1 00:00:03,400 --> 00:00:08,880 Speaker 1: This is Bloomberg Surveillance. If anybody needs capable management teams 2 00:00:08,920 --> 00:00:11,239 Speaker 1: for the future, it's the commercial banks, right, They're not 3 00:00:11,240 --> 00:00:13,600 Speaker 1: going to go away. The business isn't going to go away. 4 00:00:13,720 --> 00:00:17,720 Speaker 1: It's not as sign that the economy if not prospers. 5 00:00:17,960 --> 00:00:20,160 Speaker 1: The fact that inflation is only one percent, I don't 6 00:00:20,160 --> 00:00:21,680 Speaker 1: get it. The fourth core was bad in terms of 7 00:00:21,760 --> 00:00:23,639 Speaker 1: g d P. It wasn't bad in terms of jobs. 8 00:00:23,640 --> 00:00:25,920 Speaker 1: In fact, it was fantastic in terms of job growth, 9 00:00:26,000 --> 00:00:29,920 Speaker 1: and that's what's the most important. Bloomberg Surveillance your link 10 00:00:30,000 --> 00:00:34,440 Speaker 1: to the world of economics, finance, and investment on Bloomberg Radio. 11 00:00:34,640 --> 00:00:38,199 Speaker 1: Good morning everyone. Michael mckeein Tom Keane, Bloomberg Surveillance Worldwide. 12 00:00:38,200 --> 00:00:41,480 Speaker 1: We welcome all of you this morning Bloomberg Surveillance batch 13 00:00:41,479 --> 00:00:44,599 Speaker 1: of my Cone and residuc Accounting, Tax Advisory. It can 14 00:00:44,640 --> 00:00:48,600 Speaker 1: be hard to navigate your economic concertainty. Your business needs 15 00:00:49,080 --> 00:00:53,440 Speaker 1: industry insight and transformative advice to drive it forward. Find 16 00:00:53,479 --> 00:00:57,800 Speaker 1: out why at Cone resnik dot com. Michael McKee the 17 00:00:57,840 --> 00:01:03,560 Speaker 1: yield one point. Watching a currency market on stronger again 18 00:01:03,880 --> 00:01:10,320 Speaker 1: this morning. Indeed we're looking at a one on the end, 19 00:01:10,319 --> 00:01:13,080 Speaker 1: but the euro is lower and the pound is lower. 20 00:01:13,160 --> 00:01:17,000 Speaker 1: The only thing a little bit stronger maybe the Australian 21 00:01:17,040 --> 00:01:22,800 Speaker 1: dollar today because the dollar index is down. Very good. 22 00:01:23,080 --> 00:01:25,280 Speaker 1: Michael mcketh, thank you so much, and right now. Stephanie 23 00:01:25,360 --> 00:01:29,040 Speaker 1: Rule and John Michelswaite in conversation with Bill and Melinda Gates. 24 00:01:29,120 --> 00:01:32,440 Speaker 1: See is their annual letter on philanthropy. The question poise 25 00:01:32,560 --> 00:01:35,840 Speaker 1: this year, if you could have a superpower, what would 26 00:01:35,840 --> 00:01:39,120 Speaker 1: it be? They write, poverty is not just about a 27 00:01:39,200 --> 00:01:41,520 Speaker 1: lack of money, It is about the absence of the 28 00:01:41,600 --> 00:01:45,640 Speaker 1: resources the poor need to realize their potential. Two critical 29 00:01:45,680 --> 00:01:48,080 Speaker 1: ones our time and energy. I don't think I have 30 00:01:48,200 --> 00:01:51,240 Speaker 1: either one. Joining us now are the co chairs Bill 31 00:01:51,320 --> 00:01:54,760 Speaker 1: and Melinda Gays plus Bloomberg editor in chief John Michel Thwaite, 32 00:01:54,840 --> 00:01:59,120 Speaker 1: No pressure on me right now. Welcome, Thank you. Every 33 00:01:59,200 --> 00:02:03,320 Speaker 1: year we read your letters and they're very positive, very optimistic. 34 00:02:03,400 --> 00:02:05,800 Speaker 1: This year is no different. But it comes at a 35 00:02:05,840 --> 00:02:09,400 Speaker 1: time when so many influential voices are warning us of 36 00:02:09,400 --> 00:02:12,680 Speaker 1: a global perfect storm. Why is it that you continue 37 00:02:12,720 --> 00:02:16,079 Speaker 1: to be optimistic? What do you see that others don't well? 38 00:02:16,120 --> 00:02:18,640 Speaker 1: I think we see the decline in childhood death around 39 00:02:18,639 --> 00:02:21,480 Speaker 1: the world. We see when we travel to the developing world, 40 00:02:21,480 --> 00:02:24,160 Speaker 1: which we've been doing now for over fifteen years. Life 41 00:02:24,160 --> 00:02:26,840 Speaker 1: getting better for people. We see a rising middle class, 42 00:02:27,040 --> 00:02:30,160 Speaker 1: we see so much potential and ingenuity in the developing world. 43 00:02:30,320 --> 00:02:32,480 Speaker 1: And yet the headlines here are negative. But when you 44 00:02:32,520 --> 00:02:35,760 Speaker 1: actually read what's actually going on and look at the statistics, 45 00:02:36,000 --> 00:02:38,720 Speaker 1: life is getting better for most people around the world, 46 00:02:38,800 --> 00:02:41,720 Speaker 1: not everywhere all the time, but in general, it is 47 00:02:41,760 --> 00:02:44,040 Speaker 1: absolutely getting better. A lot of stuff though in the 48 00:02:44,120 --> 00:02:46,519 Speaker 1: letter though, which actually is rather depressing. You use the 49 00:02:46,560 --> 00:02:49,040 Speaker 1: Thomas Edison a example that it's a hundred and fifty 50 00:02:49,080 --> 00:02:51,040 Speaker 1: years since he invented the light bulb, when yet when 51 00:02:51,080 --> 00:02:54,000 Speaker 1: you look at Africa you see nothing at night other 52 00:02:54,040 --> 00:02:56,799 Speaker 1: than darkness because there aren't many electricity lights on there, 53 00:02:57,040 --> 00:02:59,359 Speaker 1: And you talk about the idea that this could actually 54 00:02:59,400 --> 00:03:02,040 Speaker 1: be The message to teenagers is that you have to 55 00:03:02,080 --> 00:03:04,960 Speaker 1: come up with an answer to silver energy problem. And 56 00:03:05,000 --> 00:03:06,840 Speaker 1: I just wondered which of the which of the particular 57 00:03:07,600 --> 00:03:11,480 Speaker 1: energies you put the most amount of. Well, it's amazing 58 00:03:11,480 --> 00:03:15,480 Speaker 1: that we've got eighty percent of the world using electricity 59 00:03:15,480 --> 00:03:18,120 Speaker 1: and almost taking for granted the magic idea that you 60 00:03:18,200 --> 00:03:20,240 Speaker 1: flipped the switch and the light comes on, or you 61 00:03:20,400 --> 00:03:23,640 Speaker 1: just set the temperature and that works. We want to 62 00:03:23,680 --> 00:03:27,800 Speaker 1: get that to everyone, and so getting the price down 63 00:03:28,600 --> 00:03:33,280 Speaker 1: by better science, better innovation. And now with this constraint 64 00:03:33,800 --> 00:03:37,200 Speaker 1: that as we add to the energy system, we cannot 65 00:03:37,320 --> 00:03:42,200 Speaker 1: emit greenhouse gases. So the old ways won't you talk 66 00:03:42,240 --> 00:03:47,240 Speaker 1: about needing a miracle, need a scientific breakthrough. We need 67 00:03:47,280 --> 00:03:49,720 Speaker 1: a miracle like the personal computer or the internet or 68 00:03:49,760 --> 00:03:53,240 Speaker 1: the mobile phone. So we need young people to think, Okay, 69 00:03:53,280 --> 00:03:56,040 Speaker 1: this is the science that's going to make a big difference, 70 00:03:56,200 --> 00:03:59,400 Speaker 1: and we need R and D money that drives it forward. 71 00:03:59,480 --> 00:04:02,120 Speaker 1: Amazing lean For all the talk about clean energy, the 72 00:04:02,160 --> 00:04:05,240 Speaker 1: money spent on the demand side, the supply of innovation, 73 00:04:05,320 --> 00:04:08,040 Speaker 1: that's the R and D increase. People are just now 74 00:04:08,080 --> 00:04:11,080 Speaker 1: beginning to talk about that, and we want them to 75 00:04:11,120 --> 00:04:14,360 Speaker 1: follow through. Well, you want to sort of bring electricity 76 00:04:14,600 --> 00:04:17,520 Speaker 1: to a billion people. It's kind of like an electrical 77 00:04:17,600 --> 00:04:20,200 Speaker 1: bringing power to the people. But let's say the lights 78 00:04:20,240 --> 00:04:22,960 Speaker 1: go on around the world. What does the world look 79 00:04:23,000 --> 00:04:26,919 Speaker 1: like in developing countries? Is there an education system, a 80 00:04:27,000 --> 00:04:30,720 Speaker 1: health system, jobs for these people to have. Well, there's 81 00:04:30,720 --> 00:04:34,400 Speaker 1: no doubt their labor has value. The health is our 82 00:04:35,120 --> 00:04:38,840 Speaker 1: biggest area of expertise. That's what the Foundation puts most 83 00:04:38,839 --> 00:04:43,560 Speaker 1: money in and there we see improving nutrition, reduced childhood 84 00:04:43,600 --> 00:04:47,719 Speaker 1: death rates, and then in uplifting a country to be 85 00:04:47,760 --> 00:04:53,400 Speaker 1: a middle income country, education, health, infrastructure, good governance, those 86 00:04:53,440 --> 00:04:56,680 Speaker 1: four really go together, and so we're trying to make 87 00:04:56,680 --> 00:05:00,200 Speaker 1: sure in Africa that the right things happen and to 88 00:05:00,279 --> 00:05:03,920 Speaker 1: help them get those four elements right. In fact, Ethiopia, 89 00:05:04,200 --> 00:05:07,159 Speaker 1: if you traveled there a decade ago versus today second 90 00:05:07,279 --> 00:05:09,960 Speaker 1: largest country in Africa, you wouldn't recognize it. I mean, 91 00:05:10,000 --> 00:05:13,440 Speaker 1: a really rising middle class people moving into the city, 92 00:05:13,960 --> 00:05:16,599 Speaker 1: starting to use more and more tools. And then in 93 00:05:16,640 --> 00:05:19,440 Speaker 1: places like Tanzani and Kenya, you have things like digital 94 00:05:19,480 --> 00:05:23,080 Speaker 1: money at scale. People are small, are saving small amounts 95 00:05:23,080 --> 00:05:25,839 Speaker 1: of money now on their phone and being able to 96 00:05:25,880 --> 00:05:28,320 Speaker 1: pay the school fees. So in some ways they're leap 97 00:05:28,360 --> 00:05:31,320 Speaker 1: frogging because they didn't have hardline phones are actually leap 98 00:05:31,320 --> 00:05:33,960 Speaker 1: frogging into cell phones, and that has huge power in 99 00:05:34,000 --> 00:05:36,560 Speaker 1: women if they can get digital money in their hands. 100 00:05:36,960 --> 00:05:39,640 Speaker 1: That basic kind of gospel of free trade and capitalism, 101 00:05:39,800 --> 00:05:41,920 Speaker 1: that that that that works as the way that this 102 00:05:41,960 --> 00:05:44,800 Speaker 1: is if you have good governance in these countries, and 103 00:05:44,880 --> 00:05:48,360 Speaker 1: you have consistently good governance, then you start to see 104 00:05:48,360 --> 00:05:50,520 Speaker 1: that rising middle class because they make all the right 105 00:05:50,560 --> 00:05:54,000 Speaker 1: economic and infrastructure improvements in the country, and then it 106 00:05:54,040 --> 00:05:57,280 Speaker 1: just builds from there. Well, it's bad capitalism and bad 107 00:05:57,320 --> 00:05:59,679 Speaker 1: governance that has so many people here in the United 108 00:05:59,720 --> 00:06:02,680 Speaker 1: States frustrated. You are inspired to write this letter by 109 00:06:02,680 --> 00:06:06,640 Speaker 1: speaking to students, teenagers in Kentucky. To those students, what's 110 00:06:06,680 --> 00:06:09,120 Speaker 1: the message when they say, well, why not help us, 111 00:06:09,400 --> 00:06:12,320 Speaker 1: why not improve our education system? Why not help us 112 00:06:12,360 --> 00:06:15,600 Speaker 1: get jobs? We're faced with a students at crisis. Well, actually, 113 00:06:15,600 --> 00:06:18,839 Speaker 1: the school that we were interviewed in is a great 114 00:06:18,880 --> 00:06:22,800 Speaker 1: example of school that has reformed. It's in Appalachia. It's 115 00:06:22,800 --> 00:06:25,080 Speaker 1: called Betsy Lane, and we couldn't have been more impressed 116 00:06:25,600 --> 00:06:29,000 Speaker 1: with the way that the teachers are using their new curriculum, 117 00:06:29,920 --> 00:06:32,360 Speaker 1: that the way the teachers are learning from each other. 118 00:06:32,800 --> 00:06:35,080 Speaker 1: That's a big focus for our foundation. In fact, our 119 00:06:35,120 --> 00:06:38,479 Speaker 1: money spent in the United States almost entirely goes to 120 00:06:38,560 --> 00:06:42,119 Speaker 1: improving the education system. And we're seeing some strong points 121 00:06:42,160 --> 00:06:46,400 Speaker 1: of light, like Kentucky started four years ago with these 122 00:06:46,480 --> 00:06:49,200 Speaker 1: these reforms. Then does it not surprise you that in 123 00:06:49,240 --> 00:06:52,479 Speaker 1: the presidential kent race there are these outliers that have 124 00:06:52,560 --> 00:06:57,200 Speaker 1: gained so much popularity because we've got a disenfranchised country. Well, 125 00:06:57,200 --> 00:07:00,240 Speaker 1: I think they're disenfranchised with what's going on sometimes times 126 00:07:00,240 --> 00:07:02,680 Speaker 1: in politics on Capitol Hill. But then when you're out 127 00:07:02,720 --> 00:07:05,160 Speaker 1: on the ground and you talk to teachers and you 128 00:07:05,240 --> 00:07:07,520 Speaker 1: talk to students about what's going on in their school, 129 00:07:07,560 --> 00:07:10,280 Speaker 1: and they see progress, they're feeling better about what's actually 130 00:07:10,360 --> 00:07:13,520 Speaker 1: happening locally, you're a little surprised to discover that. You'll 131 00:07:13,600 --> 00:07:16,400 Speaker 1: you'll know you're not actually the America's leading business person, 132 00:07:16,440 --> 00:07:21,520 Speaker 1: the most successful one as a man called Donald Trump. Well, 133 00:07:21,560 --> 00:07:24,880 Speaker 1: he's certainly in the news and uh, you know, he 134 00:07:25,520 --> 00:07:31,080 Speaker 1: generates a lot of talk and uh interest. You know, 135 00:07:31,120 --> 00:07:33,840 Speaker 1: he doesn't look as if he's going to get your age. Well, 136 00:07:34,400 --> 00:07:37,920 Speaker 1: our foundation has done a good job working with both 137 00:07:38,000 --> 00:07:42,000 Speaker 1: Republican presidents and Democratic presidents. George Bush did the huge 138 00:07:42,160 --> 00:07:47,400 Speaker 1: HIV program. Obama have been very good on foreign aide 139 00:07:47,440 --> 00:07:49,800 Speaker 1: and being supportive of that fact. In the two thousand 140 00:07:49,880 --> 00:07:54,120 Speaker 1: eight campaign, both candidates McCain and Obama committed to generous 141 00:07:54,160 --> 00:07:56,800 Speaker 1: foreign aide and making sure that things like Millary would 142 00:07:56,840 --> 00:07:59,240 Speaker 1: get lots of resources. So we haven't gotten into the 143 00:07:59,240 --> 00:08:03,280 Speaker 1: specifics and in this yet cons one quick thing about 144 00:08:03,280 --> 00:08:06,160 Speaker 1: your about the start of the area you focus on, 145 00:08:06,280 --> 00:08:09,280 Speaker 1: which is that area to do with unpaid work? And 146 00:08:09,320 --> 00:08:12,480 Speaker 1: the last amount that the girls and women do and 147 00:08:12,520 --> 00:08:14,760 Speaker 1: they get paid for the one very obvious thing. I 148 00:08:14,760 --> 00:08:16,960 Speaker 1: found that shocking. But the perhaps the biggest thing of 149 00:08:17,000 --> 00:08:19,960 Speaker 1: all out of that is what is the solution. We 150 00:08:20,040 --> 00:08:22,680 Speaker 1: do need to have a good policy. I think nationwide 151 00:08:22,720 --> 00:08:25,960 Speaker 1: we have it in three states, a paid family medical leave. 152 00:08:26,560 --> 00:08:29,080 Speaker 1: California lead on this. You've got New Jersey and Rhode Island. 153 00:08:29,080 --> 00:08:31,240 Speaker 1: You've got the tech sector seeing it as a competitive 154 00:08:31,360 --> 00:08:34,040 Speaker 1: edge to have good paid family leave. One thing I 155 00:08:34,080 --> 00:08:36,240 Speaker 1: am encouraged about in this election is both sides of 156 00:08:36,280 --> 00:08:38,520 Speaker 1: the aisle are talking about it. I think there's different 157 00:08:38,520 --> 00:08:41,000 Speaker 1: ways of getting there, but we are behind. I mean, 158 00:08:41,040 --> 00:08:44,000 Speaker 1: let's look at Western Europe. You know they have amazing 159 00:08:44,120 --> 00:08:46,800 Speaker 1: paid family medical leave for both men and women, and 160 00:08:46,840 --> 00:08:49,480 Speaker 1: it says you can take time off to care for 161 00:08:49,520 --> 00:08:51,600 Speaker 1: the elderly or care for a child. That makes a 162 00:08:51,679 --> 00:08:54,320 Speaker 1: huge difference in terms of keeping women in the workforce. 163 00:08:54,320 --> 00:08:56,880 Speaker 1: And we want women to be able to balance time 164 00:08:56,920 --> 00:08:58,920 Speaker 1: at home and work. And one of the things I 165 00:08:59,000 --> 00:09:01,040 Speaker 1: talked about the annual letter is the fact that there's 166 00:09:01,120 --> 00:09:04,040 Speaker 1: all this unpaid work that happens at home that we 167 00:09:04,080 --> 00:09:06,480 Speaker 1: don't even call work around the world, but it is. 168 00:09:06,920 --> 00:09:09,439 Speaker 1: So that's one policy thing that would really help in 169 00:09:09,480 --> 00:09:12,360 Speaker 1: the United States. Are you afraid if we're really headed 170 00:09:12,440 --> 00:09:14,800 Speaker 1: at least you're in the US into a recession? The 171 00:09:15,000 --> 00:09:17,479 Speaker 1: R and D spend that you say is so necessary, 172 00:09:17,480 --> 00:09:20,719 Speaker 1: the policy changes could that fall by the wayside at 173 00:09:20,720 --> 00:09:24,160 Speaker 1: a time when companies just need to survive. Well, the 174 00:09:25,120 --> 00:09:27,880 Speaker 1: that's a more negative view of the US economy than 175 00:09:27,920 --> 00:09:35,640 Speaker 1: I have. Well, I see in the tech sector amazing innovation. 176 00:09:36,200 --> 00:09:40,959 Speaker 1: I see in the health sector, fantastic innovation. Uh, whether 177 00:09:41,000 --> 00:09:44,480 Speaker 1: it's stem cells or genetic editing. I see in the 178 00:09:44,640 --> 00:09:48,480 Speaker 1: energy and material sector real opportunities for breakthroughs. We're able 179 00:09:48,520 --> 00:09:52,559 Speaker 1: to understand the basic physics of materials and catalysts. You 180 00:09:53,400 --> 00:09:55,319 Speaker 1: it's interesting you say that you you and I have 181 00:09:55,400 --> 00:09:58,040 Speaker 1: argued about this for a long time. You look at energy, 182 00:09:58,240 --> 00:10:00,680 Speaker 1: and we keep on hoping for this to come through. 183 00:10:00,679 --> 00:10:02,840 Speaker 1: And one reason why you cool for a miracle is 184 00:10:02,880 --> 00:10:05,360 Speaker 1: because actually all the things that we keep on anything 185 00:10:05,400 --> 00:10:07,800 Speaker 1: are really going to change, they haven't yet come through 186 00:10:07,800 --> 00:10:10,559 Speaker 1: an energy Energy seems to be an exception. Well, the 187 00:10:11,440 --> 00:10:17,880 Speaker 1: ironically for the climate challenge. Actually the hydrocarbon area has 188 00:10:17,920 --> 00:10:21,000 Speaker 1: been the most innovated, and particularly now that you have 189 00:10:21,080 --> 00:10:26,960 Speaker 1: slackening demand, the cost reduction work they're doing about all 190 00:10:26,960 --> 00:10:31,720 Speaker 1: the inputs they have there makes the bar uh tougher 191 00:10:31,800 --> 00:10:35,760 Speaker 1: for the clean solution to come along. But energy is cheaper, 192 00:10:36,480 --> 00:10:40,839 Speaker 1: and because I see so many paths to get an 193 00:10:40,960 --> 00:10:44,280 Speaker 1: energy solution, I think the chance the next fifteen years 194 00:10:44,280 --> 00:10:46,560 Speaker 1: that we do get the breakthrough is very high. And 195 00:10:47,360 --> 00:10:51,439 Speaker 1: uh that that's an optimistic view, but it's it's based 196 00:10:51,480 --> 00:10:54,360 Speaker 1: on my view of the science. You have long term 197 00:10:54,400 --> 00:10:57,160 Speaker 1: views and you take long term action. Are you concerned 198 00:10:57,400 --> 00:10:59,280 Speaker 1: that more and more of the rest of the world 199 00:10:59,400 --> 00:11:03,840 Speaker 1: has fallen into this short termism mindset and business practice. Well, 200 00:11:03,840 --> 00:11:05,400 Speaker 1: I think one of the things we one of the 201 00:11:05,400 --> 00:11:08,559 Speaker 1: reasons we keep trying to push to really promote the 202 00:11:08,600 --> 00:11:10,440 Speaker 1: idea that you have to go long term is if 203 00:11:10,520 --> 00:11:12,600 Speaker 1: you don't, then you're going to have these acute crises. 204 00:11:12,600 --> 00:11:15,240 Speaker 1: What you're seeing in Europe, particularly with the refugee crisis, 205 00:11:15,440 --> 00:11:18,400 Speaker 1: that's not just because of conflict. That's because people can't 206 00:11:18,440 --> 00:11:21,120 Speaker 1: find economic opportunity in their own area and so they 207 00:11:21,120 --> 00:11:23,560 Speaker 1: get up and move. So if we make the right 208 00:11:23,600 --> 00:11:26,560 Speaker 1: long term investments in these places. People want to stay 209 00:11:26,559 --> 00:11:28,360 Speaker 1: where they are if they can be healthy, get their 210 00:11:28,440 --> 00:11:31,120 Speaker 1: kids in a great education system, and get a job. 211 00:11:31,200 --> 00:11:33,800 Speaker 1: So we feel like you have to always focus on 212 00:11:33,840 --> 00:11:36,000 Speaker 1: the long term, and we're always coming to that, back 213 00:11:36,000 --> 00:11:38,839 Speaker 1: to that message, because it's important you to live your 214 00:11:38,880 --> 00:11:41,440 Speaker 1: lives that way. How do you make this a call 215 00:11:41,480 --> 00:11:45,440 Speaker 1: to action for others to CEOs today can't because they 216 00:11:45,480 --> 00:11:48,360 Speaker 1: have shareholders an activist banging down their door, and regular 217 00:11:48,400 --> 00:11:51,280 Speaker 1: Americans don't necessarily have the money to make long term decisions, 218 00:11:51,280 --> 00:11:57,280 Speaker 1: and politicians certainly don't. Well, the best government is where 219 00:11:57,400 --> 00:12:00,600 Speaker 1: you look down the road ten or twine years and 220 00:12:00,720 --> 00:12:04,719 Speaker 1: you you build the institutions that will help you. The 221 00:12:04,880 --> 00:12:07,319 Speaker 1: United States is the envy of the world because our 222 00:12:07,520 --> 00:12:12,840 Speaker 1: universities are national laboratories in all the key areas that 223 00:12:12,880 --> 00:12:19,319 Speaker 1: are driving change. They are had robotics, it biology, uh 224 00:12:19,720 --> 00:12:19,960 Speaker 1: Any