Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
Speaker 1: Jason Kelly. We're here every day bringing you the latest
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Speaker 1: Eastern only on Bloomberg Radio. A busy afternoon ahead. They
Speaker 1: all are busy in many ways, Carol, because we are
Speaker 1: continually hearing from city and state leaders. It was interesting
Speaker 1: looking at the rundown of those press conferences earlier today,
Speaker 1: shared by one of our producers. All the I shouldn't
Speaker 1: say all the states, but you know a huge number
Speaker 1: of states, like more than half a dozen, now holding
Speaker 1: daily briefings in many cases to update their citizens right
Speaker 1: and you can hear the stress in those governors voices.
Speaker 1: In particular, Virginia, Maryland, and Washington, d C. Now have
Speaker 1: issue stay at home orders. Virginia's stretching to June tenth
Speaker 1: uh and the San Francisco Bay Are is going to
Speaker 1: extend its mandate to May. So this is just a
Speaker 1: reminder that when we hear these deadlines or these hopes
Speaker 1: to kind of reopen our world, um, they're they're movable dates.
Speaker 1: And we constantly see that it's based on the numbers.
Speaker 1: And you continue to see the governors, even though maybe
Speaker 1: some of the new cases numbers are going down a
Speaker 1: little bit, UM, they're still putting pressure on, you know,
Speaker 1: individuals to stay at home and keep that social distancing.
Speaker 1: So we do want to talk a little bit about
Speaker 1: what we're hearing on the medical side of this story.
Speaker 1: Andy Pakosh is Professor of molecular micro biology and Immunology
Speaker 1: at Johns Hopkins University, Bloomberg School of Public Health. Bloomberg
Speaker 1: School of Public Health supported by Michael R. Bloomberg, founder
Speaker 1: of Bloomberg LP and Bloomberg Philanthropies. UM. Andy joining us,
Speaker 1: of course on the phone from Baltimore. Dr Pacash, so
Speaker 1: nice to have you with us. You know, we were
Speaker 1: saying that you can feel that the world is working
Speaker 1: very very hard to figure out a medical solution to
Speaker 1: this at the mean and you know, also at the
Speaker 1: same time, we're seeing the medical community feeling stressed in
Speaker 1: terms of caring for those existing cases. Let's talk about
Speaker 1: that first, because we have a story on the Bloomberg
Speaker 1: that talks about doctors being threatened not to talk to
Speaker 1: the press about the situation. We hear hear stories about
Speaker 1: doctors having to make choices about who gets UM necessary
Speaker 1: medical equipment. What are you hearing on that front? Well,
Speaker 1: I think there's there's a lot of stress and there's
Speaker 1: a lot of anxiety. I think, UM when you're particularly
Speaker 1: in cities where you're the beginning of the the case
Speaker 1: curve UM, it's the unknown of how many cases are
Speaker 1: going to come in, all the public health innovation is
Speaker 1: going to work, what's the timing of the interventions that
Speaker 1: are going to work, and the and that affects planning
Speaker 1: because you really don't have firm numbers to plan for,
Speaker 1: so you try to plan for, um, the worst case scenario,
Speaker 1: hope for the best case scenario, and all of those
Speaker 1: things are just, you know, incredibly stressful on a population
Speaker 1: of people who are let's be honest, right, these are
Speaker 1: the people that are actually going and facing these and
Speaker 1: dealing with infected individuals and you know, putting their lives
Speaker 1: on the law and every day and so Dr Pekash
Speaker 1: you one other thing or another thing. There are so
Speaker 1: many things we want to talk to you about. But
Speaker 1: you know, one of the other things is this notion
Speaker 1: of you know, how this is playing out across the nation,
Speaker 1: because that speaks to the doctors, that speaks speaks to
Speaker 1: the stress that they're feeling, but also the way individual
Speaker 1: governments are dealing with it. Help us understand kind of
Speaker 1: this variable reaction that we're seeing and maybe some of
Speaker 1: the implications of that. Well, you know, the number of
Speaker 1: cases that are occurring can really vary based on which
Speaker 1: part of the country that you're in, and so um um,
Speaker 1: different hospital networks are at different levels of preparation um
Speaker 1: and different hospital networks are gearing up for or a
Speaker 1: surge at different times. And so what you're seeing is
Speaker 1: that there's a very sort of user term heterogeneous response
Speaker 1: across the nation because it's all dictated by your local situation.
Speaker 1: For example, if you don't have a lot of cases,
Speaker 1: you probably don't want to start hoarding up too many
Speaker 1: respirators and those kind of things, because obviously there are
Speaker 1: needs in other parts of the country. Yet you have
Speaker 1: to balance that with the idea that eventually you will
Speaker 1: have a surgery cases and you want to be prepared
Speaker 1: for that. So who ultimately should be making those decisions,
Speaker 1: because I mean embedded in everything you just said, there's
Speaker 1: a lot of potential conflicts there and and a lot
Speaker 1: of wrong decisions that could be made. Yeah, so you know,
Speaker 1: UM centralized decision making is probably the best UM course
Speaker 1: of action. UM Making sure that UM supply line chains
Speaker 1: are there and that the movement of UH supplies can
Speaker 1: be done very very quickly is a second sort of
Speaker 1: logistical thing that needs to between in place. What do
Speaker 1: you think at this point is the most important treatment
Speaker 1: development that folks are are chasing really around the world.
Speaker 1: We're seeing a lot of coordinations certainly between UM, the
Speaker 1: healthcare community, drug makers and so on researchers, But what
Speaker 1: do you think is the most important thing that is
Speaker 1: being that is happening right now that can really help
Speaker 1: us get control of this well right now, the important
Speaker 1: thing is that multiple institutions are trying to set up
Speaker 1: controlled trials to actually firmly decide whether or not a
Speaker 1: treatment will or will not be beneficial so I know
Speaker 1: here at Johns Hopkins we have a number of them
Speaker 1: going UM this early stage of the surgeon cases at
Speaker 1: the time when we can generate some data not what
Speaker 1: is the most effective treatment and then apply that to
Speaker 1: cases that are coming down later down the pipeline. So
Speaker 1: a number of drugs are in place. We heard Johns
Speaker 1: Hopkins have been invested in using UH serum from into
Speaker 1: agels who have recovered as a potential treatment for m
Speaker 1: new cases UM. A lot of these things are now
Speaker 1: being tested and the trials to show their efficacy are
Speaker 1: being put online and we hope in the a couple
Speaker 1: of weeks to start seeing the results of those trials.
Speaker 1: Dr Peckash, we were talking UM yesterday with one of
Speaker 1: the team up at Columbia that's working with David ho
Speaker 1: and you know, you know him better than than we
Speaker 1: do in terms of his work on a research and
Speaker 1: other things. And he was talking this doctor was talking
Speaker 1: about sort of the collaboration that is happening. Would you
Speaker 1: echo him that that we're seeing a level of collaboration
Speaker 1: and maybe and maybe that's driven by a sense of
Speaker 1: urgency here and what does that look like on the
Speaker 1: front lines where you are I think that is that
Speaker 1: is one of the most amazing things that I've been
Speaker 1: UM experiencing over the past few weeks, people reaching out
Speaker 1: across disciplines, reaching from the clinical into the basic science,
Speaker 1: from the basic science into the clinical UM, trying to
Speaker 1: find ways that each of us can contribute to this
Speaker 1: overall goal of helping to deal with infected patients coming
Speaker 1: through my laboratory. UM has set up a whole new
Speaker 1: wing that's devoted strictly to helping the clinical groups here
Speaker 1: in terms of essays that we can do to support
Speaker 1: them UM. And that's happened in the past four weeks. UM,
Speaker 1: and so there's been an amazing number of of of
Speaker 1: discussion and conversations really with this idea that what can
Speaker 1: we do to help our patients as soon as possible?
Speaker 1: UM and UM, it's been fantastically inspiring. Well, let me
Speaker 1: follow up with you on that, because it's interesting as
Speaker 1: you were saying that, I thought about a question that
Speaker 1: we've been asking, you know, all the big important people
Speaker 1: that we talked to on this program and beyond, which
Speaker 1: is what do you think will change on the other
Speaker 1: side of this in terms of the way you operate
Speaker 1: as a researcher, as a physician, as a member of
Speaker 1: not just a teammate at Johns Hopkins, but in the
Speaker 1: broader medical community. Is this the sort of thing that
Speaker 1: that could change the way you do business and do
Speaker 1: your work going forward. Um. You know, uh, it's been
Speaker 1: hard to find time to think about that and everything else.
Speaker 1: But but honestly, I really do hope that that is
Speaker 1: the case, because the like that the conversations that we've
Speaker 1: had in the appreciation of how different people coming to
Speaker 1: the table can really contribute um to overall patient management
Speaker 1: in this case has been UM I don't think. I
Speaker 1: think on both sides um of both in the hospital
Speaker 1: as well searing the research laboratories. So I really would
Speaker 1: think that this is an example of someplace where all
Speaker 1: the best parts of of the medical complex of being
Speaker 1: shown and and can show that they're working together. When
Speaker 1: you look around the globe, when you look around the
Speaker 1: United States, First of all, for the US, do you anticipate,
Speaker 1: um dr PA, that every state is going to be
Speaker 1: dealing with some level of crisis because of the virus.
Speaker 1: And secondly, when you look around the globe, are there
Speaker 1: parts of the world, whether it's some of the emerging markets.
Speaker 1: We've talked about India and Africa certainly on our broadcast.
Speaker 1: That makes you a little bit nervous, UM and the
Speaker 1: impact that the virus could have on them. Yeah, So
Speaker 1: I think the US is really going to see again
Speaker 1: I'll use the term heterogeneous because I think that's the
Speaker 1: best one, even though maybe a little technical. UM, you're
Speaker 1: gonna see very different epidemics and different parts of the
Speaker 1: country really based on how how many times the virus
Speaker 1: has sort of moved into that area and how the
Speaker 1: public health measures, how effective they are, and when they
Speaker 1: were implemented. So you're going to see different reports from
Speaker 1: different parts of the country. That's not in any way
Speaker 1: meant to minimize the outbreak or say that anybody is
Speaker 1: doing a better job and than the other, but but
Speaker 1: you're going to see different reports coming from different places
Speaker 1: about this UM and absolutely I think you know, we
Speaker 1: have collaborators in various parts of Africa, Sub Saharan Africa
Speaker 1: and UM. I think that's a place where we're very
Speaker 1: concerned about whether there's lots of how large numbers of
Speaker 1: cases can be dealt with by the infrastructures already UM
Speaker 1: in the Democratic Republic of Congo. They just controlled an
Speaker 1: epidemic of ebolavirus that's been going on for nearly two years.
Speaker 1: Um an outstanding public health effort. My guess is they're
Speaker 1: not going to have to gear up the deal with
Speaker 1: yet another viral disease COVID nineteen. Well and and Dr Pakasti,
Speaker 1: you know when you when you mentioned that, it brings
Speaker 1: me to another point, which is this idea that this
Speaker 1: is while that there's a short term element to this
Speaker 1: in a sense of urgency, this is also a long
Speaker 1: game in many ways. And you understand that far better
Speaker 1: than we do. Given the research that you have done,
Speaker 1: uh and given the different diseases that you have tracked,
Speaker 1: what's the what sort of timelines do you think about
Speaker 1: in terms of obviously, there is a health crisis and
Speaker 1: immediate health crisis we have to deal with. But in
Speaker 1: terms of really getting our arms around this particular disease
Speaker 1: and coping with it for a serious amount of time
Speaker 1: going forward, how should we think about that in the
Speaker 1: longer term. Well, look to the positive examples, and there
Speaker 1: are countries they're like Singapore, Hong Kong, Um even to
Speaker 1: some extent Korea that suffered a really large number of cases,
Speaker 1: but that have gotten those cases under control and are
Speaker 1: starting to really get far ahead of the virus. So
Speaker 1: those examples tell us that, UM, the virus can be
Speaker 1: controlled with good public health measures, and that's the most
Speaker 1: important thing. So I think getting this under control with
Speaker 1: the public health interventions is going to be the critical thing.
Speaker 1: Trying to send the message to individuals about changing their behaviors,
Speaker 1: even though for a few weeks it's going to be very,
Speaker 1: very difficult to keep some of these things in place. UM,
Speaker 1: we can get ahead of this, and there are examples
Speaker 1: out there of countries that have been able to control
Speaker 1: lists and then restore some semblance of UH of social
Speaker 1: order afterwards, a social opening up afterwards. All right, well,
Speaker 1: go ahead, we're gonna leave it on that note, Andy,
Speaker 1: thank you so much, really really appreciated. Dr Andy Pakosh
Speaker 1: at Johns Hopkins University, Bloomberg School of Public Health. You're
Speaker 1: listening to Bloomberg Business Week with Carol Messer and Jason
Speaker 1: Kelly on Bloomberg Video. I can safely say that as
Speaker 1: I look out my back window across my little suburb
Speaker 1: of New York City, here there are some kids playing
Speaker 1: video games. I just know that It's true. Maybe they
Speaker 1: should be on zoom in a class, maybe they should
Speaker 1: be doing some class work. But they're playing video games.
Speaker 1: It's just a fact. Michael Packtor is video game technology
Speaker 1: analyst for web Bush Securities. He joins us on the
Speaker 1: phone from Long Beach, California. I'm right, Michael, right. I
Speaker 1: mean a lot of kids are playing video games. A
Speaker 1: lot of adults are playing video games right now. Yeah,
Speaker 1: I just took a break for playing video games. Yes,
Speaker 1: everybody playing. I think you call that research, don't you. Yeah, exactly,
Speaker 1: that's your literally your job. Absolutely. So what do we
Speaker 1: know about the backdrop here? I mean there's anecdotal evidence,
Speaker 1: but I mean you've got your hands on real data here, right, Yeah,
Speaker 1: I I do. But you know, realistically, um, there's two
Speaker 1: things we're gonna do, whether we're indoors or outdoors. We're
Speaker 1: gonna eat and we're going to entertain ourselves. And you know,
Speaker 1: it's it's intuitively obvious. If we can't go to restaurants,
Speaker 1: will eat at home. If we can't go out to
Speaker 1: movie theaters and sporting events or even engage in physical activity,
Speaker 1: we're going to do that at home. And so you know,
Speaker 1: clearly we're seeing from internet service providers that internet usages up,
Speaker 1: hoverizons set up sevent we got something yesterday from Comcast
Speaker 1: talking about WiFi access. And so the question is just
Speaker 1: what are people doing with the Internet, And the answer
Speaker 1: is obviously they're watching a lot of video and they're
Speaker 1: playing a lot of games. I mean, Spotify just said
Speaker 1: their usages up. People are just entertaining themselves in place.
Speaker 1: Games are the most likely, you know, beneficiary of this.
Speaker 1: You can do it on mobile, you can do it
Speaker 1: on tablets, you can do it on your TV, and
Speaker 1: people are doing that. So are the supplies there to
Speaker 1: meet the demand? The telegraph how to report that, whether
Speaker 1: it's the UK or the US, there's definitely you know,
Speaker 1: people are out there doing you know, and playing video games.
Speaker 1: It's a great escape right now, especially those are you know,
Speaker 1: feeling isolated from the rest of the world or from others.
Speaker 1: And the thing is the demand. Some of the consoles
Speaker 1: are completely sold out, so I'm just curious about supply. Yeah,
Speaker 1: Nintendo Switch is the one that's impossible to get. And
Speaker 1: you know, obviously they didn't plan for a pandemic, but
Speaker 1: they launched a game called Animal Crossing, which is actually
Speaker 1: pretty much a single player game, really fun though. It's
Speaker 1: like a life simulation. You farm and you trade, and
Speaker 1: it's a it's a really really fun game. So that
Speaker 1: sales of that game we're off the charts, and people
Speaker 1: are trying to get their hands on switches, and I
Speaker 1: frankly think that's because there's a big demand for kids.
Speaker 1: Uh you know, adults probably can and play on PC
Speaker 1: or phone or they have consoles. Um you're not seeing
Speaker 1: xboxes and PlayStation sold out though, so the switch is
Speaker 1: really benefiting just because it's you know, the hot item
Speaker 1: right now and they have the higher game. Well. It's
Speaker 1: also interesting, you know, you mentioned PCs because a lot
Speaker 1: of people, and I think Carol and I are both
Speaker 1: in this category, not the gamer category, but more the
Speaker 1: a lot of folks are sort of amping up their
Speaker 1: work from home sort of set ups. I mean, I know,
Speaker 1: we boosted our internet speed just to deal not only
Speaker 1: with my needs broadcasting the show, but also in anticipation
Speaker 1: more streaming and other things that the kids are doing
Speaker 1: with their schoolwork and things like that. So I do
Speaker 1: wonder how that plays through, especially the PC gaming part
Speaker 1: of the equation. UM PC gamers total about four million
Speaker 1: people total, and that's a lot um console gamers, more
Speaker 1: like two fifty million interesting mobile mobile gamers one point
Speaker 1: five billion, so you know, the most frequently used device
Speaker 1: as a mobile phone. And you can play games like
Speaker 1: Candy Crush on your tablet as well PC. You know,
Speaker 1: the dominant games or games like Fortnite, League of Legends,
Speaker 1: you know, so those are those are games that people
Speaker 1: play all the time. Console tends to be things like
Speaker 1: Madden and FIFA and Call of Duty, So different types
Speaker 1: of experiences, and I think the right analogy is like
Speaker 1: going to a movie theater to see a feature link film.
Speaker 1: You know, that's what a console game is, and watching
Speaker 1: a YouTube video is what a mobile game is like.
Speaker 1: So you know, they're they're different types of activity for
Speaker 1: different types of devices, but all really engaging, and you
Speaker 1: know people play them all day long. Is it too early, though,
Speaker 1: to to make some investment calls based on what's happening now?
Speaker 1: Does it make any sense to even think about that
Speaker 1: at this point? Michael, it's I mean beyond the pandemic.
Speaker 1: I mean, the pandemic is clearly going to drive up
Speaker 1: the use case for you know, the month of March
Speaker 1: and probably believe for the entire June quarter. Um, you'll
Speaker 1: probably see some people one over permanently. So you're going
Speaker 1: to get some people who weren't really gamers before who
Speaker 1: find it. You know, this activity is really enjoyable. Um.
Speaker 1: I actually think that we're on the verge of expanding
Speaker 1: the market just remarkably by streaming games. And that's Google's
Speaker 1: offering something called Stadia. I think Amazon's going going to
Speaker 1: enter the fray. Microsoft and Sony each have products that
Speaker 1: allow you to play games on any device without a
Speaker 1: console or a PC. When that happens, and I think
Speaker 1: that starts this fall, and I think it grows over
Speaker 1: the next five to seven years, it should double or
Speaker 1: triple demand for the content. So anybody who's got content
Speaker 1: is a beneficiary. Anybody who makes peripherals, you know, controllers
Speaker 1: or keyboards is a beneficiary. And you know, we're we're
Speaker 1: working with an et F called gamer g a m
Speaker 1: R that's ninety some odd stocks in the video game
Speaker 1: and video game technology s. That's the pure play, that's
Speaker 1: the easiest way to play it. You're going to get
Speaker 1: exposure across border, across industries to a demographic that's going
Speaker 1: to expand a lot right, Embracer, you've got Zinga, You've
Speaker 1: got Glue Mobile, You've got all the names in there. Well,
Speaker 1: because also everybody other other than you know, big big,
Speaker 1: big companies like Google where gaming is not a big
Speaker 1: piece of their business but will be someday. Amazon, same thing, um.
Speaker 1: But short of that, yes, you've got all the publishers,
Speaker 1: all the device makers, um, all the pure play mobile
Speaker 1: guys well, and even I believe, and keep me honest here, Michael,
Speaker 1: some of the semiconductor companies too. And we talk about
Speaker 1: that with our inside our internal research analyists all the
Speaker 1: time about how when you look at the videos and
Speaker 1: others of the world, so much demand it seems these days.
Speaker 1: And I guess this was both on the PC and
Speaker 1: the and the console side, uh is especially you know
Speaker 1: there's some there's some semiconductor demand that is driven by
Speaker 1: gaming right relutely. And you know in video in particular. Um,
Speaker 1: they make the high end graphics cards. So you know
Speaker 1: that four million PC gamers they need in video cards,
Speaker 1: million console players they need in video cards. All right, Well,
Speaker 1: thank you so much. We really appreciate it. Great context,
Speaker 1: and you know one of those things that totally makes
Speaker 1: sense when you think about how people are acting during
Speaker 1: this very unusual period. Michael Pactor is video game technology
Speaker 1: analysts for web Bush Securities. Joinius on the phone from
Speaker 1: Long Beach, California. I just think of it was mid
Speaker 1: March when we heard E three the video Game conference
Speaker 1: was canceled because of coronavirus fears, and it made me.
Speaker 1: You know, that was one of the things, along with
Speaker 1: the sports events, when all of these things started being canceled,
Speaker 1: because that's a huge event, so crucial to the industry,
Speaker 1: but just a reminder of the lockdown that we would
Speaker 1: soon all be facing as the world and certainly the
Speaker 1: nation as we know it was shutting down. It was
Speaker 1: like a hundred years ago. That's why I had to
Speaker 1: look back, and it was March eleventh, brother journal. Yeah,
Speaker 1: but you let me drive? Oh no, no, no, no,
Speaker 1: who's honey? Please, I'll do the body. Let me. I
Speaker 1: want to drive all Just drive, baby, good questions, keep drying.
Speaker 1: This is the drive to the Globe Commune to thanks,
Speaker 1: we'll drive us on Bloomberg Radio. All right, let's check
Speaker 1: in for the drive to close with her old pal
Speaker 1: Allan's AFRON founding partner and Cosey of I e Q Capital.
Speaker 1: Johnny is on the phone from Foster City, California, while Alan,
Speaker 1: the last time we talked to you is a very
Speaker 1: different time, and I do wonder in the interim, Uh,
Speaker 1: what's been going on? How are you feeling, has your
Speaker 1: family doing? What's it like? Uh in your neighborhood, in
Speaker 1: your town, Jason, we're home sheltering. I gotta tell you,
Speaker 1: we're living. Uh. It's kind of interesting because what you
Speaker 1: watch on television, what you hear, is absolutely terrible. But
Speaker 1: you're sitting in your home, you're with your family. Um,
Speaker 1: when this is all said and done, it's a it's
Speaker 1: a horrible health crisis, it's a horrible economic event. In
Speaker 1: the eyes of an eight year old, playing board games
Speaker 1: and having family meals at home, as long as they're safe,
Speaker 1: you're you're in an affluent area like Foster City, might
Speaker 1: be the best time of their life. So it's that
Speaker 1: that's the silver lining on what's clearly a dark cloud.
Speaker 1: But I can tell you people are anxious and this event,
Speaker 1: this event, Jason, is so different than I think about
Speaker 1: two thousand and eight, because it's personal. It's personal. It's
Speaker 1: affecting everybody directly, and people know people who are being
Speaker 1: adversely impacted health wise too, and that's what makes this
Speaker 1: one really difficult. Well, and you know it's funny, not
Speaker 1: so funny, but you know, we've been having discussions about
Speaker 1: the the longer lasting impact of the virus. And I
Speaker 1: do wonder whether it's in you know, telemedicine, or whether
Speaker 1: it's online learning, or I don't know even you know,
Speaker 1: we're all a lot of us are working from home.
Speaker 1: I do wonder or about the social nets and safety
Speaker 1: nets that are not part of our society. Um, Alan,
Speaker 1: I do wonder about the longer lasting impact. And I'm
Speaker 1: just curious if you have some thoughts on that. Yeah,
Speaker 1: we're going to learn that redundancy is important. Um We're
Speaker 1: going to learn the importance of capital expenditures, both from
Speaker 1: a health care perspective as well from a technology perspective.
Speaker 1: I pity the business soul who thought his internet was
Speaker 1: going to work well when he got home and realized
Speaker 1: it wasn't running at the same speed of the office.
Speaker 1: We're gonna be far more attentive to the need to
Speaker 1: not allow a pandemic like this happen again. Now, whether
Speaker 1: we have the political willpower and the economic ability to
Speaker 1: put in place those things we need to build up, uh,
Speaker 1: the infrastructure to deal with the pandemic. In the future
Speaker 1: we will see, but in the moment, it's you like,
Speaker 1: that's going to be something that's gonna be um done.
Speaker 1: What you're gonna see too, is in the financial markets,
Speaker 1: it's already playing that way obviously the way some stocks
Speaker 1: are working. But you're going to see pharmaceutical companies, biotech
Speaker 1: companies are going to get garner greater interest from the
Speaker 1: investment community. Clearly, a large cap will balance high, high
Speaker 1: balance sheets, strong balance sheet. Tech companies are going to
Speaker 1: be well positioned because we're just going to continue to
Speaker 1: see all things equal, certainly until this virus seems I
Speaker 1: could see if you get past if you're gonna see
Speaker 1: more of a domestic focus, more of an inward focus,
Speaker 1: more of to make sure that everyone's got their own
Speaker 1: personal safety net as well as a business having a
Speaker 1: safety net. That's kind of the big theme in the
Speaker 1: short run. Well, and that safety net point is so
Speaker 1: interesting to Alan. And you know we're gonna talk in
Speaker 1: just a little while with Robert Rice, the former Labor secretary,
Speaker 1: as you know, and you know he's going to make
Speaker 1: a pretty strong argument I believe against you know, sort
Speaker 1: of propping up a lot of panie. Uh you know,
Speaker 1: call it a bail out, call it what you want, um.
Speaker 1: But part of this rainy day uh point. I think
Speaker 1: it's really important to the extent that a lot of
Speaker 1: the criticism that's been leveled against companies, whether they're in
Speaker 1: the airline industry or elsewhere, is Listen, they spent this
Speaker 1: money on buy backs. They spent this money in ways
Speaker 1: that weren't essentially saving for a rainy day. Now this
Speaker 1: is beyond a rainy day, of course, and yet I
Speaker 1: do wonder whether that behavior will change, or whether, given
Speaker 1: this stimulus is sweeping in, whether companies will be like, no,
Speaker 1: that's cool, they'll they'll uh, they'll they'll help me out
Speaker 1: if I need it. You're touching on a really important point. Unfortunately,
Speaker 1: our stock markets built on quarterly profits yum, and so
Speaker 1: we have a mismatch. Businesses should be run for the
Speaker 1: long run, stocks should be bought for the long run.
Speaker 1: And yet we played this game matching how companies performing
Speaker 1: every ninety days and didn't match the earnings estimates and
Speaker 1: less we're going to restructure the way in WHI to
Speaker 1: calibrate and measure public company performance. I don't think you're
Speaker 1: going to see a change ultimately in corporate behavior. By
Speaker 1: backs are just another way to prop up earnings per share. UM.
Speaker 1: I do think it is probably well suited. If the
Speaker 1: government's going to hand be allowed of business, they should
Speaker 1: put in place measures to ensure that the businesses are
Speaker 1: there to support other constituents like employees, UM and customers
Speaker 1: as much as the executive. So I understand why they
Speaker 1: would do that. UM, they have to make sure that
Speaker 1: they can still create a compensation system that attracts competent, efficient,
Speaker 1: effective managers to run those businesses properly. That's the other
Speaker 1: side of the coin. If you don't allow those businesses
Speaker 1: to be running by people who are compensated enough for
Speaker 1: the hard work they do, you're going to create a
Speaker 1: business that doesn't operate efficiently or well, and that will
Speaker 1: also have a longer term negative economic impacts. So that
Speaker 1: it's it's complicated. There's multiple sides to every issue. No, yeah,
Speaker 1: it is complicated, But I do wonder and again, you know,
Speaker 1: Robert Rice is going to bring up this point, but
Speaker 1: you know, Alan, as you know, I mean, when you
Speaker 1: think about influence in Washington. It's not the individual walking
Speaker 1: down the street. It's the large and deep pockets of
Speaker 1: corporations and you know their lobbying groups. And so you
Speaker 1: do wonder whether when we do have these stimulus packages
Speaker 1: that are drafted, you know that they definitely sway um
Speaker 1: and lean, you know, on the sides of often big public,
Speaker 1: publicly held companies. I don't disagree, And the optics look
Speaker 1: terrible politically. On the other hand, I think there is
Speaker 1: an art, but it's not just optics, right, it's really
Speaker 1: activity actions that are actually taken. Yeah, And the counter
Speaker 1: argumently in its multiple pick on the airlines, the absence
Speaker 1: of a bailout of the airline industry, I'm not sure
Speaker 1: that they could survive, which gets back to the point
Speaker 1: why were they buying back shares. But if you build this,
Speaker 1: if you've built your business with amples amount of debt
Speaker 1: and you have a cyclical business, um you're going to
Speaker 1: go out of business, in which point you're gonna have
Speaker 1: a much greater cost of society. So we may be right,
Speaker 1: we shouldn't bail out the executives and the airlines. The
Speaker 1: problem is we've got a lot of people who are
Speaker 1: now on unemployment insurance, and it's hard to retrain them
Speaker 1: and find them new jobs. You can't win either way,
Speaker 1: so you've got to find a middle ground. But really,
Speaker 1: the the emphasis I think is to the degree if
Speaker 1: you're going to be punitive and eliminate various industries, the
Speaker 1: economic damage could be significantly greater than we realized. We
Speaker 1: could have the sustainable the high unemployment rate, we'd be
Speaker 1: running large deficits to support millions upon millions of people,
Speaker 1: would impair our ability to borrow effectively, and would actually
Speaker 1: create havocs the financial system. So as bad or onerous
Speaker 1: or painful to may feel to bail out some of
Speaker 1: these industries, some of them are so significant to the economy,
Speaker 1: and the absence of doing something to prop them up
Speaker 1: and support them, it caused a much greater, longer term
Speaker 1: economic damage that will take much longer to works of. Right,
Speaker 1: All right, Unfortunately, we're gonna leave it there. I feel
Speaker 1: like we're just getting worked up. Alan Zaffren. You're gonna
Speaker 1: have to come back and hang out with us virtually. Uh,
Speaker 1: and you know, maybe before too long you'll be visiting
Speaker 1: us in New York or will be out west. Thank you.
Speaker 1: So much. Founding partner k CEO of I e Q
Speaker 1: Capital on the phone from Foster City, California, thoughtful. As always,
Speaker 1: thanks for listening to Bloomberg Business Week. You can subscribe
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