1 00:00:00,320 --> 00:00:05,040 Speaker 1: Live from Our Nation's how do we reopen this economy? 2 00:00:05,160 --> 00:00:08,280 Speaker 1: The latest on how this pandemic is impacting farmers. What 3 00:00:08,400 --> 00:00:11,400 Speaker 1: does this do from the United States relationship with China? 4 00:00:11,560 --> 00:00:16,480 Speaker 1: Bloomberg Sound On, the Insiders, the influencers, the insides. We're 5 00:00:16,520 --> 00:00:19,720 Speaker 1: responding to this crisis and manufacturers are stepping up like 6 00:00:19,840 --> 00:00:23,400 Speaker 1: never before. We're looking at seventy Kennedys for different duct teams. 7 00:00:23,440 --> 00:00:26,080 Speaker 1: How do we make sure a pandemic of this scale 8 00:00:26,160 --> 00:00:30,240 Speaker 1: never happens again? This is Bloomberg Sound On with Kevin 9 00:00:30,320 --> 00:00:34,440 Speaker 1: Surrelate on Bloomberg one and one oh five point seven 10 00:00:34,560 --> 00:00:38,840 Speaker 1: f m h D two. How's the economy going to recover? 11 00:00:39,000 --> 00:00:43,519 Speaker 1: Plus President Trump now trailing in key swing states? What 12 00:00:43,760 --> 00:00:46,519 Speaker 1: can the administration do to turn it around? And what 13 00:00:46,560 --> 00:00:50,040 Speaker 1: are Democrats going to do to keep him from getting momentum? 14 00:00:50,159 --> 00:00:56,920 Speaker 1: And Jason Kelly Bloomberg's very own Jason Kelly my previous boss. Yeah, 15 00:00:56,920 --> 00:00:59,080 Speaker 1: it used to be my boss. Now he's interviewing Lebron 16 00:00:59,280 --> 00:01:04,560 Speaker 1: James Lebron We're gonna hear from that interview exclusively for 17 00:01:04,680 --> 00:01:07,600 Speaker 1: j Bloomberg's Jason Kelly, he interviewed Lebron James. We're gonna 18 00:01:07,600 --> 00:01:10,319 Speaker 1: play it, gotta play it, gotta play Lebron. Lots to 19 00:01:10,360 --> 00:01:13,319 Speaker 1: get through, including Lebron James. You don't want to miss it, folks. 20 00:01:13,360 --> 00:01:17,400 Speaker 1: It's like a Business Week special with Lebron James, only 21 00:01:17,480 --> 00:01:20,400 Speaker 1: right here. Keep it locked. Listen. It's my godson's fourth birthday, 22 00:01:20,440 --> 00:01:24,319 Speaker 1: pet Nicks. Happy birthday, buddy. And as one of our 23 00:01:24,319 --> 00:01:26,560 Speaker 1: producers on the show just said to me before we 24 00:01:26,600 --> 00:01:31,160 Speaker 1: got ready, Matt Shirley, Shirley, he goes, keV, you're gonna 25 00:01:31,200 --> 00:01:35,120 Speaker 1: be able to tell your godson that you passed to 26 00:01:35,360 --> 00:01:40,240 Speaker 1: Lebron James. So, without further ado, ladies and gentlemen, Bloomberg 27 00:01:40,319 --> 00:01:46,160 Speaker 1: Business Weeks Jason Kelly's exclusive interview with Lebron Lebron. It 28 00:01:46,240 --> 00:01:51,800 Speaker 1: seems to be a moment where we're all viewing activism 29 00:01:52,120 --> 00:01:55,640 Speaker 1: in a much broader sense. And I wonder, as a 30 00:01:55,720 --> 00:02:00,080 Speaker 1: longtime activist is someone who calls back in the of 31 00:02:00,160 --> 00:02:02,400 Speaker 1: you that you and I had, the three of us 32 00:02:02,400 --> 00:02:05,840 Speaker 1: had in February, talked about Muhammad Ali, you know, an 33 00:02:05,880 --> 00:02:08,960 Speaker 1: amazing activist in his own right now, activism is something 34 00:02:09,000 --> 00:02:12,840 Speaker 1: that we see everywhere. Is this a moment, a special moment, 35 00:02:12,840 --> 00:02:16,120 Speaker 1: in an important moment for activism in your mind. UM. 36 00:02:16,160 --> 00:02:19,000 Speaker 1: I think it's a special moment in the sense that UM, 37 00:02:19,080 --> 00:02:23,760 Speaker 1: you can be heard active activism and activists have always 38 00:02:23,800 --> 00:02:27,400 Speaker 1: been around, UM, but people had a closed ear, in 39 00:02:27,400 --> 00:02:31,000 Speaker 1: a closed mind, UM, and didn't want to recognize and 40 00:02:31,040 --> 00:02:34,480 Speaker 1: didn't want to hear and didn't want to be UM 41 00:02:34,639 --> 00:02:38,040 Speaker 1: knowledgeable about what they were speaking, where they were coming from, 42 00:02:38,080 --> 00:02:41,760 Speaker 1: the passion that they were speaking with. UM. Now it's 43 00:02:42,320 --> 00:02:47,480 Speaker 1: it's being heard. People can be heard. Black Americans, African Americans, 44 00:02:47,520 --> 00:02:50,040 Speaker 1: you know, can be heard, both men and women can 45 00:02:50,120 --> 00:02:53,160 Speaker 1: be heard UM. Or what they're passionate about and the 46 00:02:53,240 --> 00:02:56,600 Speaker 1: calling for help and the calling for we're being We're 47 00:02:56,639 --> 00:02:59,600 Speaker 1: just tired. So you know, I don't want to say activism. 48 00:02:59,600 --> 00:03:02,480 Speaker 1: It is something in this UM. You know now everyone's 49 00:03:02,520 --> 00:03:05,000 Speaker 1: doing it. Now It's always been around, but you know, 50 00:03:05,120 --> 00:03:07,200 Speaker 1: in the in the case of George Floyd, in the 51 00:03:07,240 --> 00:03:12,440 Speaker 1: case of so many other innocent lives being taken away. UM, 52 00:03:12,480 --> 00:03:15,320 Speaker 1: they've put up a stand and and now you know, 53 00:03:15,400 --> 00:03:18,640 Speaker 1: we're being heard and everyone is being heard. UM. Not 54 00:03:18,760 --> 00:03:21,840 Speaker 1: only UM, you know from from what Muhammad Ali was 55 00:03:21,880 --> 00:03:23,720 Speaker 1: saying and so many that came before him and so 56 00:03:23,760 --> 00:03:27,040 Speaker 1: many after him, but even the local people, the people 57 00:03:27,040 --> 00:03:29,840 Speaker 1: in the community, because those are the real ones, the 58 00:03:29,880 --> 00:03:32,480 Speaker 1: people that's in the communities, that's living and walking those 59 00:03:32,480 --> 00:03:36,280 Speaker 1: streets and being racialistically profiled and being judged every day 60 00:03:36,280 --> 00:03:38,360 Speaker 1: that they walk in their cities. They're the ones that 61 00:03:38,480 --> 00:03:40,200 Speaker 1: need to be heard, and they're being heard right now, 62 00:03:40,240 --> 00:03:42,800 Speaker 1: and it's it's great to see. And so what does 63 00:03:42,840 --> 00:03:45,080 Speaker 1: it feel like in in Akron? I mean, you talked 64 00:03:45,080 --> 00:03:48,040 Speaker 1: about Los Angeles a little bit, but you know, you 65 00:03:48,120 --> 00:03:51,800 Speaker 1: and Maverick have said often that so much of what 66 00:03:51,880 --> 00:03:55,360 Speaker 1: animates you started in Akrone. You guys met when you 67 00:03:55,400 --> 00:04:01,720 Speaker 1: were children, and I wonder how this feels there, Lebron No, absolutely, um, 68 00:04:01,760 --> 00:04:05,920 Speaker 1: we always we always recognize where home is a home base. 69 00:04:06,040 --> 00:04:08,640 Speaker 1: It starts there, you know, having my igh primary school 70 00:04:08,720 --> 00:04:11,920 Speaker 1: here and understanding the um you know, the level of 71 00:04:11,960 --> 00:04:15,320 Speaker 1: importance with my kids, and you know, when the pandemic, 72 00:04:15,360 --> 00:04:18,280 Speaker 1: when when COVID started, it was, it was it was 73 00:04:18,360 --> 00:04:21,200 Speaker 1: kind of heartbreaking because I knew that my kids would 74 00:04:21,200 --> 00:04:23,200 Speaker 1: have to leave the school. We had to shut down 75 00:04:23,200 --> 00:04:25,200 Speaker 1: our school for a period of time, and I understand 76 00:04:25,200 --> 00:04:28,080 Speaker 1: how important structure is and hands on is with my 77 00:04:28,200 --> 00:04:31,520 Speaker 1: kids and my school. So you know, that was very troubling. 78 00:04:31,520 --> 00:04:33,880 Speaker 1: Times for me and troubling times for our facult team 79 00:04:33,920 --> 00:04:35,680 Speaker 1: members and everyone that had to do with the I 80 00:04:35,839 --> 00:04:38,320 Speaker 1: p S. Because you know, we're so used to having 81 00:04:38,360 --> 00:04:41,560 Speaker 1: our kids and we and we know how important having 82 00:04:41,640 --> 00:04:44,960 Speaker 1: them in the classroom and having them underneath our our 83 00:04:45,000 --> 00:04:49,120 Speaker 1: wing and our our guidance. UM. So we're always paying 84 00:04:49,120 --> 00:04:52,120 Speaker 1: attention to our hometown and listening to the people, listening 85 00:04:52,160 --> 00:04:55,120 Speaker 1: to what's going on there. Um So that is constant 86 00:04:55,160 --> 00:04:57,880 Speaker 1: every single day, no matter um. You know, me and 87 00:04:57,920 --> 00:05:01,120 Speaker 1: Maverick living in Los Angeles, Uh, we have hands on 88 00:05:01,320 --> 00:05:03,480 Speaker 1: and in our ears to what's going on in our 89 00:05:03,520 --> 00:05:08,280 Speaker 1: hometown of Akron. Ohola's with Maverick. One of the things 90 00:05:08,320 --> 00:05:10,719 Speaker 1: that you did during the pandemic that was forced by 91 00:05:10,760 --> 00:05:14,960 Speaker 1: the pandemic was graduated together. Tell me why that was 92 00:05:15,000 --> 00:05:18,440 Speaker 1: so important and what was different about it and what 93 00:05:18,680 --> 00:05:21,919 Speaker 1: it represented for spring Hill and what it says about 94 00:05:21,920 --> 00:05:28,359 Speaker 1: the opportunity. Yeah, obviously, the pandemic unfortunately forced all of 95 00:05:28,760 --> 00:05:33,160 Speaker 1: students back home and and and as Lebron said, unfortunately 96 00:05:33,160 --> 00:05:35,480 Speaker 1: the kids the students that I a school like, I 97 00:05:35,640 --> 00:05:39,200 Speaker 1: promise the school is for a lot of those kids 98 00:05:39,200 --> 00:05:41,400 Speaker 1: the safest places where they get the most structured because 99 00:05:41,440 --> 00:05:45,760 Speaker 1: home is tough, and and and especially for seniors, right 100 00:05:45,880 --> 00:05:49,120 Speaker 1: high school seniors who didn't you know, get the chance 101 00:05:49,200 --> 00:05:51,880 Speaker 1: to graduate and walk across the stage and get the diploma, 102 00:05:51,920 --> 00:05:54,360 Speaker 1: which is a big moment for all of us and 103 00:05:54,360 --> 00:05:56,200 Speaker 1: and and even a person like me, it's the only 104 00:05:56,240 --> 00:05:59,280 Speaker 1: graduation I've ever had, It's the only graduation Lebron has 105 00:05:59,320 --> 00:06:02,440 Speaker 1: ever had. So it's very memorable and as an important 106 00:06:02,440 --> 00:06:06,200 Speaker 1: moment in everyone's lives. So at the company, we got 107 00:06:06,279 --> 00:06:11,839 Speaker 1: approached um by partners to come along and produce graduate 108 00:06:11,880 --> 00:06:14,880 Speaker 1: together and do it with with Lora and pal Jobs Company, 109 00:06:15,320 --> 00:06:19,560 Speaker 1: And it was just important that we really over delivered 110 00:06:19,680 --> 00:06:22,400 Speaker 1: for those students, for those kids, it wasn't about us, 111 00:06:22,880 --> 00:06:27,000 Speaker 1: It wasn't about the networks. Lebron did the fantastic job hosting. 112 00:06:27,040 --> 00:06:31,000 Speaker 1: We were fortunate enough to have UH President Barack Obama 113 00:06:31,279 --> 00:06:35,320 Speaker 1: deliver the commencement speech. But it wasn't about Lebron. It 114 00:06:35,400 --> 00:06:39,080 Speaker 1: wasn't about Obama, wasn't about us as a company. It 115 00:06:39,200 --> 00:06:43,520 Speaker 1: was about creating a special memorable moment for those students, 116 00:06:43,560 --> 00:06:45,400 Speaker 1: just like we all we got the chance to do 117 00:06:45,440 --> 00:06:48,000 Speaker 1: when we actually got to experience it live. Unfortunately, they 118 00:06:48,040 --> 00:06:50,200 Speaker 1: didn't they had to do in their living rooms with 119 00:06:50,240 --> 00:06:53,800 Speaker 1: their families. And that's what made me very happy and 120 00:06:53,880 --> 00:06:56,960 Speaker 1: proud is all the text that I received from from 121 00:06:57,040 --> 00:07:00,040 Speaker 1: families and parents who said that was a spec a 122 00:07:00,080 --> 00:07:03,760 Speaker 1: show moment for my graduating senior and now they at 123 00:07:03,800 --> 00:07:06,200 Speaker 1: least have something they can remember it by. And we 124 00:07:06,240 --> 00:07:08,120 Speaker 1: did a T shirt. We wanted to make it as 125 00:07:08,120 --> 00:07:11,080 Speaker 1: special as possible and do it in the spring Hill Away, 126 00:07:11,120 --> 00:07:13,080 Speaker 1: which is bringing to life as a as a show 127 00:07:13,520 --> 00:07:16,200 Speaker 1: on Network TV. We did an after party on on 128 00:07:16,840 --> 00:07:20,760 Speaker 1: Uninterrupted Instagram Live channel, and we brought a product, so 129 00:07:20,800 --> 00:07:23,640 Speaker 1: we wanted to really give them a full three sixty 130 00:07:23,840 --> 00:07:27,000 Speaker 1: moment so they felt very memorable and something they could 131 00:07:27,040 --> 00:07:29,360 Speaker 1: always remember, just as though they could do it live 132 00:07:29,400 --> 00:07:34,600 Speaker 1: and in person and Lebron. We moved from that to 133 00:07:35,320 --> 00:07:39,080 Speaker 1: More Than a Vote that was launched officially this week. 134 00:07:39,680 --> 00:07:42,120 Speaker 1: What does success look like from More Than a Vote 135 00:07:42,120 --> 00:07:45,559 Speaker 1: as you look toward November, UM, I think success looks 136 00:07:45,600 --> 00:07:49,040 Speaker 1: like UM educating the people that's on the grounds in 137 00:07:49,080 --> 00:07:53,040 Speaker 1: these cities that we're tackling UM. You know, we've had 138 00:07:53,200 --> 00:07:58,520 Speaker 1: voter suppression for so for so long, people not understanding UM, 139 00:07:58,720 --> 00:08:01,560 Speaker 1: how they can vote where they where they can vote 140 00:08:01,720 --> 00:08:04,560 Speaker 1: if their vote really counts. UM. You know in the 141 00:08:04,600 --> 00:08:07,800 Speaker 1: black community, you know you always here, go out and vote. 142 00:08:08,160 --> 00:08:11,200 Speaker 1: But what you don't understand is who am I voting for? 143 00:08:11,480 --> 00:08:14,760 Speaker 1: Where can I vote? How many people am I voting for? 144 00:08:14,880 --> 00:08:18,360 Speaker 1: What does these votes mean? What do they stand for? UM? 145 00:08:18,440 --> 00:08:23,200 Speaker 1: So the education side, UM is what we're most proud about. 146 00:08:24,120 --> 00:08:30,080 Speaker 1: That was Lebron James speaking exclusively with Bloomberg's Jason Kelly, 147 00:08:30,120 --> 00:08:33,079 Speaker 1: my previous boss. What a great interview, Jason, seriously congratulations 148 00:08:33,080 --> 00:08:34,920 Speaker 1: on that. To be sure to pick up the latest 149 00:08:34,960 --> 00:08:38,280 Speaker 1: issue of Bloomberg Business Week to get that exclusive interview 150 00:08:39,000 --> 00:08:42,720 Speaker 1: with Lebron James, and it's online. It's beautifully displayed too, 151 00:08:42,800 --> 00:08:46,480 Speaker 1: graphically online. Very cool, very very cool stuff. Coming up next, 152 00:08:46,480 --> 00:08:48,920 Speaker 1: we're gonna talk with mackenzie. We're gonna check in with McKenzie. 153 00:08:48,960 --> 00:08:51,880 Speaker 1: They've got a new small business report out. What can 154 00:08:51,920 --> 00:08:57,280 Speaker 1: policymakers do bipartisan wise to help small businesses? Small businesses 155 00:08:57,280 --> 00:09:00,000 Speaker 1: are taken the brunt of this economic downturn. We're gonna 156 00:09:00,040 --> 00:09:02,359 Speaker 1: check in with mackenzie and then our very own Bloomberg's 157 00:09:02,400 --> 00:09:05,240 Speaker 1: Tom Orlick about where the economy is headed for the 158 00:09:05,320 --> 00:09:07,679 Speaker 1: rest of the year. Download the Bloomberg Sound On podcast 159 00:09:07,679 --> 00:09:09,400 Speaker 1: on Apple it Tunes, at Bloomberg dot com, or by 160 00:09:09,400 --> 00:09:11,760 Speaker 1: downloading the Bloomberg Business App. You can also find me 161 00:09:11,800 --> 00:09:14,160 Speaker 1: on Radio dot Com, I Heart Radio, and Spotify. My 162 00:09:14,240 --> 00:09:17,199 Speaker 1: name is Kevin Cirelli on the Chief Washington Correspondent from 163 00:09:17,200 --> 00:09:20,840 Speaker 1: Bloomberg Television of Bloomberg Radio, and you are listening to Bloomberg. 164 00:09:27,960 --> 00:09:32,520 Speaker 1: This is Bloomberg Sound On with Kevin Surrele on Bloomberg 165 00:09:33,640 --> 00:09:36,040 Speaker 1: and one oh five point seven f M h D two. 166 00:09:36,640 --> 00:09:40,320 Speaker 1: I'm Kevin Serley, Chief Washington Correspondent from Bloomberg Television and 167 00:09:40,480 --> 00:09:44,000 Speaker 1: the Bloomberg Radio. I want to focus on small business 168 00:09:44,000 --> 00:09:45,760 Speaker 1: because coming up on the program, we're gonna check in 169 00:09:45,840 --> 00:09:48,880 Speaker 1: with Tom Orlick, Bloomberg Economics Chief Economists, and he's the 170 00:09:48,920 --> 00:09:52,480 Speaker 1: author of the new book China, The Bubble That Never Pops, 171 00:09:52,559 --> 00:09:55,080 Speaker 1: And then we're gonna check him with Frank Possano about 172 00:09:55,080 --> 00:09:57,600 Speaker 1: oil and gas and energy. But I want to start 173 00:09:57,640 --> 00:10:00,520 Speaker 1: with small business because it really is the bed of 174 00:10:00,679 --> 00:10:07,800 Speaker 1: our nation's economy and deep deeper. Maha John, partner at 175 00:10:07,880 --> 00:10:11,199 Speaker 1: McKinsey and Company in San Francisco, is joining us on 176 00:10:11,240 --> 00:10:13,320 Speaker 1: the line, and she's the co author of the Small 177 00:10:13,360 --> 00:10:17,840 Speaker 1: Business Research and Mackenzie's new report on small Businesses, um 178 00:10:17,840 --> 00:10:20,640 Speaker 1: and Deep. I'm so incredibly grateful for you to join 179 00:10:20,760 --> 00:10:22,640 Speaker 1: us because I read this report when it came out 180 00:10:22,679 --> 00:10:24,040 Speaker 1: and I said to Nila, I said, we got to 181 00:10:24,080 --> 00:10:26,520 Speaker 1: get her on the show because it's just so crucial 182 00:10:26,559 --> 00:10:28,480 Speaker 1: because so much of the focus has been in the 183 00:10:28,520 --> 00:10:33,320 Speaker 1: markets about big business and financial packages that are going 184 00:10:33,360 --> 00:10:36,439 Speaker 1: to large companies, but we haven't really talked as much 185 00:10:36,440 --> 00:10:41,240 Speaker 1: about small businesses. So what did your report find? Yeah, 186 00:10:41,280 --> 00:10:44,280 Speaker 1: I mean the report is actually quite sobering. I think 187 00:10:44,520 --> 00:10:46,880 Speaker 1: you know, when you look at small businesses in America, 188 00:10:47,440 --> 00:10:50,400 Speaker 1: about one third of them were actually vulnerable to the 189 00:10:50,440 --> 00:10:56,360 Speaker 1: impact of COVID nineteen and are vulnerable to potentially closing permanently, 190 00:10:57,160 --> 00:11:00,520 Speaker 1: which I think would really really be a devastating impact 191 00:11:00,520 --> 00:11:03,400 Speaker 1: to our economy and also to our communities. You know, 192 00:11:03,440 --> 00:11:05,160 Speaker 1: And it really is quite remarkable. And one of the 193 00:11:05,200 --> 00:11:07,560 Speaker 1: things in the report that you found, TIPA is that 194 00:11:07,600 --> 00:11:10,920 Speaker 1: minority owned small businesses are actually more at risk. What 195 00:11:10,920 --> 00:11:14,320 Speaker 1: what can you tell us about that? That's exactly right. 196 00:11:14,640 --> 00:11:16,920 Speaker 1: I mean, when you think about which businesses are at risk, 197 00:11:17,200 --> 00:11:19,800 Speaker 1: you're going to look at the impact that COVID nineteen 198 00:11:19,880 --> 00:11:23,040 Speaker 1: is having on their revenue and then the financial situation 199 00:11:23,080 --> 00:11:26,960 Speaker 1: that those businesses are in going into the crisis. And unfortunately, 200 00:11:27,160 --> 00:11:30,680 Speaker 1: black and Latino owned small businesses are actually two times 201 00:11:30,720 --> 00:11:33,720 Speaker 1: as likely to be considered you know, at risk or 202 00:11:33,760 --> 00:11:37,200 Speaker 1: distressed financially. And this is according to research the FED 203 00:11:37,280 --> 00:11:40,160 Speaker 1: did right before we actually went into the COVID crisis. 204 00:11:40,880 --> 00:11:43,040 Speaker 1: So why is that. Why is it the minority owned 205 00:11:43,040 --> 00:11:45,320 Speaker 1: businesses are more at risk in the small business Is 206 00:11:45,320 --> 00:11:49,560 Speaker 1: it because they're primarily and what type of sectors? Yeah, 207 00:11:49,640 --> 00:11:53,000 Speaker 1: it's really I think a multi sided story. First is 208 00:11:53,040 --> 00:11:58,520 Speaker 1: that when you think about the industries like food services, accommodation, hospitality, 209 00:11:59,040 --> 00:12:01,439 Speaker 1: you actually see a high your share of those businesses 210 00:12:01,559 --> 00:12:05,000 Speaker 1: owned by minority small business owners. And those are the 211 00:12:05,000 --> 00:12:08,320 Speaker 1: exact industries that fit at that tough intersection of being 212 00:12:08,360 --> 00:12:11,160 Speaker 1: more vulnerable to the crisis because of the revenue shock 213 00:12:11,240 --> 00:12:14,160 Speaker 1: that's happening, as well as just being kind of industries 214 00:12:14,160 --> 00:12:18,280 Speaker 1: with swimmer margins and sort of tougher financial resiliency components. 215 00:12:18,320 --> 00:12:20,720 Speaker 1: So and then I think secondly, it's just you know, 216 00:12:20,800 --> 00:12:25,320 Speaker 1: we've also historically seen a troubling limited access to credit 217 00:12:25,440 --> 00:12:29,520 Speaker 1: that compounds that underlying health challenge that minority on businesses faced. 218 00:12:30,400 --> 00:12:33,720 Speaker 1: So mckinzy's deep, Maha, John's on the line, and and 219 00:12:33,720 --> 00:12:35,360 Speaker 1: and folks, if you're just joining us. They put out 220 00:12:35,400 --> 00:12:38,240 Speaker 1: the Small Business Report, and by their estimate, based on 221 00:12:38,320 --> 00:12:42,120 Speaker 1: analyzing surveys of small business owners, get this, one point 222 00:12:42,240 --> 00:12:47,720 Speaker 1: four million to two point one million employers small businesses 223 00:12:48,120 --> 00:12:52,840 Speaker 1: could close permanently. Wow. And there are one point seven 224 00:12:52,920 --> 00:12:56,839 Speaker 1: million small businesses that employed twenty million workers and earned 225 00:12:56,840 --> 00:12:59,480 Speaker 1: twelve percent of US business revenue. And the sectors that 226 00:12:59,520 --> 00:13:02,360 Speaker 1: are most vulnerable. One of the things in the report 227 00:13:02,440 --> 00:13:05,160 Speaker 1: that your report does is you actually look at the 228 00:13:05,200 --> 00:13:07,200 Speaker 1: different states. What are some of the states that are 229 00:13:07,240 --> 00:13:09,920 Speaker 1: going to be harness hit by this? From a small 230 00:13:09,960 --> 00:13:13,840 Speaker 1: business perspective, I mean, what we're really seeing is that 231 00:13:13,920 --> 00:13:18,240 Speaker 1: the states that have the highest impact from COVID are 232 00:13:18,400 --> 00:13:21,120 Speaker 1: really correlated with those where we see the highest amount 233 00:13:21,160 --> 00:13:26,559 Speaker 1: of vulnerability. So if you think about, for example, uh 234 00:13:26,720 --> 00:13:29,080 Speaker 1: New York or some of these other states that have 235 00:13:29,160 --> 00:13:33,440 Speaker 1: really had to shut down in a fairly dramatic way, Michigan, 236 00:13:33,480 --> 00:13:36,679 Speaker 1: New Jersey, the highest percentage of vulnerable small businesses are 237 00:13:36,720 --> 00:13:39,960 Speaker 1: also sitting there because frankly, it's been hard to make revenue. 238 00:13:41,400 --> 00:13:44,840 Speaker 1: So what can policy makers do to follow up on 239 00:13:44,880 --> 00:13:47,000 Speaker 1: that point in order to soften the blow for so 240 00:13:47,000 --> 00:13:48,920 Speaker 1: many of these small businesses? I mean here in the 241 00:13:49,000 --> 00:13:51,800 Speaker 1: D D M V region. I mean you've you've seen 242 00:13:51,840 --> 00:13:55,040 Speaker 1: restaurants closed down, We've send just some horrible, horrible things. 243 00:13:55,240 --> 00:13:58,880 Speaker 1: What can federal policymakers do and and state policymakers do 244 00:13:59,240 --> 00:14:02,800 Speaker 1: in order to you soften the blow? Yeah, I mean 245 00:14:02,960 --> 00:14:06,320 Speaker 1: I'm not a policymaker or a politician, but are I'd 246 00:14:06,360 --> 00:14:07,959 Speaker 1: like to point out a few things that our data 247 00:14:08,000 --> 00:14:10,840 Speaker 1: shows us. First is that, as you pointed out with 248 00:14:10,880 --> 00:14:14,520 Speaker 1: those statistics, small businesses are more important to the economy 249 00:14:14,600 --> 00:14:17,960 Speaker 1: than we think as employers. They provide employments and millions 250 00:14:18,000 --> 00:14:21,440 Speaker 1: of people. They are unique opportunities for wealth creation and 251 00:14:21,560 --> 00:14:25,880 Speaker 1: upward mobility. They are multipliers in our economy as suppliers 252 00:14:25,920 --> 00:14:28,960 Speaker 1: and customers, and like you just said, they're also just 253 00:14:29,040 --> 00:14:31,120 Speaker 1: the places many of us like to spend our money 254 00:14:31,360 --> 00:14:34,800 Speaker 1: on and our core part of our community lifeblood. As 255 00:14:35,160 --> 00:14:38,920 Speaker 1: governments and business leaders start to think about what they're 256 00:14:38,920 --> 00:14:41,560 Speaker 1: actually going to do to help small businesses, I think 257 00:14:41,600 --> 00:14:44,320 Speaker 1: they've got to, you know, start to consider just like 258 00:14:44,400 --> 00:14:47,680 Speaker 1: many of the policymakers we're seeing are looking at how 259 00:14:47,720 --> 00:14:50,000 Speaker 1: do you help with short term recovery and then how 260 00:14:50,000 --> 00:14:53,760 Speaker 1: do you start investing in small businesses in innovative ways 261 00:14:53,800 --> 00:14:57,600 Speaker 1: that can build their longer term resiliency. Right, only thirty 262 00:14:57,600 --> 00:15:00,560 Speaker 1: five percent of small businesses even went into the crisis, 263 00:15:00,600 --> 00:15:03,720 Speaker 1: and a healthy financial state was the thing, you know, 264 00:15:03,760 --> 00:15:06,120 Speaker 1: we will need to change, not just in the short term, 265 00:15:06,240 --> 00:15:09,000 Speaker 1: but in the long term. That's remarkable, and that bears repeating. 266 00:15:09,040 --> 00:15:13,920 Speaker 1: Only thirty five percent folks of small businesses entered into 267 00:15:14,000 --> 00:15:19,760 Speaker 1: this crisis financially healthy, financially fit. Wow. And you know, 268 00:15:19,880 --> 00:15:21,640 Speaker 1: I gotta I gotta ask you about this because I 269 00:15:21,680 --> 00:15:24,120 Speaker 1: spend you know, day after day talking to Republicans, talking 270 00:15:24,120 --> 00:15:27,040 Speaker 1: to Democrats, especially those you know, the French Hills of 271 00:15:27,080 --> 00:15:29,480 Speaker 1: the world, the Pat Toomey's of the world, who are 272 00:15:29,520 --> 00:15:33,080 Speaker 1: really serious about this, about this recovery, and you know, 273 00:15:33,200 --> 00:15:35,520 Speaker 1: the Chris Coon's of the world who are really working 274 00:15:35,560 --> 00:15:38,560 Speaker 1: on this. And from a small business perspective, it is 275 00:15:38,600 --> 00:15:41,600 Speaker 1: frustrating I think for policy makers that it's actually the 276 00:15:41,640 --> 00:15:44,440 Speaker 1: small businesses who need the instant liquidity, who need the 277 00:15:44,480 --> 00:15:48,480 Speaker 1: instant access to loans immediately. They need it yesterday, right, 278 00:15:48,840 --> 00:15:52,800 Speaker 1: But because for whatever reason, it's more difficult to get 279 00:15:52,840 --> 00:15:57,160 Speaker 1: them access to these financial services programs and it's easier 280 00:15:57,240 --> 00:15:59,960 Speaker 1: to to funnel it into the big businesses. Can I 281 00:16:00,040 --> 00:16:02,880 Speaker 1: ask you, based upon the policies that you study, that 282 00:16:02,960 --> 00:16:05,280 Speaker 1: you know about, or just from maybe how other countries 283 00:16:05,320 --> 00:16:08,160 Speaker 1: have done this, is it possible to speed up the 284 00:16:08,240 --> 00:16:12,640 Speaker 1: relief effort to somehow inject it immediately for small businesses who, 285 00:16:12,680 --> 00:16:16,240 Speaker 1: as you rightly point out, aren't as financially fit or 286 00:16:16,800 --> 00:16:19,280 Speaker 1: being able to stay viable in the long term as 287 00:16:19,280 --> 00:16:23,120 Speaker 1: big companies are. Yeah. I mean, I think it's a 288 00:16:23,160 --> 00:16:25,600 Speaker 1: really great question, um, and it's one a lot of 289 00:16:25,600 --> 00:16:28,600 Speaker 1: people are thinking, I think quite hard about. I've seen 290 00:16:28,600 --> 00:16:31,800 Speaker 1: folks think about how do we accelerate receivable or payment 291 00:16:31,920 --> 00:16:35,040 Speaker 1: terms and start to get creative about for example, if 292 00:16:35,120 --> 00:16:37,440 Speaker 1: you've bought something from a small business instead of ninety 293 00:16:37,480 --> 00:16:40,200 Speaker 1: paid terms, looking at thirty day terms. There's some interesting 294 00:16:40,560 --> 00:16:42,800 Speaker 1: data out there Folcus has done just really looking at 295 00:16:43,000 --> 00:16:45,840 Speaker 1: how much capital could be injected into small businesses by 296 00:16:45,840 --> 00:16:50,480 Speaker 1: simply accelerating payments businesses and governments were already planning to make, 297 00:16:50,800 --> 00:16:52,600 Speaker 1: which I think is just an example of the kind 298 00:16:52,600 --> 00:16:55,600 Speaker 1: of innovative ways will need to start to think about 299 00:16:55,600 --> 00:16:59,520 Speaker 1: to drive short terms money into small businesses. But I 300 00:16:59,560 --> 00:17:03,160 Speaker 1: just want to cautitioness it's not just a short term game. Frankly, 301 00:17:03,240 --> 00:17:06,240 Speaker 1: now as we're entering months four of this crisis, there 302 00:17:06,240 --> 00:17:08,720 Speaker 1: are going to be sectors which were not initially hit 303 00:17:08,760 --> 00:17:10,960 Speaker 1: by this crisis which are now going to start to 304 00:17:11,080 --> 00:17:13,439 Speaker 1: really struggle. And so I think this is really that 305 00:17:13,600 --> 00:17:18,480 Speaker 1: moment when getting creative about resiliency, about digital technology adoption 306 00:17:19,040 --> 00:17:22,080 Speaker 1: and about how we actually really upgrade the small businesses 307 00:17:22,080 --> 00:17:24,240 Speaker 1: and support them will be key. All Right, Thank you, 308 00:17:24,320 --> 00:17:28,440 Speaker 1: de bad of mackenzie more. Next, I'm Kevin's Really. This 309 00:17:28,760 --> 00:17:34,000 Speaker 1: is Bloomberg Sound On with Kevin Surreley on Bloomberg and 310 00:17:34,040 --> 00:17:37,320 Speaker 1: one oh five point seven m h D two. I'm 311 00:17:37,400 --> 00:17:42,359 Speaker 1: Kevin Surreally, chief Washington correspondent for Bloomberg Television and for 312 00:17:42,440 --> 00:17:48,600 Speaker 1: Bloomberg Radio. Let's go over some local headlines of the day. 313 00:17:48,840 --> 00:17:54,080 Speaker 1: Stocks rise and volatile trading, oils snaps slide, US cases 314 00:17:54,200 --> 00:17:56,840 Speaker 1: rise fastest this month, and the Sun Belt leading the 315 00:17:56,880 --> 00:18:00,479 Speaker 1: way on that surge. Meanwhile, the President continue you ng 316 00:18:01,160 --> 00:18:04,159 Speaker 1: to ignore the virus spike as the US cases surge 317 00:18:04,200 --> 00:18:08,760 Speaker 1: toward records and a result of policy policy, and in fact, 318 00:18:08,760 --> 00:18:11,520 Speaker 1: top administration officials are saying that they are not going 319 00:18:11,560 --> 00:18:14,240 Speaker 1: to be advocating for there to be another type of 320 00:18:14,320 --> 00:18:18,840 Speaker 1: economic shutdown come the fall. Joining us on the line 321 00:18:19,080 --> 00:18:22,240 Speaker 1: to break down all of this is Frank Massano. He 322 00:18:22,320 --> 00:18:25,320 Speaker 1: is a partner at brace Well's Policy Resolution Group. He 323 00:18:25,359 --> 00:18:28,919 Speaker 1: has the former press secretary to several Republican lawmakers on 324 00:18:29,000 --> 00:18:33,520 Speaker 1: Capitol Hill, including Indiana Senator Richard Lugar. Frank, how are you? 325 00:18:33,560 --> 00:18:41,200 Speaker 1: How's the fam? I'm good? I really miss no one 326 00:18:41,359 --> 00:18:44,159 Speaker 1: Mrs keV Frank. You know what else I miss? I 327 00:18:44,320 --> 00:18:49,840 Speaker 1: missed the snack Frank, that's all they missed. Listen. I 328 00:18:49,960 --> 00:18:52,680 Speaker 1: have the privilege, the luxury of being able to go 329 00:18:52,800 --> 00:18:55,640 Speaker 1: into our headquarters and listen, I get the snacks. I've 330 00:18:55,640 --> 00:18:57,560 Speaker 1: been eating enough snacks for all of us, Frank, I 331 00:18:57,640 --> 00:19:00,600 Speaker 1: gotta be honest. The chocolate actually sewn. Put kick cats 332 00:19:01,000 --> 00:19:03,760 Speaker 1: in the in the snack room, so there's ki cats. 333 00:19:04,359 --> 00:19:07,480 Speaker 1: Anyway we have to get in there. Well, you're not 334 00:19:07,560 --> 00:19:11,160 Speaker 1: allowed because in trouble if I bring in any guests, Um, 335 00:19:11,320 --> 00:19:13,720 Speaker 1: don't get me in trouble. Frank, what was I gonna 336 00:19:13,720 --> 00:19:16,000 Speaker 1: ask you? Oh? What's going on at the energy markets. 337 00:19:16,040 --> 00:19:19,000 Speaker 1: In the markets today. Wow, there's a lot going on. 338 00:19:19,240 --> 00:19:23,600 Speaker 1: I mean, you know, but the biggest interesting thing is 339 00:19:23,680 --> 00:19:27,320 Speaker 1: what we don't know. We don't know, and part of 340 00:19:27,400 --> 00:19:31,080 Speaker 1: that is because you know, we started to see recovery, right, 341 00:19:31,400 --> 00:19:35,520 Speaker 1: We started to see demand increase. We started to see UM, 342 00:19:36,240 --> 00:19:39,720 Speaker 1: we started to see uh, people starting to drive again. 343 00:19:39,800 --> 00:19:42,879 Speaker 1: We started to see people get on airplanes again. We 344 00:19:42,960 --> 00:19:46,600 Speaker 1: were only capacity from where we were last year, but 345 00:19:46,720 --> 00:19:50,040 Speaker 1: that was a massive uptick of where we were in 346 00:19:50,200 --> 00:19:52,800 Speaker 1: March or in April. So we started to see all 347 00:19:52,920 --> 00:19:56,400 Speaker 1: of that progress going forward and people starting to move 348 00:19:56,480 --> 00:19:59,919 Speaker 1: again and um, you know, the oil starting to come 349 00:20:00,040 --> 00:20:03,040 Speaker 1: back in demand starting to rise. But then again, now 350 00:20:03,200 --> 00:20:05,240 Speaker 1: you know, we've seen a second one. It's not really 351 00:20:05,280 --> 00:20:08,399 Speaker 1: a second wave, but it's an expansion of of the 352 00:20:08,520 --> 00:20:11,320 Speaker 1: virus into places in the sun Belt as you said, 353 00:20:11,320 --> 00:20:13,720 Speaker 1: and in Florida in other places. And there's a real 354 00:20:13,840 --> 00:20:15,879 Speaker 1: question as to what kind of an impact that's going 355 00:20:15,920 --> 00:20:19,120 Speaker 1: to have on this you know, started this this little 356 00:20:19,400 --> 00:20:23,160 Speaker 1: tick up we've had, especially if a state like Texas, 357 00:20:23,280 --> 00:20:26,280 Speaker 1: where most of the energy industry is based, UM is 358 00:20:26,400 --> 00:20:28,800 Speaker 1: again forced to kind of lock down again, which the 359 00:20:28,840 --> 00:20:31,399 Speaker 1: governor is starting to talk about in areas like Houston 360 00:20:31,480 --> 00:20:34,240 Speaker 1: and Dallas and uh, you know, a lot of the 361 00:20:34,280 --> 00:20:37,920 Speaker 1: suburban areas and where where we have a lot of 362 00:20:37,960 --> 00:20:41,920 Speaker 1: the energy industry based. So it's really interesting we started 363 00:20:41,960 --> 00:20:46,600 Speaker 1: to see that recovery, UM and who knows, uh now, um, 364 00:20:46,680 --> 00:20:49,399 Speaker 1: where it's going to go given the kind of numbers 365 00:20:49,480 --> 00:20:53,040 Speaker 1: they're seeing in places like um in Texas, in in 366 00:20:53,280 --> 00:20:55,760 Speaker 1: in Florida, and in places in the Sun Belt where 367 00:20:55,760 --> 00:20:58,440 Speaker 1: you're seeing a lot of the cases increase. So it 368 00:20:58,560 --> 00:21:02,720 Speaker 1: really is remarkable because prior to this, the geopolitics around 369 00:21:02,720 --> 00:21:06,840 Speaker 1: the world, Saudi Arabia, Russia really heavily and influencing the 370 00:21:07,000 --> 00:21:10,119 Speaker 1: US energy sector. Uh And and the response on that, 371 00:21:10,359 --> 00:21:12,399 Speaker 1: And I guess I want to be delicate here and 372 00:21:12,480 --> 00:21:15,720 Speaker 1: how I asked this question, but is there a concern 373 00:21:16,040 --> 00:21:20,920 Speaker 1: that we could see some more international volatility target the 374 00:21:21,080 --> 00:21:24,600 Speaker 1: United States energy sector at a at a moment when 375 00:21:24,800 --> 00:21:29,640 Speaker 1: it there is increasing uncertainty given the as you pointed out, 376 00:21:30,119 --> 00:21:36,160 Speaker 1: the rising cases in some energy heavy parts of the country. Well, 377 00:21:36,200 --> 00:21:38,880 Speaker 1: I mean, I think that's always a concern, of course, UM. 378 00:21:39,000 --> 00:21:40,920 Speaker 1: But one of the things that we've seen is not 379 00:21:41,080 --> 00:21:43,920 Speaker 1: only have we seen the demands start to increase and 380 00:21:44,080 --> 00:21:46,840 Speaker 1: come back and people and in places like in New 381 00:21:46,920 --> 00:21:49,680 Speaker 1: England and other places where the recovery still seems to 382 00:21:49,720 --> 00:21:52,840 Speaker 1: be going forward, we're seeing that recovery happen there. I 383 00:21:52,920 --> 00:21:57,080 Speaker 1: think the so we will have some of that recovery 384 00:21:57,160 --> 00:22:00,080 Speaker 1: happening regardless of what's happening in other parts to you 385 00:22:00,200 --> 00:22:02,560 Speaker 1: all though. But the second piece of this is we're 386 00:22:02,600 --> 00:22:05,600 Speaker 1: starting we were just starting to see some of the 387 00:22:05,680 --> 00:22:10,080 Speaker 1: production decline start to slow down, right. So one of 388 00:22:10,119 --> 00:22:12,040 Speaker 1: their two sides of this issue, as you know, one 389 00:22:12,160 --> 00:22:15,560 Speaker 1: is the demand side, which collapsed completely, people not driving, 390 00:22:15,600 --> 00:22:19,320 Speaker 1: people not flying, UH, people staying at home. The other 391 00:22:19,400 --> 00:22:22,280 Speaker 1: side was the production side, where we basically had lots 392 00:22:22,359 --> 00:22:26,600 Speaker 1: of UH of workers basically shut out of jobs because 393 00:22:27,080 --> 00:22:29,240 Speaker 1: the you know, we were there was too much oil 394 00:22:29,280 --> 00:22:31,280 Speaker 1: on the market. Of course early on that was helped 395 00:22:31,359 --> 00:22:36,440 Speaker 1: by UH Saudi Arabia and in in Russia dumping extra 396 00:22:36,520 --> 00:22:38,960 Speaker 1: oil into the market right well that you know, with 397 00:22:39,080 --> 00:22:42,800 Speaker 1: to the President and Congress and others putting pressure on them, 398 00:22:42,880 --> 00:22:45,720 Speaker 1: that has slowed down, UM. But you know, we still 399 00:22:45,800 --> 00:22:48,800 Speaker 1: have an overabundant supply out there too, so they're worried 400 00:22:48,800 --> 00:22:52,440 Speaker 1: about that. UM. Again, I think the biggest unknown and 401 00:22:52,480 --> 00:22:55,320 Speaker 1: the biggest uncertainty is what will happen to demand in 402 00:22:55,440 --> 00:22:57,840 Speaker 1: some of those big states in the Sun Belt, UH, 403 00:22:57,960 --> 00:23:01,119 Speaker 1: in In in Texas, in in four Those are the 404 00:23:01,440 --> 00:23:05,199 Speaker 1: bigger concerns I think than than any kind of international thing. 405 00:23:05,240 --> 00:23:07,800 Speaker 1: We are seeing a little bit of UH some challenges 406 00:23:07,960 --> 00:23:12,080 Speaker 1: with UM, you know, with some of the trade issues 407 00:23:12,160 --> 00:23:16,440 Speaker 1: with Mexico so UM. You know, earlier today refiners sent 408 00:23:16,560 --> 00:23:21,040 Speaker 1: a letter UH and I know that UH trade trade 409 00:23:21,080 --> 00:23:24,920 Speaker 1: rep Lightheiser has also been talking to Mexico about the 410 00:23:25,280 --> 00:23:29,119 Speaker 1: trade traffic between Mexico and the US. UM and you know, 411 00:23:29,200 --> 00:23:31,840 Speaker 1: we we send them a lot of gasoline, so i'll 412 00:23:31,920 --> 00:23:35,040 Speaker 1: refined products. So UM. You know, that's another issue that's 413 00:23:35,080 --> 00:23:37,560 Speaker 1: starting to bubble up to and I think you'll see 414 00:23:37,640 --> 00:23:40,800 Speaker 1: some of that UH come into the into the discussion 415 00:23:40,800 --> 00:23:43,600 Speaker 1: as we go forward and discussions about the trade policy. 416 00:23:43,680 --> 00:23:44,920 Speaker 1: I don't want to put you on the spot to 417 00:23:45,280 --> 00:23:47,600 Speaker 1: feel free to say, no, you haven't. Have you been 418 00:23:47,640 --> 00:23:51,080 Speaker 1: following the venezuela issue at all? Not really, you know, 419 00:23:51,200 --> 00:23:54,440 Speaker 1: I mean it's a you know, it's really hard to 420 00:23:55,359 --> 00:23:58,480 Speaker 1: we I know that there has been some UH ships 421 00:23:58,560 --> 00:24:02,879 Speaker 1: that have been sanctioned, mostly carrying Venezuelan oil um, you know, 422 00:24:03,040 --> 00:24:06,760 Speaker 1: but you know, again that's a that's an outside factor 423 00:24:07,080 --> 00:24:10,440 Speaker 1: compared to some of the big challenges we have going 424 00:24:10,520 --> 00:24:13,959 Speaker 1: on right now with our own production capacity and then 425 00:24:14,040 --> 00:24:17,200 Speaker 1: shut in uh you know, in many cases of voluntary 426 00:24:17,280 --> 00:24:21,720 Speaker 1: shut ins that people are are using versus and the 427 00:24:21,800 --> 00:24:25,399 Speaker 1: demand side uh slides we've seen and the worry that 428 00:24:25,520 --> 00:24:28,399 Speaker 1: we may see more on the demand slide. So you know, 429 00:24:28,480 --> 00:24:32,400 Speaker 1: those are much bigger challenges, much bigger concerns that we're 430 00:24:32,480 --> 00:24:35,080 Speaker 1: dealing with right now in the immediate and the immediacy 431 00:24:35,160 --> 00:24:38,200 Speaker 1: than than other issues like Venezuela and and how many 432 00:24:38,240 --> 00:24:40,400 Speaker 1: ships they're sending up right Franks is on the line, 433 00:24:40,400 --> 00:24:42,400 Speaker 1: He's a partner a very well as Policy Resolution Group. 434 00:24:42,440 --> 00:24:44,359 Speaker 1: I do want to ask you a political question, but 435 00:24:44,440 --> 00:24:46,480 Speaker 1: I want to just put a put an end point 436 00:24:46,520 --> 00:24:49,000 Speaker 1: on this conversation as it relates to energy sector. What 437 00:24:49,119 --> 00:24:54,040 Speaker 1: does the energy sector want from federal policymakers, especially as 438 00:24:54,040 --> 00:24:56,520 Speaker 1: we're staring down the potential of another economic stimulus and 439 00:24:56,560 --> 00:25:00,119 Speaker 1: there's so much uncertainty, so much volatility right now in 440 00:25:00,240 --> 00:25:03,639 Speaker 1: the marketplace. Yeah, you know, the biggest, the biggest thing 441 00:25:03,760 --> 00:25:06,280 Speaker 1: that they want policymakers to do is just to stay 442 00:25:06,359 --> 00:25:11,000 Speaker 1: out of the way, right, UM. For for you've seen 443 00:25:11,320 --> 00:25:15,399 Speaker 1: You've seen on both sides of the on both sides 444 00:25:15,440 --> 00:25:18,000 Speaker 1: of the Democrats and Republicans, and I'm trying to do 445 00:25:18,200 --> 00:25:22,639 Speaker 1: things that would have a detrimental impact on both the 446 00:25:22,720 --> 00:25:25,800 Speaker 1: demand side and the recovery UH, and the production side 447 00:25:26,119 --> 00:25:28,320 Speaker 1: UH and the trade issues. So I think for the 448 00:25:28,440 --> 00:25:31,920 Speaker 1: most part, most of the industry at large would like 449 00:25:32,960 --> 00:25:35,359 Speaker 1: the market to do its work, would like the market 450 00:25:35,400 --> 00:25:38,040 Speaker 1: to level IE, would like to see demand come back, 451 00:25:38,560 --> 00:25:41,000 Speaker 1: and when that demand starts to come back, you'll see 452 00:25:41,040 --> 00:25:43,920 Speaker 1: the recovery start to happen. Right. We started to see 453 00:25:44,040 --> 00:25:47,119 Speaker 1: that already early on, and some of the evidence from 454 00:25:47,160 --> 00:25:49,760 Speaker 1: E I A and this week's weekly report from a 455 00:25:49,840 --> 00:25:53,560 Speaker 1: p I show that slide back up right again. There's 456 00:25:53,560 --> 00:25:56,200 Speaker 1: that uncertainty out there about what happens now as as 457 00:25:56,240 --> 00:25:59,159 Speaker 1: the COVID cases rise a little more. But the reality is, 458 00:25:59,680 --> 00:26:05,919 Speaker 1: you know, there's no trade barriers, there's no UM legal protections, 459 00:26:05,960 --> 00:26:09,800 Speaker 1: there's no there's nothing that Congress or policymakers could really 460 00:26:09,880 --> 00:26:12,520 Speaker 1: do UM that the market isn't already doing. And I 461 00:26:12,600 --> 00:26:16,320 Speaker 1: think that's what UM. The message from the majority of 462 00:26:16,400 --> 00:26:19,040 Speaker 1: the industry is there may be some here and and 463 00:26:19,160 --> 00:26:21,480 Speaker 1: and you're seeing that to play out in in a 464 00:26:21,560 --> 00:26:25,760 Speaker 1: lot of the the The kind of aid that that 465 00:26:25,960 --> 00:26:30,520 Speaker 1: has been given to business is generally right. Businesses generally 466 00:26:30,600 --> 00:26:33,960 Speaker 1: have been offered p PP loans, they've been offered the 467 00:26:34,000 --> 00:26:37,160 Speaker 1: main street lending program, and uh, you know, I'm sure 468 00:26:37,200 --> 00:26:40,320 Speaker 1: a handful of energy companies have been engaged in those 469 00:26:40,400 --> 00:26:43,800 Speaker 1: things too. But that's not anything specific to the energy industry, 470 00:26:43,840 --> 00:26:46,520 Speaker 1: and that's not what the energy industry has asked for, right, 471 00:26:46,760 --> 00:26:49,880 Speaker 1: they don't want anything specific. So I think the reality 472 00:26:50,040 --> 00:26:54,560 Speaker 1: is they're they're they're hopeful that do no harm policy 473 00:26:54,760 --> 00:26:58,240 Speaker 1: is probably the best policy here that let's demand recover 474 00:26:58,680 --> 00:27:02,119 Speaker 1: and let's production start to recover as well as the 475 00:27:02,200 --> 00:27:06,359 Speaker 1: market comes back in many places, even with the uncertainty 476 00:27:06,440 --> 00:27:08,480 Speaker 1: we see in the New States and and the challenges 477 00:27:08,520 --> 00:27:11,760 Speaker 1: they're facing. Frank Pisano, appreciate the time, buddy, Thanks for 478 00:27:11,880 --> 00:27:13,720 Speaker 1: checking him with us to give us the lay of 479 00:27:13,800 --> 00:27:17,080 Speaker 1: the land in the energy market. That's Frank Nisano. He's 480 00:27:17,080 --> 00:27:19,720 Speaker 1: a partner of Braceball's Policy Resolution Group, And coming up 481 00:27:19,960 --> 00:27:22,640 Speaker 1: we'll talk more policy and politics. I'm Kevin Sirelli, Chief 482 00:27:22,640 --> 00:27:25,240 Speaker 1: Washington correspondent for Bloomberg TV and Radio, and you're listening 483 00:27:25,280 --> 00:27:44,320 Speaker 1: to Bloomberg ninety nine one. This is Bloomberg's Sound On 484 00:27:44,720 --> 00:27:49,040 Speaker 1: with Kevin Surreley on Bloomberg and one oh five point 485 00:27:49,160 --> 00:27:52,720 Speaker 1: seven F M H D two. I'm Kevin Sireli, chief 486 00:27:52,760 --> 00:27:58,080 Speaker 1: Washington correspondent for Bloomberg Television and Bloomberg Radio. And earlier 487 00:27:58,160 --> 00:28:02,359 Speaker 1: today on the Senate or there was a bipartisan resolution 488 00:28:02,440 --> 00:28:07,480 Speaker 1: that passed condemning China's national security law cracking down on 489 00:28:07,640 --> 00:28:12,119 Speaker 1: Hong Kong Um. Senator Josh Holly, a Republican, tweeted out 490 00:28:12,320 --> 00:28:15,520 Speaker 1: today the Senate speaks of one voice, China imperialism will 491 00:28:15,600 --> 00:28:19,399 Speaker 1: not go on challenge. Joining us on the line is 492 00:28:19,480 --> 00:28:22,320 Speaker 1: my colleague Tom or Like he is Bloomberg Economics Chief 493 00:28:22,359 --> 00:28:24,960 Speaker 1: Economists and author of the new book China The Bubble 494 00:28:25,000 --> 00:28:29,280 Speaker 1: That Never Pops. Tom, Congratulations on another book. I started 495 00:28:29,320 --> 00:28:33,119 Speaker 1: reading it last night. It is incredibly, incredibly detailed and 496 00:28:33,280 --> 00:28:36,920 Speaker 1: goes into the intricacies of the economic branch of the 497 00:28:37,040 --> 00:28:40,680 Speaker 1: China Communist Party. And I want to ask you something because, 498 00:28:41,480 --> 00:28:43,600 Speaker 1: in the excess of the book that you shared with me, Um, 499 00:28:44,400 --> 00:28:47,880 Speaker 1: you say, I mean lay it out very clearly. Uh, 500 00:28:47,960 --> 00:28:51,000 Speaker 1: don't tell President Trump, but China is winning. Why do 501 00:28:51,120 --> 00:28:55,880 Speaker 1: you think that. Well, let's think about how we're doing 502 00:28:56,080 --> 00:28:59,640 Speaker 1: in the COVID nineteen crisis. Kevin. I'm first of all sorry, 503 00:28:59,640 --> 00:29:01,760 Speaker 1: I should say, delighted to be on the show. Thanks 504 00:29:01,880 --> 00:29:06,000 Speaker 1: very much for having me. Let's let's think about how 505 00:29:06,320 --> 00:29:12,320 Speaker 1: China is COVID nineteen crisis. Um So, China. Of course, 506 00:29:12,400 --> 00:29:15,400 Speaker 1: there are some really serious questions about how much information 507 00:29:15,880 --> 00:29:20,280 Speaker 1: China shared as this was as this crisis was kicking off, 508 00:29:20,360 --> 00:29:22,720 Speaker 1: and if they were as transparent as they could have 509 00:29:22,760 --> 00:29:25,840 Speaker 1: been with the international community. But if we bring the 510 00:29:25,880 --> 00:29:28,920 Speaker 1: clock forward to where we are now, China has brought 511 00:29:29,080 --> 00:29:34,200 Speaker 1: its epidemic under control, Its economy has bounced back. Factory 512 00:29:34,240 --> 00:29:38,400 Speaker 1: output in China is now back above the level it 513 00:29:38,680 --> 00:29:41,880 Speaker 1: was before the before the crisis. Um So. I think 514 00:29:42,040 --> 00:29:45,160 Speaker 1: China has demonstrated, in the face of this kind of 515 00:29:45,280 --> 00:29:50,640 Speaker 1: extreme stress test, um that they can move policy in 516 00:29:50,760 --> 00:29:53,800 Speaker 1: the right way to contain the disease and to get 517 00:29:53,840 --> 00:29:57,040 Speaker 1: the economy started again. I have to ask this follow 518 00:29:57,120 --> 00:29:59,040 Speaker 1: up question because I hear you in terms of the 519 00:29:59,120 --> 00:30:03,600 Speaker 1: short term um. But but you started your answer with 520 00:30:03,720 --> 00:30:07,960 Speaker 1: something questioning the transparency of the Communist Party of China, 521 00:30:08,200 --> 00:30:10,600 Speaker 1: shi Jing Ping was not transparent. The U s Intelligence 522 00:30:10,640 --> 00:30:15,400 Speaker 1: community has released countless reports illustrating bipartisan There have been 523 00:30:15,480 --> 00:30:19,600 Speaker 1: questions from Republicans and Democrats. The presumptive Democratic presidential nominee, 524 00:30:19,720 --> 00:30:23,200 Speaker 1: Joe Biden, is saying that President Trump has not been 525 00:30:23,280 --> 00:30:26,720 Speaker 1: tough enough against the China Communist Party. President Trump, for 526 00:30:26,840 --> 00:30:29,120 Speaker 1: his part, says that Joe Biden would not be tough enough. 527 00:30:29,200 --> 00:30:32,840 Speaker 1: So you've got a very conscut. You've got Republicans and 528 00:30:32,920 --> 00:30:36,080 Speaker 1: Democrats and the intelligence community all on the same page 529 00:30:36,840 --> 00:30:39,840 Speaker 1: that China was not transparent whatsoever. When you play it 530 00:30:39,920 --> 00:30:43,120 Speaker 1: from a long term strategy beyond just the economics, they 531 00:30:43,160 --> 00:30:45,760 Speaker 1: are going to have to somehow play Uh. They lost 532 00:30:45,800 --> 00:30:48,400 Speaker 1: a generational argument. One could make the case with a 533 00:30:48,440 --> 00:30:51,920 Speaker 1: new generation of people in America who are deeply mistrusting 534 00:30:51,960 --> 00:30:54,080 Speaker 1: of the Communist Party and will never trust them again, 535 00:30:54,360 --> 00:30:58,160 Speaker 1: particularly when they hit information from not just the United 536 00:30:58,160 --> 00:31:00,400 Speaker 1: States but all around the world. At what point will 537 00:31:00,440 --> 00:31:04,160 Speaker 1: that catch up to the Communist Party? So there is 538 00:31:04,240 --> 00:31:09,440 Speaker 1: definitely a cost there. Um Joe and I, the dean 539 00:31:09,520 --> 00:31:12,360 Speaker 1: of the Kennedy School where I studied a few years ago, 540 00:31:12,800 --> 00:31:16,200 Speaker 1: talks about soft power and the power country has not 541 00:31:16,360 --> 00:31:19,360 Speaker 1: because of its military, but because if it's the sort 542 00:31:19,400 --> 00:31:22,320 Speaker 1: of the resonance of its culture and the trust which 543 00:31:22,360 --> 00:31:26,440 Speaker 1: people have in it. UM and the United States still 544 00:31:26,560 --> 00:31:30,640 Speaker 1: has I think some considerable reserves of soft power, and 545 00:31:30,760 --> 00:31:35,080 Speaker 1: China does not have soft power. There's mistrust, fear even 546 00:31:35,400 --> 00:31:38,960 Speaker 1: about what China's rise means for the rest of the world. 547 00:31:39,680 --> 00:31:43,560 Speaker 1: I think the question is what meaningful action can the 548 00:31:43,720 --> 00:31:48,880 Speaker 1: US and other countries take which would change behavior in China, 549 00:31:48,960 --> 00:31:52,840 Speaker 1: which would move them onto a more transparent PATHUM. And 550 00:31:52,920 --> 00:31:56,120 Speaker 1: I think the answer to that, unfortunately, is it's very 551 00:31:56,200 --> 00:31:59,400 Speaker 1: hard to do. UM. We've just come through a painful 552 00:31:59,520 --> 00:32:04,440 Speaker 1: and brew using trade war between China and the United States. UM. 553 00:32:04,680 --> 00:32:07,120 Speaker 1: And there was some progress. There was some agreements on 554 00:32:07,240 --> 00:32:11,239 Speaker 1: intellectual property for example, UM. But does the U does 555 00:32:11,320 --> 00:32:14,520 Speaker 1: the US have any traction to kind of fundamentally alter 556 00:32:15,000 --> 00:32:18,840 Speaker 1: the way China manages it's it's political and it's internal affairs. 557 00:32:19,240 --> 00:32:20,840 Speaker 1: I think the answer to that is a pretty clear 558 00:32:20,920 --> 00:32:23,680 Speaker 1: Now let me fault I I don't know. I think 559 00:32:23,680 --> 00:32:25,440 Speaker 1: the jury is still out on that TOM because I 560 00:32:25,480 --> 00:32:29,040 Speaker 1: think from a broader standpoint, at what price to China 561 00:32:29,320 --> 00:32:33,640 Speaker 1: limit their ability to I mean, they weren't transparent. And 562 00:32:33,760 --> 00:32:37,880 Speaker 1: that's from again a consensus amongst the intelligence community and 563 00:32:38,120 --> 00:32:40,920 Speaker 1: from criticisms from Trump and Biden. The one thing they 564 00:32:41,000 --> 00:32:45,560 Speaker 1: agree on, um And but beyond that, at what price? 565 00:32:45,640 --> 00:32:48,040 Speaker 1: I mean what you know, when you have you know, 566 00:32:48,080 --> 00:32:50,920 Speaker 1: whether it's Europe, whether it's the United States, I mean, 567 00:32:50,960 --> 00:32:53,880 Speaker 1: and you have freedom and democracy, at what price is 568 00:32:53,920 --> 00:32:56,680 Speaker 1: the Communist Party of China play tom in terms of 569 00:32:56,840 --> 00:33:01,400 Speaker 1: limiting their ability of of citizens? Do you know what 570 00:33:01,480 --> 00:33:03,440 Speaker 1: I mean by that? I mean, I mean, if you're 571 00:33:03,480 --> 00:33:06,360 Speaker 1: from a cultural perspective, it's not just about shareholder value. 572 00:33:06,400 --> 00:33:10,080 Speaker 1: It's not just about oh, let's, you know, get businesses 573 00:33:10,080 --> 00:33:12,200 Speaker 1: back on track here. I mean there's you know, if 574 00:33:12,240 --> 00:33:14,560 Speaker 1: you're if you're keeping everyone inside and using and you 575 00:33:14,720 --> 00:33:17,480 Speaker 1: have readers and concentration camps, I mean, there's a lot 576 00:33:17,560 --> 00:33:20,000 Speaker 1: of questions for them that I think, over the long term, 577 00:33:20,280 --> 00:33:22,600 Speaker 1: with a rise of India, for example, could be very 578 00:33:22,640 --> 00:33:26,880 Speaker 1: significantly put them at risk. Yeah, I think there's there's 579 00:33:26,880 --> 00:33:29,560 Speaker 1: a fair comments. Kevin and I lived for eleven years 580 00:33:29,640 --> 00:33:32,280 Speaker 1: in Beijing, UM And for a number of those years 581 00:33:32,320 --> 00:33:34,400 Speaker 1: I lived next to the to the U. S. Embassy 582 00:33:35,120 --> 00:33:37,880 Speaker 1: in Beijing, and I can tell you that every morning 583 00:33:38,480 --> 00:33:42,240 Speaker 1: there was a line of hundreds of Chinese people outside 584 00:33:42,280 --> 00:33:45,920 Speaker 1: the US consulate queuing up to get a visa to 585 00:33:46,040 --> 00:33:48,840 Speaker 1: come and visit America. Um. And when I go to 586 00:33:49,000 --> 00:33:52,680 Speaker 1: the Chinese Consulate office in d C, there is not 587 00:33:52,880 --> 00:33:56,040 Speaker 1: a line of Americans queuing up to go and visit China. 588 00:33:56,480 --> 00:34:00,080 Speaker 1: Is a great point. Is a great point that tells you, 589 00:34:00,320 --> 00:34:02,640 Speaker 1: That tells you something really important, right, That tells you 590 00:34:02,760 --> 00:34:06,560 Speaker 1: something really important which goes beyond the economics and goes 591 00:34:06,680 --> 00:34:11,080 Speaker 1: beyond the shareholder value. Um. But the point I kind 592 00:34:11,120 --> 00:34:14,239 Speaker 1: of want to make in my book is, well, you 593 00:34:14,360 --> 00:34:18,240 Speaker 1: know what, because we have this kind of this negative 594 00:34:18,360 --> 00:34:21,160 Speaker 1: lens through which we view China, because we view China 595 00:34:21,239 --> 00:34:24,840 Speaker 1: through this kind of red mist of sort of difference 596 00:34:24,920 --> 00:34:28,480 Speaker 1: between a democratic country and a market economy and an 597 00:34:28,520 --> 00:34:33,200 Speaker 1: authoritarian party in a state dominated economy, we miss the 598 00:34:33,320 --> 00:34:36,520 Speaker 1: things that they are doing right. We missed the things 599 00:34:36,600 --> 00:34:40,200 Speaker 1: that they are effective at in terms of managing their 600 00:34:40,239 --> 00:34:44,200 Speaker 1: economic development, managing some of the risks in their financial sector. 601 00:34:44,719 --> 00:34:47,520 Speaker 1: And because the US China relationship is really going to 602 00:34:47,560 --> 00:34:51,000 Speaker 1: be the defining relationship of the twenty one century if 603 00:34:51,080 --> 00:34:53,799 Speaker 1: we don't get it right in terms of understanding those things, 604 00:34:53,960 --> 00:34:57,759 Speaker 1: then then that's going to be a problem. Fascinating. Tom 605 00:34:57,800 --> 00:35:00,280 Speaker 1: morlocks on the line. He's Bomberg Economics chief like Economy, 606 00:35:00,320 --> 00:35:02,400 Speaker 1: is an author of the great new book, China, The 607 00:35:02,520 --> 00:35:04,879 Speaker 1: Bubble That Never Pops. All right, Tom, let me ask 608 00:35:04,920 --> 00:35:07,040 Speaker 1: you about the forecast for Q three. In Q four, 609 00:35:07,280 --> 00:35:09,960 Speaker 1: you're talking about a stepped up economy. Tell me what 610 00:35:10,080 --> 00:35:15,080 Speaker 1: that means. So China's in this interesting position, right because 611 00:35:15,520 --> 00:35:18,840 Speaker 1: they've controlled their virus um and they are ready to 612 00:35:18,960 --> 00:35:22,640 Speaker 1: get back to work. Their factories are operational again. But 613 00:35:22,760 --> 00:35:25,560 Speaker 1: what's happened, Well, the virus is spread around the rest 614 00:35:25,600 --> 00:35:29,840 Speaker 1: of the world, right, So the US, many parts of Europe, 615 00:35:30,080 --> 00:35:33,480 Speaker 1: many parts of Asia are either still in lockdown or 616 00:35:33,560 --> 00:35:37,080 Speaker 1: they're slowly emerging from that lockdown. So you've got this 617 00:35:37,320 --> 00:35:41,600 Speaker 1: interesting kind of divided world. Right. You've got China which 618 00:35:41,640 --> 00:35:43,759 Speaker 1: is ready to get back to work. But where's the 619 00:35:43,840 --> 00:35:46,440 Speaker 1: demand going to come from? Who's going to export? Who's 620 00:35:46,560 --> 00:35:48,680 Speaker 1: who are they going to export from when the rest 621 00:35:48,719 --> 00:35:51,839 Speaker 1: of the world is in depression or in recession um. 622 00:35:52,040 --> 00:35:53,919 Speaker 1: And then you've got the rest of the world which 623 00:35:54,040 --> 00:35:56,719 Speaker 1: is still struggling with the control of the virus and 624 00:35:57,000 --> 00:36:01,680 Speaker 1: is going to face a more arduous and flow of recovery. Wow, 625 00:36:02,000 --> 00:36:04,600 Speaker 1: it really is remarkable. Tom. I read everything you write, 626 00:36:04,760 --> 00:36:06,560 Speaker 1: and I read all of your reports, so I very 627 00:36:06,640 --> 00:36:10,600 Speaker 1: much appreciate you, my friend, making time for me this evening. 628 00:36:10,680 --> 00:36:13,880 Speaker 1: That's Tom or like everybody. He's Bloomberg's economics chief economists 629 00:36:13,880 --> 00:36:16,160 Speaker 1: and author of the great new book, China, The Bubble 630 00:36:16,239 --> 00:36:18,520 Speaker 1: That Never Pops. Go get it, China, The Bubble That 631 00:36:18,680 --> 00:36:21,360 Speaker 1: Never Pops. I'm flying through it. China, the Bubble That 632 00:36:21,440 --> 00:36:23,840 Speaker 1: Never Pops. It's the name of Tom Warlick's new book. 633 00:36:24,160 --> 00:36:28,040 Speaker 1: Tomorrow on Bloomberg Radio Sound on, we have uh Congressman 634 00:36:28,120 --> 00:36:30,759 Speaker 1: Mike McCall. He is a Republican, top Republican on House 635 00:36:30,760 --> 00:36:35,480 Speaker 1: Foreign Affairs Foreign Relations Committee, and Senator John art Stay, 636 00:36:35,480 --> 00:36:37,320 Speaker 1: Republican from Iowa. So you don't want to miss that. 637 00:36:37,360 --> 00:36:40,319 Speaker 1: Download the bloombergs on On podcast on Apple iTunes, at 638 00:36:40,360 --> 00:36:43,719 Speaker 1: Bloomberg dot com, or by downloading the Bloomberg Business app. 639 00:36:43,760 --> 00:36:45,480 Speaker 1: You can also find me on Radio dot Com, I 640 00:36:45,600 --> 00:36:48,839 Speaker 1: Heart Radio, and Spotify. Thanks for listening. Thanks to Jason 641 00:36:48,920 --> 00:37:02,200 Speaker 1: Kelly for lebron So Bloomberg So Foo