Speaker 1: This is Bloomberg Business Week. I'm Karl Masser and I'm
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Speaker 1: Eastern Time on the Bloomberg Radio or watch us on
Speaker 1: YouTube search Bloomberg Global News. Well, the earliest studies in
Speaker 1: amicron are giving cause for cautious optimism. We've certainly seen
Speaker 1: that play out in the financial market trade, the equity
Speaker 1: trade in particular. Well, vaccines may be less powerful against
Speaker 1: the new variant. Protection can be fortified with boosters, and
Speaker 1: that's certainly something we're hearing from the company's fist in BioNTech,
Speaker 1: saying initial lab studies showed a third dose of their
Speaker 1: COVID nineteen vaccine neutralizes amicron, results that will accelerate global
Speaker 1: booster drives in the U S. I've certainly seen it
Speaker 1: as you try to sign up that it's now you've
Speaker 1: got to wait a couple of weeks to get that boostered.
Speaker 1: It's it's really step a lot of momentum. I've heard
Speaker 1: that from colleagues. I got mine on Monday. Um, but
Speaker 1: I know, talk about a catalyst to get you know,
Speaker 1: thoughts over to shots. People are noticing it in a
Speaker 1: big way. Well back with us to talk about the
Speaker 1: latest day's headlines when it comes to the pandemic. Dr
Speaker 1: Anthony Harris work Care's Chief Innovation Officer and associated or
Speaker 1: an associate medical director of the onside clinical operations for
Speaker 1: the company. Work here. If you're not familiar, there are
Speaker 1: a physician directed occupational health services company. Dr Harris also
Speaker 1: leads the company's COVID nineteam clinical response team. He is
Speaker 1: back with us UH from Chicago where they're based. Dr Harris,
Speaker 1: nice to have you back with Tim and myself. How
Speaker 1: are you How are things in Chicago when it comes
Speaker 1: to the pandemic. Well, thank you Carol, thank you Tim
Speaker 1: for having me back. And things are Things are okay.
Speaker 1: When I say okay, you know people aren't running around
Speaker 1: with their hair on fire here. Um, but certainly we're
Speaker 1: seeing the effects of this amicron scare, you know, recently,
Speaker 1: and so we're seeing more masks compliance potentially, and certainly
Speaker 1: we're talking about going to shows and whatnot. We're seeing
Speaker 1: more requirements that you have to be vaccinated to get in.
Speaker 1: How much does that actually help people? Like, what is
Speaker 1: the thing that actually prompts people to get shots the
Speaker 1: people who are sitting on the sidelines right now? Is
Speaker 1: it something like what Carol was talking about with people
Speaker 1: going to get boosters because the amicron? What's me at
Speaker 1: somebody get the first shot? Sure? Yeah, yeah. We saw
Speaker 1: early on right the early movers, kind of the third
Speaker 1: of the population roughly that had been fully vaccinated go
Speaker 1: ahead and sign up to get their boosters. And if
Speaker 1: you look at the statistics now in the US we're
Speaker 1: looking at I'm just thirty percent though as of two
Speaker 1: weeks ago received their booth boosters, and we saw an
Speaker 1: acceleration of that just last week with the scare of armoricrons.
Speaker 1: I mean, we had one of the highest boostered days
Speaker 1: on record. I believe it was two point seven million
Speaker 1: boosters administered in one twenty four hour periods, which again
Speaker 1: points back towards what motivates people to get boosters. Certainly
Speaker 1: fear is one of them, right, It's like a logically Unfortunately,
Speaker 1: we know fear only last roughly about two weeks as
Speaker 1: a motivating factor. So um, the other factors, I believe
Speaker 1: to a minor extent are gaining access to different venues.
Speaker 1: So we'll see how it continues to play out. I
Speaker 1: think mandates, right, we've seen put in place, uh increase
Speaker 1: booster participation, but I think we've already kind of topped
Speaker 1: out the effectiveness of that approach at this point. Okay,
Speaker 1: I am curious since the pandemic has started, and I
Speaker 1: think we're about you know, twenty months or so in
Speaker 1: since the pandemic took hold in the US, depending on
Speaker 1: how you count it, but roughly, so, how is your
Speaker 1: thinking and strategy evolved in terms of managing pandemic up
Speaker 1: and managing the pandemic? Dr Harris? Sure it really is,
Speaker 1: you know, going with classic um public health approaches right
Speaker 1: and by far in the way, the biggest approach is education, right,
Speaker 1: and educating the public in today's time dreft stically different
Speaker 1: than educating the public back in smallpox time. Right, Um,
Speaker 1: where And I'm just speaking anecdotally as a physician. Uh
Speaker 1: here in the US. You know, when when I started
Speaker 1: my career a decade ago, um, you know, I would
Speaker 1: approach my patients and begin to educate, and I would
Speaker 1: have some good dialogue around what the best approaches. But
Speaker 1: certainly today it's more of hey, doc, here's what I've
Speaker 1: researched on my own, guide me towards and navigate me
Speaker 1: towards the data so that I can make my best
Speaker 1: informed decision, whereas days of antiquity was more so Hey doc,
Speaker 1: you're the expert. I'm gonna do what you recommend. So
Speaker 1: I think that dynamically see playing out from a public
Speaker 1: health education standpoint, not a bad thing, right. We want
Speaker 1: people to be accountable for their own health and wellness. Um.
Speaker 1: But with today's information and the prevalence of misinformation, it
Speaker 1: is perhaps becoming more difficult to do. Hey, Dr Harris,
Speaker 1: help us understand what expectations should be as far as
Speaker 1: booster shots go. Uh, as we do, you know, get
Speaker 1: to the other side. I use the term get to
Speaker 1: the other side of this pandemic. But it just seems
Speaker 1: like every few months there's a new variant that's not
Speaker 1: getting us to the other side. So wondering is there
Speaker 1: is it realistic for us to think that we're gonna
Speaker 1: have to get a booster every six months or so? Unfortunately, Uh,
Speaker 1: the estimate is yes, right, we see wane of the
Speaker 1: booster after about six months even now, right, I know
Speaker 1: anecdotally again position partners of mine that are planning to
Speaker 1: get their fourth shop. Right, so they've been fully vacid
Speaker 1: to receive a booster, and they're already planning to get
Speaker 1: their next booster come early next year to keep their
Speaker 1: immunity level high. And the science behind that is straightforward.
Speaker 1: You have a building of immune UH, antibodies and immune cells.
Speaker 1: These are called plasma cells that remember what the virus is,
Speaker 1: what it looks like, right Uh, And those we know
Speaker 1: diminish over time both antibodies and B sales B cells
Speaker 1: to a lesser extent um. But when we're talking about
Speaker 1: new variants, even if you have a decent level of
Speaker 1: antibodies against one type of virus, doesn't necessarily mean it's
Speaker 1: going to bind well to the new virus. I e.
Speaker 1: Amicron that has thirty mutations over thirty mutations in the
Speaker 1: binding site for our antibody. So the the basic sciences.
Speaker 1: The more antibodies you have in your system, the better
Speaker 1: off you are are going to be in terms of
Speaker 1: varying against historic variants as well as new variants. Unfortunately,
Speaker 1: we know clearly antibody levels diminished over time. Dr Harris,
Speaker 1: twenty seconds left. How are you advising your team in
Speaker 1: terms of maybe where we will be in a year's time?
Speaker 1: Just quickly, please, I always say, plain and simple, you know,
Speaker 1: follow the finances and the pharmacy. We are very estimating
Speaker 1: to ramp up their production, both Feiser and mcdania murth
Speaker 1: uh in all through tween twenty two. So in a
Speaker 1: year's time we're gonna still be in listica phones. All right,
Speaker 1: good to know, I guess. Dr Anthony Harris, chief Innovation
Speaker 1: Officer at work Care, on the phone from Chicago. You're
Speaker 1: listening to Bloomberg Business Week. You're listening to Bloomberg Business
Speaker 1: Week with Carol mat Sir and Bloomberg Quick Takes Tim
Speaker 1: Stinovic on Bloomberg Radio. It's Bloomberg Big Take. It's among
Speaker 1: our most read on the Bloomberg Today. It's all spelled
Speaker 1: out in the upcoming new issue of Bloomberg Business Week.
Speaker 1: Got tomorrow on newsstands at business Week Dot comment on
Speaker 1: the Bloomberg the story one of the great rethings. I
Speaker 1: think it's safe to say of this time, the great resignation.
Speaker 1: Why are workers saying but by two jobs? Tens of
Speaker 1: millions of people around the number alone just kind of
Speaker 1: blue with their jobs. Twenty four million between April and
Speaker 1: September this year. That's the US. That's US. That's crazy.
Speaker 1: That is an absolutely wild number. Hey, let's talk about
Speaker 1: this with Joel Webber, editor at Bloomberg business Week. He's
Speaker 1: with us in the Bloomberg Interactive Broker Studio. Also joining
Speaker 1: us is the economics editor of Bloomberg Business Week, Christina
Speaker 1: Lynn Blad. Hey, Joel, Um, we're talking about this. We
Speaker 1: talked about this a lot from the U. S. Perspective,
Speaker 1: But what is so great about this story as it
Speaker 1: brings together a really really global perspective by talking about
Speaker 1: what's happening in the U S. And China and even
Speaker 1: other places as well. Yeah, So, I think the Great
Speaker 1: Resignation here in the US. We can throw around that
Speaker 1: twenty four million number if we want. It's been a thing.
Speaker 1: But what's interesting about this is that there's like other
Speaker 1: forces and other things that aren't called the great resignation
Speaker 1: in the life flat being really uh, the embodiment of this.
Speaker 1: So it has created this sort of global thing that's
Speaker 1: happening of people basically just opting out of work. And
Speaker 1: for those for those of us who haven't done that,
Speaker 1: it's like a great mystery about like what what're you
Speaker 1: doing here? And like how are you? Um? But yet
Speaker 1: there are massive implications for this, not only from um economics,
Speaker 1: but um also just like what a labor force starts
Speaker 1: to look like when you lose this many workers. But Christina,
Speaker 1: what's what's behind it all? What's happening? And what is
Speaker 1: if you haven't heard of life flat yet, what where
Speaker 1: did it all come from? Life Flat in China came
Speaker 1: from a social media post in which um, this young
Speaker 1: guy I admitted that it was almost kind of embarrassed
Speaker 1: the beginning. It's like I haven't worked for a couple
Speaker 1: of years. He used to be a factory worker and
Speaker 1: and basically he said, this is like a philosophical choice
Speaker 1: that I'm making. Um, and uh, it became it went
Speaker 1: viral and uh and and to to just get a
Speaker 1: feeling for how big it was, she Shaane Ping and
Speaker 1: other members of China's leadership responded to that language directly
Speaker 1: saying you should not lie flat. And you know, I
Speaker 1: think the thread that runs through all these countries is
Speaker 1: that people are responding to the feeling that they're working
Speaker 1: really hard, but they don't feel like they're getting ahead.
Speaker 1: And one of the reasons is if they're living in
Speaker 1: big cities, all these other prices are going up faster
Speaker 1: than their than their wages, their salaries, right, so they
Speaker 1: feel like their incomes are actually stagnant. And I think
Speaker 1: I thought that was a really interesting thing that made
Speaker 1: it different from behind, you know, other sort of burnout
Speaker 1: moments that like we've captured in culture. I do think
Speaker 1: about what you all said to like the great implications.
Speaker 1: We were just talking about, um a Goldman Sack story
Speaker 1: that's saying young U S workers are plotting early retirements,
Speaker 1: and I'm like, well, how the heck are they going
Speaker 1: to do it? Because probably a lot of folks are
Speaker 1: not like my dad who got pensions, right, and so
Speaker 1: those were young people in that survey. I now tend
Speaker 1: to think that we need personal finance courses in school miscalculation.
Speaker 1: I think about the economic implications, like so if people
Speaker 1: are not going back to work, they're not having babies. Like,
Speaker 1: how like, what does this mean globally? Well, and we
Speaker 1: have there are some case studies out there, like Japan
Speaker 1: comes up in the story because there's a statory generation,
Speaker 1: right Christina, Like, there's other places that we can kind
Speaker 1: of look to how this has played out before happening. Well,
Speaker 1: I mean it definitely in Japan. It's almost like the
Speaker 1: statory generation emerged after the country was already in decline.
Speaker 1: It was almost a response to this the the economic
Speaker 1: things that have already happened. I mean in China, what there,
Speaker 1: what leadership is concerned is that if enough people sort
Speaker 1: of change their thinking that way, because you know, in
Speaker 1: order to live that way, you really have to pare
Speaker 1: down your lifestyle, which can be found this one guy
Speaker 1: it's like four shirts for shirts, eight long sleeve. I
Speaker 1: was like, oh man, that's like four four T shirts. Yeah.
Speaker 1: I was like post working from home, you know, that's
Speaker 1: exactly sweatpants money. But right, no, it I mean, if
Speaker 1: if it really took off worldwide, it would definitely have
Speaker 1: economic implications, you know, or as President gian to something
Speaker 1: in terms of this whole idea, we all talk about
Speaker 1: this wealth gap and if workers get to feel like
Speaker 1: they're making more money, able to live in cities more easily,
Speaker 1: get to share in the wealth, could that put an
Speaker 1: end to some of this or is it more than that? Well,
Speaker 1: I mean I think that it could. You know, the
Speaker 1: pandemic lies on top of all of this is sort
Speaker 1: of this extra kind of anxiety that people are feeling.
Speaker 1: I think that maybe like what China is doing or
Speaker 1: what employers on their own can do, can sap some
Speaker 1: of the energy from this these movements by addressing these concerns.
Speaker 1: But one of the issues though, is that um, young
Speaker 1: people haven't truly verbalized their demands about what they want,
Speaker 1: you know, from from It's not like they're saying to
Speaker 1: their bosses, do this for me and I will stay,
Speaker 1: you know. They're just kind of like saying no, I can't. Yeah.
Speaker 1: I mean, I guess I have so much to This
Speaker 1: brought up so much plus the Goldman Sack story that
Speaker 1: we saw earlier today, and it just had me thinking
Speaker 1: about where we are as a society globally and how
Speaker 1: much this has to do with the pandemic versus how
Speaker 1: much it has to do with the idea that you know,
Speaker 1: maybe for the last thirty or forty years in China
Speaker 1: and the idea of worked and they don't need that
Speaker 1: anymore because China has grown so quickly, and you know,
Speaker 1: the rise of leisure here in the United States. It's
Speaker 1: really some product of the twentieth century and the idea
Speaker 1: of the five day work week, like the idea of
Speaker 1: pulling back or we at that point in history where
Speaker 1: productivity is has gotten to a place where we can
Speaker 1: we can step back a little bit. Well, and another
Speaker 1: thing we haven't talked about here is just the role
Speaker 1: of techness of being able to maybe have a gig
Speaker 1: job where you just work a little bit when you
Speaker 1: want to. And you know, there's a quote in the
Speaker 1: story of like I play three days and then I
Speaker 1: work one day, you know, and and that idea, you know,
Speaker 1: we just in the hit when you think about how
Speaker 1: the week is structured, you work five days, you take
Speaker 1: two days off. That was also that we could basically
Speaker 1: like make factories work suddenly when you throw in variables,
Speaker 1: like we're beginning to see and compensate people differently, incentivize
Speaker 1: them differently. Maybe that looks like a radically new world,
Speaker 1: and that's sort of what this starts to glimp what
Speaker 1: this starts to glimpse? Right, And I think about some
Speaker 1: of the like I just remember doing a story and
Speaker 1: Pixar like years ago, and they just if people wanted
Speaker 1: to work in the morning, they wanted to work a lot,
Speaker 1: like a full day, and they maybe take some time off.
Speaker 1: Nobody cared as long as things got done. And I
Speaker 1: do wonder are we are we getting closer that we
Speaker 1: just got about thirty sex. I think that um for
Speaker 1: creative types, especially this kind of flexible arrangements, you know
Speaker 1: may work, but you know, like you're staying business week
Speaker 1: to bed with that work. We're on the clock right now,
Speaker 1: no lying flat of business. It's a big story. We
Speaker 1: have David Rubinstein coming up of the Carlisle Group, and
Speaker 1: it's something we want to talk about with him and
Speaker 1: how he's how he's thinking about that as well. I
Speaker 1: want to know too. Yeah, right, did he get it?
Speaker 1: I don't know, is he is? He? Like no, he's
Speaker 1: working all the time. Incredible story, incredible reporting. Christina Linblad,
Speaker 1: thank you so much, Economics editor, Bloomberg business Week. It's
Speaker 1: in the upcoming issue of the magazine. Chill Weber editor
Speaker 1: of Bloomberg Business Week. Um, no lying flat for us,
Speaker 1: not yet. You're listening to Bloomberg Radio. You're listening to
Speaker 1: Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes.
Speaker 1: Tim Stinovik on Bloomber Radio. So in his latest episode
Speaker 1: of the upcoming Peer to Peer Conversations on Bloomberg the
Speaker 1: Carlisle Group co founder and co chairman David Rubinstein catching
Speaker 1: up the presidency of Hilton Worldwide, Christmas said, a David,
Speaker 1: of course, the author of a series How to Lead
Speaker 1: on Leadership, The American Story, those conversations he's had with
Speaker 1: so many of his storians, and his third in that
Speaker 1: series about the arc of the U. S as a
Speaker 1: young country as it invented and really reinvented itself. That book,
Speaker 1: The American Experiment, Dialogues on a Dream. David Rubinstein back
Speaker 1: with us on the phone in New York City. David,
Speaker 1: how are you all right? How are you doing okay?
Speaker 1: Doing okay? Um? Christmas Satti loved talking with him. You
Speaker 1: had a really deep dive of a conversation with him. Um,
Speaker 1: what stands out from you in that conversation and how
Speaker 1: the hotel industry Hilton specifically is doing. The hotel industry
Speaker 1: suffered probably as much as any industry, perhaps with the
Speaker 1: sole exception of the cruise industry, which pretty much shut
Speaker 1: down completely. The hotel industry dramatically UH saw occupancy go down. However,
Speaker 1: occupy and see is now coming back mostly from travel
Speaker 1: and leisure, not as much from business, though business is
Speaker 1: coming back a bit. They stocks though of the travel
Speaker 1: lodging companies are done quite well. I mean right now
Speaker 1: Hilton is an all time high. I think Marriott US
Speaker 1: near an all time high as well. So the market
Speaker 1: is anticipating future growth and the real challenge that they
Speaker 1: the hotel companies have, in Christens said, I talked about
Speaker 1: this is where do you get employees? UM, A lot
Speaker 1: of employees went away and now they got to hire
Speaker 1: them back and probably higher wages, and as a result,
Speaker 1: you're probably going to have some increases in in UH
Speaker 1: in the cost of rooms. In addition, should you provide
Speaker 1: all the services that you were providing before? People are
Speaker 1: used to having daily towel service and daily makeup service
Speaker 1: and their beds. Do you have to do that? Do
Speaker 1: you have to get free breakfasts every morning to some
Speaker 1: of your patrons to some of these things are going
Speaker 1: to be looked at by companies like Hilton and others.
Speaker 1: So what do you think, David about the potential permanent
Speaker 1: shifts that we see on the other side of the
Speaker 1: pandemic when we when we do get to the other
Speaker 1: side of the pandemic when it comes to travel, leisure,
Speaker 1: in hospitality. Well, I know from the business community, from
Speaker 1: my point of view, if I had to fly across
Speaker 1: the country for one hour meeting, I used to do it.
Speaker 1: Now I'm happy to do a Zoom, So I'm not
Speaker 1: traveling quite as much as I used to. I suspect
Speaker 1: it will come back at some point. But in the
Speaker 1: in the know, pre pandemic, I would go to the
Speaker 1: Middle East or go to the Far East UH for
Speaker 1: a day or two and now come back. And now
Speaker 1: I just I'm a little more reluctant do because you
Speaker 1: can do so many things on on zoom. Obviously you
Speaker 1: can't do everything on zoom, and you have to have
Speaker 1: personal contact at some point. But I do think that
Speaker 1: business and business travel will will slower, be much more
Speaker 1: slow to come back, much slower to come back. Hey, David,
Speaker 1: did Christ say anything about well, you know, because we
Speaker 1: talk a lot more about more automation coming in robotics.
Speaker 1: There's a lot more things we can do online with
Speaker 1: a hotel industry that we couldn't before. Does he say
Speaker 1: that they're making investments or helping you know, at some
Speaker 1: of their team members by really introducing automation that maybe
Speaker 1: sticks with us going forward, Well, sure they are doing
Speaker 1: that right now. For example, rarely do people uh you know,
Speaker 1: need to check in anymore. You can just get your
Speaker 1: ticket online more or less work. Now they're going to
Speaker 1: use face identification to some extent to check in. So
Speaker 1: I think technology is going to dramatically change the industry.
Speaker 1: And and clearly the industry, uh you know, is a
Speaker 1: global industry. I mean, Hilton is all over the world
Speaker 1: and they have thousands of hotels and and they have
Speaker 1: in different categories. That's a big change in the last
Speaker 1: twenty or thirty years. Used to be there was Hilton,
Speaker 1: there was Marriott. Now Hilton has about fifteen different brands.
Speaker 1: Mary has probably something similar. So you can have something
Speaker 1: for every different price point that you want. Hey, one
Speaker 1: thing we were dying to ask you, David Rubinstein, and
Speaker 1: it has to do the couple of stories that are
Speaker 1: among the most red on the Bloomberg. One has to
Speaker 1: do with Goldman talking about young U S workers are
Speaker 1: plotting early retirements. They're, you know, thinking about getting out
Speaker 1: a lot earlier. And then we've got another one on
Speaker 1: the Bloomberg Big Tickets about the great resignation, about how
Speaker 1: we've had more than twenty four million from Aple to
Speaker 1: September here in the US alone witting their jobs. We're
Speaker 1: seeing it. There was a global phenomenon, and in some
Speaker 1: countries we've already seen it happening, even pre pandemic. What's
Speaker 1: going on? Why is everybody quitting? Why are younger folks
Speaker 1: saying I've had it? Are we missing something? What do
Speaker 1: you make of this trend? Well, my generation basically you
Speaker 1: after college or graduate school, you went to work, and
Speaker 1: you worked until you're sixty or seventy, and maybe some
Speaker 1: cases even longer than that. Younger people are saying, well,
Speaker 1: I can work out of my home a bit, Why
Speaker 1: do I need to work in the traditional way? And secondly,
Speaker 1: maybe I don't need to work quite as long. I
Speaker 1: can make a fair amount of money if I do
Speaker 1: well and retire at fifty five or sixty or even fifty.
Speaker 1: So the world is changing. The world always changes. I'm
Speaker 1: not surprised the pandemic has really changed the way people
Speaker 1: look at the world. I know my own generation has
Speaker 1: looked at the world much differently because we're worried more
Speaker 1: about getting the COVID and getting UM to the point
Speaker 1: where we can survive this because of the age group,
Speaker 1: and more and more people who are older than me,
Speaker 1: even uh there are in my early seventies are saying
Speaker 1: they don't want to work anymore either because they just
Speaker 1: want to retire and and recognize that life might be
Speaker 1: easier if they just retired. Are there concerns though about productivity?
Speaker 1: If we see this, well, productivity it generally increases because
Speaker 1: of technology. So technology tends to make productivity get much better,
Speaker 1: some countries better than others. Yeah, product productivity is always
Speaker 1: a challenge, but as a general rule of thumb, productivity
Speaker 1: does increase even when you have fewer employees. Well, what
Speaker 1: about them an economic or market rethink? David, Like I do,
Speaker 1: wonder if you're tiring early or maybe you're saying, you
Speaker 1: know what, I don't need so much in my wardrobe,
Speaker 1: even if you've done well, like you just pair back? Um,
Speaker 1: are there implications that we need to be thinking about. Well, sure,
Speaker 1: I mean, people probably don't need to buy I used
Speaker 1: to buy a lot of business suits, probably don't need
Speaker 1: as many of them. I don't used to buy a
Speaker 1: lot of ties. Probably don't need a lot of them. Um,
Speaker 1: and people probably are going to just change their life
Speaker 1: a bit. You know. It's interesting that the Industrial revolution
Speaker 1: changed the way we live or work over about a
Speaker 1: hundred year period of time. The Internet maybe over twenty
Speaker 1: five year period of time, the smartphone or for seven
Speaker 1: years or so, and now over just one and a
Speaker 1: half years, we're changing the way we live and work
Speaker 1: because of a pandemic that was never anticipated. And whether
Speaker 1: that's a good thing or not, it's clearly here and
Speaker 1: it's a reality. And people are much different in the
Speaker 1: way they look at work. They don't view it as
Speaker 1: an obligation so much. If they don't enjoy it, they're
Speaker 1: not going to do it. I wonder if technological innovation, though,
Speaker 1: has kept up with the worker attitudes. We're not we're
Speaker 1: not seeing uh, we're having a hard time in the
Speaker 1: United States finding long haul truckers, but we're not seeing
Speaker 1: self driving trucks at this point on roads Um, not yet.
Speaker 1: Not yet. It's a challenge for Amazon to keep employees
Speaker 1: incredibly high turnover, but you know they're not being replaced
Speaker 1: by robots at this point. So isn't there some concern
Speaker 1: we're trepidation about the idea that that productivity hasn't in
Speaker 1: technology hasn't caught up to worker attitudes. Well, workers are
Speaker 1: higher ambitions of what they want to do, and then
Speaker 1: the kind of jobs you might get by working in
Speaker 1: a warehouse and and fulfilling orders for Amazon may not
Speaker 1: be as intellectually challenging. Is what some people really wanted
Speaker 1: to do when they went to college or or some
Speaker 1: kind of vocational training. Uh. Clearly things are going to
Speaker 1: have to adjust, But in the end, I think the
Speaker 1: American workforces is pretty resilient. I think we'll come back.
Speaker 1: We can't compete with the workforce in terms of costs
Speaker 1: in China or Asia, but we can, uh, I think
Speaker 1: do a pretty good job in making productivity better than
Speaker 1: it has been. Clearly, technological leaders UH usually come from
Speaker 1: the United States. Hey, David, you know your series of books,
Speaker 1: your trilogy you know on leadership historians really looking at uh,
Speaker 1: the growth of this nation and how it's evolved and
Speaker 1: really talking with leaders as we constantly, as you say,
Speaker 1: these invention innovative cycles seem to be happening in less
Speaker 1: time here. Um, how do you see, you know, in
Speaker 1: terms of the next trends or the people that you
Speaker 1: think we really have got to keep an eye on
Speaker 1: that that really are going to be determining maybe the
Speaker 1: future trajectory. And it can be politically as well as
Speaker 1: on a business and market front. Well, in the business world,
Speaker 1: chain is usually made, as it is in the political world,
Speaker 1: by people who are younger. Revolutions are not usually led
Speaker 1: by seven to year old people, and as a general
Speaker 1: rule of thumb, business change is usually led by demand
Speaker 1: from people who in their twenties or thirties. So how
Speaker 1: many people have now caught on with the kind of
Speaker 1: social media devices that really the young people really focused
Speaker 1: on and really helped generate. Same with computers, and the
Speaker 1: same with other kinds of services that we now rely on.
Speaker 1: Many of these came from younger people. So I think
Speaker 1: it's a very good thing if boards of directors and
Speaker 1: companies would get younger people on them. I think it's
Speaker 1: a good idea for boards of trustees as well. Nonprofits
Speaker 1: have more and more people on them who are younger.
Speaker 1: I rarely see on the words that I serve people
Speaker 1: under the age of forty. But really that's where the
Speaker 1: change is coming from. And probably it's not a bad
Speaker 1: idea to have younger people on these boards or in
Speaker 1: senior positions, advising boards of directors or trustees. So why
Speaker 1: do they resist? What happens? Like if you bring that
Speaker 1: up and you're on a board and you say, hey, guys,
Speaker 1: I love you all, but we need to ascue younger.
Speaker 1: We've certainly see the implication since the benefits of having
Speaker 1: diversity on boards. But but what's the response. Well, sometimes
Speaker 1: people are always willing to nod and say yes, let's
Speaker 1: take that up, or we should think about it, and
Speaker 1: then if you're not persistent, you won't get very far.
Speaker 1: So persistence is a real hallmark of leadership, as I've
Speaker 1: said in my book. So you've got to be persistent,
Speaker 1: and I probably should be more persistent in pushing the
Speaker 1: idea of having younger people advise boards of directors and
Speaker 1: boards of trustees or being more senior positions, because the
Speaker 1: consumers in the world, the people are changing things, are
Speaker 1: really younger people. Hey, David let's talk markets here, because
Speaker 1: you've seen lots of market cycles throughout your career, help
Speaker 1: us understand and put into context the one that we're
Speaker 1: seeing right now with the s and just continuing to
Speaker 1: to grind higher, and you know, the COVID variants still
Speaker 1: making their way around the world, and concerns about growth.
Speaker 1: If the markets have got anything wrong. Initially when COVID
Speaker 1: came about, it was that the markets we're going to
Speaker 1: be more resilient than they turned out than the then,
Speaker 1: than than people thought. In other words, when we went
Speaker 1: through COVID, people thought, Okay, the economy is going to collapse,
Speaker 1: and all of a sudden, the market will collapse. But
Speaker 1: if it turns out maybe because of federal intervention for sure,
Speaker 1: but because of federal support and other factors, the stock
Speaker 1: market actually has gone up. And in the private equity
Speaker 1: world that I operate in, markets have never been better.
Speaker 1: People are making staggering sums of money compared to what
Speaker 1: they did before. So it's very difficult to predict right now.
Speaker 1: I would say that the federal government is probably going
Speaker 1: to increase interest rates next year. That should have a
Speaker 1: somewhat impact on the market of probably reducing prices a bit,
Speaker 1: and I suspect inflation won't go away, so that might
Speaker 1: impede the market a bit. But I don't see any
Speaker 1: collapse in the near term. I don't see any kind
Speaker 1: of UH correction of any consequence. Who might have a
Speaker 1: one day to day blip because of something that happens,
Speaker 1: but a ten or fifteen percent market correction, I don't
Speaker 1: see that for an enduring period of time in the
Speaker 1: next year or so. David, what is the productive conversation?
Speaker 1: I mean, you know, I here at Bloomberg we talk
Speaker 1: a lot about the FED, We talk about inflation. You
Speaker 1: guys were just touching on it. But I mean, what
Speaker 1: is the productive conversation to have about that right now?
Speaker 1: I think people should recognize that inflation um was artificially low. Historically,
Speaker 1: throughout most of the twentieth century, inflation was three or
Speaker 1: four percent, but for the last twenty years or so,
Speaker 1: it was the two percent or less that was abnormally low. Uh.
Speaker 1: For a number of reasons, inflation got to the double
Speaker 1: digit arrange when I was in the White House in
Speaker 1: the President Carter. We're not likely to see that again.
Speaker 1: For a number of reasons that our economy is much
Speaker 1: more global than it used to be. We don't have
Speaker 1: a percentage of the of the workforce being unionized as before.
Speaker 1: And and the Federal Reserve is I think more sensitive
Speaker 1: to interest rates increases than they might have been many
Speaker 1: years ago. So I don't really think we're going to
Speaker 1: have that problem again in terms of high inflation. But
Speaker 1: I do think we'll have inflation probably above two percent
Speaker 1: and maybe for a while, maybe somewhere between three and
Speaker 1: three and a half percent. That might happen for the
Speaker 1: year or so, But it's not a calamity. Yeah, No,
Speaker 1: that's a good thing to kind of remind everybody on that.
Speaker 1: He last question, David I mentioned to three books How
Speaker 1: to Lead the American Story, The American Experiment, American Experiments,
Speaker 1: some just great conversations about our country and as it
Speaker 1: changed and evolved. Uh, if you look for infspiration, is
Speaker 1: there one particular interview that you might suggest to our
Speaker 1: audience at this point? Well, disappointing one to me was
Speaker 1: the interview with Ken Burns. I lived through the Vietnam War,
Speaker 1: not as a combatant, but as a as a civilian,
Speaker 1: as a student, and and and he said that actually
Speaker 1: it's clear from the documentary evidence that the presidents of
Speaker 1: the United States who lived for the Vietnam War knew
Speaker 1: we could never win that war militarily. They knew it.
Speaker 1: It was just a question of the politics of it.
Speaker 1: They didn't want to admit that they were going to
Speaker 1: withdraw and be seen as a loser. So we fought
Speaker 1: a war when shifty eight thousand Americans died and hundreds
Speaker 1: of thousands of Vietnamese died, really for a political reason
Speaker 1: and not for a military reason. All right, we're gonna
Speaker 1: leave it on that note, David, Thank you so much.
Speaker 1: As always, David Rubinstein, Happy holidays, b Well b Safe,
Speaker 1: founder and co executive chairman of the Carlisle Group and
Speaker 1: host of The David Rubinstein Show, Peer to peer Conversations.
Speaker 1: As mentioned his latest book out, The American Experiment, Dialogues
Speaker 1: and a Dream. It's a great holiday gift. I'm just
Speaker 1: gonna put it out there. It is. It's just a
Speaker 1: great versations. Yeah. Features conversation with Metel and Albright ken Burns.
Speaker 1: He mentioned John Mitcham, Walter Isaacson. Uh, the list goes on.
Speaker 1: I'm roam, Yeah, I bet you let me drive. Oh no, no, no, no,
Speaker 1: this is not a toy. All right, please, I'll go.
Speaker 1: I want to drive. It's a good question. This is
Speaker 1: the drive to the closed on Bluebird Radio. All right,
Speaker 1: just about ten minutes to the closing bell on Wall
Speaker 1: Street on this Wednesday. And you know what we've been
Speaker 1: talking about. It does feel like we're taking a little
Speaker 1: bit of a breather here, but a little bit of
Speaker 1: an uptick here in the last few minutes. So we
Speaker 1: are now green on the screen when it comes to
Speaker 1: the SMP down and the NASDAC, but just a little
Speaker 1: bit higher on the SMP five hundreds to call it
Speaker 1: a fractional game there as well. Let's get to it
Speaker 1: with Lisa Erickson. She senior vice president co had at
Speaker 1: Public Markets Group at US Bank. Lisa, thanks so much
Speaker 1: for joining us on the phone from Minneapolis, Minnesota. How
Speaker 1: do you make sense of the volatility that we've seen
Speaker 1: over the last week, really since sun i'd say Black Friday,
Speaker 1: UM and the trading day that we saw there the
Speaker 1: first one the markets had a chance to digest the
Speaker 1: news about Omicron and really the rip higher that we've
Speaker 1: seen since then, the recovery. Yeah, well, first of all,
Speaker 1: him and Carol, thanks so much for having me. But
Speaker 1: to your point, it really has been very volatile over
Speaker 1: the last week or so, and I think what you
Speaker 1: see is that we've had really a very good fundamental
Speaker 1: picture with an uptick strongly across all of our major
Speaker 1: US equity indices. And so when you get some new
Speaker 1: news like what has happened with the development of the
Speaker 1: Omnikron variant, um markets really have to price into that uncertainty,
Speaker 1: and then as additional news flow comes, there is going
Speaker 1: to be a positive rally as people perceive that risk softening.
Speaker 1: You know, from our vantage point, it really remains to
Speaker 1: be seen where this settles out. You know, it's probably
Speaker 1: going to take another week or two really to get
Speaker 1: more sense fully of the severity and the transmissibility of
Speaker 1: this variant. But in the meantime, it is somewhat encouraging
Speaker 1: that we've gotten some you know, early news of perhaps
Speaker 1: a milder variant than was initially expected. All right, so
Speaker 1: help me at Justina Lee Bloomberg wrote this out in
Speaker 1: our Five Things to Watch earlier this morning, and she said,
Speaker 1: just last week everyone was worried, um Lisa about the
Speaker 1: impact of faster FED tightening on risky assets with high valuations.
Speaker 1: That make them more susceptible to rising rates. Now, concerns
Speaker 1: over the variant being a dragon the economic recovery have faded,
Speaker 1: but it's less clear whether the FED story has changed.
Speaker 1: So it's interesting that we've eased concerns about Amkron. But
Speaker 1: are we comfortable then if the FED, you know, ends
Speaker 1: up moving faster than we all anticipated, because that was
Speaker 1: our big worry last week. Absolutely, Carol, that's a great point,
Speaker 1: and FED really is another big near term as well
Speaker 1: is longer term in blunt on what's going on with
Speaker 1: the markets, And to your point, really some of the
Speaker 1: concerns were magnified initially by the fact that chair Pal
Speaker 1: really mentioned the possibility of a faster tapering. Um, we
Speaker 1: do think that's really a key development going forward. I
Speaker 1: think the market expectation in our base cases that that
Speaker 1: will happen next week when the FED meats. But certainly
Speaker 1: a lot of the language around that announcement is going
Speaker 1: to be key and seeing whether some of the balance
Speaker 1: of risk are both to the upside and downside on
Speaker 1: inflation are mentioned, or if it really is more of
Speaker 1: a hawkish tone repeat that, what do you think is
Speaker 1: going to happen next week. What are you looking for? Well,
Speaker 1: our base case again is that the Fed is incented
Speaker 1: and has spoken to really continuing to move forward the
Speaker 1: tapering pace, possibly to thirty billion a month from fifteen
Speaker 1: billion a month. But again, I think the devil's really
Speaker 1: going to be in the details and are main concern
Speaker 1: right now is again a more hawkish tone around that pronouncement,
Speaker 1: really just focusing on the upside risk UH to inflation
Speaker 1: and what that means is the possibility of too hot
Speaker 1: monetary policy, especially when we look into next year and
Speaker 1: we see that the comparisons for inflation are going to
Speaker 1: get tougher, so they could actually be pivoting into an
Speaker 1: upswing just right when some of those numbers come down
Speaker 1: exactly and you know, we've definitely seen that with a
Speaker 1: flattening of the yield curve, you know, or some of
Speaker 1: the conversations we've had over the last week about you know,
Speaker 1: whether you know, treasury investors are warning us Lisa that hey, folks,
Speaker 1: you know, as we get into the next year, we're
Speaker 1: going to see maybe growth slow down, and there's some
Speaker 1: concerns and could the Fed be making a misstep perhaps,
Speaker 1: I hate to say, you know, could we head into
Speaker 1: a recession. It's hard to even get your head around
Speaker 1: that at this point, but you do wonder, especially since
Speaker 1: FED policy takes a while to actually have its impact.
Speaker 1: You know, the timing of all of this is just
Speaker 1: so key. Absolutely to your point. Again, the the based
Speaker 1: comparisons for growth next year are tough too, so you know,
Speaker 1: just at the start growth is likely to come down
Speaker 1: to some extent going into the next year. So the
Speaker 1: FED really is in a tough position because we have
Speaker 1: had some elevated inflation and it is not completely clear
Speaker 1: how long that will continue to laugh And yet on
Speaker 1: the other hand, we know there's a possibility that it
Speaker 1: could come down a little bit as well as you know,
Speaker 1: there's going to be some pressure on the growth number.
Speaker 1: So they're in a tough spot. And that's why, really
Speaker 1: what we're hoping for is that there's some more balanced
Speaker 1: language around you know, the possibility of faster tapering. But
Speaker 1: again it remains to be seen how they come out
Speaker 1: next week. Least. The narrative has been throughout the pandemic
Speaker 1: from the FED, you know, maximizing making sure that they're
Speaker 1: maximizing the ability for people to get back to work,
Speaker 1: and I wonder what you think now is more of
Speaker 1: a focus for FED share Powell is it? Is it
Speaker 1: price stability or maximum employment. Well, as he set out
Speaker 1: really earlier UM several months ago, in terms of what
Speaker 1: it would take to begin the reduction of all of
Speaker 1: the stimulus that's been in place, it really was around both.
Speaker 1: It was around price pressures as well as well as
Speaker 1: maximum employment. And so I think what you're seeing is
Speaker 1: now both are more sharply coming into focus. On the
Speaker 1: employment side, we have gotten some recent strong prince even
Speaker 1: just today with some of the indicators on UM labor force.
Speaker 1: You know, again, I think those are strengthening the case
Speaker 1: that we're approaching that full employment picture. But again, since
Speaker 1: those are both key, we expect the FED to continue
Speaker 1: to look at both of those as they move forward. Hey, Lisa,
Speaker 1: so the SMP is this year you've got the nastack.
Speaker 1: You still guys like large caps. That's where you you
Speaker 1: say investors should focus, and that includes include large cap tech.
Speaker 1: It certainly does, and we're really seeing a balanced opportunity
Speaker 1: among large cat stocks in terms of both interest in
Speaker 1: secular growth types of industries like technology as well as piplicals.
Speaker 1: And really the reason behind that is we've got, despite
Speaker 1: some of the potential risks we're talking about right now,
Speaker 1: a pretty nice economy. If you look at the macro indicators,
Speaker 1: they're really primarily on solid footing, and so that gives
Speaker 1: with the reopening activity, both the opportunity for some of
Speaker 1: those secular growth trends to continue as well as some
Speaker 1: of the reopening companies to do well. So that's really
Speaker 1: the focus on large cap. It really gives you a
Speaker 1: nice balanced, diversified exposure across both types of sectors. All right,
Speaker 1: good to get your thoughts, Lisa. Thank you so much.
Speaker 1: Lisa Ericson. She's senior vice president and co head of
Speaker 1: the Public Markets Group over at US Bank, on the
Speaker 1: phone from Minneapolis. Thanks for listening to Bloomberg Business Week.
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