, and that's where I 86 00:04:35,440 --> 00:04:39,240 Speaker 1: want to go next, because I feel like everyday, folks, 87 00:04:39,279 --> 00:04:42,880 Speaker 1: and I would put myself in that category, even knowing 88 00:04:42,960 --> 00:04:47,640 Speaker 1: enough to be dangerous looking at Washington, think, hold on 89 00:04:47,680 --> 00:04:50,839 Speaker 1: a second, Like there's a clear need here. Why can't 90 00:04:50,880 --> 00:04:55,280 Speaker 1: these guys get together and agree on something what's going 91 00:04:55,320 --> 00:04:58,680 Speaker 1: on here? I mean, help us understand what the stalemate 92 00:04:58,839 --> 00:05:01,680 Speaker 1: is and what you thing may happen given that you 93 00:05:01,760 --> 00:05:05,360 Speaker 1: know how Congress works, you've worked there, Yeah, I mean, look, 94 00:05:05,360 --> 00:05:08,919 Speaker 1: the lesson we learned from the Great Recession is that 95 00:05:09,000 --> 00:05:11,840 Speaker 1: if you come to the table with two little stimulus 96 00:05:12,160 --> 00:05:14,760 Speaker 1: or you end it too quickly, uh, it means the 97 00:05:14,800 --> 00:05:17,840 Speaker 1: downturn goes on longer. You know. During in two thousand nine, 98 00:05:18,040 --> 00:05:21,039 Speaker 1: the Obama Administration's got an eight hundred billion dollars stimulus 99 00:05:21,040 --> 00:05:24,360 Speaker 1: package path and that was it. And you know, we're 100 00:05:24,360 --> 00:05:27,680 Speaker 1: now talking trillions of dollars that have already spent we're 101 00:05:27,680 --> 00:05:32,680 Speaker 1: talking about, you know, a House Democratic proposal about three trillion, 102 00:05:33,120 --> 00:05:34,839 Speaker 1: and then the White House coming in at about a 103 00:05:34,880 --> 00:05:38,279 Speaker 1: trillion right now, And so I applaud them for saying 104 00:05:38,440 --> 00:05:41,200 Speaker 1: more money needs to go in, UM, but it's very 105 00:05:41,200 --> 00:05:44,359 Speaker 1: clear when you look at things like enhanced unemployment benefits, 106 00:05:44,560 --> 00:05:46,880 Speaker 1: whether you look at kind of assistance to state and 107 00:05:46,960 --> 00:05:49,599 Speaker 1: local governments, particularly assistance to schools that are trying to 108 00:05:49,600 --> 00:05:53,400 Speaker 1: reopen up, there is a real financial need around the 109 00:05:53,440 --> 00:05:56,040 Speaker 1: country right now. UM. And I guess the only question 110 00:05:56,120 --> 00:05:58,599 Speaker 1: is is can they compromise in the middle. I think 111 00:05:58,640 --> 00:06:02,120 Speaker 1: that they probably win, ill Um, but but I do 112 00:06:02,240 --> 00:06:04,359 Speaker 1: wonder about, you know, all of those people trying to 113 00:06:04,360 --> 00:06:06,400 Speaker 1: figure out, hey, how do I make my rent payment? 114 00:06:06,440 --> 00:06:09,279 Speaker 1: How do I buy groceries? While Congress is kind of 115 00:06:09,320 --> 00:06:11,520 Speaker 1: diithering over all of this. Well, and we're going to 116 00:06:11,600 --> 00:06:13,880 Speaker 1: continue this conversation because Chris, I want to ask you 117 00:06:13,920 --> 00:06:17,960 Speaker 1: about a tweet that the President UM put out yesterday 118 00:06:18,080 --> 00:06:21,360 Speaker 1: about working on executive orders when it comes to payrell 119 00:06:21,400 --> 00:06:25,440 Speaker 1: tax cuts, of fviction protections, unemployment extensions, and student loan 120 00:06:25,480 --> 00:06:29,839 Speaker 1: repayment options. Because we are trying to understand exactly what 121 00:06:30,000 --> 00:06:33,080 Speaker 1: authority the president has to has to do with this. Chris, 122 00:06:33,160 --> 00:06:35,719 Speaker 1: we talked about President Trump his tweet yesterday, how we 123 00:06:35,800 --> 00:06:38,839 Speaker 1: talked about working on these executive order when it comes 124 00:06:38,880 --> 00:06:42,360 Speaker 1: to apparel, tax cut, of viction protections, unemployment extensions, and 125 00:06:42,400 --> 00:06:47,360 Speaker 1: student loan repayment options executive orders. My understanding is some 126 00:06:47,400 --> 00:06:49,839 Speaker 1: things he might be able to do, some things are dicier. 127 00:06:50,839 --> 00:06:52,640 Speaker 1: I think that's exactly right. I think when you talk 128 00:06:52,720 --> 00:06:56,760 Speaker 1: about uh, mortgage or rent relief to the extent that 129 00:06:56,800 --> 00:07:00,160 Speaker 1: the mortgages are backed by the federal government or or 130 00:07:00,680 --> 00:07:03,360 Speaker 1: you know, it's it's it's someone who's in federal public housing, 131 00:07:03,920 --> 00:07:06,520 Speaker 1: I think that's certainly possible. I think obviously student loans 132 00:07:06,520 --> 00:07:09,120 Speaker 1: since a lot of them are backed by the federal government. Um, 133 00:07:09,360 --> 00:07:14,120 Speaker 1: some kind of extension of the mortoring is possible. The 134 00:07:14,520 --> 00:07:19,880 Speaker 1: wholesale shifting of money to provide enhance unemployment, I'm pretty 135 00:07:19,960 --> 00:07:22,360 Speaker 1: dubious that you can do this. You know, it's a 136 00:07:22,440 --> 00:07:27,800 Speaker 1: cardinal rule of appropriations law that appropriated funds can only 137 00:07:27,840 --> 00:07:30,080 Speaker 1: be used for appropriated or purposes, So you can't just 138 00:07:30,160 --> 00:07:33,440 Speaker 1: kind of move pots of money around. And what it 139 00:07:33,480 --> 00:07:36,000 Speaker 1: appears that he's doing is that there's money that was 140 00:07:36,040 --> 00:07:38,920 Speaker 1: in the Cares Act that they think has not been 141 00:07:39,000 --> 00:07:41,640 Speaker 1: spent that they want to shuffle around, And the truth 142 00:07:41,680 --> 00:07:43,600 Speaker 1: of it is that while it's not been spent, it's 143 00:07:43,600 --> 00:07:46,000 Speaker 1: already been allocated, and a lot of that has already 144 00:07:46,000 --> 00:07:49,000 Speaker 1: been allocated to to state and local government. So all 145 00:07:49,000 --> 00:07:52,040 Speaker 1: you're doing is basically robbing one pot for another part, 146 00:07:52,160 --> 00:07:54,320 Speaker 1: even if you could do it so um, he might 147 00:07:54,320 --> 00:07:55,760 Speaker 1: be able to do some things, but he can't. He 148 00:07:55,800 --> 00:07:59,600 Speaker 1: can't do everything that is being discussed right now in 149 00:07:59,680 --> 00:08:05,360 Speaker 1: cong Us. So speaking of some of the president's actions, Chris, 150 00:08:05,440 --> 00:08:07,600 Speaker 1: I got to ask you about what's been going on 151 00:08:08,120 --> 00:08:13,440 Speaker 1: with the president and China and TikTok and bite tens 152 00:08:13,600 --> 00:08:17,480 Speaker 1: and tens and h what do you make of that 153 00:08:17,800 --> 00:08:23,560 Speaker 1: from the perspective of someone who understands global trade policy 154 00:08:24,360 --> 00:08:28,000 Speaker 1: and US China relationships, Like, what are we to make 155 00:08:28,040 --> 00:08:31,120 Speaker 1: of this and what's most likely to happen next in 156 00:08:31,160 --> 00:08:34,320 Speaker 1: your estimation? Yes, so there there, Look, there is a 157 00:08:34,480 --> 00:08:38,040 Speaker 1: legitimate issue when we're talking about TikTok and wheat Chat 158 00:08:38,160 --> 00:08:42,439 Speaker 1: in terms of data being shared with the Chinese government, 159 00:08:42,600 --> 00:08:46,079 Speaker 1: data about US users or the censorship that's on the 160 00:08:46,080 --> 00:08:48,120 Speaker 1: wheat Chat platform, which we don't talk about enough, but 161 00:08:48,160 --> 00:08:50,160 Speaker 1: it's a pretty big platform here in the United States 162 00:08:50,160 --> 00:08:54,720 Speaker 1: among Chinese Americans. Um. So there is a legitimate issue, 163 00:08:54,760 --> 00:08:57,439 Speaker 1: and there's a bipartisan concern about it. It's the reason 164 00:08:57,480 --> 00:09:00,520 Speaker 1: why if you're a Department of Defense of show you 165 00:09:00,520 --> 00:09:03,280 Speaker 1: you're you're instructed not to have TikTok on your phone. 166 00:09:03,920 --> 00:09:08,199 Speaker 1: But how you're going about this is odd and I think, um, 167 00:09:08,240 --> 00:09:13,280 Speaker 1: you know, unconventional. Um to use an executive order under 168 00:09:13,280 --> 00:09:17,400 Speaker 1: the guys in national security probably stresses, stretches the bounds 169 00:09:17,400 --> 00:09:19,960 Speaker 1: of what I can consider appropriate. And I think what 170 00:09:20,080 --> 00:09:23,160 Speaker 1: the president is doing with respected TikTok and trying to 171 00:09:23,320 --> 00:09:27,000 Speaker 1: force a transaction. Uh. And then you know this thing 172 00:09:27,040 --> 00:09:29,040 Speaker 1: he throughout the other day saying hey, and the federal 173 00:09:29,040 --> 00:09:31,360 Speaker 1: government should take a cut of that. Um. You know, 174 00:09:31,400 --> 00:09:34,920 Speaker 1: I think against stretches. I think what Democrats and Republicans 175 00:09:34,920 --> 00:09:38,040 Speaker 1: would would say is acceptable behavior of the federal government 176 00:09:38,080 --> 00:09:40,880 Speaker 1: towards the business. Um. And so look, I think the 177 00:09:40,960 --> 00:09:45,120 Speaker 1: aim um is probably right in trying to rain them in, 178 00:09:45,679 --> 00:09:47,480 Speaker 1: but I have some serious questions about how he's going 179 00:09:47,520 --> 00:09:50,960 Speaker 1: about doing this in terms of the U. S. China relationship. Chris, 180 00:09:51,000 --> 00:09:53,000 Speaker 1: you know, I'm curious about some of the conversations you 181 00:09:53,040 --> 00:09:56,280 Speaker 1: guys had in the Obama White House. I mean, are 182 00:09:56,280 --> 00:10:00,080 Speaker 1: you surprised at how contentious is it has become and 183 00:10:00,200 --> 00:10:03,240 Speaker 1: kind of how this tech war between the two nations 184 00:10:03,280 --> 00:10:06,040 Speaker 1: has progressed. Do you think we would have gotten there ultimately? 185 00:10:06,080 --> 00:10:08,760 Speaker 1: Maybe in a different way, But you know, China is 186 00:10:08,760 --> 00:10:11,839 Speaker 1: a much more developed nation. It's much more important to 187 00:10:11,840 --> 00:10:15,600 Speaker 1: the global economy. It's not like it was ten years ago, right, 188 00:10:15,679 --> 00:10:18,040 Speaker 1: And I would argue that if you wanted to counter China, 189 00:10:18,200 --> 00:10:20,559 Speaker 1: the one thing we should have done, um, was to 190 00:10:20,679 --> 00:10:23,400 Speaker 1: pass to be part of the Transpacific Partnership, which I 191 00:10:23,440 --> 00:10:26,880 Speaker 1: would have put the US in a trading relationship with 192 00:10:27,400 --> 00:10:29,320 Speaker 1: a lot of the other countries in Asia. So I 193 00:10:29,360 --> 00:10:32,719 Speaker 1: think that was a huge missed opportunity by this administration. 194 00:10:32,800 --> 00:10:35,440 Speaker 1: And then obviously we've had, you know, a trade war 195 00:10:35,520 --> 00:10:38,120 Speaker 1: for the better part of the Trump administration, which is 196 00:10:38,160 --> 00:10:41,200 Speaker 1: now morphed into kind of a war over the you know, 197 00:10:41,360 --> 00:10:45,240 Speaker 1: cause of coronavirus and and how forthcoming they've been, which 198 00:10:45,280 --> 00:10:47,960 Speaker 1: is now morphed into kind of a tech trade war 199 00:10:48,000 --> 00:10:51,520 Speaker 1: as well. UM. I don't think this is good, um, 200 00:10:51,559 --> 00:10:53,680 Speaker 1: but I think we need to recognize, you know, the 201 00:10:53,760 --> 00:10:57,400 Speaker 1: U S. China relationship is a complicated one. Uh. There 202 00:10:57,400 --> 00:10:59,880 Speaker 1: are certainly areas where we need to find a way 203 00:10:59,880 --> 00:11:03,800 Speaker 1: to collaborate with them on something like um climate change 204 00:11:03,840 --> 00:11:06,720 Speaker 1: being the most important one. But there are obviously tensions. 205 00:11:06,720 --> 00:11:10,280 Speaker 1: I mean they are a rival economically and increasingly militarily. 206 00:11:10,400 --> 00:11:12,680 Speaker 1: So I think we need to look at this in 207 00:11:12,720 --> 00:11:15,560 Speaker 1: a in a holistic way. And and my concern is 208 00:11:15,600 --> 00:11:17,800 Speaker 1: that too much of these are kind of one off 209 00:11:18,559 --> 00:11:21,960 Speaker 1: battles between the US and China without engaging our allies, 210 00:11:22,000 --> 00:11:24,800 Speaker 1: and I think without having a clear understanding of two, three, 211 00:11:24,920 --> 00:11:28,200 Speaker 1: four steps down the road. Absolutely all right, great context 212 00:11:28,280 --> 00:11:31,160 Speaker 1: is always timely and insightful. We love catching up with you. 213 00:11:31,240 --> 00:11:34,840 Speaker 1: Chris Lew down at University of Virginia's Miller Center, of course, 214 00:11:34,840 --> 00:11:38,440 Speaker 1: a former member of the Obama administration. Great to get 215 00:11:38,520 --> 00:11:41,400 Speaker 1: his insight. We're listening to Bloomberg Business Week, Jason Kelly, 216 00:11:41,440 --> 00:11:43,800 Speaker 1: Carroll Masser, and you know, as we look to wrap 217 00:11:43,880 --> 00:11:45,559 Speaker 1: up the first hour of the show, Carol, I think 218 00:11:45,559 --> 00:11:47,720 Speaker 1: it's worth dwelling a bit if we can on our 219 00:11:47,760 --> 00:11:50,319 Speaker 1: conversation with Chris Lew only because you know, you and 220 00:11:50,400 --> 00:11:52,880 Speaker 1: I were messaging to each other back and forth towards 221 00:11:52,880 --> 00:11:54,640 Speaker 1: the end of that interview. He's really become a go 222 00:11:54,720 --> 00:11:56,800 Speaker 1: to guy for us and and I think one of 223 00:11:56,800 --> 00:11:59,360 Speaker 1: the most important things to remember about him, and he 224 00:11:59,400 --> 00:12:03,440 Speaker 1: really demons rate in that conversation, was that he has 225 00:12:03,480 --> 00:12:07,480 Speaker 1: worked across the various branches of government. Because we didn't 226 00:12:07,520 --> 00:12:10,040 Speaker 1: get to talk about Supreme Court, he worked in the 227 00:12:10,160 --> 00:12:13,120 Speaker 1: judiciary system as well, so he knows all the levers 228 00:12:13,160 --> 00:12:16,719 Speaker 1: and so his perspective one what the executive branch can 229 00:12:16,840 --> 00:12:20,880 Speaker 1: and can't do, I think is critical right now in 230 00:12:21,000 --> 00:12:24,120 Speaker 1: terms of figuring out what happens next. Yeah, totally. And 231 00:12:24,160 --> 00:12:26,120 Speaker 1: that's why I love, you know, talking to him, because 232 00:12:26,120 --> 00:12:28,600 Speaker 1: he really does understand how government works, as you said, 233 00:12:28,840 --> 00:12:30,920 Speaker 1: from the three branches of government. I put it out 234 00:12:30,960 --> 00:12:34,120 Speaker 1: on Twitter. I put the link out for our Apple 235 00:12:34,160 --> 00:12:37,520 Speaker 1: podcast feed, um, so that folks can It'll be uploaded 236 00:12:37,520 --> 00:12:39,200 Speaker 1: a little bit later on, but definitely check it out. 237 00:12:39,240 --> 00:12:41,120 Speaker 1: It's a great thing for I was going to say 238 00:12:41,120 --> 00:12:44,280 Speaker 1: the ride home, but your home probably already exactly. Maybe 239 00:12:44,280 --> 00:12:45,600 Speaker 1: you could have a glass of one at the end 240 00:12:45,640 --> 00:12:49,560 Speaker 1: of the danes. I listened a lot of podcasts doing dishes, 241 00:12:49,559 --> 00:12:52,800 Speaker 1: all right, U. Joe Weber the editor of Bloomberg Business Week. 242 00:12:52,920 --> 00:12:56,200 Speaker 1: He is joining us from Massachusetts to talk about a 243 00:12:56,320 --> 00:13:02,400 Speaker 1: really interesting story. Uh it's a out Italy. It's about bicycles, 244 00:13:02,520 --> 00:13:08,280 Speaker 1: and it really is a window into how we are 245 00:13:08,360 --> 00:13:14,079 Speaker 1: recovering very unevenly, shall we say, from everything that's going 246 00:13:14,200 --> 00:13:17,640 Speaker 1: on right now. Joel tell us about this story by 247 00:13:17,720 --> 00:13:21,120 Speaker 1: Vernon silver Well, on its face, it sounds like a 248 00:13:21,160 --> 00:13:25,079 Speaker 1: great program, right, Uh, the bicycle bailout that it came 249 00:13:25,160 --> 00:13:28,720 Speaker 1: up with, And that was what really um intrigued me 250 00:13:28,760 --> 00:13:32,280 Speaker 1: about it because, uh, you know, here, here's a here's 251 00:13:32,280 --> 00:13:35,800 Speaker 1: a country known for bicycles and known for cycling, and 252 00:13:36,480 --> 00:13:40,240 Speaker 1: um and also goes to say, like, you know, let's 253 00:13:40,280 --> 00:13:43,760 Speaker 1: have fewer automobiles on the road. Um As this program 254 00:13:43,800 --> 00:13:45,480 Speaker 1: is sort of attempting to do, but at the same 255 00:13:45,520 --> 00:13:52,800 Speaker 1: time it risks alienating um, large portions of the country 256 00:13:52,840 --> 00:13:55,960 Speaker 1: who can't even afford to buy a bike in the 257 00:13:56,000 --> 00:13:59,520 Speaker 1: first place. Right. So what's ironic about this is that 258 00:13:59,600 --> 00:14:03,440 Speaker 1: one of the ways that governments are attempting to stimulate 259 00:14:03,520 --> 00:14:05,760 Speaker 1: the economy is to give consumers a break. But then 260 00:14:06,679 --> 00:14:09,840 Speaker 1: there's so many people who have fallen on hard times 261 00:14:09,920 --> 00:14:12,840 Speaker 1: during the pandemic that what's really going to happen here 262 00:14:12,880 --> 00:14:17,360 Speaker 1: is that we're gonna have inequality being exacerbated. Yeah, I mean, 263 00:14:17,559 --> 00:14:19,960 Speaker 1: I love I love this story, and I love what 264 00:14:20,400 --> 00:14:23,280 Speaker 1: m Vernon and the team, right you know, Joel that 265 00:14:23,320 --> 00:14:25,680 Speaker 1: they talk about, you know, these trillions of dollars. We're 266 00:14:25,680 --> 00:14:27,760 Speaker 1: just talking about it with Chris lou who was in 267 00:14:27,800 --> 00:14:30,840 Speaker 1: the Obama administration. You know, trillions of dollars that are 268 00:14:30,840 --> 00:14:34,920 Speaker 1: going for everything, and by everything that sometimes means you know, 269 00:14:34,960 --> 00:14:37,360 Speaker 1: like a really expensive bicycle. And you're right, it's it's 270 00:14:37,400 --> 00:14:40,120 Speaker 1: helping to kind of widen ultimately, the income gaps that 271 00:14:40,200 --> 00:14:43,160 Speaker 1: are already laid bay are by the virus. Um, let's 272 00:14:43,160 --> 00:14:46,280 Speaker 1: bring Vernon Silver into the conversation as well. He joins 273 00:14:46,360 --> 00:14:50,320 Speaker 1: us right now, and he is UH Projects and Investigations Report, 274 00:14:50,360 --> 00:14:52,120 Speaker 1: and he joins us on the phone I believe from Rome. 275 00:14:52,440 --> 00:14:54,920 Speaker 1: So Vernon talked to us about this story. Um, because 276 00:14:54,960 --> 00:14:57,320 Speaker 1: it really is a great read, but it also kind 277 00:14:57,320 --> 00:14:59,400 Speaker 1: of makes you stop for a moment and realize, you know, 278 00:14:59,440 --> 00:15:03,680 Speaker 1: the inequal qualities that are out there. Yeah, honestly, it's 279 00:15:03,840 --> 00:15:07,960 Speaker 1: this thing starts with the moment that Italy comes out 280 00:15:08,000 --> 00:15:11,680 Speaker 1: of the beginnings of of this lockdown, and one of 281 00:15:11,680 --> 00:15:14,200 Speaker 1: the most noticeable things on the streets where the piles 282 00:15:14,320 --> 00:15:17,640 Speaker 1: of boxes of bicycles and the crowds of people in 283 00:15:17,640 --> 00:15:20,880 Speaker 1: front of the bike shop. Um, because when you are 284 00:15:20,960 --> 00:15:24,160 Speaker 1: giving people essentially the ability to get a bike of 285 00:15:24,280 --> 00:15:28,280 Speaker 1: up to a value of a thousand dollars at six off, 286 00:15:29,160 --> 00:15:32,040 Speaker 1: people are gonna grab it. But those people are not, 287 00:15:32,280 --> 00:15:36,360 Speaker 1: you know, the delivery bicycle guys. It's people like people. 288 00:15:36,440 --> 00:15:38,720 Speaker 1: You know that. We saw an interview which is, you know, 289 00:15:38,840 --> 00:15:42,440 Speaker 1: someone who needs a couple a couple of folding bicycles 290 00:15:42,480 --> 00:15:46,520 Speaker 1: to take to their beach house in Tuscany so vernon 291 00:15:46,560 --> 00:15:51,040 Speaker 1: how expensive were the bikes that that you bought? Okay, 292 00:15:51,040 --> 00:15:57,520 Speaker 1: this is you got me out. I was saying, we 293 00:15:57,600 --> 00:15:59,840 Speaker 1: have not discussed this, and I was gonna save it 294 00:16:00,040 --> 00:16:03,760 Speaker 1: for the end, but I had to try, right, I mean, um, 295 00:16:04,680 --> 00:16:07,080 Speaker 1: so here's here, and this is interesting because this is 296 00:16:07,120 --> 00:16:10,960 Speaker 1: also about inequality. Um. I've sprung for a three hundred 297 00:16:11,000 --> 00:16:13,760 Speaker 1: euro bipe. It's a mint green number with a brown 298 00:16:13,840 --> 00:16:16,800 Speaker 1: seed It's really nice. Um. But I did not go 299 00:16:16,920 --> 00:16:20,680 Speaker 1: for the super expensive one because the decree that announced 300 00:16:20,680 --> 00:16:25,000 Speaker 1: this thing said resident citizens in Italy of large of 301 00:16:25,080 --> 00:16:27,920 Speaker 1: cities could get this, and I'm not an Italian citizen, 302 00:16:28,400 --> 00:16:30,720 Speaker 1: so I had no guarantee that I was going to 303 00:16:30,840 --> 00:16:34,760 Speaker 1: get the rebate, and they're like, tonight, literally tonight, the 304 00:16:34,800 --> 00:16:38,600 Speaker 1: government is working on finalizing the wording of who exactly 305 00:16:38,640 --> 00:16:40,760 Speaker 1: gets it, and I won't know yet if I get it. 306 00:16:40,800 --> 00:16:44,479 Speaker 1: But if they keep it with just citizens, talk about inequality. 307 00:16:44,520 --> 00:16:46,920 Speaker 1: Who are the people who are coming to Italy who 308 00:16:47,120 --> 00:16:49,920 Speaker 1: need to do the jobs that might require a bicycle, 309 00:16:50,400 --> 00:16:52,960 Speaker 1: Immigrants from Africa, from the Middle East, from you know, 310 00:16:53,080 --> 00:16:57,640 Speaker 1: Filipino delivery men. Right, if you if you only give 311 00:16:57,680 --> 00:17:01,120 Speaker 1: it to Italian citizens, you're cutting out like all the 312 00:17:01,120 --> 00:17:03,320 Speaker 1: people who you can see on a daily basis who 313 00:17:03,320 --> 00:17:06,119 Speaker 1: need a bicycle. So I might not qualify as somebody 314 00:17:06,160 --> 00:17:08,760 Speaker 1: who's not an Italian citizen for a second. For a 315 00:17:08,800 --> 00:17:12,880 Speaker 1: second there say who really needs bikes? Hard working award 316 00:17:12,920 --> 00:17:18,200 Speaker 1: winning journalists. So but and then we might have shot 317 00:17:18,240 --> 00:17:21,600 Speaker 1: off your mic. I'm just gonna tell you, um no. 318 00:17:21,720 --> 00:17:24,840 Speaker 1: But it really reminds us, right, these programs, I mean, 319 00:17:25,000 --> 00:17:28,199 Speaker 1: I don't know, are we supposed to say it's not 320 00:17:28,240 --> 00:17:30,199 Speaker 1: going to be perfect. We get it and there are 321 00:17:30,200 --> 00:17:32,159 Speaker 1: ways to hopefully fix it. I mean, I don't know 322 00:17:32,200 --> 00:17:36,320 Speaker 1: what's the takeaway from this reporting that you did? I mean, 323 00:17:36,400 --> 00:17:38,960 Speaker 1: what's interesting is we made a global right. We put 324 00:17:38,960 --> 00:17:40,840 Speaker 1: out the call to reporters around the world and came 325 00:17:40,880 --> 00:17:43,760 Speaker 1: up with amazing stuff. You can get an electric car 326 00:17:43,880 --> 00:17:46,879 Speaker 1: for free in Germany, but you have to have you know, 327 00:17:47,160 --> 00:17:49,919 Speaker 1: over ten thousand euros to spend on the electric car 328 00:17:49,960 --> 00:17:55,880 Speaker 1: in the first place. You can get dollars Australian back 329 00:17:56,000 --> 00:17:58,960 Speaker 1: for renovating your house in the suburbs of Melbourne, but 330 00:17:59,000 --> 00:18:00,359 Speaker 1: you have to own a house. You have to have 331 00:18:00,400 --> 00:18:03,400 Speaker 1: the money to put up to the renovation. Right, these 332 00:18:03,440 --> 00:18:06,119 Speaker 1: are these are people with means. This is not getting 333 00:18:06,160 --> 00:18:08,720 Speaker 1: the money to everybody. What we from the economists, what 334 00:18:08,760 --> 00:18:11,720 Speaker 1: we got was really interesting is you can deploy as 335 00:18:11,720 --> 00:18:14,800 Speaker 1: a government the money in better ways, whether it's through 336 00:18:15,119 --> 00:18:17,720 Speaker 1: paying everybody a living wage no matter what you know, 337 00:18:17,720 --> 00:18:20,359 Speaker 1: whether they're out of work or not. Um, you know, 338 00:18:20,640 --> 00:18:24,240 Speaker 1: cutting everybody's payroll tax, just pumping money directly into the 339 00:18:24,240 --> 00:18:27,680 Speaker 1: economy rather than doing it piecemeal in ways that might 340 00:18:27,720 --> 00:18:32,240 Speaker 1: be less equal. So I mean that really brings it 341 00:18:32,240 --> 00:18:33,960 Speaker 1: to a head, right Vernon, like you can either do 342 00:18:34,040 --> 00:18:38,000 Speaker 1: these bailout programs that help consumers for for purchases of 343 00:18:38,119 --> 00:18:42,680 Speaker 1: luxury items, let's call them. What in practice is anybody 344 00:18:42,720 --> 00:18:48,280 Speaker 1: got the other thing dialed yet No, it's it's I mean, essentially, 345 00:18:48,280 --> 00:18:50,480 Speaker 1: once you're spending trillions, you might as well throw it 346 00:18:50,560 --> 00:18:53,200 Speaker 1: it at everybody. I mean, on the other end, there 347 00:18:53,240 --> 00:18:56,719 Speaker 1: are the richest families in countries like Italy that were 348 00:18:56,760 --> 00:18:59,560 Speaker 1: able to borrow billions of dollars that they might not 349 00:18:59,600 --> 00:19:03,160 Speaker 1: even need, hey back to run their companies. Maybe that's good. 350 00:19:03,200 --> 00:19:06,480 Speaker 1: Maybe you know, they don't have to fireworkers, but they are. 351 00:19:06,520 --> 00:19:08,800 Speaker 1: They are benefiting at the top end. People are benefiting 352 00:19:08,800 --> 00:19:10,760 Speaker 1: at the middle. But you know, if you have a 353 00:19:10,800 --> 00:19:15,000 Speaker 1: fire hose of trillions, why not just spread everywhere? Is 354 00:19:15,040 --> 00:19:18,280 Speaker 1: the reply that we got. Yeah, interesting, Well it is 355 00:19:18,320 --> 00:19:20,840 Speaker 1: a sort of force of reporting. And I'm glad you 356 00:19:20,840 --> 00:19:22,960 Speaker 1: mentioned sort of the call that went out to the Empire, 357 00:19:23,359 --> 00:19:27,439 Speaker 1: because it is a really nice effort that you put together. 358 00:19:27,720 --> 00:19:30,320 Speaker 1: As always. Vernon Silver joining us from Rome H, one 359 00:19:30,359 --> 00:19:32,880 Speaker 1: of our senior writers at Bloomberg, just love, love, love 360 00:19:33,560 --> 00:19:35,720 Speaker 1: his work, and it's a way to tell the story 361 00:19:35,880 --> 00:19:39,000 Speaker 1: that we don't always here. Earlier in the week, yesterday, 362 00:19:39,200 --> 00:19:42,720 Speaker 1: in fact, was the Bloomberg Equality S of the latest edition, 363 00:19:42,760 --> 00:19:46,960 Speaker 1: and it was all about race on Wall Street trying 364 00:19:47,040 --> 00:19:50,800 Speaker 1: to make some significant changes, and I was fortunate to 365 00:19:50,840 --> 00:19:53,200 Speaker 1: catch up with Henrykravis. He is the co chairman, co CEO, 366 00:19:53,320 --> 00:19:56,320 Speaker 1: co founder at kk ARE, the private equity firm been 367 00:19:56,320 --> 00:19:58,960 Speaker 1: around for forty plus years. It bears his name and 368 00:19:59,000 --> 00:20:02,400 Speaker 1: that of his cousin George Roberts and Jerome Colberg, their 369 00:20:02,720 --> 00:20:06,240 Speaker 1: fellow founding partner, also was joined by William Goodlow. He's 370 00:20:06,320 --> 00:20:09,919 Speaker 1: the president and CEO of s EO. That is a 371 00:20:09,960 --> 00:20:12,720 Speaker 1: group that works with people like Henry Kravis, who is 372 00:20:12,760 --> 00:20:18,880 Speaker 1: the chairman of that group. Two basically prepare folks who 373 00:20:19,240 --> 00:20:23,359 Speaker 1: come from more diverse backgrounds to work on Wall Street. 374 00:20:23,600 --> 00:20:27,600 Speaker 1: Here is what Henry Kravis had to say. We're behind 375 00:20:28,040 --> 00:20:31,480 Speaker 1: Wall Streets, behind, the c suite is behind. We've all 376 00:20:31,560 --> 00:20:36,120 Speaker 1: been slow and recognizing the problem and doing something about it. 377 00:20:36,440 --> 00:20:41,119 Speaker 1: I really believe that maybe now for a change, we 378 00:20:41,240 --> 00:20:45,440 Speaker 1: have the opportunity to make a big difference the There's 379 00:20:45,480 --> 00:20:49,520 Speaker 1: no question the numbers are bleak. You can look anywhere. 380 00:20:50,160 --> 00:20:56,159 Speaker 1: There's no way that the UH corporations and Wall Street 381 00:20:56,200 --> 00:21:00,280 Speaker 1: firms have not hired the diverse candidates. Eat will to 382 00:21:01,119 --> 00:21:05,120 Speaker 1: or an access of the percentage of the black population 383 00:21:05,160 --> 00:21:10,159 Speaker 1: in America. None of us have that. But we have 384 00:21:10,280 --> 00:21:12,600 Speaker 1: a long way to go and I really believe that 385 00:21:12,680 --> 00:21:15,840 Speaker 1: we will. But let me just say, it starts at 386 00:21:15,840 --> 00:21:19,840 Speaker 1: the top. If the CEO of any company, whether it 387 00:21:19,880 --> 00:21:23,600 Speaker 1: be Wall Street or c Suite, has made a decision 388 00:21:24,000 --> 00:21:26,879 Speaker 1: that they're going to make a change, and they really 389 00:21:26,880 --> 00:21:30,199 Speaker 1: are going to now make a difference, it will happen. 390 00:21:31,160 --> 00:21:35,400 Speaker 1: We all have to overcome, in my view, the unconscious 391 00:21:35,480 --> 00:21:39,359 Speaker 1: bias nous that exists everywhere. You know, if you think 392 00:21:39,400 --> 00:21:47,280 Speaker 1: about what we all go through every day, the slight 393 00:21:47,359 --> 00:21:55,480 Speaker 1: injustices that minorities face every day is incredible. These slight 394 00:21:55,560 --> 00:22:01,760 Speaker 1: injustices white the executives don't face. And so we've got 395 00:22:01,760 --> 00:22:06,480 Speaker 1: to be patient. We've got to make a decision that 396 00:22:06,640 --> 00:22:11,520 Speaker 1: we're going to change this. And it starts maybe not 397 00:22:11,640 --> 00:22:16,000 Speaker 1: only with the CEO, but it starts with boards of directors. 398 00:22:16,000 --> 00:22:19,760 Speaker 1: So if the board of directors is a diverse board 399 00:22:19,800 --> 00:22:25,040 Speaker 1: of directors for any company, you'll start to have a change. 400 00:22:25,920 --> 00:22:28,879 Speaker 1: Let me give you an example, Okay. At KKR, we 401 00:22:28,960 --> 00:22:31,840 Speaker 1: made a decision about two years ago that we were 402 00:22:31,880 --> 00:22:36,359 Speaker 1: going to change, uh the makeup of the boards of 403 00:22:36,400 --> 00:22:39,399 Speaker 1: all the companies that we controlled, and we had a 404 00:22:39,400 --> 00:22:44,480 Speaker 1: goal to get to over a hundred diverse board members 405 00:22:44,480 --> 00:22:48,399 Speaker 1: in our portfolio companies, and I'm happy to say we 406 00:22:48,480 --> 00:22:53,000 Speaker 1: got there. So now what we have to do. We've 407 00:22:53,040 --> 00:22:58,400 Speaker 1: got to increase the hiring. It's it's not just the hiring, 408 00:22:58,480 --> 00:23:03,800 Speaker 1: but it's the training. It's being patient and working with 409 00:23:03,880 --> 00:23:08,280 Speaker 1: diverse candidates that come in. So we have a long 410 00:23:08,320 --> 00:23:11,520 Speaker 1: way to go. But if you make up your mind 411 00:23:11,680 --> 00:23:14,440 Speaker 1: that you can do it, you'll do it. You'll get 412 00:23:14,440 --> 00:23:19,040 Speaker 1: it done. So let's talk about getting it done. And 413 00:23:19,240 --> 00:23:22,359 Speaker 1: William Goodlow, you are the CEO of s e O. 414 00:23:22,680 --> 00:23:26,359 Speaker 1: And for anyone who's been paying attention to Bloomberg this week, 415 00:23:26,960 --> 00:23:32,040 Speaker 1: the cover story of Bloomberg Markets featured an incredibly powerful 416 00:23:32,640 --> 00:23:35,960 Speaker 1: series of conversations. And as I talk to people about 417 00:23:35,960 --> 00:23:39,360 Speaker 1: those conversations, there are a number of alumni of your 418 00:23:39,480 --> 00:23:44,440 Speaker 1: organization there, William talking about their experiences, talking about them 419 00:23:44,480 --> 00:23:49,080 Speaker 1: in a very honest way. Help us understand what SEO does, 420 00:23:49,400 --> 00:23:53,399 Speaker 1: especially when it comes to changing the face of Wall Street. 421 00:23:53,640 --> 00:23:57,959 Speaker 1: It goes back to SEO founding in n with founded 422 00:23:58,000 --> 00:24:01,040 Speaker 1: with a mission to create a more equitable society, and 423 00:24:01,080 --> 00:24:06,200 Speaker 1: that's at every level, including the highest economic levels of society. 424 00:24:06,240 --> 00:24:10,600 Speaker 1: Because we know that talent is widely distributed and yet 425 00:24:10,760 --> 00:24:14,760 Speaker 1: it's unevenly developed. And if there's one takeaway we hope 426 00:24:14,800 --> 00:24:17,960 Speaker 1: your audience UH takes is that s c O is 427 00:24:18,000 --> 00:24:22,280 Speaker 1: in the talent development business and we've been doing it 428 00:24:22,359 --> 00:24:26,480 Speaker 1: for fifty seven years. Um. You know. Unfortunately, the murder 429 00:24:26,520 --> 00:24:29,520 Speaker 1: of George Floyd brought more attention to some of the 430 00:24:30,000 --> 00:24:33,840 Speaker 1: inequities in society, and we needed the protests to bring 431 00:24:33,920 --> 00:24:36,840 Speaker 1: that attention to it. But the real change will come 432 00:24:36,840 --> 00:24:39,960 Speaker 1: when we change the systems and the structures, and that's 433 00:24:40,000 --> 00:24:43,800 Speaker 1: what SCO has been doing. Each year, we serve over 434 00:24:43,840 --> 00:24:48,720 Speaker 1: four thousand young people, overwhelmingly Black and Latin x uh, 435 00:24:48,800 --> 00:24:53,040 Speaker 1: and we address systemic and equities through four different programs. 436 00:24:53,040 --> 00:24:56,160 Speaker 1: That's the old founding program. The Scholars program serves high 437 00:24:56,200 --> 00:24:59,359 Speaker 1: school and college students two thousand from New York City 438 00:24:59,359 --> 00:25:03,199 Speaker 1: Public school the loan from grades nine through twelve. Students 439 00:25:03,280 --> 00:25:08,520 Speaker 1: attend several hundred hours of intense s CEO academic classes 440 00:25:08,560 --> 00:25:12,440 Speaker 1: while still attending their public schools. By twelfth grade, students 441 00:25:12,480 --> 00:25:16,920 Speaker 1: are truly academically prepared for college level work. But s 442 00:25:16,920 --> 00:25:21,560 Speaker 1: CEO doesn't stop there. We provide comprehensive support for students 443 00:25:21,600 --> 00:25:28,240 Speaker 1: throughout college and earned a college degree first for similar 444 00:25:28,480 --> 00:25:34,200 Speaker 1: students from low income backgrounds nationally, and that is William Goodlow, 445 00:25:34,240 --> 00:25:37,440 Speaker 1: the CEO of s c O, joined by Henry Crevice, 446 00:25:37,800 --> 00:25:40,240 Speaker 1: of course, the co founder, co chairman and co CEO 447 00:25:40,400 --> 00:25:44,080 Speaker 1: of KKR. Carol. Yeah, great conversation. I think the more 448 00:25:44,119 --> 00:25:46,159 Speaker 1: and more that we talk about this and we hear 449 00:25:46,200 --> 00:25:49,679 Speaker 1: from the likes of someone like Henry Cravis or William Goodlow, 450 00:25:49,920 --> 00:25:51,760 Speaker 1: we get an idea of what's going on. We also 451 00:25:51,760 --> 00:25:53,359 Speaker 1: get an idea of what the problems are and what 452 00:25:53,440 --> 00:25:55,720 Speaker 1: still needs to be done. But I think we've got 453 00:25:55,760 --> 00:25:59,919 Speaker 1: to make sure that this conversation continues to happen. Jason, Well, 454 00:26:00,000 --> 00:26:02,359 Speaker 1: and it starts as at the top as Henry said. 455 00:26:02,400 --> 00:26:04,280 Speaker 1: And that board of director's piece, I think is really 456 00:26:04,320 --> 00:26:14,240 Speaker 1: important because the governance of companies it's got to change. Brother, journal. Yeah, 457 00:26:14,320 --> 00:26:16,119 Speaker 1: but you let me drive. Oh no, no, no no, no, 458 00:26:16,359 --> 00:26:20,680 Speaker 1: he's going to drive, honey, please, I'll do the riding drivel. 459 00:26:22,080 --> 00:26:31,000 Speaker 1: I want to drive. Just drive, baby, good questions trying. 460 00:26:37,480 --> 00:26:40,760 Speaker 1: This is the drive to the globe. Give me thanks, 461 00:26:40,800 --> 00:26:45,200 Speaker 1: We'll drying us down on Bluebird Radio. All right, it 462 00:26:45,359 --> 00:26:47,920 Speaker 1: is a time before the drive to the clothes on 463 00:26:48,000 --> 00:26:50,680 Speaker 1: this Friday to wrap up the trading week. Let's break 464 00:26:50,720 --> 00:26:54,360 Speaker 1: it down with Jim Lowell, chief investment officer of Advisor Investments. 465 00:26:54,440 --> 00:26:57,640 Speaker 1: They're looking after a little more than five billion dollars. 466 00:26:57,800 --> 00:27:00,440 Speaker 1: Joining us on the phone from Nita Massachu, says Jim, 467 00:27:00,600 --> 00:27:03,639 Speaker 1: how are you? How are things up in the Greater 468 00:27:04,240 --> 00:27:08,840 Speaker 1: Austin area. They're doing just fine. Obviously we live in 469 00:27:09,280 --> 00:27:12,399 Speaker 1: crazy times, not just in terms of COVID nineteen, but 470 00:27:13,040 --> 00:27:15,720 Speaker 1: obviously in an election year and with a market that's 471 00:27:15,760 --> 00:27:19,200 Speaker 1: probably a way ahead of the medical facts. We think 472 00:27:19,240 --> 00:27:23,280 Speaker 1: now it's a very good time to stay rational, calm, collected, 473 00:27:23,400 --> 00:27:27,200 Speaker 1: and of course disciplined. That is a great place to start. 474 00:27:27,280 --> 00:27:30,320 Speaker 1: What does rational mean then? Does it mean gold which 475 00:27:30,359 --> 00:27:33,240 Speaker 1: has been on a tear? Does it mean cash? And 476 00:27:33,640 --> 00:27:36,960 Speaker 1: you know under the mattress? What does it really mean Jim, Well, 477 00:27:37,040 --> 00:27:39,160 Speaker 1: you certainly could have some cash on hand. We think 478 00:27:39,240 --> 00:27:42,640 Speaker 1: it's was both as a buffer for what we suspect 479 00:27:42,720 --> 00:27:45,720 Speaker 1: will be increased volatility as we get closer to the election, 480 00:27:46,600 --> 00:27:50,359 Speaker 1: but also as some dry powder for opportunities that may 481 00:27:50,400 --> 00:27:53,399 Speaker 1: manifest themselves along the way. If, of course, we get 482 00:27:53,440 --> 00:27:57,480 Speaker 1: a vaccine, all bets are suddenly going to be on 483 00:27:58,119 --> 00:28:01,639 Speaker 1: the economy being able to whether the storm of the 484 00:28:01,720 --> 00:28:04,520 Speaker 1: COVID storm is better than it than it will without it. 485 00:28:05,119 --> 00:28:08,400 Speaker 1: But we also have been noticing gold. Certainly, our tactical 486 00:28:08,520 --> 00:28:12,160 Speaker 1: models have been picking up on the on the gold trend. UM. 487 00:28:12,440 --> 00:28:15,680 Speaker 1: Our view is that gold is a very poor long 488 00:28:15,880 --> 00:28:19,800 Speaker 1: term hold, but there are periods where it can give 489 00:28:19,920 --> 00:28:25,000 Speaker 1: investors not just emotional comfort but even tactical return advantage. UM. 490 00:28:25,520 --> 00:28:29,480 Speaker 1: Gold of course occupies that paradoxical space where investors tend 491 00:28:29,560 --> 00:28:32,280 Speaker 1: to like it when they think the economy is going 492 00:28:32,400 --> 00:28:35,400 Speaker 1: to heck, and they also tend to like it when 493 00:28:35,440 --> 00:28:38,840 Speaker 1: they think the economy is overheating. UM. We think we're 494 00:28:38,880 --> 00:28:42,200 Speaker 1: probably between those two two moments. And while we do 495 00:28:42,360 --> 00:28:44,280 Speaker 1: think gold may have a little bit of room to run, 496 00:28:44,920 --> 00:28:48,840 Speaker 1: uh maybe even into next year, we would be very 497 00:28:48,920 --> 00:28:52,680 Speaker 1: cautious about recommending it to anyone other than is a speculative. 498 00:28:52,760 --> 00:28:57,520 Speaker 1: Best Jim, talk to me about China, because we talked 499 00:28:57,520 --> 00:28:59,240 Speaker 1: a lot about it this week. It's sort of a 500 00:29:00,080 --> 00:29:01,880 Speaker 1: I was gonna say, tactical way, but in a very 501 00:29:01,960 --> 00:29:05,680 Speaker 1: specific way as it relates to TikTok and now more 502 00:29:05,760 --> 00:29:08,959 Speaker 1: recently what's going on with ten cent, and I mean 503 00:29:09,320 --> 00:29:13,200 Speaker 1: the rhetoric is certainly being amplified, but these are some 504 00:29:13,320 --> 00:29:17,160 Speaker 1: real actions potentially that are being taken. How does that 505 00:29:17,240 --> 00:29:22,600 Speaker 1: give you pause when you think about any exposure to China? 506 00:29:22,720 --> 00:29:25,720 Speaker 1: How do you figure that into an investment thesis. So 507 00:29:25,840 --> 00:29:29,840 Speaker 1: it's an excellent question, and we have been cautiously moving 508 00:29:30,480 --> 00:29:34,000 Speaker 1: our games onto China, actually having a small take in 509 00:29:34,200 --> 00:29:38,080 Speaker 1: some some China oriented positions inside of the actively managed 510 00:29:38,120 --> 00:29:41,600 Speaker 1: funds that we own. We think that the rhetoric is 511 00:29:41,720 --> 00:29:46,200 Speaker 1: likely never going to die down. But the major trends 512 00:29:46,720 --> 00:29:48,880 Speaker 1: I think is that in my life style I'm sixty 513 00:29:48,960 --> 00:29:52,320 Speaker 1: years old, we've moved from an outright belief in a 514 00:29:52,360 --> 00:29:57,400 Speaker 1: global economy to really a duopolate US China with every 515 00:29:57,480 --> 00:30:01,320 Speaker 1: other country effectively playing second or third fiddle, some not 516 00:30:01,480 --> 00:30:04,480 Speaker 1: even making it to band camp. So we think you 517 00:30:04,600 --> 00:30:07,040 Speaker 1: want to have some China exposure, you want to have 518 00:30:07,240 --> 00:30:10,640 Speaker 1: US exposure. But we suspect that there will be clashes 519 00:30:11,560 --> 00:30:15,080 Speaker 1: along along the road in any given year, whether it's 520 00:30:15,080 --> 00:30:18,000 Speaker 1: an election year, whether it's a Republican or democratic president. 521 00:30:18,440 --> 00:30:20,720 Speaker 1: China has been a hard country to bring to the 522 00:30:20,800 --> 00:30:24,960 Speaker 1: bargaining cable in any real way. All that said and done, 523 00:30:25,160 --> 00:30:27,920 Speaker 1: it has grown its own economy better and better over 524 00:30:28,000 --> 00:30:30,000 Speaker 1: the past decade to the point where we think there 525 00:30:30,040 --> 00:30:35,280 Speaker 1: are some attractive opportunities are well, we definitely think that 526 00:30:35,400 --> 00:30:38,000 Speaker 1: if you're looking inside of China and you want to 527 00:30:38,040 --> 00:30:43,280 Speaker 1: look at brands that Chinese consumers tend to want to own, 528 00:30:43,560 --> 00:30:46,600 Speaker 1: we we are first interest in China was really from 529 00:30:46,600 --> 00:30:51,400 Speaker 1: an investment angle was parked by Apple and wondering whether 530 00:30:51,480 --> 00:30:54,800 Speaker 1: or not brand America products We're going to get hurt 531 00:30:54,920 --> 00:31:00,960 Speaker 1: by China's UH social ranking system based on consumer interesting behavior, 532 00:31:01,400 --> 00:31:05,200 Speaker 1: and what we saw was an opportunity in brand China 533 00:31:05,360 --> 00:31:09,080 Speaker 1: for the Chinese consumers. So we like, we like technology 534 00:31:09,320 --> 00:31:13,800 Speaker 1: and consumer related sectors inside of China's economy. Here at home, 535 00:31:14,160 --> 00:31:17,080 Speaker 1: we could see to love the battleship balance sheets of 536 00:31:17,400 --> 00:31:21,720 Speaker 1: bootship dividend growers UH and health care remains a significant 537 00:31:21,760 --> 00:31:24,600 Speaker 1: overweight in our portfolios. Talk to me more about health 538 00:31:24,680 --> 00:31:28,800 Speaker 1: care because obviously so much focus on so many aspects 539 00:31:28,840 --> 00:31:31,480 Speaker 1: of that, But healthcare is a big bucket. Drill down 540 00:31:31,520 --> 00:31:35,360 Speaker 1: a level if you can. Health Care is effectively twenty 541 00:31:35,440 --> 00:31:37,480 Speaker 1: plus percent of our economy, So you're right, it is. 542 00:31:37,600 --> 00:31:39,800 Speaker 1: It is the biggest bucket in our economy. And when 543 00:31:39,800 --> 00:31:42,880 Speaker 1: you look at the demographics demand from our aging population, 544 00:31:43,000 --> 00:31:46,960 Speaker 1: that of Japan, that of Europe. There's obviously a necessary 545 00:31:47,080 --> 00:31:50,040 Speaker 1: demand for more and less invasive ways to treat a 546 00:31:50,160 --> 00:31:53,200 Speaker 1: whole host of of illnesses for an aging population. But 547 00:31:53,240 --> 00:31:55,920 Speaker 1: then you also have emerging market demand where consumers are 548 00:31:55,920 --> 00:31:59,920 Speaker 1: finally able to demand first any healthcare, and then more 549 00:32:00,000 --> 00:32:03,480 Speaker 1: are in better ways to treat themselves through healthcare. So 550 00:32:03,680 --> 00:32:07,360 Speaker 1: we think that it is a sector that has uh 551 00:32:08,120 --> 00:32:11,720 Speaker 1: long term benefits. It's risk adjusted return profile is stellar. 552 00:32:12,880 --> 00:32:15,520 Speaker 1: I would also say that when you look at health care, 553 00:32:16,280 --> 00:32:20,600 Speaker 1: it is increasingly correlated to what's going on in the 554 00:32:20,680 --> 00:32:23,600 Speaker 1: innovation side of the technology hub, which we also like, 555 00:32:24,320 --> 00:32:26,960 Speaker 1: and so inside of healthcare you get a great risk 556 00:32:27,000 --> 00:32:32,120 Speaker 1: adjusted necessary demands story with some real innovation. Hey, you know, 557 00:32:32,360 --> 00:32:35,080 Speaker 1: on the health care side, Jim, Jason and I have 558 00:32:35,160 --> 00:32:38,080 Speaker 1: had conversations with a lot of as you would expect 559 00:32:38,120 --> 00:32:41,200 Speaker 1: because of the virus, healthcare professionals, people who are running 560 00:32:41,320 --> 00:32:44,240 Speaker 1: you know, massive health care systems. One of the things 561 00:32:44,320 --> 00:32:46,760 Speaker 1: they say is that we are increasingly a need to 562 00:32:47,000 --> 00:32:51,000 Speaker 1: but already slowly starting to move towards a system that's 563 00:32:51,040 --> 00:32:54,000 Speaker 1: more about keeping folks well. We've talked about it a lot. 564 00:32:54,520 --> 00:32:56,800 Speaker 1: We still have a long way to go, rather than 565 00:32:57,080 --> 00:32:59,080 Speaker 1: you know, people coming in when everything's wrong, but rather 566 00:32:59,400 --> 00:33:01,760 Speaker 1: you know this folk is I'm keeping everybody well. Is 567 00:33:01,800 --> 00:33:04,680 Speaker 1: that an investment play that you're thinking about seriously and 568 00:33:04,760 --> 00:33:06,760 Speaker 1: making bets on or you're kind of waiting to see 569 00:33:07,000 --> 00:33:10,280 Speaker 1: how it works out? Well, I would say it's it's 570 00:33:10,360 --> 00:33:12,840 Speaker 1: kind of like thinking about investing in solar. If you 571 00:33:12,920 --> 00:33:16,040 Speaker 1: own the major oils, you own a big stakes of 572 00:33:16,200 --> 00:33:19,040 Speaker 1: solar power inside of their holdings. If you look at 573 00:33:19,040 --> 00:33:22,080 Speaker 1: the h MOS people, the insurance companies, they're really trying 574 00:33:22,120 --> 00:33:24,400 Speaker 1: to figure out ways too, as you say, help us 575 00:33:24,520 --> 00:33:28,360 Speaker 1: live more healthfully. Not because they want us all necessary 576 00:33:28,400 --> 00:33:31,080 Speaker 1: to live more healthily, but it's typically better for their 577 00:33:31,080 --> 00:33:33,720 Speaker 1: bottom line. And of course, you know, tragically inside of 578 00:33:33,800 --> 00:33:36,120 Speaker 1: COVID ninety what we see is just take the simple 579 00:33:36,200 --> 00:33:40,959 Speaker 1: issue of obesity having a higher morbidity rate with regard 580 00:33:41,040 --> 00:33:44,520 Speaker 1: to COVID nineteen. So I think as a culture, um, 581 00:33:44,960 --> 00:33:47,360 Speaker 1: this may be a this may be a turning point 582 00:33:47,400 --> 00:33:50,520 Speaker 1: where we really all do look to live more helpfully. 583 00:33:50,640 --> 00:33:53,800 Speaker 1: But yeah, don't tell that the Kraft mac and cheese 584 00:33:54,840 --> 00:33:59,760 Speaker 1: yea oreos. We've gone, We've gone long oreos during this 585 00:33:59,800 --> 00:34:02,480 Speaker 1: pain endemic all right. Jim Little, chief investment officer for 586 00:34:02,600 --> 00:34:06,560 Speaker 1: Advisor Investments, joining us on the phone from Niedham, Massachusetts. 587 00:34:06,960 --> 00:34:09,400 Speaker 1: Thanks so much for listening to Bloomberg Business Week. Download 588 00:34:09,440 --> 00:34:12,320 Speaker 1: the podcast on iTunes, Southcloud, Bloomberg dot com, or wherever 589 00:34:12,480 --> 00:34:14,600 Speaker 1: you get your podcasts. And of course you can always 590 00:34:14,640 --> 00:34:16,680 Speaker 1: listen to our radio show at two pm Eastern on 591 00:34:16,760 --> 00:34:19,960 Speaker 1: Bloomberg Radio, or watch us on YouTube by searching Bloomberg 592 00:34:20,000 --> 00:34:20,640 Speaker 1: Global News.