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Speaker 1: This is Bloomberg Wall Street Week. What's the state of

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Speaker 1: corporate governments? The deficit is a real issue to use.

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Speaker 1: Economy continues to send mixed signals to the financial stories

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Speaker 1: that cheap our world, fed action to con concerns over

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Speaker 1: dollar liquidity and encouraging China data. The five hundred wealthiest

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Speaker 1: people in the world. Through the eyes of the most

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Speaker 1: influential voices Larry Summers, the former Treasury Secretary, Starard CEO,

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Speaker 1: Kevin Johnson sec Chairman j Clayton. Bloomberg wool Street Week

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Speaker 1: with David Weston from Bloomberg Radio. Learning to live with it,

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Speaker 1: whether it's a virus that won't go away or stimulus

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Speaker 1: we can't afford to have go away. This is Bloomberg

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Speaker 1: Wall Street Week. I'm David Weston. Trouble with these deficits

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Speaker 1: is not so much the size of the deficit today

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Speaker 1: when there's a lot of unutilized capacity in the economy,

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Speaker 1: but are we on a course that carries us continuing

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Speaker 1: along with these kinds of deficits as the economy does recover.

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Speaker 1: In the economy is has been to recovery. It's been

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Speaker 1: recovering rather vigorously for some months and at certainly time

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Speaker 1: looking ahead to begin seeing me docing that deficit. That

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Speaker 1: was FED Chair Paul Volker talking about the need to

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Speaker 1: address the growing deficit all the way back in when

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Speaker 1: it came to a grand total of just fifty three

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Speaker 1: billion dollars. This year, the federal deficit was two point

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Speaker 1: seven trillion dollars in just the first nine months of

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Speaker 1: the year. And that is before another round of fiscal stimulus.

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Speaker 1: And that is what has caused some Republicans like Senator

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Speaker 1: Rick Scott of Florida to resist too big a stimulus package,

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Speaker 1: even though they agree we need to do something. Well here,

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Speaker 1: here's what's frustrating is we know we need to take

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Speaker 1: care and I want to take care of the people

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Speaker 1: have lost their jobs. Um, we know we need to

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Speaker 1: take care of our small businesses to reopen our economy.

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Speaker 1: And what human plots you're talking about is election reform, um,

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Speaker 1: you know, postal service. You know, these are issues that

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Speaker 1: we should talk about. But this is trying to get

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Speaker 1: our economy open and take care of COVID. So it's

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Speaker 1: it's and last week it was so frustrating because we

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Speaker 1: weren't done. We knew the existing unemployment system, the additional

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Speaker 1: money that we put up was going to expire. We

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Speaker 1: had a bill, Martha McSally had a bill and Schumer

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Speaker 1: blocked it. I mean, it's it's like they're being disingenuous.

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Speaker 1: They say, oh, we care, but they don't really. And

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Speaker 1: what I'm concerned about is the unbelievable dollars that we're spending.

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Speaker 1: We're going to have what about twenty seven train dollars

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Speaker 1: were there debt at least by the end of the year.

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Speaker 1: Our federal Reserve, just to keep integrates down, has bought

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Speaker 1: what our net treasury issuances this year gold to record prices.

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Speaker 1: I think the markets telling us to watch out. We

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Speaker 1: got a lot of debt. You've got to be careful

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Speaker 1: you're spending your money, and up here nobody cares. It's

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Speaker 1: it's like spend, spend, spun. And then our states are saying, oh,

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Speaker 1: we haven't been able to bounce our budget. Maybe we

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Speaker 1: can use the coronavirus as an excuse to get some

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Speaker 1: money out of the federal governments. We can put the

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Speaker 1: money down on our pensions, pay for our excesses. Which

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Speaker 1: means that if you're a Florida taxpayer and you said

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Speaker 1: I bo I got out of Cuomo's New York because

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Speaker 1: the taxes are so high. Then Quomos come back and said, no, no, no, no,

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Speaker 1: I want money out of the federal government. Well, that

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Speaker 1: means Florida taxpayers, every taxpayer is gonna be paying for this.

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Speaker 1: So I think we've got to be take care the unemployed,

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Speaker 1: help our small businesses, get our economy reopened. We need

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Speaker 1: to have liability protection, and then don't waste your money.

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Speaker 1: Watch every dollar and hold China accountable. I mean this

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Speaker 1: is caused by Communist China. It's run by, as you know,

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Speaker 1: the Communist Party of China. And whether it's not allowing

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Speaker 1: TikTok to be used here, or holding them accountable for

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Speaker 1: all of our costs, or you know, holding them accountable

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Speaker 1: because they're taking away the basic rights of Hong Kong

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Speaker 1: citizens or putting a million people in prison for their religion.

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Speaker 1: We've got to keep holding them accountable for their bad acts. So,

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Speaker 1: as you suggest, Center, there's a lot of money we're

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Speaker 1: talking about, there's a lot of zeros. After the numbers

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Speaker 1: is a practical matter. One of the biggest gaps, it

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Speaker 1: seems to me, is that assistance to the States. It's

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Speaker 1: looks to me like the Republicians. Democrats basically agree there

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Speaker 1: should be some help for the schools to get the

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Speaker 1: schools reopen, but for state assistance generally. Why is it

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Speaker 1: the Republicans feel so strongly? Why did the Democrats? We

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Speaker 1: all agree the states are hurt in part by the pandemic,

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Speaker 1: don't we. Well? I think we all understand that we

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Speaker 1: should help our states, and we did. We We gave

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Speaker 1: them over We gave Statan locals over five hundred billion dollars,

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Speaker 1: and we gave them loan access to another five billion dollars.

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Speaker 1: So we've given them a lot of money. Now, I

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Speaker 1: was a governor of Florida from two thousand eleven and

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Speaker 1: two thousand through two thousand eighteen. I had four hurricanes.

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Speaker 1: The federal government never said, oh, Governor Scott, let me

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Speaker 1: give you all the money for your costs with regard

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Speaker 1: to these hurricanes. They never did that. They played a portion.

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Speaker 1: They helped us with sheltering, they helped us with the

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Speaker 1: break pick up, but they didn't cover our lost revenues.

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Speaker 1: And what these states are saying is I thank you

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Speaker 1: for the money on the coronavirus, because we're we're paying

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Speaker 1: pterotoxic was paying a hundred of it. But we want

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Speaker 1: you to take care of our unfunded pension plans. We

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Speaker 1: want to take care oh. New York sold some some

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Speaker 1: climate change bonds. Help us with that, help us things

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Speaker 1: that we would never never pay for. So I want

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Speaker 1: to be helpful to our state locals for the coronavirus.

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Speaker 1: I do not want to pay UH, and I don't

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Speaker 1: think Florida tax beers should pay for UH the excesses

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Speaker 1: of New York, or California or Elinori New York who

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Speaker 1: never lived within their means. But Senator, does that mean

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Speaker 1: that you might be in favor of some further assistance

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Speaker 1: the states if there were strings attached to make sure

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Speaker 1: it went four things specifically related to coronavirus. Here's what

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Speaker 1: we did. We did Ron Johnson ted Cruz, and I

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Speaker 1: did a letter to all the governors and asked him, Okay,

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Speaker 1: we've given you, We've given you over five hundred billion

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Speaker 1: dollars you in your your cities and counties. How have

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Speaker 1: you spent it? How much money do you have left? All? Right?

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Speaker 1: And I guess how many? Guess how many responded? Less

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Speaker 1: than ten? They just want the money, and we we

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Speaker 1: gave them money for Medicaid. Medicaid costs are actually down.

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Speaker 1: We gave them money for their schools. Actually, school costs

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Speaker 1: have been down so far. None We were talking about

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Speaker 1: helping our schools, you know, with money to reopen. All right,

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Speaker 1: I'm all in favor of helping our schools. But shouldn't

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Speaker 1: we say, tell us what your real needs are. How

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Speaker 1: much of the money we've already given you, have you

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Speaker 1: already spent? How have you spent it? But no, they

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Speaker 1: don't want to give us any information, but they want

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Speaker 1: us to give him more money. And I mean, you

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Speaker 1: would never do that as a person, you'd never do that,

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Speaker 1: and as a business, you would never do that. Why

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Speaker 1: are we doing that as government? That was revolicans Senator

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Speaker 1: Rick Scott of Florida. Coming up, it's all about the virus,

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Speaker 1: and we hear from the man who spent a lifetime

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Speaker 1: battling pandemics, the general in charge of fighting this one,

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Speaker 1: Dr Anthony Fauci, of the National Institute of Allergy and

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Speaker 1: Infectious Diseases. That's next on Wall Street Week on Bloomberg.

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Speaker 1: This is Bloomberg Wall Street Week with David Weston from

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Speaker 1: Bloomberg Radio over seven and fifty tho bull are tested

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Speaker 1: each day in the United States for COVID nineteen, but

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Speaker 1: there are delays in getting some test results back, which

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Speaker 1: limits their effectiveness. I spoke with Dr Anthony Fauci, director

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Speaker 1: of the National Institute of Allergy and Infectious Diseases, about

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Speaker 1: the testing needs for the country. Well, the people who

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Speaker 1: are responsible for the testing, namely doctor Admiral draw and

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Speaker 1: his colleagues. They give some statistics that a substantial proportion

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Speaker 1: of the test come back hours, mostly forty eight hours.

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Speaker 1: There's a certain percentage that take five, six, seven or

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Speaker 1: more days. You're absolutely correct, and I can't credibly defend

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Speaker 1: that and say that's a good thing. It's not because

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Speaker 1: if you have to wait that long, particularly particularly if

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Speaker 1: the testing is done to really determine if you are

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Speaker 1: infected and would you be infecting somebody else, that's an

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Speaker 1: unreasonable amount of time to wait and it kind of

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Speaker 1: obviates the underlying reason for doing the test, which means

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Speaker 1: we need to do better. We need to get or

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Speaker 1: more of the test that need to be done back

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Speaker 1: within that period of no excuses, it needs to be done.

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Speaker 1: Shouldn't that be done on a federal level as a

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Speaker 1: practical matter. I mean, it may be problems in enforcing

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Speaker 1: things like mask wearing and things like that. Why don't

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Speaker 1: we have a national policy and national approach to testing.

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Speaker 1: We have money in the stimulus bill that's being debated

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Speaker 1: right now in a capital hip of that. Are we

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Speaker 1: doing enough as a federal government to fix this problem? Yeah?

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Speaker 1: You know, what we depend on here in the United

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Speaker 1: States is the private enterprise, the various independent companies that

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Speaker 1: make it and distributed it. And that's just the system,

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Speaker 1: the way it works. I'm not sure. We do have

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Speaker 1: public health groups that get UM testing from the public

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Speaker 1: health system, but the ones that really drive it on

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Speaker 1: the private enterprise. And is that effective? Is that the

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Speaker 1: way we're going to beat this thing? As you say,

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Speaker 1: over a long time, I mean, obviously we need to

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Speaker 1: do better because I mean, even though we are much

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Speaker 1: much better off now than we were in the beginning

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Speaker 1: where we had some missteps. At the end of the day,

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Speaker 1: when you make phone calls and you hear that it's

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Speaker 1: taking X number of days to get back, it clearly

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Speaker 1: means we need to do better. What is the role

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Speaker 1: of information and fighting this pandemic as practical matter? I mean,

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Speaker 1: and particularly consistent information because we are sort of getting

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Speaker 1: conflicting messages from the parents. So if you forgive that analogy,

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Speaker 1: we kids out here. I mean, for example, President Trump

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Speaker 1: on hydroxy chloro queens that you know, I really believe

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Speaker 1: it's very effective. He went after Dr Burke's what can

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Speaker 1: we do to get everybody in the same page because

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Speaker 1: we don't know, we're not infectious disease experts, and we're

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Speaker 1: trying to figure out how to comply. We need a

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Speaker 1: consistent message. How can we get to that world? I

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Speaker 1: think when you're dealing with things that are purely medical,

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Speaker 1: I mean, remember when you talk about the situation we're

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Speaker 1: in now, we're in the middle of a pandemic, and

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Speaker 1: we have other considerations that I have to do with

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Speaker 1: economic and political and other things. I have nothing to

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Speaker 1: do with that. If you're talking about a medical question,

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Speaker 1: listen to the medical experts. That's the advice, and you

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Speaker 1: won't get it. You will not get a conflicting message

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Speaker 1: from the medical experts about things like hydroxy chloroquine, about

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Speaker 1: what the results of a vaccine trial aw or what

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Speaker 1: the results of monoclonal anybody. So when it comes to

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Speaker 1: pure public health, medical things. Listen to what the medical

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Speaker 1: experts say. How is President Trump getting his medical information

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Speaker 1: as practical medicas. There seems to be some conflict on

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Speaker 1: things like hydroxic orquine not limited to that. Is there

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Speaker 1: a vetting of the information that that he has access to?

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Speaker 1: You know, I don't know that because I certainly don't

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Speaker 1: have privy to all of the input into the president.

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Speaker 1: The only thing that I know is what we do,

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Speaker 1: and we do that through the task Force, through the

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Speaker 1: Vice President. The Vice president then briefs the president or

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Speaker 1: the President invited us all to the Oval Office to

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Speaker 1: brief him in person. So so, Dr Prog, let's look

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Speaker 1: into your crystal ball right now, and assuming we don't

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Speaker 1: have an effective, fully effective vaccine in the next eighteen

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Speaker 1: to twenty four months, what is a trading floor on

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Speaker 1: Wall Street look like? What does a school look like?

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Speaker 1: What does a public event look like? You know, I

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Speaker 1: gotta tell you, David, I believe and I and I

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Speaker 1: and I sound like a broken record, which is good

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Speaker 1: because I want to sound like a broken record. And

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Speaker 1: that is there are things that we can do without

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Speaker 1: shutting down the country, that can get those numbers down

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Speaker 1: to a manageable amount that you could do things that

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Speaker 1: would be very productive and enhancing of the economy. We

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Speaker 1: should not think of either lockdown completely or caution to

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Speaker 1: the wind. There's a middle ground that we can do

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Speaker 1: of the five or six things that I mentioned to

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Speaker 1: you that will allow us to prudently and carefully open

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Speaker 1: up the economy. It's not all or none. I think

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Speaker 1: there's a misperception that unless we either lockdown or open up,

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Speaker 1: that there's nothing in between. There is something in between.

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Speaker 1: The issue is, and I want to give this a

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Speaker 1: point because I really am going to over the next

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Speaker 1: days two weeks keep repeating it over and over again.

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Speaker 1: We've got to make sure that all the links in

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Speaker 1: the chain of the United States of America as a

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Speaker 1: country bringing that virus down to a level that we

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Speaker 1: can function where we don't have to lockdown, where we

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Speaker 1: can revitalize the economy. We can do it, but all

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Speaker 1: the links have got to work, you know, I I

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Speaker 1: use you know, I'm trying to use analogies of metaphis

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Speaker 1: that people understand. And you could have a lot of people,

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Speaker 1: a lot of states doing really well when you have

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Speaker 1: segments of the population that don't appreciate that even though

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Speaker 1: they may not get sick from the virus, if they

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Speaker 1: are careless and allow themselves to get infected, they're propagating

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Speaker 1: the outbreak so it doesn't go away, and that kind

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Speaker 1: of obviates all the good things that other people are

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Speaker 1: doing to stay safe. I use the analogy only because

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Speaker 1: I learned this from my daughter. My daughter, when she

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Speaker 1: was in college, was on the varsity of a Division

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Speaker 1: one crew team in college, and I used to go

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Speaker 1: to those matches, and you're an eight person boat. The

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Speaker 1: only way you win the race when every rower on

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Speaker 1: that boat is doing it correctly. You get one rower

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Speaker 1: on the boat that either accidentally, as they say, catch

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Speaker 1: your crab and go off or not doing it in

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Speaker 1: the boat doesn't win. So it's the same thing. We're

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Speaker 1: all in this together. Unless we all do it and

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Speaker 1: do it correctly, we can get it down to the

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Speaker 1: point where we can open That was Dr Anthony Fauci

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Speaker 1: of the NIH coming up the challenge of returning students

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Speaker 1: to the classroom through the eyes of someone who ran

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Speaker 1: the Chicago school system and then the US Department of Education,

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Speaker 1: Arnie Duncan. That's next on Wall Street Week on Bloomberg.

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Speaker 1: This is Bloomberg Wall Street Week with David Weston from

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Speaker 1: Bloomberg Radio. Arnie Duncan has devoted his life to education.

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Speaker 1: He took time off from college to work for his

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Speaker 1: mother's after school program on the South Side of Chicago,

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Speaker 1: became CEO of the Chicago Public School System, and ultimately

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Speaker 1: served as Secretary of Education under President Barack Obama. So

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Speaker 1: he knows both the importance and the challenges of returning

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Speaker 1: public school students to the classroom this fall. Of course,

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Speaker 1: all of us as caters, my wife and I, his parents,

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Speaker 1: all our kids, all of us desperately want to go

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Speaker 1: to a physical school to be in person. Um. The challenge,

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Speaker 1: and the terrible challenge is that that's not always safe

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Speaker 1: to do. And what we haven't done is adults across

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Speaker 1: the country, David, in March and April and May and

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Speaker 1: June and July, and now we're starting to August, what

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Speaker 1: we haven't done to make our community safe, which would

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Speaker 1: in turn make our school safe, means that many places

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Speaker 1: are going to have to open only virtually UM. Some

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Speaker 1: places may be able to start with the highbred, and

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Speaker 1: very few places are going to be able to open

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Speaker 1: with children and adults. There physically, and it's it's bad

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Speaker 1: for kids, it's bad for education. Um, but we have

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Speaker 1: a country have lacked discipline, the lack of commitment to science.

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Speaker 1: We haven't followed what's worked in other countries, and it's

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Speaker 1: it's just had a just a terrible effect, the destructive

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Speaker 1: impact on education, on kids and ultimately obviously on the

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Speaker 1: COVID death rate in the country, which is unacceptably, unacceptably

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Speaker 1: high and still rising. Yeah, and I don't know. I'm

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Speaker 1: struck by the fact that I think the New York

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Speaker 1: City is the only major school district right now still

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Speaker 1: holding out the possibility of really reopening physically. Your old

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Speaker 1: school district of Chicago said they can't do it right away.

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Speaker 1: At the same time, when we talk about remote learning,

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Speaker 1: that's one thing, let's be honest. For upper middle class,

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Speaker 1: upper class people with their fancy mac books and things

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Speaker 1: like that, a lot of support, a lot of WiFi,

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Speaker 1: there are a lot of urban school districts across the

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Speaker 1: country that that really struggle with remote learning. Can we

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Speaker 1: really teach children in some of these large urban school

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Speaker 1: districts through remote learning? Let me ask that directly one second,

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Speaker 1: but just for people to understand how complex. All this

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Speaker 1: is um schools aren't just places of education, of social

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Speaker 1: safety nets, and so we've been doing a weekly call

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Speaker 1: since the pandemic started with school districts and with nonprofits

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Speaker 1: across the country on food distribution, and throughout this from

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Speaker 1: day one, school districts have continued to feed children, their

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Speaker 1: families and the broader community tens of millions of meals

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Speaker 1: every single day. It's just been an extraordinary heroic effort. Um. Secondly,

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Speaker 1: we have to take care of children's social emotional health,

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Speaker 1: and we've seen districts pivot very quickly to telehealth, so counselors,

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Speaker 1: social workers, teachers, psychologists checking on those kids that were

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Speaker 1: already struggling and unfortunate. David, you know, we have so

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Speaker 1: many families now in financial distress, people who were living

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Speaker 1: paycheck to paycheck and doing okay, and their world has

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Speaker 1: been turned upside down trying to take care of those kids.

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Speaker 1: And then finally, yes, we have to figure out how

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Speaker 1: to educate children and districts again, I'm working for all

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Speaker 1: the lack of federal leadership, which is so infurying to me.

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Speaker 1: At the local level, we've seen extraordinary compassion and empathy

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Speaker 1: and thoughtfulness and urgency. So here in Chicago have given

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Speaker 1: out a hundred thousand devices to children, in Boston thirty thousand.

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Speaker 1: In San Antonio there's a very poor district they have

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Speaker 1: forty nine thousand students have given out forty seven thousand devices.

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Speaker 1: Um places like South Bend, Indiana have park school buses

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Speaker 1: in the poor communities that are WiFi and able, so

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Speaker 1: the students can have access to that. And for better

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Speaker 1: or worse, what this pandemic has done, David, is it's lifted.

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Speaker 1: It's sort of, you know, ripped the scab with the

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Speaker 1: band aid off these gaping wounds of massive inequities across

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Speaker 1: our society. Yes, of course, in our educational system, and

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Speaker 1: we have to make sure children can learn anything they

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Speaker 1: want any time, anywhere. We have to close the digital

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Speaker 1: divide and use this time of crisis to do something

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Speaker 1: much better for children, whether it's in the inner city,

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Speaker 1: whether it's in Appalachia, whether it's on Native American reservations. So, Ernie,

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Speaker 1: as you point out, we're not where we should be,

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Speaker 1: We're not where we would want to be at centime.

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Speaker 1: We are where we are. The question is what do

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Speaker 1: we do at this point? It strikes me that there

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Speaker 1: are real challenges remote learning for the child, but also

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Speaker 1: for the supervision at home. A lot of kids, you

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Speaker 1: can't just put them in a room and have them

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Speaker 1: do it. And also for the teachers, it can't be

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Speaker 1: the same teaching remotely as it is in person. How

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Speaker 1: what can we do to help that process because it

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Speaker 1: must be a different process. So a couple of things,

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Speaker 1: and again, all this stuff is three dimensional chests. It's

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Speaker 1: a you know, it's a new world and unprecedented time.

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Speaker 1: So let's just sort of walks through it. Um. Clearly

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Speaker 1: for our babies are pre k K first and second

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Speaker 1: our little guys. UM, it's it's really really hard. So

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Speaker 1: as we think about opening physically, whether it's at the

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Speaker 1: start of the school year or whether it's a couple

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Speaker 1: of weeks you know into the school year, UM, I

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Speaker 1: would prioritize bringing those younger children back. And you know,

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Speaker 1: my my children freshman in college and a rising junior

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Speaker 1: high school. UM, the online stuff is it is easier

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Speaker 1: for them at that age than for our baby. So

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Speaker 1: we have to try and get those younger kids back

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Speaker 1: into physical buildings that we have to use. The high

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Speaker 1: schools for the little guys to uh to open that up. Secondly,

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Speaker 1: you know, with the pandemic started, we were thrown into

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Speaker 1: this virtual learning world. Know very very quickly about preparation. UM.

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Speaker 1: Teachers that had um, you know, a couple of months

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Speaker 1: now to you know, to try and work on this,

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Speaker 1: to have professional development, to get better at it. UM.

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Speaker 1: It is still imperfect, you know from you just as

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Speaker 1: a parent, as a dad. UM, some of my children's

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Speaker 1: classes worked really well, others didn't. UM. The large discussions

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Speaker 1: via zoom are hard. But we have the zoom breakouts

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Speaker 1: and three or four or five kids talking and working

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Speaker 1: together on that works better. But we have to move

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Speaker 1: into this world. UM. Many children, probably the majority of

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Speaker 1: children in this country are going to spend somewhere between

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Speaker 1: you know, half their time and or all their time

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Speaker 1: at least for the start of the school year in

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Speaker 1: this situation, in this virtual learning our world. That was

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Speaker 1: Arnie Duncan, managing partner of the Emerson Collective. Coming up

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Speaker 1: contributors Larry Summers of Harvard and Jillian Tett at The

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Speaker 1: Financial Times. That's next on Wall Street Week on Bloomberg.

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Speaker 1: This is Bloomberg Wall Street Week with David Weston from

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Speaker 1: Bloomberg Radio. It was a week for hanging on economic numbers,

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Speaker 1: though positive, fell far short of pointing us back to

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Speaker 1: where we'd been. You know, there was some pullback of

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Speaker 1: reopenings and so forth, and yet, and yet we still

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Speaker 1: got one eight million with a big differ fine almost

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Speaker 1: a full percentage point drop in the unemployment rate, leaving

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Speaker 1: us grasping for a fiscal boost out of Washington that

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Speaker 1: leaders so far have not been able to deliver. I

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Speaker 1: think there's a handful of very big issues that we

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Speaker 1: are still very far apart. The other side is going

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Speaker 1: out there and making it like they're there for children

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Speaker 1: and and people in new working families, which couldn't be

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Speaker 1: further from the truth. And this week we saw a

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Speaker 1: shadow cast over the one clear bright spot in the

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Speaker 1: markets equities when President Trump expanded his tech battle of

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Speaker 1: China to a threatened ban on TikTok and we chat.

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Speaker 1: We want to see untrusted Chinese apps removed from US

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Speaker 1: app stores. Oh yes, the virus. The virus, it just

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Speaker 1: kept on coming, with numbers of cases leveling off in

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Speaker 1: states like Florida and Texas and California maybe, but deaths

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Speaker 1: kept moving up and the spread of the disease expanded

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Speaker 1: to new states like Iowa and Minnesota and Wisconsin. It

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Speaker 1: was a big week on Global Wall Street. And to

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Speaker 1: help us try to understand it, we welcome now our

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Speaker 1: special contributor Larry Summers of Harvard, former treasure Secretary. So, Larry,

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Speaker 1: let's start with some economic numbers. The jobs numbers that

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Speaker 1: came out at the very end of the week better

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Speaker 1: than expected one point seven one point seven six million

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Speaker 1: jobs added. Does it change our view about the path

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Speaker 1: of this recovery. I don't think at all, Um, it changed.

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Speaker 1: It confirms what we sort of uh knew. It refers

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Speaker 1: to a survey that was taken UH several weeks ago.

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Speaker 1: The higher frequency numbers are not as strong, and there

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Speaker 1: are a variety of questions that make the unemployment rate

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Speaker 1: in the ten range almost certainly an underestimate of how

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Speaker 1: bad things how bad things are. So I think the

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Speaker 1: basic view that we're now in for a long slog

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Speaker 1: until something puts the health problems UH in the rear

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Speaker 1: view mirror. Nothing in this number changes UH that picture.

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Speaker 1: Nothing in UH data that's that we're seeing suggests that

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Speaker 1: the health problem is moving to the rear view mirror.

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Speaker 1: And the main development UH this week is growing concern

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Speaker 1: that the economy is going to run into a stimulus

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Speaker 1: pothole because Congress is going to take us off the stimulus. UH.

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Speaker 1: Cold Turkey, and the other main concern this week is

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Speaker 1: at a moment when the world needs to be coming

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Speaker 1: together around a common problem. The risks of major economic

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00:23:51,960 --> 00:23:55,480
Speaker 1: conflict between the United States and China are going up.

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00:23:56,040 --> 00:23:58,639
Speaker 1: So it's hard to feel better at the end of

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00:23:58,640 --> 00:24:00,920
Speaker 1: the week than one did it beginning of the week.

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Speaker 1: It's hard to feel better today than one felt uh

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00:24:05,400 --> 00:24:09,679
Speaker 1: several weeks ago. There's no strong tendency for things to

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00:24:09,720 --> 00:24:12,879
Speaker 1: be moving in the right direction. If anything, they're probably

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00:24:12,920 --> 00:24:15,639
Speaker 1: moving in the wrong direction. And joining Larry Summers and

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00:24:15,760 --> 00:24:17,639
Speaker 1: me is now Jillian Tecy is the chair of the

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00:24:17,680 --> 00:24:21,240
Speaker 1: Financial Times editorial Board. Welcome, Jillian, good to have you here.

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00:24:21,240 --> 00:24:23,520
Speaker 1: I want to start, however, with Larry. Larry brought up

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00:24:23,520 --> 00:24:25,520
Speaker 1: the question of stimulus. We're supposed to get it this week.

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00:24:25,760 --> 00:24:30,080
Speaker 1: So Larry, where are we the stimulus? Look you'll you'll,

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00:24:30,119 --> 00:24:33,800
Speaker 1: you'll be following very closely. Whatever the ins and outs

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00:24:34,040 --> 00:24:39,680
Speaker 1: in Washington are, I'd stick with the economics. It is

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00:24:40,080 --> 00:24:48,720
Speaker 1: crazy to be withdrawing huge quantities of economic support right

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00:24:48,760 --> 00:24:53,000
Speaker 1: now when the economy is in the process of turning

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00:24:53,080 --> 00:24:59,400
Speaker 1: over because of the spreading of virus. Yes, there are

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00:24:59,440 --> 00:25:02,320
Speaker 1: some legit them in issues about the size of unemployment

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00:25:02,359 --> 00:25:08,480
Speaker 1: insurance checks. But for every individual who is not working

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00:25:08,600 --> 00:25:13,440
Speaker 1: because of inadequate and unemployment because of excessive unemployment insurance,

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00:25:14,080 --> 00:25:17,879
Speaker 1: there are probably five who are not working because we

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00:25:17,920 --> 00:25:24,359
Speaker 1: don't have satisfactory childcare arrangements and financial support. Yes, there

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00:25:24,359 --> 00:25:30,400
Speaker 1: may be some tax disincentive effects, but they are small

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00:25:31,080 --> 00:25:37,480
Speaker 1: compared to the lack of basic support for taking care

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00:25:37,520 --> 00:25:44,040
Speaker 1: of the education of the kids of working uh families.

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00:25:44,560 --> 00:25:48,080
Speaker 1: This is that rare case in economics where demand and

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00:25:48,160 --> 00:25:53,440
Speaker 1: supply come together. We need more demand that means injecting money,

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00:25:53,600 --> 00:25:57,719
Speaker 1: and we need more supply and that means supporting working families.

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00:25:58,200 --> 00:26:02,320
Speaker 1: We're doing neither. It's a huge error. So Jillian Larrea says,

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00:26:02,320 --> 00:26:04,919
Speaker 1: we definitely need more stimulus this time. You have a

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00:26:05,040 --> 00:26:07,720
Speaker 1: very strong columount. All your columns are strong. Let's be

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00:26:07,720 --> 00:26:10,399
Speaker 1: honest this week in the Financial Times, it's not just

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00:26:10,600 --> 00:26:12,520
Speaker 1: the fact of stimulus to the amount, but also how

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00:26:12,520 --> 00:26:14,280
Speaker 1: it's done and in fact, what we've done so far

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00:26:14,359 --> 00:26:16,920
Speaker 1: is I will use the word regressive. Well in a sense,

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00:26:16,960 --> 00:26:19,720
Speaker 1: we don't just need more stimulus, we need smart stimulus

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00:26:19,760 --> 00:26:23,040
Speaker 1: and smart supports above all else. Um. And it's very

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00:26:23,119 --> 00:26:26,280
Speaker 1: understandable in some ways that when the COVID crisis hit,

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00:26:26,800 --> 00:26:31,000
Speaker 1: policy policymakers dashed to provide support and they didn't have

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00:26:31,160 --> 00:26:34,880
Speaker 1: time to spend hours or days or weeks passing all

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00:26:34,920 --> 00:26:37,520
Speaker 1: the fine details. But when we go back and look

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00:26:37,560 --> 00:26:40,760
Speaker 1: what's happened with something like the Payment Protection Plan, the

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00:26:40,800 --> 00:26:43,840
Speaker 1: PPP program, which was supposed to be supporting small business

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00:26:43,840 --> 00:26:48,119
Speaker 1: in America, what is that becoming clear is actually it

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00:26:48,200 --> 00:26:52,160
Speaker 1: was attributed very very unevenly. The New York Federal Reserve

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00:26:52,280 --> 00:26:56,199
Speaker 1: released a fascinating paper this week which essentially shows that

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00:26:56,320 --> 00:26:59,480
Speaker 1: not only did many of the most needy areas in America,

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00:26:59,520 --> 00:27:04,120
Speaker 1: particularly metropolitan areas, not get the money fairly, but also

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00:27:04,640 --> 00:27:08,960
Speaker 1: the black businesses. Black owned businesses received a much large,

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00:27:08,960 --> 00:27:12,720
Speaker 1: smaller proportion of the money than white owned business and

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00:27:12,760 --> 00:27:15,440
Speaker 1: they've also been going essentially failing, at twice the rate

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00:27:15,560 --> 00:27:19,200
Speaker 1: of white owned businesses. So the good news is there's

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00:27:19,200 --> 00:27:21,320
Speaker 1: still quite a lot of money left in the PvP pot,

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00:27:21,600 --> 00:27:24,600
Speaker 1: about a hundred and thirty billion UM. People are talking

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00:27:24,640 --> 00:27:27,600
Speaker 1: about more programs going forward, and as Larry says, it's

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00:27:27,600 --> 00:27:30,439
Speaker 1: pretty clear that more support will be needed. But the

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00:27:30,480 --> 00:27:32,800
Speaker 1: bad news is that people aren't talking about ways of

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00:27:32,840 --> 00:27:35,800
Speaker 1: actually making it much smarter at the moment. So Lorry,

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00:27:35,800 --> 00:27:37,600
Speaker 1: what about it. You've been in those positions of power

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00:27:37,680 --> 00:27:39,680
Speaker 1: in the White House and near the White House. Can

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00:27:39,720 --> 00:27:41,359
Speaker 1: we walk into God at the same time? Can we

491
00:27:41,440 --> 00:27:44,680
Speaker 1: both similar the economy and correct some of the growing

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00:27:44,760 --> 00:27:50,080
Speaker 1: inequalities in the country. There's a poor people versus rich

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00:27:50,160 --> 00:27:59,320
Speaker 1: people dimension of there's a racial dimension of inequality. There's

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00:27:59,359 --> 00:28:06,600
Speaker 1: a gender uh dimension of uh any of inequality. There's

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00:28:06,640 --> 00:28:12,480
Speaker 1: an immigrant uh dimension of inequality. There's a depressed regions

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00:28:12,640 --> 00:28:17,320
Speaker 1: dimension of inequality. And we should be addressed. We should

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00:28:17,320 --> 00:28:24,359
Speaker 1: be addressing all of them. But I do think that uh,

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00:28:24,480 --> 00:28:26,879
Speaker 1: we need to be and I think there should be

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00:28:26,960 --> 00:28:31,520
Speaker 1: set asides in each of the categories I just referred to.

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00:28:32,400 --> 00:28:38,680
Speaker 1: I would just caution though, that maintaining a strong economy

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00:28:38,960 --> 00:28:43,440
Speaker 1: is ultimately the most important form of stimulus, and that

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00:28:43,600 --> 00:28:51,000
Speaker 1: when people try to design overly elaborate, extremely complicated models

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00:28:51,440 --> 00:28:55,640
Speaker 1: for targeting, what inevitably happens is that the whole thing

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00:28:55,880 --> 00:29:02,680
Speaker 1: slows down and less money uh moves and comes out.

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00:29:03,320 --> 00:29:07,680
Speaker 1: So I think that we do need to target better.

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00:29:08,400 --> 00:29:12,840
Speaker 1: But if we don't stimulate the economy, the recession is

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00:29:12,880 --> 00:29:18,600
Speaker 1: going to get worse. And that's the most regressive, anti poor,

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00:29:18,960 --> 00:29:24,480
Speaker 1: anti black thing that we can allow to happen. So

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00:29:24,840 --> 00:29:29,000
Speaker 1: let's move, let's respond to all these concerns, but let's

510
00:29:29,000 --> 00:29:31,760
Speaker 1: not let the best be the enemy of the good.

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00:29:31,880 --> 00:29:34,840
Speaker 1: Exactly where I was going, Jillian, that I actually learned

512
00:29:34,840 --> 00:29:37,120
Speaker 1: as a Russian proverb, don't let the best being be good?

513
00:29:37,280 --> 00:29:39,440
Speaker 1: Are people coming with some way to avoid the best

514
00:29:39,480 --> 00:29:42,160
Speaker 1: being the mmy good and still not have the stimulus

515
00:29:42,160 --> 00:29:46,800
Speaker 1: be alcohol again regressive? Well, one certainly hope so. And

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00:29:46,800 --> 00:29:49,000
Speaker 1: they are all very practical things that can be done.

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00:29:49,200 --> 00:29:51,040
Speaker 1: I mean to go back to the issue about why

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00:29:51,160 --> 00:29:54,120
Speaker 1: black owned businesses are failing at twice the rate to

519
00:29:54,160 --> 00:29:58,120
Speaker 1: whitehad once a number the forty versus seventeen percent that

520
00:29:58,120 --> 00:30:02,560
Speaker 1: have essentially stopped operating since COVID hit huge distinction. Something

521
00:30:02,640 --> 00:30:04,840
Speaker 1: very practical you could do is say, let's put the

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00:30:04,840 --> 00:30:08,560
Speaker 1: p PP money out through fintech platforms, because black owned

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00:30:08,560 --> 00:30:12,040
Speaker 1: businesses are far more reliant on fintech platforms. Because they

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00:30:12,040 --> 00:30:16,280
Speaker 1: have very weak relationships with mainstream traditional banks. So that's

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00:30:16,280 --> 00:30:18,959
Speaker 1: a very simple practical step that could be taken, and

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00:30:18,960 --> 00:30:22,240
Speaker 1: one hopes it will be taken going forward. But perhaps

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00:30:22,280 --> 00:30:25,800
Speaker 1: a bigger issue people should also be recognizing is that

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00:30:26,240 --> 00:30:28,800
Speaker 1: the type of actions the Federal Reserve has taken have

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00:30:28,920 --> 00:30:33,440
Speaker 1: also been incredibly regressive in the sense of inflating assets

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00:30:33,480 --> 00:30:37,080
Speaker 1: which are overwhelmingly held by the wealthier parts of population

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00:30:37,560 --> 00:30:41,280
Speaker 1: and essentially creating a wealth gap that's widening between the

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00:30:41,320 --> 00:30:44,960
Speaker 1: wealthy and the poor. Many people, including Larry, would say

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00:30:44,960 --> 00:30:47,040
Speaker 1: the third had no choice. They had to go and

534
00:30:47,080 --> 00:30:49,400
Speaker 1: do this because they had to do whatever it took

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00:30:49,840 --> 00:30:52,120
Speaker 1: to use that famous phrase, to get the economy going.

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00:30:52,600 --> 00:30:56,360
Speaker 1: But that point about the regression of assets prices rising

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00:30:56,840 --> 00:30:59,520
Speaker 1: needs to be debated and understood, if not now then

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00:30:59,560 --> 00:31:02,520
Speaker 1: in the few chair and policy tailored to actually try

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00:31:02,560 --> 00:31:05,680
Speaker 1: and do something to counteract that. But are people abating

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00:31:05,680 --> 00:31:08,120
Speaker 1: it other than in your color and the ft, Julian,

541
00:31:08,240 --> 00:31:10,280
Speaker 1: are you seeing people debating and coming over the ideas?

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00:31:10,440 --> 00:31:12,160
Speaker 1: I think well, in terms of the issue of central

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00:31:12,160 --> 00:31:14,640
Speaker 1: bank policy and the impact on rich and poor, there's

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00:31:14,680 --> 00:31:17,000
Speaker 1: only one central bank to my knowledge that's actually had

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00:31:17,040 --> 00:31:19,520
Speaker 1: the courage to try and measure what happened in the

546
00:31:19,560 --> 00:31:22,480
Speaker 1: first rounds of que back in two thousand and nine,

547
00:31:22,560 --> 00:31:24,680
Speaker 1: and that's a Bank of England, and it released a

548
00:31:24,680 --> 00:31:26,840
Speaker 1: report showing that almost all the gains had gone to

549
00:31:26,960 --> 00:31:30,280
Speaker 1: the wealthy wealthiest five percent on the UK economy when

550
00:31:30,360 --> 00:31:33,920
Speaker 1: KWIE was first unleashed. Now QUEE is dramatically bigger, so

551
00:31:34,000 --> 00:31:36,000
Speaker 1: you have to guess that the games are even more extreme.

552
00:31:36,280 --> 00:31:38,600
Speaker 1: But no, that point has not been discussed. And I

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00:31:38,640 --> 00:31:41,080
Speaker 1: would agree with Larry. We can't sit there and try

554
00:31:41,120 --> 00:31:45,000
Speaker 1: and design the perfect policy. We can't left perfect be

555
00:31:45,040 --> 00:31:47,600
Speaker 1: the enemy of any kind of action. Thank now, Larry

556
00:31:47,600 --> 00:31:50,000
Speaker 1: Summers are very special contributor in Wall Street Week is

557
00:31:50,040 --> 00:31:52,920
Speaker 1: of course the former Jury secretary as well as now

558
00:31:53,000 --> 00:31:55,800
Speaker 1: at Harvard and Julian Tag of the Financial Times with

559
00:31:55,840 --> 00:31:58,120
Speaker 1: her great color and how would you will as sim