WEBVTT - Kravis Says 'Wall St. Is Behind' 0:00:00.720 --> 0:00:03.720 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:03.800 --> 0:00:06.320 Jason Kelly. We're right here every day bringing you the 0:00:06.400 --> 0:00:11.160 latest news from the world's of business and finance, plus technology, politics, economics, 0:00:11.240 --> 0:00:14.280 all harnessing the power of Business Week reporters and editors, 0:00:14.440 --> 0:00:16.439 and of course Carol that's part of a team of 0:00:16.520 --> 0:00:20.439 twenty seven hundred journalists and analysts more than a hundred 0:00:20.480 --> 0:00:23.240 and twenty countries and Jason. You can download Bloomberg Business 0:00:23.280 --> 0:00:26.239 Week on iTunes, SoundCloud, bl Bloomberg dot com. You can 0:00:26.280 --> 0:00:28.640 also listen to our radio show at two pm Eastern 0:00:28.680 --> 0:00:31.560 on Bloomberg Radio every weekday, or watch us on YouTube 0:00:31.600 --> 0:00:36.159 by searching Bloomberg Global News. The US labor market, as 0:00:36.200 --> 0:00:38.519 you've been hearing from Charlie and others right here at 0:00:38.560 --> 0:00:41.720 Bloomberg continuing to regain some ground in July was at 0:00:41.720 --> 0:00:45.320 a slower pace, indicating the economic rebound still making headway, 0:00:45.360 --> 0:00:49.120 depue a surge in coronavirus infections. Larry Cudlow, the President's 0:00:49.200 --> 0:00:52.040 Chief Economic advisor, ahead of the National Economic Council, weighing 0:00:52.360 --> 0:00:55.560 about the report earlier on Bloomberg Radio and Bloomberg TV. 0:00:56.800 --> 0:01:01.680 This was a hot spot report. This is July eighteen, 0:01:02.360 --> 0:01:05.080 and the surging hotspots in the south and West and 0:01:05.200 --> 0:01:08.679 some other places began in the back end of June 0:01:08.760 --> 0:01:11.840 and lasted through July. You know, there was some pullback 0:01:11.920 --> 0:01:15.319 of reopenings and so forth, and yet and yet we 0:01:15.440 --> 0:01:18.520 still got one point eight million, with a big decline, 0:01:18.560 --> 0:01:21.920 almost a full percentage point drop in the unemployment rate, 0:01:22.160 --> 0:01:26.240 which will move to single digits easily in the summer 0:01:26.280 --> 0:01:30.960 and fall. It seems like just about anybody looking at 0:01:31.000 --> 0:01:35.200 this had the end Yet regardless of what you made 0:01:35.200 --> 0:01:37.440 of it. Let's put it to Chris Lew, Senior fellow 0:01:37.520 --> 0:01:41.039 at University of Virginia's Miller Center. He, of course, is 0:01:41.240 --> 0:01:44.479 former Deputy Secretary of Labor under President Obama. He joins 0:01:44.520 --> 0:01:50.120 us on the phone from in and around the nation's capital. So, Chris, 0:01:50.840 --> 0:01:53.080 as you've had a little bit of time, a few 0:01:53.080 --> 0:01:56.120 hours to digest this, and you know the mechanics of 0:01:56.160 --> 0:01:59.040 this better than anyone. What should we take away from 0:01:59.080 --> 0:02:02.680 this specific jobs report? Well, look, I think the top 0:02:02.720 --> 0:02:05.880 line number one eight million, as well as the drop 0:02:05.920 --> 0:02:08.720 in unemployment or both positive signs. But I think when 0:02:08.720 --> 0:02:10.959 you look beneath this, you know you also have to 0:02:11.000 --> 0:02:13.520 consider the context that we lost about twenty two million 0:02:13.639 --> 0:02:17.680 jobs in the spring, We've are still down about thirteen 0:02:17.720 --> 0:02:20.840 million jobs. Uh, and it and it's pretty obvious that 0:02:20.919 --> 0:02:25.040 the economy or the economic recovery is slowing pretty dramatically 0:02:25.080 --> 0:02:28.520 from what we saw two or three months ago. Um. 0:02:28.600 --> 0:02:29.960 So there are a couple of things that I look at. 0:02:30.000 --> 0:02:32.160 I look at, uh, you know, the five million people 0:02:32.200 --> 0:02:35.880 that have left the workforce. Obviously, we saw yesterday that 0:02:36.160 --> 0:02:39.680 about thirty one million people are unemployment, So we're still 0:02:39.720 --> 0:02:43.280 in a pretty big hole. And you know, again, I 0:02:43.320 --> 0:02:45.560 mean this sort of confirms what we've always known, which 0:02:45.560 --> 0:02:49.720 is we're never going to have a sustained recovery until 0:02:49.720 --> 0:02:52.280 we get our arms around this virus. And you know, 0:02:52.400 --> 0:02:54.280 every time this kind of breaks out in a different 0:02:54.280 --> 0:02:57.480 part of the country, we have these reopenings being paused 0:02:57.560 --> 0:03:00.120 or rolled back again. And that's just a really off 0:03:00.200 --> 0:03:02.880 environment for this economy to get any legs in. So 0:03:02.960 --> 0:03:06.480 then what kind of visibility would you think you might 0:03:06.520 --> 0:03:09.480 be able to feel comfortable talking about Chris in terms 0:03:09.520 --> 0:03:12.239 of the types of labor reports that maybe we should 0:03:12.320 --> 0:03:14.400 all get ready for over the next few months as 0:03:14.400 --> 0:03:17.760 a society, because we know the vaccines coming, but the 0:03:17.840 --> 0:03:20.360 dates are maybe the end of the year, maybe early 0:03:20.440 --> 0:03:23.200 next year. Well, look, I think I think we're going 0:03:23.240 --> 0:03:25.560 to continue to kind of climb out of this hole. 0:03:26.240 --> 0:03:28.800 But I would take issue with where Larry Cudlow is 0:03:28.840 --> 0:03:30.880 as to whether you know, this is really kind of 0:03:30.880 --> 0:03:33.079 a hotspot or a v shape recovery. I think it's 0:03:33.120 --> 0:03:35.800 kind of crawling out of this. And I think what 0:03:35.920 --> 0:03:38.720 we see in among the different data that we've seen 0:03:38.720 --> 0:03:41.520 over the last couple of weeks, you know, some concerns 0:03:41.640 --> 0:03:45.120 whether temporary layoffs or what we thought were temporary are 0:03:45.120 --> 0:03:48.280 now going to become permanent. Um, we continue to have 0:03:48.360 --> 0:03:52.280 this issue about UH state and local government employees and 0:03:52.320 --> 0:03:55.160 whether they're going to faith layoffs if there's no relief 0:03:55.200 --> 0:03:57.360 from Washington as well, and the other thing I just 0:03:57.360 --> 0:03:59.040 started look in this number, I mean, two thirds of 0:03:59.120 --> 0:04:05.240 the gains in these report we're from basically leisure, hospitality, restaurants, 0:04:05.280 --> 0:04:08.000 and retail, and we know that those are kind of 0:04:08.040 --> 0:04:10.320 the industries where it really there's a lot of face 0:04:10.440 --> 0:04:13.720 to face interaction with people, and you do wonder if 0:04:13.720 --> 0:04:17.240 we can't get our arms around this pandemic, um, whether 0:04:17.279 --> 0:04:19.880 the gains just sort of stop at that point, and 0:04:19.920 --> 0:04:23.680 whether people are just going to permanently change their spending habits. Um. 0:04:23.760 --> 0:04:26.280 You know, it's hard to imagine kind of the travel 0:04:26.680 --> 0:04:31.719 and toursm industry going back to normal anytime soon. Alright, So, Chris, 0:04:31.800 --> 0:04:35.400 you mentioned help coming from Washington, and that's where I 0:04:35.440 --> 0:04:39.240 want to go next, because I feel like everyday, folks, 0:04:39.279 --> 0:04:42.880 and I would put myself in that category, even knowing 0:04:42.960 --> 0:04:47.640 enough to be dangerous looking at Washington, think, hold on 0:04:47.680 --> 0:04:50.839 a second, Like there's a clear need here. Why can't 0:04:50.880 --> 0:04:55.280 these guys get together and agree on something what's going 0:04:55.320 --> 0:04:58.680 on here? I mean, help us understand what the stalemate 0:04:58.839 --> 0:05:01.680 is and what you thing may happen given that you 0:05:01.760 --> 0:05:05.360 know how Congress works, you've worked there, Yeah, I mean, look, 0:05:05.360 --> 0:05:08.919 the lesson we learned from the Great Recession is that 0:05:09.000 --> 0:05:11.840 if you come to the table with two little stimulus 0:05:12.160 --> 0:05:14.760 or you end it too quickly, uh, it means the 0:05:14.800 --> 0:05:17.840 downturn goes on longer. You know. During in two thousand nine, 0:05:18.040 --> 0:05:21.039 the Obama Administration's got an eight hundred billion dollars stimulus 0:05:21.040 --> 0:05:24.360 package path and that was it. And you know, we're 0:05:24.360 --> 0:05:27.680 now talking trillions of dollars that have already spent we're 0:05:27.680 --> 0:05:32.680 talking about, you know, a House Democratic proposal about three trillion, 0:05:33.120 --> 0:05:34.839 and then the White House coming in at about a 0:05:34.880 --> 0:05:38.279 trillion right now, And so I applaud them for saying 0:05:38.440 --> 0:05:41.200 more money needs to go in, UM, but it's very 0:05:41.200 --> 0:05:44.359 clear when you look at things like enhanced unemployment benefits, 0:05:44.560 --> 0:05:46.880 whether you look at kind of assistance to state and 0:05:46.960 --> 0:05:49.599 local governments, particularly assistance to schools that are trying to 0:05:49.600 --> 0:05:53.400 reopen up, there is a real financial need around the 0:05:53.440 --> 0:05:56.040 country right now. UM. And I guess the only question 0:05:56.120 --> 0:05:58.599 is is can they compromise in the middle. I think 0:05:58.640 --> 0:06:02.120 that they probably win, ill Um, but but I do 0:06:02.240 --> 0:06:04.359 wonder about, you know, all of those people trying to 0:06:04.360 --> 0:06:06.400 figure out, hey, how do I make my rent payment? 0:06:06.440 --> 0:06:09.279 How do I buy groceries? While Congress is kind of 0:06:09.320 --> 0:06:11.520 diithering over all of this. Well, and we're going to 0:06:11.600 --> 0:06:13.880 continue this conversation because Chris, I want to ask you 0:06:13.920 --> 0:06:17.960 about a tweet that the President UM put out yesterday 0:06:18.080 --> 0:06:21.360 about working on executive orders when it comes to payrell 0:06:21.400 --> 0:06:25.440 tax cuts, of fviction protections, unemployment extensions, and student loan 0:06:25.480 --> 0:06:29.839 repayment options. Because we are trying to understand exactly what 0:06:30.000 --> 0:06:33.080 authority the president has to has to do with this. Chris, 0:06:33.160 --> 0:06:35.719 we talked about President Trump his tweet yesterday, how we 0:06:35.800 --> 0:06:38.839 talked about working on these executive order when it comes 0:06:38.880 --> 0:06:42.360 to apparel, tax cut, of viction protections, unemployment extensions, and 0:06:42.400 --> 0:06:47.360 student loan repayment options executive orders. My understanding is some 0:06:47.400 --> 0:06:49.839 things he might be able to do, some things are dicier. 0:06:50.839 --> 0:06:52.640 I think that's exactly right. I think when you talk 0:06:52.720 --> 0:06:56.760 about uh, mortgage or rent relief to the extent that 0:06:56.800 --> 0:07:00.160 the mortgages are backed by the federal government or or 0:07:00.680 --> 0:07:03.360 you know, it's it's it's someone who's in federal public housing, 0:07:03.920 --> 0:07:06.520 I think that's certainly possible. I think obviously student loans 0:07:06.520 --> 0:07:09.120 since a lot of them are backed by the federal government. Um, 0:07:09.360 --> 0:07:14.120 some kind of extension of the mortoring is possible. The 0:07:14.520 --> 0:07:19.880 wholesale shifting of money to provide enhance unemployment, I'm pretty 0:07:19.960 --> 0:07:22.360 dubious that you can do this. You know, it's a 0:07:22.440 --> 0:07:27.800 cardinal rule of appropriations law that appropriated funds can only 0:07:27.840 --> 0:07:30.080 be used for appropriated or purposes, So you can't just 0:07:30.160 --> 0:07:33.440 kind of move pots of money around. And what it 0:07:33.480 --> 0:07:36.000 appears that he's doing is that there's money that was 0:07:36.040 --> 0:07:38.920 in the Cares Act that they think has not been 0:07:39.000 --> 0:07:41.640 spent that they want to shuffle around, And the truth 0:07:41.680 --> 0:07:43.600 of it is that while it's not been spent, it's 0:07:43.600 --> 0:07:46.000 already been allocated, and a lot of that has already 0:07:46.000 --> 0:07:49.000 been allocated to to state and local government. So all 0:07:49.000 --> 0:07:52.040 you're doing is basically robbing one pot for another part, 0:07:52.160 --> 0:07:54.320 even if you could do it so um, he might 0:07:54.320 --> 0:07:55.760 be able to do some things, but he can't. He 0:07:55.800 --> 0:07:59.600 can't do everything that is being discussed right now in 0:07:59.680 --> 0:08:05.360 cong Us. So speaking of some of the president's actions, Chris, 0:08:05.440 --> 0:08:07.600 I got to ask you about what's been going on 0:08:08.120 --> 0:08:13.440 with the president and China and TikTok and bite tens 0:08:13.600 --> 0:08:17.480 and tens and h what do you make of that 0:08:17.800 --> 0:08:23.560 from the perspective of someone who understands global trade policy 0:08:24.360 --> 0:08:28.000 and US China relationships, Like, what are we to make 0:08:28.040 --> 0:08:31.120 of this and what's most likely to happen next in 0:08:31.160 --> 0:08:34.320 your estimation? Yes, so there there, Look, there is a 0:08:34.480 --> 0:08:38.040 legitimate issue when we're talking about TikTok and wheat Chat 0:08:38.160 --> 0:08:42.439 in terms of data being shared with the Chinese government, 0:08:42.600 --> 0:08:46.079 data about US users or the censorship that's on the 0:08:46.080 --> 0:08:48.120 wheat Chat platform, which we don't talk about enough, but 0:08:48.160 --> 0:08:50.160 it's a pretty big platform here in the United States 0:08:50.160 --> 0:08:54.720 among Chinese Americans. Um. So there is a legitimate issue, 0:08:54.760 --> 0:08:57.439 and there's a bipartisan concern about it. It's the reason 0:08:57.480 --> 0:09:00.520 why if you're a Department of Defense of show you 0:09:00.520 --> 0:09:03.280 you're you're instructed not to have TikTok on your phone. 0:09:03.920 --> 0:09:08.199 But how you're going about this is odd and I think, um, 0:09:08.240 --> 0:09:13.280 you know, unconventional. Um to use an executive order under 0:09:13.280 --> 0:09:17.400 the guys in national security probably stresses, stretches the bounds 0:09:17.400 --> 0:09:19.960 of what I can consider appropriate. And I think what 0:09:20.080 --> 0:09:23.160 the president is doing with respected TikTok and trying to 0:09:23.320 --> 0:09:27.000 force a transaction. Uh. And then you know this thing 0:09:27.040 --> 0:09:29.040 he throughout the other day saying hey, and the federal 0:09:29.040 --> 0:09:31.360 government should take a cut of that. Um. You know, 0:09:31.400 --> 0:09:34.920 I think against stretches. I think what Democrats and Republicans 0:09:34.920 --> 0:09:38.040 would would say is acceptable behavior of the federal government 0:09:38.080 --> 0:09:40.880 towards the business. Um. And so look, I think the 0:09:40.960 --> 0:09:45.120 aim um is probably right in trying to rain them in, 0:09:45.679 --> 0:09:47.480 but I have some serious questions about how he's going 0:09:47.520 --> 0:09:50.960 about doing this in terms of the U. S. China relationship. Chris, 0:09:51.000 --> 0:09:53.000 you know, I'm curious about some of the conversations you 0:09:53.040 --> 0:09:56.280 guys had in the Obama White House. I mean, are 0:09:56.280 --> 0:10:00.080 you surprised at how contentious is it has become and 0:10:00.200 --> 0:10:03.240 kind of how this tech war between the two nations 0:10:03.280 --> 0:10:06.040 has progressed. Do you think we would have gotten there ultimately? 0:10:06.080 --> 0:10:08.760 Maybe in a different way, But you know, China is 0:10:08.760 --> 0:10:11.839 a much more developed nation. It's much more important to 0:10:11.840 --> 0:10:15.600 the global economy. It's not like it was ten years ago, right, 0:10:15.679 --> 0:10:18.040 And I would argue that if you wanted to counter China, 0:10:18.200 --> 0:10:20.559 the one thing we should have done, um, was to 0:10:20.679 --> 0:10:23.400 pass to be part of the Transpacific Partnership, which I 0:10:23.440 --> 0:10:26.880 would have put the US in a trading relationship with 0:10:27.400 --> 0:10:29.320 a lot of the other countries in Asia. So I 0:10:29.360 --> 0:10:32.719 think that was a huge missed opportunity by this administration. 0:10:32.800 --> 0:10:35.440 And then obviously we've had, you know, a trade war 0:10:35.520 --> 0:10:38.120 for the better part of the Trump administration, which is 0:10:38.160 --> 0:10:41.200 now morphed into kind of a war over the you know, 0:10:41.360 --> 0:10:45.240 cause of coronavirus and and how forthcoming they've been, which 0:10:45.280 --> 0:10:47.960 is now morphed into kind of a tech trade war 0:10:48.000 --> 0:10:51.520 as well. UM. I don't think this is good, um, 0:10:51.559 --> 0:10:53.680 but I think we need to recognize, you know, the 0:10:53.760 --> 0:10:57.400 U S. China relationship is a complicated one. Uh. There 0:10:57.400 --> 0:10:59.880 are certainly areas where we need to find a way 0:10:59.880 --> 0:11:03.800 to collaborate with them on something like um climate change 0:11:03.840 --> 0:11:06.720 being the most important one. But there are obviously tensions. 0:11:06.720 --> 0:11:10.280 I mean they are a rival economically and increasingly militarily. 0:11:10.400 --> 0:11:12.680 So I think we need to look at this in 0:11:12.720 --> 0:11:15.560 a in a holistic way. And and my concern is 0:11:15.600 --> 0:11:17.800 that too much of these are kind of one off 0:11:18.559 --> 0:11:21.960 battles between the US and China without engaging our allies, 0:11:22.000 --> 0:11:24.800 and I think without having a clear understanding of two, three, 0:11:24.920 --> 0:11:28.200 four steps down the road. Absolutely all right, great context 0:11:28.280 --> 0:11:31.160 is always timely and insightful. We love catching up with you. 0:11:31.240 --> 0:11:34.840 Chris Lew down at University of Virginia's Miller Center, of course, 0:11:34.840 --> 0:11:38.440 a former member of the Obama administration. Great to get 0:11:38.520 --> 0:11:41.400 his insight. We're listening to Bloomberg Business Week, Jason Kelly, 0:11:41.440 --> 0:11:43.800 Carroll Masser, and you know, as we look to wrap 0:11:43.880 --> 0:11:45.559 up the first hour of the show, Carol, I think 0:11:45.559 --> 0:11:47.720 it's worth dwelling a bit if we can on our 0:11:47.760 --> 0:11:50.319 conversation with Chris Lew only because you know, you and 0:11:50.400 --> 0:11:52.880 I were messaging to each other back and forth towards 0:11:52.880 --> 0:11:54.640 the end of that interview. He's really become a go 0:11:54.720 --> 0:11:56.800 to guy for us and and I think one of 0:11:56.800 --> 0:11:59.360 the most important things to remember about him, and he 0:11:59.400 --> 0:12:03.440 really demons rate in that conversation, was that he has 0:12:03.480 --> 0:12:07.480 worked across the various branches of government. Because we didn't 0:12:07.520 --> 0:12:10.040 get to talk about Supreme Court, he worked in the 0:12:10.160 --> 0:12:13.120 judiciary system as well, so he knows all the levers 0:12:13.160 --> 0:12:16.719 and so his perspective one what the executive branch can 0:12:16.840 --> 0:12:20.880 and can't do, I think is critical right now in 0:12:21.000 --> 0:12:24.120 terms of figuring out what happens next. Yeah, totally. And 0:12:24.160 --> 0:12:26.120 that's why I love, you know, talking to him, because 0:12:26.120 --> 0:12:28.600 he really does understand how government works, as you said, 0:12:28.840 --> 0:12:30.920 from the three branches of government. I put it out 0:12:30.960 --> 0:12:34.120 on Twitter. I put the link out for our Apple 0:12:34.160 --> 0:12:37.520 podcast feed, um, so that folks can It'll be uploaded 0:12:37.520 --> 0:12:39.200 a little bit later on, but definitely check it out. 0:12:39.240 --> 0:12:41.120 It's a great thing for I was going to say 0:12:41.120 --> 0:12:44.280 the ride home, but your home probably already exactly. Maybe 0:12:44.280 --> 0:12:45.600 you could have a glass of one at the end 0:12:45.640 --> 0:12:49.560 of the danes. I listened a lot of podcasts doing dishes, 0:12:49.559 --> 0:12:52.800 all right, U. Joe Weber the editor of Bloomberg Business Week. 0:12:52.920 --> 0:12:56.200 He is joining us from Massachusetts to talk about a 0:12:56.320 --> 0:13:02.400 really interesting story. Uh it's a out Italy. It's about bicycles, 0:13:02.520 --> 0:13:08.280 and it really is a window into how we are 0:13:08.360 --> 0:13:14.079 recovering very unevenly, shall we say, from everything that's going 0:13:14.200 --> 0:13:17.640 on right now. Joel tell us about this story by 0:13:17.720 --> 0:13:21.120 Vernon silver Well, on its face, it sounds like a 0:13:21.160 --> 0:13:25.079 great program, right, Uh, the bicycle bailout that it came 0:13:25.160 --> 0:13:28.720 up with, And that was what really um intrigued me 0:13:28.760 --> 0:13:32.280 about it because, uh, you know, here, here's a here's 0:13:32.280 --> 0:13:35.800 a country known for bicycles and known for cycling, and 0:13:36.480 --> 0:13:40.240 um and also goes to say, like, you know, let's 0:13:40.280 --> 0:13:43.760 have fewer automobiles on the road. Um As this program 0:13:43.800 --> 0:13:45.480 is sort of attempting to do, but at the same 0:13:45.520 --> 0:13:52.800 time it risks alienating um, large portions of the country 0:13:52.840 --> 0:13:55.960 who can't even afford to buy a bike in the 0:13:56.000 --> 0:13:59.520 first place. Right. So what's ironic about this is that 0:13:59.600 --> 0:14:03.440 one of the ways that governments are attempting to stimulate 0:14:03.520 --> 0:14:05.760 the economy is to give consumers a break. But then 0:14:06.679 --> 0:14:09.840 there's so many people who have fallen on hard times 0:14:09.920 --> 0:14:12.840 during the pandemic that what's really going to happen here 0:14:12.880 --> 0:14:17.360 is that we're gonna have inequality being exacerbated. Yeah, I mean, 0:14:17.559 --> 0:14:19.960 I love I love this story, and I love what 0:14:20.400 --> 0:14:23.280 m Vernon and the team, right you know, Joel that 0:14:23.320 --> 0:14:25.680 they talk about, you know, these trillions of dollars. We're 0:14:25.680 --> 0:14:27.760 just talking about it with Chris lou who was in 0:14:27.800 --> 0:14:30.840 the Obama administration. You know, trillions of dollars that are 0:14:30.840 --> 0:14:34.920 going for everything, and by everything that sometimes means you know, 0:14:34.960 --> 0:14:37.360 like a really expensive bicycle. And you're right, it's it's 0:14:37.400 --> 0:14:40.120 helping to kind of widen ultimately, the income gaps that 0:14:40.200 --> 0:14:43.160 are already laid bay are by the virus. Um, let's 0:14:43.160 --> 0:14:46.280 bring Vernon Silver into the conversation as well. He joins 0:14:46.360 --> 0:14:50.320 us right now, and he is UH Projects and Investigations Report, 0:14:50.360 --> 0:14:52.120 and he joins us on the phone I believe from Rome. 0:14:52.440 --> 0:14:54.920 So Vernon talked to us about this story. Um, because 0:14:54.960 --> 0:14:57.320 it really is a great read, but it also kind 0:14:57.320 --> 0:14:59.400 of makes you stop for a moment and realize, you know, 0:14:59.440 --> 0:15:03.680 the inequal qualities that are out there. Yeah, honestly, it's 0:15:03.840 --> 0:15:07.960 this thing starts with the moment that Italy comes out 0:15:08.000 --> 0:15:11.680 of the beginnings of of this lockdown, and one of 0:15:11.680 --> 0:15:14.200 the most noticeable things on the streets where the piles 0:15:14.320 --> 0:15:17.640 of boxes of bicycles and the crowds of people in 0:15:17.640 --> 0:15:20.880 front of the bike shop. Um, because when you are 0:15:20.960 --> 0:15:24.160 giving people essentially the ability to get a bike of 0:15:24.280 --> 0:15:28.280 up to a value of a thousand dollars at six off, 0:15:29.160 --> 0:15:32.040 people are gonna grab it. But those people are not, 0:15:32.280 --> 0:15:36.360 you know, the delivery bicycle guys. It's people like people. 0:15:36.440 --> 0:15:38.720 You know that. We saw an interview which is, you know, 0:15:38.840 --> 0:15:42.440 someone who needs a couple a couple of folding bicycles 0:15:42.480 --> 0:15:46.520 to take to their beach house in Tuscany so vernon 0:15:46.560 --> 0:15:51.040 how expensive were the bikes that that you bought? Okay, 0:15:51.040 --> 0:15:57.520 this is you got me out. I was saying, we 0:15:57.600 --> 0:15:59.840 have not discussed this, and I was gonna save it 0:16:00.040 --> 0:16:03.760 for the end, but I had to try, right, I mean, um, 0:16:04.680 --> 0:16:07.080 so here's here, and this is interesting because this is 0:16:07.120 --> 0:16:10.960 also about inequality. Um. I've sprung for a three hundred 0:16:11.000 --> 0:16:13.760 euro bipe. It's a mint green number with a brown 0:16:13.840 --> 0:16:16.800 seed It's really nice. Um. But I did not go 0:16:16.920 --> 0:16:20.680 for the super expensive one because the decree that announced 0:16:20.680 --> 0:16:25.000 this thing said resident citizens in Italy of large of 0:16:25.080 --> 0:16:27.920 cities could get this, and I'm not an Italian citizen, 0:16:28.400 --> 0:16:30.720 so I had no guarantee that I was going to 0:16:30.840 --> 0:16:34.760 get the rebate, and they're like, tonight, literally tonight, the 0:16:34.800 --> 0:16:38.600 government is working on finalizing the wording of who exactly 0:16:38.640 --> 0:16:40.760 gets it, and I won't know yet if I get it. 0:16:40.800 --> 0:16:44.479 But if they keep it with just citizens, talk about inequality. 0:16:44.520 --> 0:16:46.920 Who are the people who are coming to Italy who 0:16:47.120 --> 0:16:49.920 need to do the jobs that might require a bicycle, 0:16:50.400 --> 0:16:52.960 Immigrants from Africa, from the Middle East, from you know, 0:16:53.080 --> 0:16:57.640 Filipino delivery men. Right, if you if you only give 0:16:57.680 --> 0:17:01.120 it to Italian citizens, you're cutting out like all the 0:17:01.120 --> 0:17:03.320 people who you can see on a daily basis who 0:17:03.320 --> 0:17:06.119 need a bicycle. So I might not qualify as somebody 0:17:06.160 --> 0:17:08.760 who's not an Italian citizen for a second. For a 0:17:08.800 --> 0:17:12.880 second there say who really needs bikes? Hard working award 0:17:12.920 --> 0:17:18.200 winning journalists. So but and then we might have shot 0:17:18.240 --> 0:17:21.600 off your mic. I'm just gonna tell you, um no. 0:17:21.720 --> 0:17:24.840 But it really reminds us, right, these programs, I mean, 0:17:25.000 --> 0:17:28.199 I don't know, are we supposed to say it's not 0:17:28.240 --> 0:17:30.199 going to be perfect. We get it and there are 0:17:30.200 --> 0:17:32.159 ways to hopefully fix it. I mean, I don't know 0:17:32.200 --> 0:17:36.320 what's the takeaway from this reporting that you did? I mean, 0:17:36.400 --> 0:17:38.960 what's interesting is we made a global right. We put 0:17:38.960 --> 0:17:40.840 out the call to reporters around the world and came 0:17:40.880 --> 0:17:43.760 up with amazing stuff. You can get an electric car 0:17:43.880 --> 0:17:46.879 for free in Germany, but you have to have you know, 0:17:47.160 --> 0:17:49.919 over ten thousand euros to spend on the electric car 0:17:49.960 --> 0:17:55.880 in the first place. You can get dollars Australian back 0:17:56.000 --> 0:17:58.960 for renovating your house in the suburbs of Melbourne, but 0:17:59.000 --> 0:18:00.359 you have to own a house. You have to have 0:18:00.400 --> 0:18:03.400 the money to put up to the renovation. Right, these 0:18:03.440 --> 0:18:06.119 are these are people with means. This is not getting 0:18:06.160 --> 0:18:08.720 the money to everybody. What we from the economists, what 0:18:08.760 --> 0:18:11.720 we got was really interesting is you can deploy as 0:18:11.720 --> 0:18:14.800 a government the money in better ways, whether it's through 0:18:15.119 --> 0:18:17.720 paying everybody a living wage no matter what you know, 0:18:17.720 --> 0:18:20.359 whether they're out of work or not. Um, you know, 0:18:20.640 --> 0:18:24.240 cutting everybody's payroll tax, just pumping money directly into the 0:18:24.240 --> 0:18:27.680 economy rather than doing it piecemeal in ways that might 0:18:27.720 --> 0:18:32.240 be less equal. So I mean that really brings it 0:18:32.240 --> 0:18:33.960 to a head, right Vernon, like you can either do 0:18:34.040 --> 0:18:38.000 these bailout programs that help consumers for for purchases of 0:18:38.119 --> 0:18:42.680 luxury items, let's call them. What in practice is anybody 0:18:42.720 --> 0:18:48.280 got the other thing dialed yet No, it's it's I mean, essentially, 0:18:48.280 --> 0:18:50.480 once you're spending trillions, you might as well throw it 0:18:50.560 --> 0:18:53.200 it at everybody. I mean, on the other end, there 0:18:53.240 --> 0:18:56.719 are the richest families in countries like Italy that were 0:18:56.760 --> 0:18:59.560 able to borrow billions of dollars that they might not 0:18:59.600 --> 0:19:03.160 even need, hey back to run their companies. Maybe that's good. 0:19:03.200 --> 0:19:06.480 Maybe you know, they don't have to fireworkers, but they are. 0:19:06.520 --> 0:19:08.800 They are benefiting at the top end. People are benefiting 0:19:08.800 --> 0:19:10.760 at the middle. But you know, if you have a 0:19:10.800 --> 0:19:15.000 fire hose of trillions, why not just spread everywhere? Is 0:19:15.040 --> 0:19:18.280 the reply that we got. Yeah, interesting, Well it is 0:19:18.320 --> 0:19:20.840 a sort of force of reporting. And I'm glad you 0:19:20.840 --> 0:19:22.960 mentioned sort of the call that went out to the Empire, 0:19:23.359 --> 0:19:27.439 because it is a really nice effort that you put together. 0:19:27.720 --> 0:19:30.320 As always. Vernon Silver joining us from Rome H, one 0:19:30.359 --> 0:19:32.880 of our senior writers at Bloomberg, just love, love, love 0:19:33.560 --> 0:19:35.720 his work, and it's a way to tell the story 0:19:35.880 --> 0:19:39.000 that we don't always here. Earlier in the week, yesterday, 0:19:39.200 --> 0:19:42.720 in fact, was the Bloomberg Equality S of the latest edition, 0:19:42.760 --> 0:19:46.960 and it was all about race on Wall Street trying 0:19:47.040 --> 0:19:50.800 to make some significant changes, and I was fortunate to 0:19:50.840 --> 0:19:53.200 catch up with Henrykravis. He is the co chairman, co CEO, 0:19:53.320 --> 0:19:56.320 co founder at kk ARE, the private equity firm been 0:19:56.320 --> 0:19:58.960 around for forty plus years. It bears his name and 0:19:59.000 --> 0:20:02.400 that of his cousin George Roberts and Jerome Colberg, their 0:20:02.720 --> 0:20:06.240 fellow founding partner, also was joined by William Goodlow. He's 0:20:06.320 --> 0:20:09.919 the president and CEO of s EO. That is a 0:20:09.960 --> 0:20:12.720 group that works with people like Henry Kravis, who is 0:20:12.760 --> 0:20:18.880 the chairman of that group. Two basically prepare folks who 0:20:19.240 --> 0:20:23.359 come from more diverse backgrounds to work on Wall Street. 0:20:23.600 --> 0:20:27.600 Here is what Henry Kravis had to say. We're behind 0:20:28.040 --> 0:20:31.480 Wall Streets, behind, the c suite is behind. We've all 0:20:31.560 --> 0:20:36.120 been slow and recognizing the problem and doing something about it. 0:20:36.440 --> 0:20:41.119 I really believe that maybe now for a change, we 0:20:41.240 --> 0:20:45.440 have the opportunity to make a big difference the There's 0:20:45.480 --> 0:20:49.520 no question the numbers are bleak. You can look anywhere. 0:20:50.160 --> 0:20:56.159 There's no way that the UH corporations and Wall Street 0:20:56.200 --> 0:21:00.280 firms have not hired the diverse candidates. Eat will to 0:21:01.119 --> 0:21:05.120 or an access of the percentage of the black population 0:21:05.160 --> 0:21:10.159 in America. None of us have that. But we have 0:21:10.280 --> 0:21:12.600 a long way to go and I really believe that 0:21:12.680 --> 0:21:15.840 we will. But let me just say, it starts at 0:21:15.840 --> 0:21:19.840 the top. If the CEO of any company, whether it 0:21:19.880 --> 0:21:23.600 be Wall Street or c Suite, has made a decision 0:21:24.000 --> 0:21:26.879 that they're going to make a change, and they really 0:21:26.880 --> 0:21:30.199 are going to now make a difference, it will happen. 0:21:31.160 --> 0:21:35.400 We all have to overcome, in my view, the unconscious 0:21:35.480 --> 0:21:39.359 bias nous that exists everywhere. You know, if you think 0:21:39.400 --> 0:21:47.280 about what we all go through every day, the slight 0:21:47.359 --> 0:21:55.480 injustices that minorities face every day is incredible. These slight 0:21:55.560 --> 0:22:01.760 injustices white the executives don't face. And so we've got 0:22:01.760 --> 0:22:06.480 to be patient. We've got to make a decision that 0:22:06.640 --> 0:22:11.520 we're going to change this. And it starts maybe not 0:22:11.640 --> 0:22:16.000 only with the CEO, but it starts with boards of directors. 0:22:16.000 --> 0:22:19.760 So if the board of directors is a diverse board 0:22:19.800 --> 0:22:25.040 of directors for any company, you'll start to have a change. 0:22:25.920 --> 0:22:28.879 Let me give you an example, Okay. At KKR, we 0:22:28.960 --> 0:22:31.840