WEBVTT - Trump Threatens Post Office As Way To Settle Amazon Score 0:00:02.680 --> 0:00:05.320 Welcome to the Bloomberg Penl Podcast. I'm Paul swing you. 0:00:05.360 --> 0:00:07.720 Along with my co host Lisa Brahma Wicks. Each day 0:00:07.760 --> 0:00:10.280 we bring you the most noteworthy and useful interviews for 0:00:10.320 --> 0:00:12.560 you and your money. Whether at the grocery store or 0:00:12.600 --> 0:00:15.480 the trading floor, find a Bloomberg Penl podcast on Apple 0:00:15.560 --> 0:00:17.959 podcast or wherever you listen to podcasts, as well as 0:00:18.000 --> 0:00:21.640 that Bloomberg dot com. Well. As we dig deeper into 0:00:21.680 --> 0:00:24.639 the two point four trillion dollars stimulus bill the US 0:00:24.720 --> 0:00:27.920 Congress past, we are finding all sorts of interesting provisions. 0:00:27.920 --> 0:00:31.640 One highlighted my President Trump himself the idea that there 0:00:31.680 --> 0:00:33.720 would be ten billion dollars that would go to the 0:00:33.800 --> 0:00:36.559 US Postal Service to help support and plug some of 0:00:36.560 --> 0:00:40.080 the gaps that have emerged in the wake of the coronavirus. However, 0:00:40.159 --> 0:00:44.720 President Trump saying that unless the Postal Service raises its prices, 0:00:44.800 --> 0:00:49.560 particularly on last mile delivery packages, it will instruct Secretary 0:00:49.600 --> 0:00:53.920 Treasury Secretary Stephen Manuchin to withhold that ten billion dollars. 0:00:53.920 --> 0:00:57.120 Tim O'Brien, who's a senior columnist with Bloomberg Opinion, joining 0:00:57.200 --> 0:00:59.520 us now. Tim always wonderful to hear what you have 0:00:59.640 --> 0:01:02.760 to say about this. How much of a surprise was 0:01:02.840 --> 0:01:08.160 this to people who saw President Trump pinpoint this specific issue. Um. 0:01:08.200 --> 0:01:11.120 I don't think it's a surprise that you know, he 0:01:11.160 --> 0:01:14.480 wants he's seeking change at the Postal Service. The Postal 0:01:14.520 --> 0:01:18.440 Service needs change. Uh. Nor is it a surprise that 0:01:18.520 --> 0:01:22.319 he's focused in again on the pricing the Postal Service 0:01:22.400 --> 0:01:25.800 charges for packages. However, the way he's focusing on it 0:01:25.959 --> 0:01:29.880 is incorrect. The package delivery piece of the post Office 0:01:29.880 --> 0:01:33.960 is business, is its most robust and profitable. It's mail 0:01:34.080 --> 0:01:37.280 carrying that's a problem for the post Office. I think 0:01:37.319 --> 0:01:40.240 what was surprising was he was in the Oval Office 0:01:40.280 --> 0:01:44.000 and he simply said what everyone has suspected has been 0:01:44.040 --> 0:01:45.480 on his mind for a long time, is that he 0:01:45.600 --> 0:01:48.920 singled out Amazon dot com as as one of the 0:01:48.960 --> 0:01:53.600 reasons he has um this animosity towards the Postal Service. 0:01:53.800 --> 0:01:56.800 President Trump has said that the Postal Service loses money 0:01:56.800 --> 0:02:00.000 on every package is that delivers. Is that right? Nope, 0:02:00.000 --> 0:02:03.360 it's not correct. Again, that's a that's a very profitable 0:02:03.880 --> 0:02:07.160 part of the postal services business and has been, you know, 0:02:07.560 --> 0:02:11.240 alongside the boom and e commerce. Uh. The Postal Service 0:02:11.280 --> 0:02:15.079 plays a really important role for commercial deliverers like FedEx 0:02:15.080 --> 0:02:20.280 and US and ups um delivering packages through the so 0:02:20.400 --> 0:02:23.680 called last mile to people's homes. It's not efficient or 0:02:23.720 --> 0:02:26.880 really profitable for the commercial carriers to use, so they 0:02:26.919 --> 0:02:29.440 rely on the post post office for that, and that 0:02:29.520 --> 0:02:33.359 has been a really bright spot in the postal services business. 0:02:33.639 --> 0:02:37.320 Over the last fourteen to fifteen years or so, mail 0:02:37.480 --> 0:02:41.320 carrying has really declined, and that's always been the lions share. 0:02:41.360 --> 0:02:44.480 The post Office is business and that's where they're really hurting, 0:02:44.520 --> 0:02:47.079 and that's what they need to fix. So the president's 0:02:47.120 --> 0:02:50.120 identifying the wrong thing. Tim, I want to switch gears 0:02:50.160 --> 0:02:52.640 a little bit and move from the postal service to 0:02:53.240 --> 0:02:56.600 just the general two point four trillion dollar bailout, In particular, 0:02:57.120 --> 0:03:00.200 the p p P the area that was in did 0:03:00.280 --> 0:03:04.000 to help support small businesses. How good is the oversight 0:03:04.080 --> 0:03:06.680 of that program, Given the fact that we're learning that 0:03:06.720 --> 0:03:09.399 a good proportion of the money has gone to either 0:03:09.400 --> 0:03:13.040 publicly traded companies or others who had other means of financing, 0:03:13.960 --> 0:03:17.240 it's clearly not good enough at all, Lisa, and this 0:03:17.360 --> 0:03:19.720 was something I think we talked about a couple of 0:03:19.720 --> 0:03:23.640 weeks ago when the first tranche of money launched the 0:03:23.639 --> 0:03:28.639 first billion. Um uh. You know, I personally think it's 0:03:28.639 --> 0:03:32.120 a good idea that we're we're supporting businesses in this crisis, 0:03:32.400 --> 0:03:33.920 but I think it has to be supported in a 0:03:33.919 --> 0:03:36.760 really efficient and rational way. And the problem with that 0:03:36.840 --> 0:03:39.120 first big trunch of money, as we now know, is 0:03:39.160 --> 0:03:42.560 it went to people who had either other resources, other 0:03:42.640 --> 0:03:45.960 companies that have other resources to raise funds, or we're 0:03:46.000 --> 0:03:49.520 simply too big to fit any of the definitions that 0:03:49.560 --> 0:03:52.320 program had for a small business, which was five hundred 0:03:52.320 --> 0:03:56.000 employees or left. Um. I think based on my own 0:03:56.000 --> 0:03:58.720 back of the envelope math, only about five percent of 0:03:58.720 --> 0:04:01.400 the country's small businesses got money in that first round. 0:04:01.960 --> 0:04:06.360 And so now we have a second round that's larger billion, 0:04:06.760 --> 0:04:10.520 and there's still really isn't enough good oversighting place. The 0:04:10.560 --> 0:04:14.840 General Accountability Office is going to be um watching some 0:04:14.960 --> 0:04:18.680 of this. They're, you know, very well regarded bipartisan organization, 0:04:19.000 --> 0:04:21.280 but they don't report until the end of June at 0:04:21.279 --> 0:04:24.839 the earliest, and all of the other congressional and White 0:04:24.839 --> 0:04:27.960 House watchdog organizations aren't up and running yet. I was 0:04:28.000 --> 0:04:31.400 struck by a story today on the Bloomberg about study 0:04:31.760 --> 0:04:35.960 that showed that only of the money went to small 0:04:36.000 --> 0:04:40.400 businesses in areas that were the hardest hit by the coronavirus. 0:04:40.880 --> 0:04:43.800 Is your sense that this next tronch of financing that 0:04:43.920 --> 0:04:47.440 starts getting distributed this week will be more equally distributed? 0:04:48.240 --> 0:04:50.920 One would hope there's not enough transparency yet to know. 0:04:51.600 --> 0:04:53.800 And and so that's a great question you're raising LESA, 0:04:53.800 --> 0:04:56.359 and it's and and the and and Bloomberg News is 0:04:56.400 --> 0:05:00.120 reporting on that is is really important. I think the 0:05:00.160 --> 0:05:03.080 other thing we don't know is p p P is 0:05:03.120 --> 0:05:07.200 a payroll protection plan. It's meant to help workers get 0:05:07.240 --> 0:05:10.240 over this hump during this crisis, and we really don't 0:05:10.240 --> 0:05:13.719 have any auditing arm in place to know if the 0:05:13.760 --> 0:05:16.800 companies are even actually using it for payroll. And I 0:05:16.920 --> 0:05:23.159 have this, you know, lingering, journalistic, cynical kind of worry 0:05:23.279 --> 0:05:24.599 that at the end of the day, will never know 0:05:24.640 --> 0:05:28.120 if a god to the workers. So what should happen here? 0:05:28.160 --> 0:05:31.840 Tim from an oversight perspective, real quickly twenty seconds, um, 0:05:31.920 --> 0:05:33.920 I think I think it should happen at the federal 0:05:34.040 --> 0:05:35.360 level in the White House to begin with. I think 0:05:35.400 --> 0:05:37.640 they need to screen right out of the gate who's 0:05:37.640 --> 0:05:40.040 getting the money, and there should be really clear criteria 0:05:40.120 --> 0:05:41.760 for why and how they're getting it and how they're 0:05:41.760 --> 0:05:44.719 going to use it. Tim O'Brian, thanks so much for 0:05:44.839 --> 0:05:47.760 joining us. We appreciate your thoughts. As always Tim O'Brian's 0:05:47.760 --> 0:05:51.000 senior columns for Bloomberg Opinion. Check out his column UH 0:05:51.160 --> 0:05:54.040 today on the Bloomberg and Bloomberg dot Com. Trump views 0:05:54.120 --> 0:05:57.040 post office as a way to settle scores. Interesting column, 0:05:57.040 --> 0:06:00.520 interesting take on that on a big issue. There you 0:06:00.520 --> 0:06:02.839 can read all of Tim's work at Bloomberg dot com, 0:06:02.880 --> 0:06:05.599 slash Opinion or on the terminal at O P I 0:06:05.839 --> 0:06:12.240 n go for all of Bloomberg Opinion work. Well, we 0:06:12.279 --> 0:06:15.560 are now in probably week five or six of this quarantine, 0:06:15.640 --> 0:06:18.400 more and more of us working from home. The question is, 0:06:18.440 --> 0:06:21.320 are we more or less productive than we are when 0:06:21.320 --> 0:06:25.080 we are in our workplace? Uh Nicholas Bloom, professor of 0:06:25.080 --> 0:06:27.800 economics at Stanford University, has done a lot of work 0:06:27.920 --> 0:06:31.359 on this concept. We welcome uh Professor Bloom. So professor, 0:06:31.400 --> 0:06:34.479 thanks so much for joining us. I know initially your 0:06:34.520 --> 0:06:38.360 work suggested that working from alms actually you could be 0:06:38.440 --> 0:06:40.520 more productive. Is that's still the case in the world 0:06:40.560 --> 0:06:44.920 of the coronavirus. Yes, I looked at you know, a 0:06:45.040 --> 0:06:48.839 number of studies, and normally working from home is at 0:06:48.920 --> 0:06:52.000 least to a big increase in productivity. But we're coronavirus. 0:06:52.080 --> 0:06:55.000 We've got four big issues. One many of us have 0:06:55.080 --> 0:06:58.880 our kids are home, which is she's distracting. Uh open, 0:06:58.960 --> 0:07:01.280 don't have our own and so a lot of people 0:07:01.279 --> 0:07:06.320 are staring living room. When I looked at working from home, 0:07:06.360 --> 0:07:08.280 we looked at people who chose to work from home, 0:07:08.760 --> 0:07:10.880 and you know, many of us did not show him 0:07:10.880 --> 0:07:13.480 would not like to do so. And then finally, um, 0:07:13.560 --> 0:07:15.960 we also looked at working from home part time, so 0:07:16.560 --> 0:07:19.880 something like of Americans with a graduate from home a 0:07:19.960 --> 0:07:22.400 day a week, but only super century full time. But 0:07:22.480 --> 0:07:26.840 we're now all forced at home full time. I will say, Nick, 0:07:27.080 --> 0:07:30.760 in a research recent research published that you you put 0:07:30.760 --> 0:07:33.080 out there. You said working from home with your children 0:07:33.120 --> 0:07:36.640 as a productivity disaster. My four year old regularly bursts 0:07:36.640 --> 0:07:38.920 into the room hoping to find me in a playful mood, 0:07:38.920 --> 0:07:41.400 shouting do do her nickname for me? In the middle 0:07:41.440 --> 0:07:44.280 of conference calls. We've all been there, Nick, And I'm 0:07:44.360 --> 0:07:48.000 wondering how much is this simply a parenting issue versus 0:07:48.040 --> 0:07:53.280 a non parenting issue or something broader about this idea 0:07:53.440 --> 0:07:56.280 of being more productive when you're face to face with 0:07:56.400 --> 0:08:01.560 coworkers and in an office environment. So there is a 0:08:01.680 --> 0:08:03.800 big issue, may you know, I thought year does burst 0:08:03.800 --> 0:08:05.440 in in fact, why you know, our older kids are 0:08:05.520 --> 0:08:08.440 learning to play the bagpipe, and though which is worse. 0:08:11.640 --> 0:08:14.160 Even setting that aside, there's a bigger issue. Once we 0:08:14.240 --> 0:08:18.480 go back post COVID, around one third of jobs only 0:08:18.520 --> 0:08:20.640 are suitable to work from home. So there's a study 0:08:20.680 --> 0:08:23.960 out of Chicago University that looked at jobs and you know, 0:08:24.240 --> 0:08:27.560 for managers, for a senior people, you know, for journalist 0:08:27.560 --> 0:08:29.280 for example, much of this can be done at home, 0:08:29.360 --> 0:08:31.880 but the large parts of the economy we can't do that. 0:08:32.200 --> 0:08:34.760 So for some of us it's fantastic when our kids 0:08:34.800 --> 0:08:36.680 are back at school and when we have you know, 0:08:36.800 --> 0:08:39.120 space and time. But I don't think it's ever going 0:08:39.160 --> 0:08:41.320 to be like it was now, which is free time. 0:08:41.600 --> 0:08:44.240 It turns out the evidence is strongly needs something like 0:08:44.360 --> 0:08:46.120 three days a week to be in the office to 0:08:46.160 --> 0:08:48.760 be motivating and creative. And the problem is now we 0:08:48.840 --> 0:08:50.840 just don't have that eye that's not even kids. There's 0:08:52.280 --> 0:08:56.480 no face efface interactions. So professor, I mean, some people 0:08:56.480 --> 0:08:59.920 have been suggesting that this is going to accelerate the 0:09:00.320 --> 0:09:04.079 work from home kind of Um, I guess migration that's 0:09:04.080 --> 0:09:06.480 been taking place really over the last ten fifteen years. 0:09:06.480 --> 0:09:10.520 Do you think that is reasonable to assume. Yes, definitely. 0:09:10.559 --> 0:09:13.160 So we we went from before COVID from a level 0:09:13.200 --> 0:09:16.680 of working from homers it was common one day a week, 0:09:16.720 --> 0:09:19.480 but it was extremely rare full time obviously even now 0:09:19.559 --> 0:09:22.199 all working from home full time to post COVID. But 0:09:22.320 --> 0:09:24.719 I think we're just back to a higher level, but 0:09:24.720 --> 0:09:26.160 a lot like we are now. So I think it 0:09:26.160 --> 0:09:30.400 would be most jobs will probably allow their employees to 0:09:30.400 --> 0:09:34.520 work from home something like two I doubt memory encourage 0:09:35.000 --> 0:09:37.240 all the time. And that's going to have a huge impact. 0:09:37.320 --> 0:09:40.440 Even how attractive is it to live in the center, 0:09:41.120 --> 0:09:45.400 don't have to commute in five those weeks, why not 0:09:45.760 --> 0:09:47.920 further out? So I think it's just going to be 0:09:47.960 --> 0:09:50.839 a huge impact. Um. You know. A great example is 0:09:50.960 --> 0:09:54.000 London after the London Olympics two thousand and twelve, they 0:09:54.120 --> 0:09:56.440 shot the center of London for three weeks to avoid 0:09:56.480 --> 0:09:59.400 congestion and those sort of mtic long run pickup and 0:09:59.520 --> 0:10:02.360 working from home because of the success that I think, 0:10:02.360 --> 0:10:05.439 because it's kind of like a bigger at so Nick, 0:10:05.520 --> 0:10:07.800 there's this question. The reason why this is so important 0:10:07.840 --> 0:10:10.360 to so many people right now, in addition to just 0:10:10.400 --> 0:10:12.360 what the future holds for people who do have the 0:10:12.400 --> 0:10:15.080 privilege of being able to work from home, is the 0:10:15.120 --> 0:10:17.679 fate of commercial real estate going forward? And you've had 0:10:17.679 --> 0:10:21.000 a lot of business leaders from Work in Stanley CEO 0:10:21.120 --> 0:10:23.400 to Black Black Rocks CEO come out and say that 0:10:23.440 --> 0:10:25.600 they think one of the bigger consequences of this is 0:10:25.600 --> 0:10:29.120 that companies will need less real estate. Does this sort 0:10:29.160 --> 0:10:33.000 of mark the death of commercial real estate, of the 0:10:33.080 --> 0:10:35.480 sort of big office given the fact that people will 0:10:35.480 --> 0:10:38.120 be able to work from home more frequently, or are 0:10:38.160 --> 0:10:42.120 those calls getting a little ahead of themselves. No, I 0:10:42.160 --> 0:10:44.000 think it's a you know, it's a bleak time for 0:10:44.040 --> 0:10:46.920 commercial real estate and also actually residential real estate in 0:10:46.960 --> 0:10:49.520 the center of cities. If we go from you know, 0:10:49.559 --> 0:10:51.920 working from home, that is very rare. So let's say 0:10:51.960 --> 0:10:54.040 two out of five days a week you continue, you 0:10:54.040 --> 0:10:58.199 probably need school blessed office space even can't perfectly hot 0:10:58.280 --> 0:11:01.840 death stands that, you know, that kind of top and demand, 0:11:01.840 --> 0:11:04.160 it's going to be problematic. It's not obvious by the 0:11:04.160 --> 0:11:06.520 way you want still maintain big officers. I just think 0:11:06.559 --> 0:11:10.400 we need less of them unless those headquarters. So that's 0:11:10.400 --> 0:11:11.840 going to be a big switch. If you look at 0:11:11.920 --> 0:11:14.640 firms that do working from home, they don't typically operate 0:11:14.720 --> 0:11:17.840 smaller satellite officers. They just required people are coming less 0:11:17.840 --> 0:11:20.920 presently to their may not. Nicholas Bloom, thank you so 0:11:21.040 --> 0:11:23.360 much for being with us, and good luck working from 0:11:23.360 --> 0:11:26.560 home with the kids and the bagpipes. Nicholas Bloom, professor 0:11:26.559 --> 0:11:32.640 of economics at Stanford University, joining us from Stanford, California. 0:11:33.640 --> 0:11:36.200 We know this too, cute. G D print is going 0:11:36.240 --> 0:11:38.839 to be ugly. The question is how ugly and how 0:11:38.920 --> 0:11:42.280 long will it remain at those depressed levels of Welcome 0:11:42.320 --> 0:11:45.360 Tom or Like, chief economist for Bloomberg Economics, he joins 0:11:45.400 --> 0:11:47.760 us on the phone. Tom, thanks so much for joining us. 0:11:47.760 --> 0:11:50.120 I know Bloomberg Economics is that with some new research. 0:11:50.360 --> 0:11:53.160 What is your update and current economic outlook as we 0:11:53.200 --> 0:11:57.880 await the second quarter GDP print. Um, So it's a 0:11:57.880 --> 0:12:02.520 pretty bleak outlook, Paul Um. Globally we are now looking 0:12:02.760 --> 0:12:06.839 at a contraction of four for the year. That's our 0:12:06.880 --> 0:12:09.880 base case. UM. Now, if we think back to two 0:12:09.920 --> 0:12:13.080 thousand and nine, the Great financial crisis that was a 0:12:13.120 --> 0:12:16.840 pretty bad year. The global economy that year only shrank, 0:12:17.120 --> 0:12:20.760 not point two. So our base case is actually something 0:12:20.880 --> 0:12:24.760 substantially more negative. If we look in more detail at 0:12:24.760 --> 0:12:28.720 the United States, looking at the looking at the first 0:12:28.760 --> 0:12:32.360 quarter number, well, it kind of depends how much the 0:12:32.440 --> 0:12:35.120 lockdown hit. It came right at the end of March. 0:12:35.280 --> 0:12:37.720 We'll see how much it it took off that first 0:12:37.800 --> 0:12:41.360 quarter of print. The second quarter, certainly we're looking at 0:12:41.400 --> 0:12:45.800 a very steep contraction. Our US team is penciling in 0:12:46.000 --> 0:12:50.760 a thirty seven annualized drop in the second quarter. I'm 0:12:50.800 --> 0:12:55.720 struggling to pair these increasingly bleak outlooks with the optimism 0:12:55.720 --> 0:12:57.319 that we're seeing in markets right now, at least in 0:12:57.360 --> 0:13:00.520 equity markets, and a lot of people are saying traders 0:13:00.520 --> 0:13:02.920 are just looking past the second quarter and even the 0:13:02.960 --> 0:13:05.080 third quarter and looking into the fourth quarter when we 0:13:05.160 --> 0:13:10.480 should get a resurgence in economic activity. I'm wondering how 0:13:10.600 --> 0:13:13.480 much that's your base case that we're not going to 0:13:13.559 --> 0:13:16.640 get necessarily a second wave of the coronavirus and we'll 0:13:16.679 --> 0:13:23.320 get meaningful pickups in growth heading towards September, November, December. Yeah, 0:13:23.320 --> 0:13:26.040 I think that's a great question question Lisa and I 0:13:26.200 --> 0:13:30.880 to see a disconnect between some fairly bleak or rather 0:13:31.000 --> 0:13:36.400 historically bleak economic numbers coming down the line UM and 0:13:36.640 --> 0:13:39.760 the and what's going on in the equity market UM. 0:13:39.840 --> 0:13:44.120 So our base case is the eytbreak comes under control 0:13:44.360 --> 0:13:48.520 in the second quarter, and we see a reasonably rapid 0:13:48.520 --> 0:13:52.800 pick up in the third quarter as lockdown's ease. Now 0:13:52.840 --> 0:13:56.319 that's our base case, but it comes with some unusually 0:13:56.440 --> 0:14:00.720 large caveats UM. The first one is what happens to 0:14:00.760 --> 0:14:04.960 the virus. Well, it seems like from what happened in China, 0:14:05.320 --> 0:14:09.400 a lockdown can be successful in essentially permanently bringing it 0:14:09.520 --> 0:14:12.840 under control. But we don't know if that can be 0:14:12.880 --> 0:14:15.840 replicated around the world, and we don't even really know 0:14:15.920 --> 0:14:19.080 if it will stick in China, So it's entirely possible 0:14:19.400 --> 0:14:21.800 we could see cases popping back up again in the 0:14:21.840 --> 0:14:25.640 third and fourth quarter, a lockdown coming back in in 0:14:25.720 --> 0:14:28.720 the final weeks and months of the year, and even 0:14:28.720 --> 0:14:32.680 our four percent contraction calls for global GDP could turn 0:14:32.680 --> 0:14:38.040 out to be too pessimist, too optimistice, Sorry, carry on, 0:14:38.080 --> 0:14:41.920 pool go ahead, Sorry, I was The second big risk 0:14:42.120 --> 0:14:46.600 is well, we think that the underlying economy is actually okay, 0:14:46.840 --> 0:14:48.600 and so once you get rid of the virus and 0:14:48.880 --> 0:14:51.320 you get rid of the lockdown, people can come back 0:14:51.320 --> 0:14:54.720 to work and growth comes back pretty quickly. That's actually 0:14:54.760 --> 0:14:58.840 also an optimistic assumption. We're seeing twenty six million people 0:14:58.880 --> 0:15:02.800 losing their jobs in the United States, similar impact across 0:15:02.840 --> 0:15:07.520 other big economies, businesses going bankrupt. It's possible that this 0:15:07.600 --> 0:15:11.200 is going to be a scarring recession and high unemployment. 0:15:11.280 --> 0:15:15.000 Business bankruptcies, perhaps even some bank failures are going to 0:15:15.080 --> 0:15:17.480 mean that the recovery in the third and fourth quarter 0:15:17.680 --> 0:15:22.720 intoe just isn't that robust. So time just quickly. How 0:15:22.760 --> 0:15:25.560 bad do you think this unemployment rate is going to be? 0:15:26.160 --> 0:15:28.520 And then I guess how permanent? I guess you were 0:15:28.600 --> 0:15:30.480 kind of touching on that a little bit. How permanent 0:15:30.480 --> 0:15:31.840 do you feel like it will be? Are we at 0:15:31.840 --> 0:15:36.280 a higher level of just annallywing unemployment going forward? So 0:15:36.600 --> 0:15:39.320 we think that the unemployment rate in the second quarter 0:15:39.480 --> 0:15:43.200 is going to push close to um that's an extraordinarily 0:15:43.320 --> 0:15:46.160 high level. Back in the Great Financial Crisis, it got 0:15:46.200 --> 0:15:49.600 to so we're looking at a really really high level 0:15:49.640 --> 0:15:53.920 of unemployment. The question for the longer term is, well, 0:15:54.520 --> 0:15:58.560 have businesses just said, Okay, take a break, we'll call 0:15:58.600 --> 0:16:01.200 you in three months, and when the lockdown is over, 0:16:01.680 --> 0:16:03.960 people can basically get back to work and its business 0:16:04.000 --> 0:16:07.640 as usual. Or are we looking at a more damaging 0:16:08.120 --> 0:16:11.120 break in the labor market if we see people being 0:16:11.160 --> 0:16:15.280 furloughed and then those furloughs turning into permanent unemployment, and 0:16:15.440 --> 0:16:18.520 that's going to be a much more serious drag on output, 0:16:18.760 --> 0:16:21.000 and we'd be looking at a creeping recovery in the 0:16:21.040 --> 0:16:25.080 second half and into Tom more like thank you so 0:16:25.120 --> 0:16:27.640 much for being with us, Tom, or like chief economists 0:16:27.640 --> 0:16:30.400 for a Bloomberg Economics joining us from Washington, d C. 0:16:33.560 --> 0:16:36.800 In five weeks, the US labor market erased what took 0:16:36.960 --> 0:16:39.920 more than a decade to build more than twenty six 0:16:39.960 --> 0:16:44.040 million jobs lost as the coronavirus rereaked havoc across the 0:16:44.120 --> 0:16:48.040 United States. We're expecting millions more in the filing initial 0:16:48.080 --> 0:16:52.720 jobless filings come Thursday. A question about how quickly these 0:16:52.800 --> 0:16:55.840 jobs will return and what businesses could and should and 0:16:55.880 --> 0:16:59.400 would be doing to bring these people back online as 0:16:59.400 --> 0:17:03.760 we get signs that the virus is subsiding. James Sinclair 0:17:03.920 --> 0:17:05.880 on the front lines of all of this chief executive 0:17:05.880 --> 0:17:09.359 officer of Enterprise Alumni based in Los Angeles. James, you 0:17:09.440 --> 0:17:13.400 talk with employers, how much are they planning for the reset, 0:17:13.520 --> 0:17:17.480 the post coronavirus re jiggering of the economy as they 0:17:17.480 --> 0:17:20.960 try to get a greater proportion of their employees back online. 0:17:22.240 --> 0:17:25.160 Good morning, Lisa, Thanks for having me. You're absolutely right. 0:17:25.200 --> 0:17:27.399 So we work with some of the largest companies in 0:17:27.440 --> 0:17:30.000 the world, and we're seeing this massive influx of new 0:17:30.040 --> 0:17:33.760 customers across retail and tourism, travel, and so we do 0:17:33.840 --> 0:17:36.400 have a good pulse of what's next and what's needed 0:17:36.440 --> 0:17:39.320 to restart, and we are seeing a lot of organizations 0:17:39.400 --> 0:17:43.400 leveraging Enterprise Alumni to start their rehiring plan. This concept 0:17:43.440 --> 0:17:46.359 of who's available um not only people who used to 0:17:46.400 --> 0:17:49.120 work for them just before the crisis, but also historically 0:17:49.640 --> 0:17:51.680 and their ability to be able to ramp up very 0:17:51.760 --> 0:17:55.280 quickly by using alumni or former employees who used to 0:17:55.280 --> 0:17:58.800 work for the organization. So, James spaced upon kind of 0:17:58.800 --> 0:18:01.560 what you're hearing some of the companies that you talked to. 0:18:02.040 --> 0:18:06.720 How quickly do you think this restart will occur, will 0:18:06.760 --> 0:18:09.240 be a gradual type of thing, or are these companies 0:18:09.320 --> 0:18:13.880 chomping at the bit. So I think there are two conversations. 0:18:14.000 --> 0:18:16.800 Number one, it's how do we manage the community today? 0:18:16.880 --> 0:18:19.080 All of these people that we followed, all these people 0:18:19.119 --> 0:18:21.760 that we need to communicate with and place into a 0:18:21.800 --> 0:18:24.920 central resource to have that conversation. But I think people 0:18:24.960 --> 0:18:27.399 are chomping at a bit is almost an understatement. I 0:18:27.400 --> 0:18:29.600 think we're all chumping at a bit. And the question 0:18:29.680 --> 0:18:31.960 is what does that recovery look like and how are 0:18:32.000 --> 0:18:34.760 they going to potentially make up for lost time? But 0:18:34.800 --> 0:18:37.639 how are they going to start really quickly? Because they 0:18:37.680 --> 0:18:41.040 can't afford a three to four week productivity cycle. They 0:18:41.040 --> 0:18:43.600 need people that are going to hit the ground running. Uh. 0:18:43.800 --> 0:18:46.040 And so to that to a lot of customers we're 0:18:46.040 --> 0:18:48.520 speaking to, that tends to be the biggest priority now 0:18:48.560 --> 0:18:51.520 that when we get the go ahead or the green light, 0:18:51.800 --> 0:18:55.400 how can we scale up very very rapidly. James, we're 0:18:55.400 --> 0:18:58.159 talking about the jobs market in the United States as 0:18:58.160 --> 0:19:01.280 though we're a modelist, and obviously so not. In different 0:19:01.280 --> 0:19:03.720 industries have gotten hit harder than others. I know that 0:19:03.800 --> 0:19:07.680 your company makes software that are used that's used by 0:19:07.760 --> 0:19:11.320 a variety of different companies and industries. NESTLYE p and G. 0:19:11.480 --> 0:19:17.080 Marriat HSBC. I'm wondering how specific will the restart be 0:19:17.280 --> 0:19:20.240 two companies that are better positioned to weather this. In 0:19:20.280 --> 0:19:23.800 other words, could we see everyone get back online yet 0:19:23.840 --> 0:19:27.959 the hotels remain with furload employees for a lot longer. 0:19:29.520 --> 0:19:31.760 I think from what we're seeing from the staffing plans 0:19:31.800 --> 0:19:35.320 that organizations are leveraging in our in our application is 0:19:35.359 --> 0:19:37.159 that it is going to be gradual, that even though 0:19:37.200 --> 0:19:39.439 there's going to be a green light and a mass 0:19:39.520 --> 0:19:42.119 re higher, it is going to be industry specific. You 0:19:42.200 --> 0:19:45.119 take the airlines overnight, They're not suddenly going to have 0:19:47.240 --> 0:19:50.080 fil rates on their planes, same as occupantcy for hotel, 0:19:50.240 --> 0:19:53.320 same as restaurants. Just because the market is reopening, it 0:19:53.359 --> 0:19:55.879 doesn't mean everyone's going to feel comfortable suddenly going to 0:19:55.920 --> 0:19:58.919 a sports game, going to a conference, or jumping on 0:19:58.960 --> 0:20:01.719 a plane. So so they are expecting that when they 0:20:01.760 --> 0:20:06.240 do reopen, they're going to reopen as smaller organizations. So jameson, 0:20:06.240 --> 0:20:09.000 how about some small business owners We've seen, you know, 0:20:09.040 --> 0:20:12.400 a lot of pain there on Main Street USA. Any 0:20:12.480 --> 0:20:15.040 sense of how they are trying to manage to do this, 0:20:15.160 --> 0:20:18.840 how they plan on reopening once they do get that 0:20:18.920 --> 0:20:22.920 green light. I think the smaller and medium sized businesses 0:20:22.960 --> 0:20:25.119 across the US, this is really going to be leveraging 0:20:25.160 --> 0:20:28.280 their community, leveraging all the goodwill they've built over the 0:20:28.359 --> 0:20:31.200 number of years. You know, we're hoping that as many 0:20:31.200 --> 0:20:33.840 businesses as possible will survive post this, but I think 0:20:34.160 --> 0:20:38.159 the recovery is going to be really again leveraging this community. 0:20:38.240 --> 0:20:40.200 So again, whether you're a small business or a large 0:20:40.200 --> 0:20:42.920 cust a large customer of ours, you're still thinking about 0:20:42.960 --> 0:20:44.880 that network and all the people that used to work 0:20:44.960 --> 0:20:47.640 for you that you've had a relationship with, because also 0:20:47.760 --> 0:20:50.040 right now they become your brand advocates. We see a 0:20:50.040 --> 0:20:52.919 lot of customers right now recognizing that the ad spend 0:20:52.960 --> 0:20:55.000 is so small, So how can we leverage all of 0:20:55.000 --> 0:20:59.080 our former employees to push our messaging, push our programming 0:20:59.240 --> 0:21:01.400 and kind of give us the reach that we would 0:21:01.400 --> 0:21:04.840 normally have to pay for. James how much goodwill, though, 0:21:04.880 --> 0:21:07.000 has been lost for some of these employees who have 0:21:07.080 --> 0:21:10.560 lost their jobs. So I think this becomes company to 0:21:10.640 --> 0:21:13.119 company where this is an opportunity to really see the 0:21:13.200 --> 0:21:16.200 type of organization for what they are, their culture and 0:21:16.240 --> 0:21:20.760 their values. We have one retail company that has whisked 0:21:20.800 --> 0:21:23.920 up a platform for Enterprise Alumni for all of their 0:21:24.200 --> 0:21:26.600 former employees, for all of those furloughed, and one of 0:21:26.600 --> 0:21:28.919 the things they're doing is every week the CEO is 0:21:28.920 --> 0:21:31.800 doing a town hall talking to them about what's happening 0:21:31.800 --> 0:21:34.120 in the market, what they can expect, how they might 0:21:34.200 --> 0:21:38.119 up skill. We have another customer in tourism who is 0:21:38.160 --> 0:21:41.520 offering all of their furloughed employees access to an MBA program, 0:21:41.560 --> 0:21:44.720 access to learning, access to skills. So I think you're 0:21:44.720 --> 0:21:47.639 seeing a lot of companies using this opportunity to a 0:21:48.160 --> 0:21:51.960 be great employers and ensure they're offering those furloughed employees 0:21:52.000 --> 0:21:55.000 access to resources to help them up skill and be 0:21:55.000 --> 0:21:59.280 better post crisis, but also be great communicators because none 0:21:59.320 --> 0:22:01.720 of us really you know, you know what that date 0:22:02.040 --> 0:22:05.600