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Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Always

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Speaker 1: with Michael McKee. Daily we bring you insight from the

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Speaker 1: best in economics, finance, investment, and international relations. Find Bloomberg

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Speaker 1: Surveillance on iTunes, SoundCloud, Bloomberg dot Com, and of course

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Speaker 1: on the Bloomberg Right now. To assist me with my

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Speaker 1: two oh one k I've been in the double leverage

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Speaker 1: all cash fund, missing this bullmarket entirely, Geno, Martin Adams

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Speaker 1: of Wells Fargo. You have written and Adam park was

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Speaker 1: on the other day another one of your members of

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Speaker 1: the clan with Morgan Stanley. You guys, I like what

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Speaker 1: you said. You've gotta be at the market. But over

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Speaker 1: the years, Gina, you've written measured responsible adult notes. Yeah,

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Speaker 1: you avoided the cheerleading. Now what do you do? I mean,

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Speaker 1: are we at froth level now? I don't think so.

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Speaker 1: And I say that because relative to other markets, stocks

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Speaker 1: actually still look reasonably priced. I mean the trouble is

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Speaker 1: if you have a turnaround in the bond market, in particular,

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Speaker 1: if you have a turnaround in the corporate credit market.

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Speaker 1: But we've waited for years, years and years, what do

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Speaker 1: you know they're they're neutral. Um, they've tried to be

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Speaker 1: cautious on and off because the fundamental outlook for credit

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Speaker 1: is definitely deteriorating or late in the ecomic cycle. The

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Speaker 1: capacity to pay is less and less so over time.

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Speaker 1: So they're neutral and relatively cautious. But they're not calling

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Speaker 1: for a massive acceleration in spreads and not calling for

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Speaker 1: a huge default rate uptick. This is just creepy in

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Speaker 1: in August, and the idea of comparing this to I've

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Speaker 1: got to actually go back and look at those years

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Speaker 1: of the nifty fifty, which I associate with Madmen, like

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Speaker 1: season four. I can't remember when it exactly was. But

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Speaker 1: we're not atty fifty valuations are we now? And this

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Speaker 1: is actually we're not at valuation. We're definitely not at

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Speaker 1: tech bubble valuations. Valuations now not even close. And if

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Speaker 1: you look at leadership in the equity market off of

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Speaker 1: the Brexit bottom, especially and even off of the February bottom,

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Speaker 1: it's been a very broad based market. This is a

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Speaker 1: market that certainly has been led by defensive sectors and

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Speaker 1: higher yielding sectors, but most stocks in the index are participating.

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Speaker 1: Even when you look at the second quarter earning season,

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Speaker 1: about seventy percent of industries recorded better than expected earnings growth.

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Speaker 1: Did they record they record better than expected cash full

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Speaker 1: because what I'm seeing is a responsible cap X, which

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Speaker 1: leads to stability and free cash. Well, they reported better

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Speaker 1: than expected revenue growth too. I can't coach to the

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Speaker 1: percent that reports that expected cash level exactly. More than

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Speaker 1: three quarters reported better than expected revenue growth, which tells

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Speaker 1: you it's not all manipulated. It's actually we're starting to

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Speaker 1: see some incremental sends of improvement. And so this is

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Speaker 1: the key question that Thanks so much, folks for the

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Speaker 1: response on television an hour ago, Kim showing holds with

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Speaker 1: us with Don Strays. I'm in gino Martin Adams. I

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Speaker 1: thought that conversation was great. But the money question for

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Speaker 1: our listeners worldwide is can corporate officers the stocks we own,

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Speaker 1: can they remove themselves from the chronic productivity malaise of America.

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Speaker 1: I've got a faith they can, am I right, you know,

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Speaker 1: I think that a lot of the SMP can. They're

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Speaker 1: the biggest, they're the strongest, they're the most multinational companies.

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Speaker 1: They're used to seeking out sources of growth. Globally. The

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Speaker 1: trouble is that globally we're in something of a malaise.

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Speaker 1: You know, this is just not just a US comin on.

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Speaker 1: This is slow global growth and a lack of confidence,

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Speaker 1: which I think is a really key point. There is

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Speaker 1: some fundamental lack of confidence in investment prospects that somehow

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Speaker 1: has to shift, and no one knows what that trigger

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Speaker 1: is going to be, but at some point we should

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Speaker 1: see a shift toward expectations for growth to improve. And

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Speaker 1: maybe this is quite frankly a demographic problem because if

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Speaker 1: you look at when the stock market peaked and win

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Speaker 1: productivity peaked and peaked right around the time when US

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Speaker 1: growth in the labor force peaked, and we've seen a

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Speaker 1: slowdown in that sense. If we can get this new

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Speaker 1: millennial generation entering the labor force, we can get some

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Speaker 1: greater prospects for growth, We get more optimism economy. You

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Speaker 1: can see the turnaround coming. The authority here with Gina

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Speaker 1: Martin Adams Wells Fargo. She is the advantage of John

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Speaker 1: Sylvia working down the hall. I mean, other than him

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Speaker 1: talking to you about Red Sox baseball forever, when you

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Speaker 1: talk to Dr Sylvia about American immigration and about his

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Speaker 1: great research on America moving around is at a better

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Speaker 1: dynamic now, which leads to a little bit better labor

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Speaker 1: force growth and even wage growth, which you and I

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Speaker 1: know goes right into revenue. There's more migration internally, so

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Speaker 1: there's a little bit more migration because the housing market

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Speaker 1: sort of clamp unleashed, right, a little bit more migration.

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Speaker 1: Immigration is a tougher topic. I mean, immigration really sort

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Speaker 1: of compressed through geopolitical concern and policy mechanism over the

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Speaker 1: last couple of decades has been tough. You ask any

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Speaker 1: company who tries to get those h one for employing

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Speaker 1: immigrant laborers of high quality, high education immigrant labors that

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Speaker 1: there's very beauty go around the next idea and we

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Speaker 1: go back to the classic I think it was ten

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Speaker 1: orgo years ago. This is like forty years ago now

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Speaker 1: of being intelligent in doing buy backs when stock is cheap.

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Speaker 1: Do you think buy backs will diminish as a use

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Speaker 1: of cash because of the new valuation or the new

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Speaker 1: almost froth in the market and buybacks? Actually, what if

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Speaker 1: you look at history, buybacks accelerate with the people in

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Speaker 1: the market peaks, and what we saw honestly that this

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Speaker 1: year buybacks are up ten per year on I mean

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Speaker 1: a year ago, two years ago, everybody like you were saying, yeah,

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Speaker 1: they'll diminish you a little bit, and that didn't happen.

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Speaker 1: I think that one of the biggest risks to the

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Speaker 1: equity market over the longer term is that access to

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Speaker 1: capital slows down or gets squeezed because the buyback phenomenon

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Speaker 1: has been so significant in this particular cycle. If companies

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Speaker 1: are clearly using they're tapping the corporate credit market to

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Speaker 1: fuel the buyback phenomenon, inequities. If the corporate credit market

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Speaker 1: locks up, and then we're in big trouble. I'm I'm

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Speaker 1: picking on Disney with earnings yesterday, and I love the

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Speaker 1: idea they're gonna pick up a hunka MLB. Streaming is

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Speaker 1: an experiment before they buy the whole thing Disney debt

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Speaker 1: with a cost of capital one. Come on, the CFO

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Speaker 1: has got to turn to Mr Iger and say, let's

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Speaker 1: go at the sixties ling temp go vote right. Yeah,

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Speaker 1: there's no reason not to tap the debt market right now.

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Speaker 1: And companies are doing it. They're doing it in the US,

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Speaker 1: they're doing it increasingly. Christine McCarthy going to say we're

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Speaker 1: gonna do a massive share buy back with that debt.

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Speaker 1: Why wouldn't they do that? Maybe massives are wrong word,

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Speaker 1: but well, there's not a lot of reason not to

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Speaker 1: do it. There really isn't. And I think that companies

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Speaker 1: and for the most part, have gone that directly dollar cost.

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Speaker 1: If you if you're in cash, which a lot of

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Speaker 1: people are, how do you dollar cost averaging? Or you

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Speaker 1: just line up the ducks and buy him in August?

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Speaker 1: You probably keep buying. I mean the buybacks tend to

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Speaker 1: peek come fall, so we'll see you have a little

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Speaker 1: summer lull that occurs in the August period, and then

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Speaker 1: they pick back up in the September October period in

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Speaker 1: advance of earnings. What does it mean that there's no volumes? There?

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Speaker 1: Is that just the summer law you're talking? It doesn't

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Speaker 1: it's not. Are you the only one working on Wall

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Speaker 1: Street this morning? It's possible. Now there are plenty of

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Speaker 1: us still still trying to get our heads around what's

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Speaker 1: going on in the market. So I think that we're

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Speaker 1: all pretty busy this summer. What do you do with Apple?

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Speaker 1: I mean they're I mean Apple, but the ten stocks

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Speaker 1: like Apple where they're just behind. I think so that

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Speaker 1: the fang phenomenon that occurred last year has become much

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Speaker 1: narrower trade right, I mean, there's there's only a few

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Speaker 1: that are sort of surviving their uptrend um. You've got

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Speaker 1: a lot going on in the tech sector. And what

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Speaker 1: we're seeing in tech right now is semiconductors and the

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Speaker 1: I T software and services groups doing a lot better

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Speaker 1: than some of the traditional hardware groups. Apple falls into

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Speaker 1: that hardware group. Ums to be Yeah, it is, it's hardware.

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Speaker 1: And so tech is doing pretty well because the I

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Speaker 1: T software and services like the Googles of the world,

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Speaker 1: facebooks of the world, are still doing pretty well, but

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Speaker 1: the hardware struggling. So you know, I think you still

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Speaker 1: want to maintain positions in tech, but you want to

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Speaker 1: allocate appropriately at the industry. We're going to continue Geno

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Speaker 1: Marny Adams as well as Fargo. Berry Ridholts will be

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Speaker 1: along as well, he demanded. He took the surveillance of

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Speaker 1: Korski from Connecticut this morning. I think I just heard

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Speaker 1: it come down on the top of the building. Barry

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Speaker 1: Ridholts in for Michael mckewey a fun Yesterday's Smart Discussion yesterday, Barry,

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Speaker 1: before you get to Gina Martin Adams Wells Fargo. Let

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Speaker 1: me ask you, Verry Ridlds. Do you link chronic lousy

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Speaker 1: productivity into equity markets or can stock owners ignore the

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Speaker 1: economic big picture of productivity. I've been saying for a

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Speaker 1: good couple of years now that the so called productivity

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Speaker 1: problem is more of a measurement of improvements in productivity

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Speaker 1: and not an actual productavity. We simply you're not capturing.

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Speaker 1: It's the old saw. Improvements and productivity are everywhere except

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Speaker 1: for the statistics. And to be fair, a lot of

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Speaker 1: people disagree with what you say, but many do. That's

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Speaker 1: part of the debate. Why don't you jump in with

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Speaker 1: Gina Martin Adams? Sure? Sure, so so I'm familiar with

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Speaker 1: your work. Uh I know your colleague h John Sylvia

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Speaker 1: for many years. Where are we in this cycle? It

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Speaker 1: seems that there's still a lot of disbelief. We've just

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Speaker 1: had a whole run of people calling for market crash,

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Speaker 1: sell everything. Although you know, it's easy to say that

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Speaker 1: when you're a billionaire and aren't saving for retirement. Where

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Speaker 1: are we in the cycle? You know, I'd say we're

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Speaker 1: mid to later stages, but nowhere near over um There

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Speaker 1: are some really very typical indicators that you use to

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Speaker 1: suggest the cycle is over. One is the inverted yield curve.

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Speaker 1: Everyone wants to say that's meaningless, but reality is rates

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Speaker 1: are where they are. Rates represent buying in learning conditions

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Speaker 1: until the short rate and bond rate invert. So how

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Speaker 1: do you higher than long long term bond rates? I'm

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Speaker 1: completely with you on that, But how do you reply

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Speaker 1: to the people, Well, how are you going to get

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Speaker 1: an inverted yield curve? When the Fed is manipulating the

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Speaker 1: short manipulating setting the short end of the yield curve,

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Speaker 1: they'll never invert. Well, when has My My reply is

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Speaker 1: when is the Fed nots at the short end of

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Speaker 1: the yield curve for starters? Well, but not not at zero?

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Speaker 1: Is right? And the Fed is committed to incrementally trying

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Speaker 1: to tighten policy. So we're above zero. Well, a lot

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Speaker 1: of the major you know, money centers in the world

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Speaker 1: are facing negative interest rates in the long end. So

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Speaker 1: the one way we could get there is our ten

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Speaker 1: year goes to zero. So in the land of the blind,

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Speaker 1: the one eyed man is king. Is that pretty much now?

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Speaker 1: So you've got you've got rates. The other indicator of

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Speaker 1: a cycle is going to be the l E I right.

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Speaker 1: Leading economic indicators very consistently invert go below zero percent

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Speaker 1: growth in advance of recession. You usually get a full

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Speaker 1: year lead on that too. So they've been fairly I mean,

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Speaker 1: they're not robust, but they've been pretty consistently above zero

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Speaker 1: for five years. It looks like flat. Um. You know,

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Speaker 1: the market itself is a pretty good indicator of recession.

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Speaker 1: The market has had moderate corrections, you know, some even

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Speaker 1: at ten percent, which took a lot of people by surprise.

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Speaker 1: Almost almost from if you go peak November to February,

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Speaker 1: markets recovering and it's breaking out positively. So there are

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Speaker 1: there are just no reasons to expect the economic cycles

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Speaker 1: is coming to an end. So would you agree with

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Speaker 1: the statement that new all time highs in stock markets

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Speaker 1: are bullish, because again another contingency of folks come out

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Speaker 1: and say, oh my goodness, new market highs, this is terrible,

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Speaker 1: seems a little counterdown. I totally disagree. I mean, I

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Speaker 1: think the technicals tell a lot. Price momentum is very

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Speaker 1: important as an indicator itself, and price momentum is improving,

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Speaker 1: what will break the price momentum? Yeah? Well, I mean,

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Speaker 1: any sort of shock could snap it. Any sort of

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Speaker 1: shock could snap it. One one thing that I'm worried

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Speaker 1: about that, you know, I think the consensus has gotten

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Speaker 1: very comfortable in the oil price outlook right now, suggesting

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Speaker 1: oil prices, you know, maybe we we kind of hover

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Speaker 1: here around forty dollars, but we're not going to push lower.

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Speaker 1: If oil prices push lower back to five, even pushed

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Speaker 1: below twenty five dollars, that's a huge shock to the

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Speaker 1: earning stream, to the economy, to the market. That would

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Speaker 1: certainly derail the upward path of progress any sort of

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Speaker 1: financial crisis. You know, I'm quite worried about the fact

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Speaker 1: that global central banks can no longer find sellers of

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Speaker 1: assets to buy. I mean, this is this is some

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Speaker 1: friction that we're going to have to contend with. I'm

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Speaker 1: a little worried about negative interest rates. Any sort of

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Speaker 1: global financial crisis is obviously going to have detrimental impacts

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Speaker 1: on the price as well. So the Bank of Japan

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Speaker 1: is now buying uh used cars, old law and furniture

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Speaker 1: books at library sales. I mean, so doesn't this really

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Speaker 1: reflect And again, this is something that's been a subtext

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Speaker 1: for a while there is a massive shortage of quality

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Speaker 1: sovereign paper around the world, and never have before has

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Speaker 1: there been a greater need for for countries, both the

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Speaker 1: US and Europe to spend a little money. That's very true. Actually,

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Speaker 1: they would obviously be very well absorbed. It's kind of shocking,

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Speaker 1: quite frankly, that the US Treasury bond is at one

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Speaker 1: and a half percent, considering we're the most stable developed economy. Well,

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Speaker 1: I won't go because we're goime here. But forty plus

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Speaker 1: years ago I said in a small room with John

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Speaker 1: Templeton in Toronto and in his Tennessee exit Barry Sir

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Speaker 1: John said, Tom, there'll be a shortage of bonds. Were there, Gina,

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Speaker 1: Do we have other governments starting to buy full faith

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Speaker 1: and credit US paper? It's a good question. Yes, uh

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Speaker 1: probably I think that for now what other government central

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Speaker 1: banks are doing is focusing on domestic markets. You're seeing,

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Speaker 1: but that could be the show, Yeah, you could, you

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Speaker 1: could see that potentially shift. Okay, this has been fabilous, Gina,

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Speaker 1: Martin Adams, thank you so much. My regards to John Sylvia,

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Speaker 1: see if he can pitch middle relief for the Red

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Speaker 1: Sox because they need it. Gina, Martin Avns with Wells Fargo,

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Speaker 1: Barry Reynolds and Tom Keith. Thrilled your with us. This

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Speaker 1: is Bloomberg. Disney always surprises, and they did yesterday and

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Speaker 1: it's something that touched is a lot of our listeners,

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Speaker 1: which is the digital miracle that has been streaming of sports.

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Speaker 1: Rich Greenfield has been in a student watcher of Disney.

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Speaker 1: He has been very cautious on the Disney plan forward

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Speaker 1: and he joins us. Thrilled that he joins us this morning,

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Speaker 1: A rich Um, First of all, do you change your

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Speaker 1: tone on Disney? You've been more than cautious. Do you adapt? No?

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Speaker 1: I mean, look, we've been aggressively telling investors this stock

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Speaker 1: needs to be sold and if they can short, they

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Speaker 1: should be shorting the stock. The stock is just meaningfully overvalued.

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Speaker 1: And I think you saw the telltale signs of the

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Speaker 1: problem last night, which is ESPN continues to believe the strivers.

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Speaker 1: That's the problem is losing subs. We all are biased.

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Speaker 1: I'm addicted to Apple TV because there are no commercials.

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Speaker 1: I'm watching MLB. I think I watched Giants last night.

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Speaker 1: Play somebody can't remember? Am I right that Disney wants

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Speaker 1: to buy a trial size of MLB Baseball. They're buying

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Speaker 1: part of the tech side of what MLB has built

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Speaker 1: to the streaming infrastructure that enables the MLB product that

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Speaker 1: you're using. That back end has started to be used

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Speaker 1: for companies like w w E, The Blaze, Sony's PlayStation View,

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Speaker 1: HBO Now, and so that technology is underlying other companies

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Speaker 1: video streaming businesses. And so Disney is buying us or

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Speaker 1: ESPN is buying a third of that asset long term

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Speaker 1: has a path to control. And I think what it

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Speaker 1: shows you, Tom, is that Disney is basically admitting that

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Speaker 1: it's got a real direct to consumer problem, uh, and

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Speaker 1: it's trying to basically divert investor attention away from the

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Speaker 1: core problem and say, hey, look at us, We've got

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Speaker 1: this new streaming deal. Long term, we have a path

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Speaker 1: to launching some form of streaming product. We won't tell

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Speaker 1: you about the economics, we won't tell you about how

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Speaker 1: we'd ever do it in terms of getting away from

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Speaker 1: the big cable bundle. But focus on this investment, don't

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Speaker 1: focus on the underlying problems at ESPN. And I think

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Speaker 1: that's really the tell of earnings last night. I think

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Speaker 1: that's why the stock is trading down pre market. Hey, Rich,

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Speaker 1: how much of this is specific to Disney and how

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Speaker 1: much of this is just a longstanding secular problem. I'm

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Speaker 1: a big DVR user. Other than the Super Bowl, I

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Speaker 1: can't remember the last time I saw a commercial. Well, look,

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Speaker 1: there is you know, there is a secular challenge that's

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Speaker 1: facing the entire media sector. Of all of these basic

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Speaker 1: cable networks have been over earning. People have been basically

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Speaker 1: paying for things they don't want. It reminds me of

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Speaker 1: the music industry, where you were buying a whole album

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Speaker 1: to get the thong you wanted. That unbundling problem is

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Speaker 1: exactly what we're seeing now in the multi channel world,

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Speaker 1: where you were paying for lots of channels that you

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Speaker 1: didn't want. I mean, we did a survey that said

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Speaker 1: that fifty of Americans would love to save eight dollars

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Speaker 1: by giving up ESPN and ESPN two a month. And

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Speaker 1: so this is not just an ESPN problem. Where it

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Speaker 1: becomes a very acute specific ESPN challenge though, is Unlike

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Speaker 1: most cable networks, they have high fixed costs, they have

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Speaker 1: locked in through will in the next decade their sports contracts,

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Speaker 1: and so that is very unique to Disney, very unique

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Speaker 1: to ESPN, and it's why of all of the stocks

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Speaker 1: in the group, um, when you layer invaluation as well

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Speaker 1: bring evaluation. That's why we've chosen Disney as the one

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Speaker 1: you should short. Richard Greenfield is the b T I

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Speaker 1: G and there's lots of neutrals in his universe. One

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Speaker 1: of the surprising neutrals is Facebook. Yesterday, rich Procter and

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Speaker 1: Gamble went neutral on Facebook, got a big splash in

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Speaker 1: the media. They've said the ads are less than effective.

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Speaker 1: Is that gonna Is that gonna be Lemmings over the

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Speaker 1: Proctor and Gamble Cliff Are they all going to follow? No,

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Speaker 1: I don't mean look, I think Proctor and Gambles basically

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Speaker 1: just saying at the end of the day, what Facebook's

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Speaker 1: really trying to do is get reach, uh that this

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Speaker 1: is less about targeting. That they really want to use

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Speaker 1: the mass reach of Facebook, use the mass reach of

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Speaker 1: things like YouTube and Snapchat, and it's less about targeting

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Speaker 1: individual consumers. So it's not like Tom Keen likes baseball.

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Speaker 1: Let's target people who are over the age of blank

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Speaker 1: that like baseball, that use an Apple TV device that

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Speaker 1: they're literally trying to say, look, how do we reach

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Speaker 1: a hundred million people? And you know, in some ways

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Speaker 1: there's a super Bowl in terms of viewership or usage

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Speaker 1: on Facebook every single day, and I think so the

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Speaker 1: pitch is really turning into less about targeting, although they

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Speaker 1: have amazing data, and more about how do we reach

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Speaker 1: people because those people, as you guys said before, they're

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Speaker 1: not watching ads on TV the way they used to agree,

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Speaker 1: Rich is a problem. I'm the oldest person on Facebook

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Speaker 1: Berry pick it up. No you're not. They're definitely not

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Speaker 1: the old So so a real question becomes how much

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Speaker 1: of this is about mobile and the advantages there, and

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Speaker 1: how much of this is about people like Tom sitting

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Speaker 1: at his desktop finding uh old classmates and seeing how

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Speaker 1: they're doing. Is Facebook now going to be the default

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Speaker 1: advertising medium for mobile? Well? I think basically it has

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Speaker 1: basically been a monopoly, and I think that's why you know,

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Speaker 1: we we've had to buy on Facebook for the last

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Speaker 1: several years, and the premise up until very recently was

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Speaker 1: it was the key winner as advertising dollars were shifting

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Speaker 1: from other forms online as well as from other platforms

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Speaker 1: like TV, that you know, this was just the better

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Speaker 1: mousetrap for mobile, and this was really the only way

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Speaker 1: to reach people on mobile. I think the challenge they're

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Speaker 1: facing now is they've got a new engagement threat from

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Speaker 1: something like Snapchat, where time spent is certainly under pressure

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Speaker 1: on a relative basis, And the question is will they

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Speaker 1: have this market all to themselves and what will that

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Speaker 1: due to growth as you move into next year. But

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Speaker 1: there is absolutely no doubt that their dominance in mobile

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Speaker 1: display advertising has made them, um, you know, a real

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Speaker 1: behemoth in the space and a force to be reckoned with.

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Speaker 1: And look, because that's why it's got a three hundred

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Speaker 1: and fifty billion dollar market cap. So Snapchat, aside that

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Speaker 1: they're the obvious competitor, who else is it possible competitor

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Speaker 1: to Facebook in the mobile space? They're Google would certainly argue.

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Speaker 1: I think Google and YouTube would certainly argue that. You know,

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Speaker 1: if you're trying to drive mobile ad dollars, um, those

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Speaker 1: would be the two core platforms today it's Google and

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Speaker 1: Facebook and everybody else is you know, picking up the

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Speaker 1: small leftovers at the table right now. I don't know

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Speaker 1: if YouTube is really given the the ending of the

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Speaker 1: unlimited bandwidth, I find myself watching far less video mobile

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Speaker 1: that's really a desktop thing. Um, who else? So we

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Speaker 1: have the two behemoths, who else might be an up

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Speaker 1: and comingroom. I think the only thing I would say

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Speaker 1: is most of the time that you're on your mobile phone,

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Speaker 1: you're generally more than half the time you're on a

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Speaker 1: WiFi network. And so, um, consumption of YouTube has continued

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Speaker 1: to explode positively. Now I agree with the YouTube consumption,

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Speaker 1: but um, you know we've covered on this show a lot.

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Speaker 1: Are people really watching videos? Rich Greenfield, give us an

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Speaker 1: update on ad blocking. Let me give you the experience, folks.

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Speaker 1: I'm blocked on certain platforms and I'm not blocked on

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Speaker 1: other platforms, and now I find the ads even more

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Speaker 1: wildly intrusive than before. Rich, You're one of the best

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Speaker 1: guys in the world on this. Is this for real? Look,

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Speaker 1: the the whole media world has a problem, right, whether

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Speaker 1: it's ad blocking or you know, one of you said

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Speaker 1: before that you have a DVR at home and you're

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Speaker 1: not usually burying commercial Mary said that ad blocking is

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Speaker 1: not a new thing. I mean ad blocking also existed. Hey,

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Speaker 1: you were watching the football game and you went to

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Speaker 1: the bath room. That was essentially blocking the ad or

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Speaker 1: you change the channel and when surfing to another channel.

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Speaker 1: So add walking in some form or add avoidance has

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Speaker 1: been around for a long time. I think the challenges

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Speaker 1: is we now live in a digital world where, whether

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Speaker 1: it's ad blockers, whether it's ad free content like Netflix,

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Speaker 1: you don't have to be tortured by advertising when you know,

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Speaker 1: and that's really so all of the media industry is

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Speaker 1: trying to adjust. I mean, look at the Olympics. Ratings

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Speaker 1: are a disaster. Nobody is enjoying this torture as ad load.

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Speaker 1: And while the ad load is similar to four years ago,

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Speaker 1: I think we've all become that much more a system

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Speaker 1: to not having ads and having more control over our experience.

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Speaker 1: And so I think just the consumer globally is adjusting

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Speaker 1: to this is the way you watch content and you

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Speaker 1: don't have to watch ads if you don't want to,

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Speaker 1: or you don't enough to watch as many ads. And

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Speaker 1: so the question really for all of the companies that

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Speaker 1: probably you look at on this show is how are

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Speaker 1: you going to reach consumers in a world where people

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Speaker 1: don't watch TV commercials the way they used to. And

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Speaker 1: that's a big fundamental question is what is the future

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Speaker 1: of advertising look like, well, what does it? You know?

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Speaker 1: It probably is shorter, meaning shorter form. It may mean

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Speaker 1: that the advertising actually has to become content itself, where

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Speaker 1: those advertisers are actually creating their own content that you

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Speaker 1: want to consume, you want to share. Do you have

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Speaker 1: any belief within your decades of perspective that the game

428
00:24:28,720 --> 00:24:32,880
Speaker 1: is fewer more expensive ads. I hear that from all

429
00:24:32,920 --> 00:24:38,000
Speaker 1: sorts of revenue producers. Well, that theory work, Um, I

430
00:24:38,040 --> 00:24:41,160
Speaker 1: think it will. The question is, right now, you're still

431
00:24:41,240 --> 00:24:45,040
Speaker 1: got what eighteen minutes an hour of tortuous commercials on television.

432
00:24:46,160 --> 00:24:48,199
Speaker 1: There has to be a better way. I mean, you

433
00:24:48,200 --> 00:24:51,000
Speaker 1: turn on the NBC, Um, you want to go watch

434
00:24:51,040 --> 00:24:54,040
Speaker 1: one of the live events on the NBC Sports Experience,

435
00:24:54,600 --> 00:24:57,239
Speaker 1: and you have you click on the live event and

436
00:24:57,280 --> 00:25:00,560
Speaker 1: it literally says the ft you of y a couple

437
00:25:00,600 --> 00:25:03,160
Speaker 1: of ads. It says the event has ended, like it's

438
00:25:03,200 --> 00:25:08,240
Speaker 1: just the whole unskippable tortuous advertising experience. Somehow it has

439
00:25:08,280 --> 00:25:11,560
Speaker 1: to get better and smarter, and that that probably means

440
00:25:11,600 --> 00:25:14,920
Speaker 1: targeted ads that actually you want to watch that if

441
00:25:14,920 --> 00:25:17,359
Speaker 1: you don't like, you can skip. Like it puts the viewer,

442
00:25:17,440 --> 00:25:20,280
Speaker 1: it empowers the viewer in a way that certainly does

443
00:25:20,320 --> 00:25:23,880
Speaker 1: not exist today. So that's very similar to the what

444
00:25:23,880 --> 00:25:29,160
Speaker 1: what we see not on television, but how some smarter

445
00:25:29,400 --> 00:25:32,840
Speaker 1: ads online show up in that you watch the first

446
00:25:32,880 --> 00:25:36,000
Speaker 1: five seconds you have to, and if they haven't grabbed

447
00:25:36,040 --> 00:25:39,200
Speaker 1: your attention, you have the option of skipping. I'm pretty

448
00:25:39,280 --> 00:25:44,680
Speaker 1: much a default skipper. Is that an effective uh way

449
00:25:44,720 --> 00:25:47,439
Speaker 1: of reaching people? Do people who have to watch the

450
00:25:47,480 --> 00:25:50,359
Speaker 1: first five seconds before they get back to the video

451
00:25:50,400 --> 00:25:55,040
Speaker 1: do they actually watch the duration of that add? I

452
00:25:55,080 --> 00:25:58,040
Speaker 1: think about sixteen or sevent to. I mean, the reality

453
00:25:58,200 --> 00:26:01,280
Speaker 1: is when you give people the ways again, assuming you're

454
00:26:01,320 --> 00:26:03,840
Speaker 1: showing them a good ad, every time you decide to

455
00:26:03,880 --> 00:26:05,720
Speaker 1: skip an ad, you learn that the consumer didn't like

456
00:26:05,920 --> 00:26:08,600
Speaker 1: that ad, And so the idea is they have to

457
00:26:08,600 --> 00:26:10,680
Speaker 1: get smarter. If they don't get smarter with the data

458
00:26:10,720 --> 00:26:12,520
Speaker 1: of what you skip and what you don't skip, shame

459
00:26:12,560 --> 00:26:15,840
Speaker 1: on them. But I think that idea of you don't

460
00:26:15,880 --> 00:26:18,960
Speaker 1: have to watch ads that aren't relevant to you. If

461
00:26:19,000 --> 00:26:21,600
Speaker 1: you love movie trailers or you love you know, pick

462
00:26:21,680 --> 00:26:24,160
Speaker 1: your topic. You don't have to watch the car driving

463
00:26:24,200 --> 00:26:27,400
Speaker 1: around the mountain commercials anymore. Rich very quickly here and

464
00:26:27,520 --> 00:26:29,439
Speaker 1: I minute we've got left with you Berry Redholts and

465
00:26:29,480 --> 00:26:32,800
Speaker 1: I have been advantaged by the use of Twitter. Is

466
00:26:32,800 --> 00:26:35,080
Speaker 1: it going to be around in five years? God? I

467
00:26:35,119 --> 00:26:37,480
Speaker 1: hope so. I mean, I'm a huge Twitter user and

468
00:26:37,520 --> 00:26:40,040
Speaker 1: as you, I think it's been great from a business

469
00:26:40,040 --> 00:26:42,640
Speaker 1: prospect to learn and interact with the world. I think

470
00:26:42,640 --> 00:26:44,879
Speaker 1: the challenges is Twitter is still not easy, and I

471
00:26:44,920 --> 00:26:48,600
Speaker 1: think they're big push into sports and live content is

472
00:26:48,680 --> 00:26:51,760
Speaker 1: because they really want to bait somebody in the traditional

473
00:26:51,800 --> 00:26:54,600
Speaker 1: media world, especially someone who's in the sports world, meaning

474
00:26:54,600 --> 00:26:58,840
Speaker 1: a Disney, a Fox, Time, Warner, CBS. They want to

475
00:26:58,880 --> 00:27:01,119
Speaker 1: be bought by a larger to a company. And whether

476
00:27:01,160 --> 00:27:03,480
Speaker 1: that happens I don't know, but I clearly think when

477
00:27:03,480 --> 00:27:07,119
Speaker 1: you look at this strategic and push or complete redirection

478
00:27:07,119 --> 00:27:11,160
Speaker 1: of the company into live content, sports content especially, they're

479
00:27:11,200 --> 00:27:14,720
Speaker 1: literally trying to provoke a buyer. Fabulous Fitch Greenfield, thank

480
00:27:14,720 --> 00:27:28,480
Speaker 1: you so much, greatly appreciate that this is a guy

481
00:27:28,640 --> 00:27:32,280
Speaker 1: I've really been wanting to speak to. Jared Bernstein is

482
00:27:32,640 --> 00:27:38,160
Speaker 1: the progressive liberal economist that conservatives lean forward and read

483
00:27:38,359 --> 00:27:42,000
Speaker 1: and listen to. He has assisted Vice President Biden in

484
00:27:42,200 --> 00:27:46,719
Speaker 1: his economics and he's providing assistance to Secretary Clinton. And

485
00:27:46,720 --> 00:27:49,760
Speaker 1: he is someone at all Republicans will pay attention to

486
00:27:50,400 --> 00:27:54,360
Speaker 1: is well, Jared, what is the key distinction between Clinton

487
00:27:54,440 --> 00:27:58,360
Speaker 1: economics and Trump economics. Well, I think it starts with

488
00:27:58,560 --> 00:28:02,679
Speaker 1: just your basic vision and of the governor's role in

489
00:28:02,720 --> 00:28:07,200
Speaker 1: the economy, and traditionally, of course, Republicans often at least

490
00:28:07,200 --> 00:28:10,840
Speaker 1: on pay per view that role as marginal. So if

491
00:28:10,880 --> 00:28:12,600
Speaker 1: you kind of dig beneath the service, a lot of

492
00:28:12,640 --> 00:28:17,000
Speaker 1: times it's about giving advantages to businesses, sometimes at the

493
00:28:17,040 --> 00:28:19,520
Speaker 1: expense of working people. So if you look at the

494
00:28:19,560 --> 00:28:22,680
Speaker 1: tax code, that's the best way to see it. Um UH.

495
00:28:22,800 --> 00:28:28,160
Speaker 1: Secretary Clinton UH raises revenues typically from the top one

496
00:28:28,200 --> 00:28:32,080
Speaker 1: percent of households and uses them for things like boosting

497
00:28:32,080 --> 00:28:37,720
Speaker 1: the manufacturing sector, investing in childcare, investing in preschool infrastructure,

498
00:28:38,360 --> 00:28:41,480
Speaker 1: UH manufacturing. Donald Trump, on the other hand, and his

499
00:28:41,600 --> 00:28:44,640
Speaker 1: tax plan follows very traditional, which is kind of surprising

500
00:28:44,640 --> 00:28:47,680
Speaker 1: for him because he's generally so anti establishment, a very

501
00:28:47,680 --> 00:28:52,240
Speaker 1: traditional orthodoxy, trickled down plan with large tax cuts on

502
00:28:52,280 --> 00:28:54,680
Speaker 1: those at the top of the income swe From where

503
00:28:54,720 --> 00:28:59,560
Speaker 1: you sit from a distance and remove from GOP economic analysis,

504
00:29:00,120 --> 00:29:05,719
Speaker 1: would President Reagan recognize Trump economics. He'd recognized it UM

505
00:29:05,960 --> 00:29:10,600
Speaker 1: quite closely. On the tax side. He certainly wouldn't recognize

506
00:29:11,440 --> 00:29:14,880
Speaker 1: some of the trade rhetoric, although Reagan was not beyond

507
00:29:14,960 --> 00:29:17,880
Speaker 1: the tariffs. In fact, both of us with long memories

508
00:29:17,920 --> 00:29:22,120
Speaker 1: remember a Reagan paraff on on micro processor's at one point,

509
00:29:22,160 --> 00:29:24,600
Speaker 1: which by the way, didn't work out very well. So

510
00:29:25,000 --> 00:29:28,160
Speaker 1: I think on the kind of trickle down supply sides

511
00:29:28,280 --> 00:29:32,800
Speaker 1: or the Artur Laughers style approach to cutting taxes for

512
00:29:32,880 --> 00:29:37,320
Speaker 1: the wealthy and hoping that it trickles down, he'd recognized that. Unfortunately,

513
00:29:37,360 --> 00:29:40,360
Speaker 1: in economic terms, that's really been a bus Hey, Jared

514
00:29:40,400 --> 00:29:44,640
Speaker 1: Barry Ridholtz, Here two questions I have for you on

515
00:29:44,800 --> 00:29:48,480
Speaker 1: a Clinton, well let's call it a third term or

516
00:29:48,600 --> 00:29:52,120
Speaker 1: Hillary Clinton first term. What are we thinking about in

517
00:29:52,280 --> 00:29:57,040
Speaker 1: terms of a repatriation of overseas corporate capital with perhaps

518
00:29:57,520 --> 00:30:00,560
Speaker 1: some modest tax attached to it. And what are the

519
00:30:00,640 --> 00:30:07,320
Speaker 1: odds of a corporate uh tax reform in the next administration?

520
00:30:08,440 --> 00:30:11,640
Speaker 1: Very important question, and I think those are related questions.

521
00:30:11,920 --> 00:30:15,840
Speaker 1: Hillary Putton really hasn't talked about corporate tax or form yet,

522
00:30:15,920 --> 00:30:18,200
Speaker 1: though I suspect you will at some point in the

523
00:30:18,240 --> 00:30:21,800
Speaker 1: relatively near future. And I wouldn't be surprised if what

524
00:30:21,840 --> 00:30:24,680
Speaker 1: we saw was something uh in the skirt of what

525
00:30:24,760 --> 00:30:28,160
Speaker 1: President Obama has proposed, which gets to your questions. If

526
00:30:28,200 --> 00:30:30,520
Speaker 1: you have what's called a tax holiday, which is a

527
00:30:30,600 --> 00:30:33,920
Speaker 1: sort of one time repatriation of earnings at a favorable

528
00:30:34,040 --> 00:30:37,200
Speaker 1: rate of foreign earnings, the earnings that multinationals are storing

529
00:30:37,240 --> 00:30:40,120
Speaker 1: abroad in the trillions right now, we understand. So if

530
00:30:40,160 --> 00:30:42,880
Speaker 1: you say to them, um, here's a one time gift

531
00:30:42,920 --> 00:30:45,200
Speaker 1: where you can repatriate your earnings at five or ten

532
00:30:45,240 --> 00:30:48,320
Speaker 1: percent or something, Uh, we'll do that, but uh, it

533
00:30:48,360 --> 00:30:51,480
Speaker 1: only incentivizes them to go ahead and prefer a lot

534
00:30:51,480 --> 00:30:54,080
Speaker 1: more earnings in the future. What the President has proposed

535
00:30:54,360 --> 00:30:57,880
Speaker 1: is deemed repatriation. That is, uh, you've got to repatriate

536
00:30:57,920 --> 00:31:00,560
Speaker 1: at at at a tax rate he's and something like

537
00:31:00,600 --> 00:31:06,360
Speaker 1: fourteen percent as a transition to a reformed corporate code.

538
00:31:06,400 --> 00:31:08,360
Speaker 1: When you get into the details of that, that's a

539
00:31:08,440 --> 00:31:13,600
Speaker 1: very important difference. Jared Um, I associate with Secretary Clinton

540
00:31:13,880 --> 00:31:15,960
Speaker 1: a phrase some years ago, I think before she was

541
00:31:16,040 --> 00:31:20,280
Speaker 1: secretary even senator, which is fair trade. Fare is an

542
00:31:20,280 --> 00:31:24,120
Speaker 1: emotional word for both sides of the political aisle. How

543
00:31:24,120 --> 00:31:29,320
Speaker 1: does Jared Bernstein describe fair trade? So? I described that

544
00:31:29,520 --> 00:31:34,840
Speaker 1: as trade agreements and trade negotiations that have workers at

545
00:31:34,880 --> 00:31:38,400
Speaker 1: their core instead of sole corporate interests. I don't describe

546
00:31:38,440 --> 00:31:41,920
Speaker 1: it as necessarily less globalization or less trade. I'm one

547
00:31:41,920 --> 00:31:45,200
Speaker 1: of these people who actually think that globalization is a

548
00:31:45,240 --> 00:31:48,800
Speaker 1: positive not just for us in our cheaper consumer goods,

549
00:31:48,800 --> 00:31:51,400
Speaker 1: but for other countries who have to have an opportunity

550
00:31:51,400 --> 00:31:55,120
Speaker 1: to grow their economies and emerge by selling to wealthier

551
00:31:55,160 --> 00:31:57,880
Speaker 1: countries like ours. However, the problem is that the rules

552
00:31:57,920 --> 00:31:59,880
Speaker 1: of the road have been written much too much in

553
00:31:59,920 --> 00:32:03,120
Speaker 1: the spirit of just kind of appeasing corporate interests, many

554
00:32:03,120 --> 00:32:07,240
Speaker 1: of which end up being protectionist by expending patents for

555
00:32:07,960 --> 00:32:11,920
Speaker 1: you know, biologic drug paths and things like that. So

556
00:32:11,920 --> 00:32:14,760
Speaker 1: so I think it needs to be reshaped. But I

557
00:32:14,800 --> 00:32:17,280
Speaker 1: don't believe you can put that toothpaste back in the two.

558
00:32:17,440 --> 00:32:20,440
Speaker 1: That's why I don't. I don't really like the Trump approach,

559
00:32:20,480 --> 00:32:22,880
Speaker 1: which sounds to me like it's a kind of nostalgia

560
00:32:22,960 --> 00:32:25,800
Speaker 1: for an area well, an era when we didn't engage

561
00:32:25,800 --> 00:32:29,680
Speaker 1: in as traders now. Jared one final question quickly here.

562
00:32:29,720 --> 00:32:32,719
Speaker 1: I spoke with Professor Stiglets a few days ago, clearly

563
00:32:32,720 --> 00:32:37,520
Speaker 1: in support of Clinton um Clinton economics. A lot of

564
00:32:37,520 --> 00:32:42,360
Speaker 1: the middle is scared of liberals. They're scared of Joe Stiglets.

565
00:32:42,400 --> 00:32:44,719
Speaker 1: I'm not sure they're scared of Jared Bernstein. We know

566
00:32:44,800 --> 00:32:48,520
Speaker 1: they're scared of Barry Riddolds. But but a lot of

567
00:32:48,680 --> 00:32:54,120
Speaker 1: people worry about those liberals. How do you respond to that.

568
00:32:54,200 --> 00:32:58,640
Speaker 1: Where can the tone come from Secretary Clinton to assure

569
00:32:58,800 --> 00:33:02,240
Speaker 1: the people in the middle. I think probably if you

570
00:33:02,240 --> 00:33:05,440
Speaker 1: you know, it's funny the historical record, and I don't

571
00:33:05,800 --> 00:33:08,920
Speaker 1: quite understand why this is the case myself, and I

572
00:33:08,920 --> 00:33:11,480
Speaker 1: think probably it has something to do with luck. But

573
00:33:11,560 --> 00:33:18,000
Speaker 1: the historical record suggests that Democrats have historically. Democratic presidents

574
00:33:18,000 --> 00:33:21,480
Speaker 1: have historically posted better numbers, whether it's productivity, g d P,

575
00:33:22,280 --> 00:33:26,240
Speaker 1: even media and family income jobs, even the stock market

576
00:33:26,240 --> 00:33:29,760
Speaker 1: by the way, And I think that may have something

577
00:33:29,800 --> 00:33:34,560
Speaker 1: to do with recognizing a proper balance between governments and

578
00:33:34,680 --> 00:33:37,640
Speaker 1: its role in the economy and trying to allow the

579
00:33:37,800 --> 00:33:40,360
Speaker 1: private sector to do its thing at the same time.

580
00:33:40,400 --> 00:33:42,400
Speaker 1: So I think he's getting that balance is right, and

581
00:33:42,440 --> 00:33:45,840
Speaker 1: I think the Republican Party has really just gone so

582
00:33:45,960 --> 00:33:49,720
Speaker 1: far to the right in terms of just essentially cutting tactics,

583
00:33:49,800 --> 00:33:53,080
Speaker 1: gutting government and not recognizing that an eighteen trillion dollars

584
00:33:53,480 --> 00:33:56,760
Speaker 1: eighteen trillion dollar economy. The government has to play role

585
00:33:56,800 --> 00:34:04,840
Speaker 1: now balancing critical, ignoring. Okay, Jared Bernstein, thank you so

586
00:34:04,960 --> 00:34:23,719
Speaker 1: much this morning. This is a great honor. Richard Hassa

587
00:34:23,760 --> 00:34:25,520
Speaker 1: turned to me a few days ago the Council on

588
00:34:25,520 --> 00:34:28,960
Speaker 1: Foreign Relations and said, really, you must speak to Sheila Smith.

589
00:34:29,480 --> 00:34:33,040
Speaker 1: She graced Jonathan Sobel's wonderful article in the New York

590
00:34:33,080 --> 00:34:36,560
Speaker 1: Times a few days ago on the Emperor of Japan,

591
00:34:36,640 --> 00:34:38,760
Speaker 1: and we are honored to bring you this morning, Sheila

592
00:34:38,840 --> 00:34:42,480
Speaker 1: Smith of the Council on Foreign Relations out of Colombia

593
00:34:43,080 --> 00:34:48,160
Speaker 1: on the Emperor and Japan. Dr Smith, good morning, uh um,

594
00:34:48,400 --> 00:34:52,680
Speaker 1: you go back to Elizabeth Gray Vining. I believe nineteen

595
00:34:53,160 --> 00:34:57,600
Speaker 1: two an extraordinary book in a window of Japan and

596
00:34:57,640 --> 00:35:01,400
Speaker 1: transition after World War Two. The young boy in that

597
00:35:01,480 --> 00:35:05,800
Speaker 1: book now two where is Japan? Now? Will will things

598
00:35:05,880 --> 00:35:09,799
Speaker 1: forever change? Or is that overplayed by the West. Well,

599
00:35:09,840 --> 00:35:13,080
Speaker 1: you know, the current Emperor of Japan is referred to

600
00:35:13,640 --> 00:35:17,000
Speaker 1: as the Heysa Emperor. And as you know, every Japanese

601
00:35:17,040 --> 00:35:20,120
Speaker 1: emperor has his own era, and this emperor is deeply

602
00:35:20,160 --> 00:35:24,360
Speaker 1: tied to this particular moment in Japanese history. Heise and

603
00:35:24,480 --> 00:35:28,520
Speaker 1: Japanese means to realize peace. H. He is the second

604
00:35:28,880 --> 00:35:31,880
Speaker 1: post war emperor, the first, of course being his father,

605
00:35:32,000 --> 00:35:36,440
Speaker 1: who navigated those very difficult moments through defeat and occupation.

606
00:35:36,880 --> 00:35:39,480
Speaker 1: So today's Emperor is a as a young man right

607
00:35:39,560 --> 00:35:42,239
Speaker 1: came into that post war period, as you said, um,

608
00:35:42,280 --> 00:35:46,160
Speaker 1: and has really grown up in many ways with the

609
00:35:46,160 --> 00:35:49,600
Speaker 1: post war Japanese society that he now begins to speak

610
00:35:49,640 --> 00:35:54,719
Speaker 1: to about his retirements. Where will this institution be And

611
00:35:54,760 --> 00:35:58,239
Speaker 1: that's disrespectful to the Japanese people, but where do you

612
00:35:58,320 --> 00:36:02,640
Speaker 1: perceive this institutional be five and ten years from now

613
00:36:02,680 --> 00:36:05,880
Speaker 1: with the Crown Prince? No, I think that's a great question.

614
00:36:05,920 --> 00:36:07,799
Speaker 1: I think one of the things that struck me when

615
00:36:07,800 --> 00:36:10,680
Speaker 1: I listened to the emverse speak on the video on

616
00:36:10,800 --> 00:36:15,280
Speaker 1: Monday was that he was talking about his own personal life,

617
00:36:15,400 --> 00:36:18,880
Speaker 1: his aging, and identified himself with a society as well.

618
00:36:19,080 --> 00:36:22,000
Speaker 1: By what he was also talking about and alluding to

619
00:36:22,160 --> 00:36:26,840
Speaker 1: was his family and then this imperial family, his children, Um,

620
00:36:27,040 --> 00:36:29,799
Speaker 1: the Crown Prince will succeed him. Of course, they grew

621
00:36:29,880 --> 00:36:34,000
Speaker 1: up very very differently. They're very cosmopolitan, they were educated abroad. Uh,

622
00:36:34,040 --> 00:36:37,520
Speaker 1: they have children of their own. Um, So he's really

623
00:36:37,560 --> 00:36:40,960
Speaker 1: making an appeal not only for himself but for this

624
00:36:41,040 --> 00:36:43,480
Speaker 1: new family of his that has to face a fairly

625
00:36:43,560 --> 00:36:49,360
Speaker 1: restricted and quite um politically contentious role in Japanese society.

626
00:36:49,400 --> 00:36:51,600
Speaker 1: He's just joining a Sheila Smith, the counts on Foreign

627
00:36:51,600 --> 00:36:56,520
Speaker 1: Relations on UM the wrong berry. Berry holds the wrong word. Abdication.

628
00:36:56,640 --> 00:37:00,720
Speaker 1: I've been told by Robert Feldman of Morgan's Only Others

629
00:37:00,800 --> 00:37:05,160
Speaker 1: is decidedly the wrong word to use in this case. Yeah,

630
00:37:05,360 --> 00:37:08,480
Speaker 1: you know, it conjures up, application, conjures up you know, UM,

631
00:37:09,760 --> 00:37:13,680
Speaker 1: the British example, right, yeah, and all of that, it

632
00:37:13,719 --> 00:37:19,799
Speaker 1: conjures up. Helen moriners it, James Judi Dence, I can't remember. So. Yeah.

633
00:37:19,800 --> 00:37:24,279
Speaker 1: My question, as a ugly American is we don't really

634
00:37:24,400 --> 00:37:28,080
Speaker 1: understand this concept of an emperor and what it means

635
00:37:28,160 --> 00:37:31,960
Speaker 1: for what appears to be a democratic country. Could you

636
00:37:32,000 --> 00:37:34,960
Speaker 1: explain for the rest of our listeners, who may not

637
00:37:35,120 --> 00:37:40,080
Speaker 1: be UM Japanophiles, may not understand the significance of the

638
00:37:40,120 --> 00:37:44,560
Speaker 1: emperor to the Japanese people. Sure, I think structurally the

639
00:37:44,600 --> 00:37:48,000
Speaker 1: easiest UM model to think about would be the British

640
00:37:48,080 --> 00:37:50,960
Speaker 1: and the British monarchy, right, Um, the emperor, They're not

641
00:37:51,000 --> 00:37:53,719
Speaker 1: completely the same, but it is very similar, and that

642
00:37:53,760 --> 00:37:57,600
Speaker 1: the Japanese have a parliamentary democracy. They elect their prime

643
00:37:57,640 --> 00:38:00,719
Speaker 1: minister um. The majority party in part eleament then gets

644
00:38:00,760 --> 00:38:03,120
Speaker 1: to choose the leader that they want to put forward

645
00:38:03,160 --> 00:38:05,560
Speaker 1: for the country's prime minister. That is exactly the way

646
00:38:05,640 --> 00:38:09,279
Speaker 1: Japan is now run. That new system of government was

647
00:38:09,400 --> 00:38:13,840
Speaker 1: established in the nineteen seven Constitution. But that constitution also

648
00:38:13,920 --> 00:38:17,200
Speaker 1: sets out this role of symbol of the state UM

649
00:38:17,520 --> 00:38:20,800
Speaker 1: for the Japanese Emperor Uh, he's a symbol of the state,

650
00:38:20,880 --> 00:38:24,040
Speaker 1: but also um of the unity of the people. And

651
00:38:24,080 --> 00:38:26,279
Speaker 1: I think that's an important piece of the puzzle for

652
00:38:26,360 --> 00:38:29,800
Speaker 1: Japanese as they look to the specific to the emperor

653
00:38:29,800 --> 00:38:32,600
Speaker 1: we're now discussing, he is somebody who has come to

654
00:38:32,640 --> 00:38:36,280
Speaker 1: the four in many ways. UM. In two thousand eleven,

655
00:38:36,560 --> 00:38:40,120
Speaker 1: when Japan suffered those terrible disasters, he was the one

656
00:38:40,160 --> 00:38:42,479
Speaker 1: that got on the airwaves two or three days later

657
00:38:42,960 --> 00:38:45,719
Speaker 1: to say to the Japanese people, we have suffered the

658
00:38:45,719 --> 00:38:48,719
Speaker 1: worst disaster since World War Two, but we must come

659
00:38:48,760 --> 00:38:52,920
Speaker 1: together as a nation to respond. So he It was

660
00:38:52,960 --> 00:38:55,040
Speaker 1: then that I sensed a lot among many of my

661
00:38:55,120 --> 00:38:58,440
Speaker 1: Japanese friends and colleagues, whatever they thought about the politics

662
00:38:58,480 --> 00:39:01,960
Speaker 1: of the Imperial institution. He was really the person that

663
00:39:02,080 --> 00:39:06,560
Speaker 1: represented them and could pull them together as Japanese. Well,

664
00:39:06,680 --> 00:39:10,400
Speaker 1: to go to Ruth Benedict, which is a stunning book.

665
00:39:10,800 --> 00:39:14,879
Speaker 1: It's It's It's timeless folks on the immediacy, as John

666
00:39:14,920 --> 00:39:21,319
Speaker 1: Dower has written about about Tokyo in MacArthur's what is

667
00:39:21,360 --> 00:39:25,600
Speaker 1: the proper station of the people to their Emperor? To

668
00:39:25,640 --> 00:39:30,560
Speaker 1: Bury's good question about describe it Ruth Benedict's phrase, taking

669
00:39:30,640 --> 00:39:36,839
Speaker 1: one's proper station is the emotion of the moment, isn't it? Well,

670
00:39:36,880 --> 00:39:39,319
Speaker 1: it is, But I think remember that Ruth Benedict was

671
00:39:39,560 --> 00:39:42,600
Speaker 1: writing at a very different time. I would say today

672
00:39:42,680 --> 00:39:46,080
Speaker 1: you probably have much more diversity in terms of how

673
00:39:46,200 --> 00:39:50,040
Speaker 1: Japanese view the emperor and the Imperial Institution. I think

674
00:39:50,120 --> 00:39:54,040
Speaker 1: younger Japanese um may have not quite as as as

675
00:39:54,280 --> 00:39:58,080
Speaker 1: as weighty a sense of the Emperor as their leader,

676
00:39:58,600 --> 00:40:00,839
Speaker 1: or they may not identify with them in the way

677
00:40:00,880 --> 00:40:03,799
Speaker 1: that their grandparents generation did so. So remember there's been

678
00:40:03,840 --> 00:40:07,160
Speaker 1: a tremendous amount of social change in Japan. That being said,

679
00:40:07,920 --> 00:40:11,480
Speaker 1: um the Imperial institution itself continues to have a fairly

680
00:40:11,600 --> 00:40:15,080
Speaker 1: central place in the way that the Japanese think about

681
00:40:15,600 --> 00:40:19,239
Speaker 1: the people. Who occupy that house right. Um. They're not

682
00:40:19,320 --> 00:40:22,360
Speaker 1: quite like the British monarchy, where there's lots of tabloid journalism,

683
00:40:22,400 --> 00:40:25,480
Speaker 1: although there is some, right um, but it's much more

684
00:40:25,520 --> 00:40:28,200
Speaker 1: restricted and much more constrained. There is lots of if

685
00:40:28,239 --> 00:40:31,600
Speaker 1: you ride the subways and read the tabloids, you'll see

686
00:40:31,640 --> 00:40:35,399
Speaker 1: lots of reported beliefs of the household agency and things

687
00:40:35,400 --> 00:40:37,279
Speaker 1: like that, but they're not so much out in the

688
00:40:37,320 --> 00:40:42,160
Speaker 1: public as the British or European monarch monarchy. One final

689
00:40:42,280 --> 00:40:44,359
Speaker 1: question before we go, we've got some news you've got

690
00:40:44,360 --> 00:40:48,640
Speaker 1: to cover her. Unfortunately, does the Emperor do walk about

691
00:40:49,200 --> 00:40:51,799
Speaker 1: or will you I'm thinking the Queen of England or

692
00:40:51,840 --> 00:40:54,080
Speaker 1: will the Crown Prince do that? Do you just assume

693
00:40:54,120 --> 00:40:59,319
Speaker 1: a more accessible um leader of the Japanese people. I

694
00:40:59,320 --> 00:41:02,880
Speaker 1: think he has been extraordinary accessible compared to his father.

695
00:41:03,239 --> 00:41:05,960
Speaker 1: I suspect that the Crown Prince, when he occupies that role,

696
00:41:06,120 --> 00:41:08,759
Speaker 1: will be even more accessible than his father. I think

697
00:41:08,760 --> 00:41:10,520
Speaker 1: it's just going to be, you know, there there is

698
00:41:10,520 --> 00:41:13,480
Speaker 1: a certain question of safety, of course always, but the

699
00:41:14,160 --> 00:41:18,200
Speaker 1: Emperor and Empress, the current Emperor and Empress were in Tohoku,

700
00:41:18,480 --> 00:41:22,880
Speaker 1: right dealing with the people in shelters, they have been discussing.

701
00:41:22,880 --> 00:41:25,000
Speaker 1: They meet with children, they go out and about a

702
00:41:25,040 --> 00:41:29,040
Speaker 1: lot um, but again escort appropriately. I think the younger

703
00:41:29,080 --> 00:41:32,719
Speaker 1: generation will want to break out of that. Again. Implicit

704
00:41:32,760 --> 00:41:35,680
Speaker 1: in his statement and Monday was that his family needs

705
00:41:35,719 --> 00:41:39,120
Speaker 1: to grow and his family to develop. So I suspect

706
00:41:39,280 --> 00:41:43,000
Speaker 1: generation the generation to come will also start to push

707
00:41:43,160 --> 00:41:46,520
Speaker 1: a little bit at the limits and the restrictions imposed

708
00:41:46,560 --> 00:41:48,920
Speaker 1: on their role as well as on their lives. Sheila,

709
00:41:49,000 --> 00:41:50,800
Speaker 1: thank you so much. Sheila Smith with the Council on

710
00:41:50,880 --> 00:41:53,520
Speaker 1: Foreign Relations. I can't say enough about her work that

711
00:41:53,560 --> 00:41:59,520
Speaker 1: you can see at CFR dot org on Japan. Thanks

712
00:41:59,520 --> 00:42:03,680
Speaker 1: for listening to the Bloomberg Surveillance podcast. Subscribe and listen

713
00:42:03,960 --> 00:42:09,360
Speaker 1: to interviews on iTunes, SoundCloud, or whichever podcast platform you prefer.

714
00:42:09,960 --> 00:42:14,520
Speaker 1: I'm on Twitter at Tom Keane, Michael McKee is at Economy.

715
00:42:14,560 --> 00:42:18,279
Speaker 1: Before the podcast, you can always catch us worldwide. I'm

716
00:42:18,320 --> 00:42:19,240
Speaker 1: Bloomberg Radio