1 00:00:00,240 --> 00:00:02,440 Speaker 1: This is Bloomberg Wall Street Week. 2 00:00:02,560 --> 00:00:04,480 Speaker 2: We may not have an overall recession, We're having a 3 00:00:04,559 --> 00:00:06,840 Speaker 2: rolling recession. To Cone, roll looks pretty strongly. It is 4 00:00:06,840 --> 00:00:07,680 Speaker 2: when it comes to jobs. 5 00:00:07,720 --> 00:00:09,880 Speaker 1: The financial stories that shape our world. 6 00:00:09,960 --> 00:00:13,640 Speaker 2: Three major regional bank failures send shockwaves through the banking system. 7 00:00:13,680 --> 00:00:15,480 Speaker 2: We're all trying to figure out what to make of 8 00:00:15,600 --> 00:00:17,000 Speaker 2: generative AI. 9 00:00:16,920 --> 00:00:19,320 Speaker 1: Through the eyes of the most influential voices. 10 00:00:19,440 --> 00:00:22,400 Speaker 2: Welcome down, Doctor Paul Krugman, Ryan moynihan, a Bank of America, 11 00:00:22,560 --> 00:00:25,279 Speaker 2: deebro Lair of the Paulson Institute, well then Hubbard of 12 00:00:25,280 --> 00:00:26,280 Speaker 2: the Columbia Business School. 13 00:00:26,280 --> 00:00:30,120 Speaker 1: Bloomberg Wall Street Week with David Weston from Bloomberg Radio. 14 00:00:30,240 --> 00:00:33,920 Speaker 2: A total eclipse of the sun, Connecticut repeats his men's 15 00:00:33,920 --> 00:00:38,319 Speaker 2: basketball champion, and inflation pushes back. This is Bloomberg Wall 16 00:00:38,320 --> 00:00:42,400 Speaker 2: Street Week. I'm David Weston. This week, Former Trade Representative 17 00:00:42,400 --> 00:00:45,479 Speaker 2: and World Bank President Bob Zellick on what both parties 18 00:00:45,520 --> 00:00:47,839 Speaker 2: are getting wrong on US trade policy. 19 00:00:48,520 --> 00:00:51,760 Speaker 3: If you add barriers to one type of product or another, 20 00:00:52,040 --> 00:00:52,840 Speaker 3: people will move. 21 00:00:53,680 --> 00:00:57,680 Speaker 2: And Finucan of Rubicon Capital on whatever happened to ESG. 22 00:00:58,680 --> 00:01:02,080 Speaker 4: I don't think there's an argument about the science. I 23 00:01:02,120 --> 00:01:05,679 Speaker 4: think most companies are committed, but some of the tools 24 00:01:05,680 --> 00:01:06,840 Speaker 4: they thought they were going. 25 00:01:06,680 --> 00:01:09,560 Speaker 5: To have have been held back a little bit. 26 00:01:10,200 --> 00:01:13,680 Speaker 2: And former IBM had Sam Palmesano on the right way 27 00:01:13,840 --> 00:01:15,440 Speaker 2: to regulate generative AI. 28 00:01:16,280 --> 00:01:18,600 Speaker 6: Well, we want the government to is regulate the users 29 00:01:18,600 --> 00:01:22,679 Speaker 6: of the technology. 30 00:01:24,880 --> 00:01:27,200 Speaker 2: Well, we start with those US inflation numbers coming in 31 00:01:27,280 --> 00:01:31,120 Speaker 2: higher than expected, something that caught many market participants by surprise, 32 00:01:31,240 --> 00:01:34,400 Speaker 2: but that did not surprise our special contributor Larry Summers 33 00:01:34,400 --> 00:01:34,920 Speaker 2: of Harvard. 34 00:01:36,080 --> 00:01:40,440 Speaker 7: I was not hugely surprised by the numbers. In an 35 00:01:40,480 --> 00:01:44,880 Speaker 7: economy that's growing faster than potential, with an unemployment rate 36 00:01:45,080 --> 00:01:50,240 Speaker 7: that has a three handle, in the presence of massive 37 00:01:50,520 --> 00:01:56,960 Speaker 7: and growing budget deficits and epically easy financial conditions, the 38 00:01:57,040 --> 00:02:02,320 Speaker 7: idea that inflation would remain robust or even accelerate should 39 00:02:02,360 --> 00:02:05,920 Speaker 7: not be a surprise to anyone, and that's what this 40 00:02:06,080 --> 00:02:10,880 Speaker 7: data suggests. It was not me or some outside observer 41 00:02:11,400 --> 00:02:16,880 Speaker 7: who emphasized the concept of supercore inflation, that is, taking 42 00:02:16,919 --> 00:02:20,880 Speaker 7: out the transitory stuff and also. 43 00:02:20,720 --> 00:02:22,359 Speaker 8: Taking out housing. 44 00:02:22,840 --> 00:02:27,840 Speaker 7: This confirms the idea that the neutral rate is way 45 00:02:28,200 --> 00:02:31,920 Speaker 7: above the two point six percent level that the FED 46 00:02:32,080 --> 00:02:36,120 Speaker 7: has been using as a north star. In my view, 47 00:02:36,280 --> 00:02:38,799 Speaker 7: puts back on the table. It is still not what 48 00:02:38,880 --> 00:02:42,520 Speaker 7: I would expect, but you have to take seriously the 49 00:02:42,600 --> 00:02:46,920 Speaker 7: possibility that the next rate move will be upwards rather 50 00:02:47,040 --> 00:02:48,760 Speaker 7: than downwards. 51 00:02:49,560 --> 00:02:51,799 Speaker 2: As much as Larry Summers may have been warning about 52 00:02:51,840 --> 00:02:54,520 Speaker 2: inflation staying higher than we'd like, the reaction to the 53 00:02:54,560 --> 00:02:57,400 Speaker 2: markets did not look like they've been fully prepared. The 54 00:02:57,480 --> 00:02:59,359 Speaker 2: S and P five hundred was off one point six 55 00:02:59,360 --> 00:03:01,720 Speaker 2: percent for the way, wending at fifty one to twenty three, 56 00:03:01,919 --> 00:03:04,440 Speaker 2: much closer to that year end median number of fifty 57 00:03:04,440 --> 00:03:07,520 Speaker 2: one hundred set by our Bloomberg Elves. The NANZDAC gave 58 00:03:07,600 --> 00:03:09,760 Speaker 2: up just under half a percent of the week, while 59 00:03:09,760 --> 00:03:12,320 Speaker 2: the yield of the ten year was up eleven basis 60 00:03:12,320 --> 00:03:15,200 Speaker 2: points to end at four point five percent. To explain 61 00:03:15,240 --> 00:03:17,320 Speaker 2: all this to us, we welcome back now Kristin Bitterly. 62 00:03:17,480 --> 00:03:20,799 Speaker 2: She's head of Investment Solutions for Citigroup Global Markets. Always 63 00:03:20,800 --> 00:03:23,640 Speaker 2: great to have you, Kristens. It's all about inflation. 64 00:03:23,680 --> 00:03:25,760 Speaker 9: It looks like it is all about inflation, and I 65 00:03:25,760 --> 00:03:28,600 Speaker 9: would also say earnings. So let's just look at the 66 00:03:28,600 --> 00:03:30,959 Speaker 9: price action that we've seen to start the second quarter. 67 00:03:31,360 --> 00:03:34,920 Speaker 9: You have geopolitics, you also have earning season kicking off. 68 00:03:35,440 --> 00:03:38,400 Speaker 9: You have also some seasonal elements to what we see 69 00:03:38,440 --> 00:03:41,119 Speaker 9: in April. This week, you tend to see a lot 70 00:03:41,120 --> 00:03:44,040 Speaker 9: of tax payment selling, both within the bond market, in 71 00:03:44,080 --> 00:03:47,040 Speaker 9: the municipal bond market, as well as within the equity market. 72 00:03:47,120 --> 00:03:49,240 Speaker 9: So when you combine all of this and put into 73 00:03:49,360 --> 00:03:51,880 Speaker 9: perspective that just yesterday we were at all time highs 74 00:03:51,880 --> 00:03:54,880 Speaker 9: in the Nasdaq and we're coming off two quarters of 75 00:03:54,920 --> 00:03:58,160 Speaker 9: double digit gains, I think we may be putting too 76 00:03:58,240 --> 00:04:00,760 Speaker 9: much weight on some of the volatility that we're seeing 77 00:04:01,000 --> 00:04:03,600 Speaker 9: that are pretty garden variety pullbacks within the market. 78 00:04:03,720 --> 00:04:05,400 Speaker 2: We spend a lot of time we'ring with the labor market, 79 00:04:05,600 --> 00:04:07,560 Speaker 2: So folcus say, on those jobs numbers are goading over 80 00:04:07,560 --> 00:04:09,760 Speaker 2: a month, are they really a factor at this point? 81 00:04:10,040 --> 00:04:12,200 Speaker 9: So I think if you're going to say what matters more, 82 00:04:12,280 --> 00:04:14,440 Speaker 9: is it the labor market or is inflation? In terms 83 00:04:14,440 --> 00:04:16,839 Speaker 9: of the Fed's dual mandate and what they're going to 84 00:04:16,839 --> 00:04:19,320 Speaker 9: pay attention to, the data that we have out of 85 00:04:19,360 --> 00:04:22,719 Speaker 9: the labor market is very robust. The job creation that 86 00:04:22,760 --> 00:04:25,080 Speaker 9: we've seen, if we look at it year over year, 87 00:04:25,200 --> 00:04:27,200 Speaker 9: you could start to see some cracks in that. So, 88 00:04:27,520 --> 00:04:29,720 Speaker 9: for example, you can look at jolts, and you can 89 00:04:29,760 --> 00:04:32,200 Speaker 9: see the millions of jobs that we've actually come down 90 00:04:32,240 --> 00:04:34,440 Speaker 9: in terms of openings. You can also look at the 91 00:04:34,480 --> 00:04:38,320 Speaker 9: quicks rate that's stabilized a bit, so we've seen some softening, 92 00:04:38,440 --> 00:04:41,880 Speaker 9: but I think the large picture a pretty robust labor market. 93 00:04:42,240 --> 00:04:45,560 Speaker 9: That being said, when you look at inflation, that's where 94 00:04:45,600 --> 00:04:47,760 Speaker 9: the Fed's attention is. And I think what we're seeing 95 00:04:47,839 --> 00:04:51,560 Speaker 9: right now, and what Larry Summers just mentioned is the 96 00:04:51,600 --> 00:04:54,760 Speaker 9: fact that the FED needs to see a trajectory of disinflation, 97 00:04:55,279 --> 00:04:57,640 Speaker 9: and so what we have for this first quarter we 98 00:04:57,680 --> 00:05:00,159 Speaker 9: don't have that data. We have more of a stalling 99 00:05:00,240 --> 00:05:02,920 Speaker 9: and a pause. And so to credibly be able to 100 00:05:03,000 --> 00:05:05,200 Speaker 9: cut and know that inflation is on a path to 101 00:05:05,400 --> 00:05:06,840 Speaker 9: actually what we believe is going to be two and 102 00:05:06,880 --> 00:05:09,360 Speaker 9: a half percent by this year's end, you need to 103 00:05:09,400 --> 00:05:11,200 Speaker 9: see some of those trends actually take place. 104 00:05:11,279 --> 00:05:13,520 Speaker 2: So christ you said, it's not just the infliction data, 105 00:05:13,520 --> 00:05:15,640 Speaker 2: it's also earnings. What are we looking for earnings? 106 00:05:15,680 --> 00:05:18,880 Speaker 9: It is so within earnings, I think it is something 107 00:05:18,880 --> 00:05:23,640 Speaker 9: about actually beating and then raising guidance and expectations, because 108 00:05:23,800 --> 00:05:27,039 Speaker 9: the expectations right now I think are relatively reasonable. I 109 00:05:27,080 --> 00:05:29,640 Speaker 9: think what are we going to see we raise our 110 00:05:29,720 --> 00:05:31,919 Speaker 9: expectations for the full year. So we came into this 111 00:05:32,000 --> 00:05:35,440 Speaker 9: year relatively conservative, thinking that we would see slower growth data. 112 00:05:35,920 --> 00:05:38,320 Speaker 9: I think that when you look across the US equity market, 113 00:05:38,360 --> 00:05:41,359 Speaker 9: it's been really resilient. So you have about five sectors 114 00:05:41,400 --> 00:05:44,320 Speaker 9: out of the eleven that are anticipated to deliver earnings growth. 115 00:05:44,560 --> 00:05:47,320 Speaker 9: You also have some sectors that have been surprised. So 116 00:05:47,360 --> 00:05:48,880 Speaker 9: when we look at the price of oil and what 117 00:05:49,600 --> 00:05:51,960 Speaker 9: that is going to do for energy, even if we 118 00:05:52,000 --> 00:05:56,719 Speaker 9: look at utilities, the anticipated earnings growth is in the twenties, 119 00:05:57,000 --> 00:06:00,719 Speaker 9: so from a percentage standpoint, which is oddly actually beneficiary 120 00:06:00,839 --> 00:06:04,120 Speaker 9: of AI. So expect more AI language, but in sectors 121 00:06:04,120 --> 00:06:05,120 Speaker 9: that you wouldn't expect. 122 00:06:05,200 --> 00:06:07,919 Speaker 2: What about mainstream versus Wall Street? Because Russell two thousand 123 00:06:08,000 --> 00:06:09,919 Speaker 2: is not had an easy time of it. It is not. 124 00:06:10,080 --> 00:06:13,000 Speaker 9: And if you look at like small business confidence measures, 125 00:06:13,279 --> 00:06:15,600 Speaker 9: they're also not where they where we would want them 126 00:06:15,600 --> 00:06:17,440 Speaker 9: to be. So I think this is another thing when 127 00:06:17,680 --> 00:06:19,360 Speaker 9: people are talking about whether or not the Fed's going 128 00:06:19,400 --> 00:06:22,000 Speaker 9: to cut and some of the measures that we're looking at, 129 00:06:22,240 --> 00:06:24,159 Speaker 9: I think you have to say, why do we see 130 00:06:24,200 --> 00:06:26,880 Speaker 9: such strong consumer spending? Why do we see the resiliency, 131 00:06:27,440 --> 00:06:30,560 Speaker 9: and really it is a delineation between if you're looking 132 00:06:30,560 --> 00:06:33,680 Speaker 9: within the market, the corporations that have their balance sheets 133 00:06:33,680 --> 00:06:36,480 Speaker 9: in order that took advantage of historically low interest rates. 134 00:06:36,600 --> 00:06:38,440 Speaker 9: Even at the beginning of this year, we saw a 135 00:06:38,600 --> 00:06:41,960 Speaker 9: huge amount of investment grade issuance come to market. It's 136 00:06:42,000 --> 00:06:44,560 Speaker 9: actually the highest quarter since what we saw back in 137 00:06:44,600 --> 00:06:47,400 Speaker 9: twenty twenty. So there are a lot of companies that 138 00:06:47,480 --> 00:06:50,560 Speaker 9: have their balance sheet in order. That's very different than 139 00:06:50,560 --> 00:06:51,560 Speaker 9: the Russell two thousand. 140 00:06:51,839 --> 00:06:53,960 Speaker 2: The very end here any investment advice, how do you 141 00:06:53,960 --> 00:06:55,040 Speaker 2: invest in this in climate? 142 00:06:55,160 --> 00:06:57,800 Speaker 9: So a couple of things. I would say, stay diversified. 143 00:06:58,040 --> 00:07:00,240 Speaker 9: So when you look at the price action today, there 144 00:07:00,279 --> 00:07:03,000 Speaker 9: is value to having both fixed income within your portfolio 145 00:07:03,279 --> 00:07:06,599 Speaker 9: as well as equities. The broadening out to make sure 146 00:07:06,960 --> 00:07:09,159 Speaker 9: that again you're not going to unprofitable parts of the 147 00:07:09,200 --> 00:07:12,280 Speaker 9: market are highly levered, but you're finding opportunities to take 148 00:07:12,320 --> 00:07:15,080 Speaker 9: advantage of some of these themes, but at a reasonable valuation. 149 00:07:15,480 --> 00:07:16,960 Speaker 9: The other thing that I will say is if you're 150 00:07:16,960 --> 00:07:21,680 Speaker 9: worried about geopolitics, there are hedging opportunities that exist, So 151 00:07:21,960 --> 00:07:25,360 Speaker 9: don't trade your portfolio based on geopolitics or elections, but 152 00:07:25,440 --> 00:07:27,520 Speaker 9: take advantage of some of those hedges to stay invested in. 153 00:07:27,680 --> 00:07:30,080 Speaker 2: Unfortunately, we need some of those hedges on geopolitics, I'm 154 00:07:30,120 --> 00:07:33,720 Speaker 2: afraid many thanks to Kristin Bitterley of City Group Global Markets. 155 00:07:34,640 --> 00:07:38,160 Speaker 2: Artificial intelligence is on the march. Jamie diamond says it 156 00:07:38,160 --> 00:07:40,200 Speaker 2: may be as powerful as the invention of the steam 157 00:07:40,200 --> 00:07:43,240 Speaker 2: engine or the discovery of electricity. And the government has 158 00:07:43,240 --> 00:07:47,440 Speaker 2: given AI chipmaker TSMC eleven point six billion dollars to 159 00:07:47,440 --> 00:07:49,600 Speaker 2: build a plan in the United States, but some say 160 00:07:49,640 --> 00:07:52,040 Speaker 2: that the government is behind I'm figuring out a safe 161 00:07:52,200 --> 00:07:56,200 Speaker 2: regulatory framework for this rapidly developing technology. To give us 162 00:07:56,200 --> 00:07:59,080 Speaker 2: his perspective on regulation in the tech industry, we welcome 163 00:07:59,120 --> 00:08:01,640 Speaker 2: back now. Sampalm is on. He's former head of IBM 164 00:08:01,720 --> 00:08:04,720 Speaker 2: and now chairman of the Center for Global Entervise. Sam 165 00:08:04,760 --> 00:08:06,800 Speaker 2: great to have you back on Wall Street week. As 166 00:08:06,840 --> 00:08:08,920 Speaker 2: I say, you have a perspective historical perspective here. This 167 00:08:08,960 --> 00:08:10,840 Speaker 2: is not the first time we've had major tech innovation. 168 00:08:10,960 --> 00:08:13,360 Speaker 2: If you go back to Windows and you look at 169 00:08:13,520 --> 00:08:17,080 Speaker 2: the smartphone, you look at social media. Put this in perspective. 170 00:08:17,160 --> 00:08:18,560 Speaker 2: What has the government done in the past, and what 171 00:08:18,680 --> 00:08:20,400 Speaker 2: has it done well and maybe not so well? 172 00:08:21,000 --> 00:08:22,800 Speaker 6: Oh yah, David, thank you. It's great to be back 173 00:08:22,840 --> 00:08:25,240 Speaker 6: on the program, and it's always going to be with you. 174 00:08:25,440 --> 00:08:27,560 Speaker 8: Good evening to everyone you know. 175 00:08:27,640 --> 00:08:30,040 Speaker 6: As a friend of mine, put this, we always dress 176 00:08:30,080 --> 00:08:33,880 Speaker 6: for yesterday's weather. Especially true when it comes to regulation right. 177 00:08:34,480 --> 00:08:38,840 Speaker 6: Governments tend to apply existing laws and frameworks to new phenomenon, 178 00:08:38,960 --> 00:08:42,839 Speaker 6: which is a challenge. I'll use two example, do any 179 00:08:42,880 --> 00:08:47,160 Speaker 6: trust and then subsidies are tariffs and going back to 180 00:08:47,200 --> 00:08:50,840 Speaker 6: the eighties here, But funny how history repeats itself. To 181 00:08:50,920 --> 00:08:54,520 Speaker 6: take the first suit, which is IBM, mostly by the 182 00:08:54,559 --> 00:08:57,320 Speaker 6: Maintrain dominance. It lasted from the last day the Johnson 183 00:08:57,320 --> 00:09:00,840 Speaker 6: administration to the start of the Reagan administration. We dismissed 184 00:09:01,400 --> 00:09:05,840 Speaker 6: Microsoft mostly about bundling windows and browsers. To think about 185 00:09:05,880 --> 00:09:09,520 Speaker 6: how relevant that would be today in today's world. So 186 00:09:09,559 --> 00:09:12,360 Speaker 6: the results is that over time these suits kind of 187 00:09:13,600 --> 00:09:16,160 Speaker 6: it lasts so long that the technology's. 188 00:09:15,520 --> 00:09:18,280 Speaker 8: Advanced and they become used. I'll give you another. 189 00:09:18,000 --> 00:09:20,720 Speaker 6: Example, pairs and subsidies. Since you brought up a chips tack, 190 00:09:20,760 --> 00:09:23,559 Speaker 6: it might be relevant here as well. In the eighties 191 00:09:23,600 --> 00:09:27,320 Speaker 6: the issue was Japan. It wasn't necessarily what's happening from 192 00:09:27,360 --> 00:09:30,080 Speaker 6: their concerns with China and their supply chains, but it 193 00:09:30,120 --> 00:09:33,880 Speaker 6: was in semiconductors and mostly memory. Reagan slapped one hundred 194 00:09:33,880 --> 00:09:37,440 Speaker 6: percent tariffs on chips from Japan on a year later Congress, 195 00:09:37,600 --> 00:09:41,439 Speaker 6: plus five hundred million to subsidized American chip companies those days. 196 00:09:41,440 --> 00:09:42,360 Speaker 5: That was a lot of money. 197 00:09:42,559 --> 00:09:46,120 Speaker 6: I need was to say, both both efforts fell flat. 198 00:09:46,840 --> 00:09:49,720 Speaker 6: So why Well, one thing that all the incentives around 199 00:09:49,720 --> 00:09:52,520 Speaker 6: memory chips and the industry had moved. The microprocess are 200 00:09:52,559 --> 00:09:56,360 Speaker 6: now called logic, and so we missed it again. And 201 00:09:56,440 --> 00:09:59,160 Speaker 6: so my point is it's really really hard in tech 202 00:09:59,600 --> 00:10:02,079 Speaker 6: to pick winners and losers because the space just moves 203 00:10:02,080 --> 00:10:04,800 Speaker 6: so fast. And that's what we're seeing again today. 204 00:10:05,000 --> 00:10:06,839 Speaker 2: If you were to advise the government, as you do 205 00:10:06,960 --> 00:10:10,319 Speaker 2: regularly on these issues, what's the right balance between on 206 00:10:10,360 --> 00:10:12,679 Speaker 2: the one hand, running a risk of it getting out 207 00:10:12,679 --> 00:10:14,800 Speaker 2: of control, going off on its own. Some people would 208 00:10:14,800 --> 00:10:17,200 Speaker 2: say that happened with social media actually at this point, 209 00:10:17,360 --> 00:10:19,320 Speaker 2: that we let it go too far too fast as 210 00:10:19,320 --> 00:10:22,439 Speaker 2: a post on the other hand, regulating and actually suppressing 211 00:10:22,480 --> 00:10:23,800 Speaker 2: some of the innovation that we need. 212 00:10:24,080 --> 00:10:26,280 Speaker 6: Well, actually, you make a great point, and the analogy 213 00:10:26,440 --> 00:10:29,240 Speaker 6: of the Internet and social media is absolutely true. The 214 00:10:29,280 --> 00:10:32,160 Speaker 6: first thing, a first comment I would make, it's not 215 00:10:32,320 --> 00:10:34,960 Speaker 6: just a bide administration executive order, it's also what the 216 00:10:35,000 --> 00:10:37,760 Speaker 6: EU is doing the eu AI. I think that's really 217 00:10:37,800 --> 00:10:41,000 Speaker 6: really important because you need to have coordination on a 218 00:10:41,040 --> 00:10:43,680 Speaker 6: global basis because all these companies and all these systems 219 00:10:43,720 --> 00:10:45,400 Speaker 6: are going to operate on global scale. 220 00:10:45,480 --> 00:10:46,840 Speaker 8: So that's a positive thing. 221 00:10:47,520 --> 00:10:51,680 Speaker 6: But from a company's perspective, you need to understand because 222 00:10:51,679 --> 00:10:55,120 Speaker 6: you got to play offense and defense. So in playing offense, 223 00:10:55,240 --> 00:10:57,880 Speaker 6: you need to understand where you can apply the technology, 224 00:10:57,920 --> 00:11:00,160 Speaker 6: how you can make good use of the technology, what 225 00:11:00,280 --> 00:11:03,400 Speaker 6: you really want and if you're a CEO running these companies, 226 00:11:03,840 --> 00:11:08,319 Speaker 6: you actually want basically guardrail. You want, you want rules 227 00:11:08,360 --> 00:11:12,200 Speaker 6: to be established, you want regulation. Now, Kencheneal and I 228 00:11:12,240 --> 00:11:14,600 Speaker 6: created this thing called the Data Trust Alliance to look 229 00:11:14,640 --> 00:11:18,719 Speaker 6: at transparency and and integrity of the data and in 230 00:11:18,840 --> 00:11:21,320 Speaker 6: the operations or in the uses of the data. And 231 00:11:21,360 --> 00:11:24,200 Speaker 6: it's a couple of dozen companies and the CEOs are involved. 232 00:11:24,559 --> 00:11:26,720 Speaker 6: But where they're coming from, which is different from the 233 00:11:26,760 --> 00:11:27,840 Speaker 6: technology leaders. 234 00:11:28,200 --> 00:11:29,079 Speaker 8: They're coming from the. 235 00:11:29,080 --> 00:11:31,440 Speaker 6: Perspective is that you don't really you don't want you 236 00:11:31,480 --> 00:11:35,960 Speaker 6: to regulate the technology because that will limit innovation. What 237 00:11:36,080 --> 00:11:38,280 Speaker 6: we want the government to is regulate the uses of 238 00:11:38,320 --> 00:11:41,600 Speaker 6: the technology. What are those use cases and let's look 239 00:11:41,600 --> 00:11:44,479 Speaker 6: at those use cases and I'll call it a continuum 240 00:11:44,480 --> 00:11:48,439 Speaker 6: of risk. So if it's national security high risk, if 241 00:11:48,440 --> 00:11:51,800 Speaker 6: it's call centers and those sorts of things low risk, 242 00:11:51,920 --> 00:11:54,000 Speaker 6: it's almost as I take it back to the cyber 243 00:11:54,120 --> 00:11:56,080 Speaker 6: days of Tom Donald and I were running the Obama 244 00:11:56,120 --> 00:11:59,920 Speaker 6: Commission for Cyber We had a continuum of risk. One 245 00:12:00,200 --> 00:12:03,560 Speaker 6: was no one dies and the other one photo sharing. 246 00:12:04,000 --> 00:12:04,280 Speaker 1: Though. 247 00:12:04,840 --> 00:12:07,400 Speaker 6: This is how I think if I was the government, 248 00:12:07,679 --> 00:12:09,960 Speaker 6: I would suggest to the government they think about the 249 00:12:10,160 --> 00:12:13,240 Speaker 6: use cases and how the technology is being applied, not 250 00:12:13,360 --> 00:12:18,600 Speaker 6: just the technology itself. Because if you influence the usage 251 00:12:18,720 --> 00:12:20,800 Speaker 6: and you have guard rails established, that you get to 252 00:12:20,840 --> 00:12:22,280 Speaker 6: the standards. So it's going to be hard to have 253 00:12:22,320 --> 00:12:23,200 Speaker 6: standards they want. 254 00:12:23,400 --> 00:12:26,160 Speaker 2: Sam, it's always such a Treatamyan walshrobg thank you so much. 255 00:12:26,360 --> 00:12:32,240 Speaker 2: That's Sam Palmersano of the Center for Global Enterprise. Coming up, 256 00:12:32,280 --> 00:12:36,000 Speaker 2: India heads into forty four days of national elections. We 257 00:12:36,040 --> 00:12:39,120 Speaker 2: talked with Rashir Sharma of Rockefeller International about the boost 258 00:12:39,160 --> 00:12:42,839 Speaker 2: Prime Minister Modi is likely to get from the Indian economy. 259 00:12:43,559 --> 00:12:47,040 Speaker 10: The fact that inflation has been relatively under control. Is 260 00:12:47,080 --> 00:12:49,840 Speaker 10: I think one of those underappreciated factors. 261 00:12:50,320 --> 00:12:52,600 Speaker 2: That's next on Wall Street Week on Bloomberg. 262 00:12:54,280 --> 00:12:58,440 Speaker 1: This is Bloomberg Well Street Week with David Weston from 263 00:12:58,600 --> 00:12:59,520 Speaker 1: Bloomberg Radio. 264 00:13:05,880 --> 00:13:09,160 Speaker 2: This is Wall STREETWEK I'm David Western. India's economic growth 265 00:13:09,200 --> 00:13:12,079 Speaker 2: will play a large role in the national election starting 266 00:13:12,240 --> 00:13:15,320 Speaker 2: later this month. Growth that has been the goal since 267 00:13:15,360 --> 00:13:19,199 Speaker 2: Prime Minister Indira Gandhi visited President Reagan back in nineteen 268 00:13:19,280 --> 00:13:19,840 Speaker 2: eighty two. 269 00:13:20,760 --> 00:13:25,480 Speaker 11: In India, our preoccupation is with building and development. Our 270 00:13:25,559 --> 00:13:29,800 Speaker 11: problem is not to influence others, but to consolidate our 271 00:13:29,880 --> 00:13:35,120 Speaker 11: political and economic independence. We believe in freedom with a 272 00:13:35,200 --> 00:13:39,719 Speaker 11: passion that only those who have been denied it can understand. 273 00:13:40,880 --> 00:13:44,800 Speaker 11: We believe in equality because many in our country were 274 00:13:44,880 --> 00:13:48,720 Speaker 11: so long deprived of it. We believe in the worth 275 00:13:48,760 --> 00:13:51,760 Speaker 11: of the human being, for that is the foundation of 276 00:13:51,800 --> 00:13:54,839 Speaker 11: our democracy and our work for development. 277 00:13:55,520 --> 00:13:58,880 Speaker 2: And Prime Minister Moting emphasized that same economic growth when 278 00:13:58,880 --> 00:14:02,120 Speaker 2: he visited President by forty one years later. 279 00:14:02,760 --> 00:14:07,320 Speaker 12: When I first visited the US at a primeister, India 280 00:14:08,200 --> 00:14:11,400 Speaker 12: but the tenth largest economy. 281 00:14:10,800 --> 00:14:15,600 Speaker 13: In the world. Today, India is the fifth. 282 00:14:16,040 --> 00:14:24,880 Speaker 12: Largest economic India will be the far largest economy soon. 283 00:14:27,520 --> 00:14:32,400 Speaker 12: We are not only growing bigger, but we are also 284 00:14:32,520 --> 00:14:33,400 Speaker 12: growing faster. 285 00:14:35,800 --> 00:14:38,840 Speaker 2: To explain how much economic progress India has made and 286 00:14:38,920 --> 00:14:41,560 Speaker 2: what it could mean for the upcoming elections, we welcome 287 00:14:41,560 --> 00:14:44,680 Speaker 2: back now. We're Shir Sharma, Chairman of Rockefeller International and 288 00:14:44,840 --> 00:14:47,560 Speaker 2: founder and CIO of Breakout Capital. We're sure great to 289 00:14:47,560 --> 00:14:49,840 Speaker 2: have you back with us. We have elections coming up 290 00:14:50,080 --> 00:14:52,680 Speaker 2: and the economy I think is according to your column, 291 00:14:52,720 --> 00:14:54,640 Speaker 2: action the ft will play a large role in this. 292 00:14:54,960 --> 00:14:57,960 Speaker 2: Give us your perspective on just how far India has 293 00:14:57,960 --> 00:14:58,880 Speaker 2: come economically. 294 00:15:00,080 --> 00:15:03,760 Speaker 10: Right up until the nineteen eighties, India was a big 295 00:15:03,880 --> 00:15:08,520 Speaker 10: laggard economy that its rankings in both per capita income 296 00:15:08,640 --> 00:15:11,960 Speaker 10: terms in both its in terms of his GDP size 297 00:15:12,360 --> 00:15:17,000 Speaker 10: kept on falling for the entire period. The turning point 298 00:15:17,600 --> 00:15:21,320 Speaker 10: as far as India's economic progress was concerned, I think 299 00:15:21,480 --> 00:15:25,160 Speaker 10: was really the nineteen nineties when you had the major 300 00:15:25,200 --> 00:15:29,320 Speaker 10: burst of economic reforms that took place. When the Indian 301 00:15:29,360 --> 00:15:33,720 Speaker 10: economy nearly went bankrupt, it had to go to the 302 00:15:33,760 --> 00:15:37,320 Speaker 10: IMF again and get a big rescue program. That's really 303 00:15:37,360 --> 00:15:42,960 Speaker 10: what began India's economic turnaround, and that's what led to 304 00:15:43,120 --> 00:15:46,120 Speaker 10: India's rise, and what we've seen over the past few 305 00:15:46,200 --> 00:15:50,360 Speaker 10: years is a continuing momentum of that rise, which began 306 00:15:50,800 --> 00:15:52,840 Speaker 10: in the early nineteen nineties, so that. 307 00:15:52,880 --> 00:15:56,440 Speaker 2: Began before Prime Minister Moti It came to office. At 308 00:15:56,440 --> 00:15:59,120 Speaker 2: the same time it has continued. How much is he 309 00:15:59,160 --> 00:16:01,720 Speaker 2: getting credited day in India for that as he looks 310 00:16:01,760 --> 00:16:03,160 Speaker 2: towards these elections. 311 00:16:02,760 --> 00:16:04,680 Speaker 13: Which is getting lots of credit for that? And I 312 00:16:04,680 --> 00:16:06,200 Speaker 13: think there are two or three reasons for it. 313 00:16:06,720 --> 00:16:09,640 Speaker 10: One is the fact that it's reached a sort of 314 00:16:09,640 --> 00:16:12,720 Speaker 10: critical mass, which is that when India was rising in 315 00:16:12,760 --> 00:16:13,960 Speaker 10: the nineteen nineties or in the. 316 00:16:13,960 --> 00:16:16,960 Speaker 13: Two thousands, the base was much smaller. 317 00:16:17,000 --> 00:16:20,000 Speaker 10: It's still in per capita income terms of relatively small base, 318 00:16:20,400 --> 00:16:23,640 Speaker 10: but now that India has become the world's fifth largest economy, 319 00:16:24,040 --> 00:16:27,360 Speaker 10: that just tends to have a much greater effect. 320 00:16:28,400 --> 00:16:30,800 Speaker 13: But in terms of his direct. 321 00:16:30,480 --> 00:16:32,720 Speaker 10: Credit, I think that the one thing which is possibly 322 00:16:32,800 --> 00:16:37,400 Speaker 10: underestimated is that how non inflationary this growth has been 323 00:16:37,840 --> 00:16:39,840 Speaker 10: over the last few years. That if you look at 324 00:16:39,840 --> 00:16:43,000 Speaker 10: the previous growth spurts that India had, particularly in the 325 00:16:43,000 --> 00:16:46,960 Speaker 10: preceding Congress government, one of the big problems was that 326 00:16:47,000 --> 00:16:50,160 Speaker 10: it also led to a big surgeon inflation. This time, 327 00:16:50,240 --> 00:16:53,840 Speaker 10: inflation has been relatively low, and that is a big 328 00:16:53,880 --> 00:16:58,240 Speaker 10: plus because in politics around the world, economic growth mayo. 329 00:16:58,120 --> 00:17:00,800 Speaker 13: May not matter, but matters. 330 00:17:01,120 --> 00:17:04,960 Speaker 10: Nothing kills the prospects of incumbents as much as rising prices, 331 00:17:05,400 --> 00:17:08,639 Speaker 10: and the fact that inflation has been relatively under control 332 00:17:09,000 --> 00:17:11,919 Speaker 10: is I think one of those underappreciated factors because we 333 00:17:11,960 --> 00:17:15,880 Speaker 10: as economic commentators or even political commentators, focus so much 334 00:17:15,880 --> 00:17:18,439 Speaker 10: on just the headline GDP growth numbers. So the fact 335 00:17:18,440 --> 00:17:22,840 Speaker 10: that you have very low inflation or relatively low inflation, 336 00:17:23,400 --> 00:17:23,920 Speaker 10: I think. 337 00:17:23,720 --> 00:17:24,840 Speaker 13: Has been a big positive. 338 00:17:24,880 --> 00:17:27,119 Speaker 10: The other couple of things which are working in his 339 00:17:27,200 --> 00:17:31,040 Speaker 10: favor is that this growth spurt has happened at a 340 00:17:31,119 --> 00:17:34,720 Speaker 10: time when so many other emerging markets, including China, have 341 00:17:34,880 --> 00:17:35,600 Speaker 10: been sputtering. 342 00:17:36,160 --> 00:17:38,320 Speaker 2: You point out in your Financial Times Calm. He also 343 00:17:38,320 --> 00:17:40,879 Speaker 2: has managed his own press quite effectively. I mean, you 344 00:17:40,880 --> 00:17:43,040 Speaker 2: have a quote in there that there's freedom of speech, 345 00:17:43,400 --> 00:17:46,359 Speaker 2: not a freedom from speech. The consequence of that speech 346 00:17:46,480 --> 00:17:49,359 Speaker 2: after speech, there's not so much freedom. So how does 347 00:17:49,400 --> 00:17:52,000 Speaker 2: he managed that and is there a trade off there 348 00:17:52,080 --> 00:17:54,160 Speaker 2: where they actually are giving up some of their civil 349 00:17:54,240 --> 00:17:56,400 Speaker 2: rights in the interests of growth, which we've seen other 350 00:17:56,400 --> 00:17:57,320 Speaker 2: places over time. 351 00:17:58,320 --> 00:17:59,879 Speaker 13: Now, there's no question about that. 352 00:18:00,040 --> 00:18:03,280 Speaker 10: If you look at the Indian media, there's a lot 353 00:18:03,320 --> 00:18:06,760 Speaker 10: of self censorship which goes on a lot of news 354 00:18:06,840 --> 00:18:11,440 Speaker 10: organizations that have spoken out against Modi or the DJP, 355 00:18:12,119 --> 00:18:15,960 Speaker 10: they have been under investigation. The pattern is quite clear, 356 00:18:16,080 --> 00:18:19,320 Speaker 10: which is that if you have been speaking out against Modi, 357 00:18:19,600 --> 00:18:21,760 Speaker 10: you better watch out. I think that's been the clear 358 00:18:21,840 --> 00:18:24,840 Speaker 10: message that has been sent out. The state machinery has 359 00:18:24,880 --> 00:18:30,400 Speaker 10: been used quite extensively to silence critics and to silence 360 00:18:30,440 --> 00:18:30,879 Speaker 10: the media. 361 00:18:31,040 --> 00:18:33,280 Speaker 2: One of the things you draw an analogy to is 362 00:18:33,320 --> 00:18:36,200 Speaker 2: after World War Two, Taiwan and also South Korea particularly 363 00:18:36,359 --> 00:18:40,840 Speaker 2: have had amazing growth with more authoritarian regimes, more than 364 00:18:40,840 --> 00:18:43,919 Speaker 2: I think we'd say premister Modi has, but that that 365 00:18:43,960 --> 00:18:47,000 Speaker 2: went away as they really moved into the middle income levels. 366 00:18:47,280 --> 00:18:49,040 Speaker 2: So that is the question. At some point is that 367 00:18:49,080 --> 00:18:51,960 Speaker 2: deal get changed? If that is the deal premister Motori 368 00:18:52,080 --> 00:18:54,359 Speaker 2: has with the people of India, does that get changed 369 00:18:54,400 --> 00:18:57,320 Speaker 2: to some point as it approaches middle income status? No. 370 00:18:57,440 --> 00:19:00,800 Speaker 10: I think that in India's case, it's a bit different 371 00:19:00,840 --> 00:19:03,080 Speaker 10: because India is going the other way. That India gave 372 00:19:03,119 --> 00:19:06,639 Speaker 10: its people political freedom first and did not give its 373 00:19:06,640 --> 00:19:10,280 Speaker 10: people economic freedom, and so you didn't have much economic 374 00:19:10,320 --> 00:19:16,800 Speaker 10: progress for the first forty audios of the new India 375 00:19:17,000 --> 00:19:21,399 Speaker 10: which emerged after British rule. So now it seems to 376 00:19:21,400 --> 00:19:23,720 Speaker 10: be reversing the order a bit so more than per 377 00:19:23,720 --> 00:19:26,240 Speaker 10: capitain income levels. I think that there are two things. 378 00:19:26,280 --> 00:19:30,480 Speaker 10: One that Modi has to keep delivering on the economic 379 00:19:30,560 --> 00:19:33,160 Speaker 10: front for this deal to work. And the second thing 380 00:19:33,200 --> 00:19:36,320 Speaker 10: I'll say is this that having covered Indian elections for 381 00:19:36,359 --> 00:19:40,000 Speaker 10: the last thirty odd years, that Indians do believe a 382 00:19:40,040 --> 00:19:41,800 Speaker 10: lot more in democracy. 383 00:19:41,880 --> 00:19:43,840 Speaker 13: It runs in the fiber of that country. 384 00:19:44,200 --> 00:19:46,840 Speaker 10: They seem to or at least a swing voter seems 385 00:19:46,840 --> 00:19:49,560 Speaker 10: to have suspended that for now in return for what 386 00:19:49,600 --> 00:19:52,879 Speaker 10: they perceive as economic progress. But it really seems to 387 00:19:52,920 --> 00:19:55,640 Speaker 10: be because of Modi that he has got such personal 388 00:19:55,680 --> 00:19:59,440 Speaker 10: appeal that he's been able to strike such a bargain 389 00:20:00,080 --> 00:20:03,400 Speaker 10: with the swing voter. In the post Moodie world, I'm 390 00:20:03,400 --> 00:20:06,240 Speaker 10: not sure that this works anymore because India is a 391 00:20:06,280 --> 00:20:10,880 Speaker 10: very federal country. Even today, nearly half of the states 392 00:20:10,920 --> 00:20:13,880 Speaker 10: in India, the twenty eight odd states in India, those 393 00:20:13,920 --> 00:20:17,720 Speaker 10: are run by opposition parties, so that's quite a high number. 394 00:20:18,040 --> 00:20:19,600 Speaker 2: We're sure it's always such a treat to have you 395 00:20:19,640 --> 00:20:21,719 Speaker 2: with us. Thank you so much. That's for shir Sharma, 396 00:20:21,760 --> 00:20:24,880 Speaker 2: whose new book What Went Wrong with Capitalism is out 397 00:20:25,040 --> 00:20:29,520 Speaker 2: this coming June. Japanese Prime Minister Kishita visited Washington this 398 00:20:29,600 --> 00:20:31,920 Speaker 2: week in the midst of a difficult dispute over whether 399 00:20:32,040 --> 00:20:35,720 Speaker 2: Nippon Steel could buy US steel, focusing American voters once 400 00:20:35,760 --> 00:20:38,880 Speaker 2: again on the role of manufacturing jobs in the US economy. 401 00:20:39,119 --> 00:20:43,240 Speaker 2: Bloomberg International Economics and Policy correspondent Michael McKee is here 402 00:20:43,240 --> 00:20:44,600 Speaker 2: to lay out the issues. 403 00:20:45,000 --> 00:20:46,960 Speaker 14: The US came out of World War Two as the 404 00:20:47,000 --> 00:20:51,159 Speaker 14: global manufacturing powerhouse. Factory jobs became a ticket to the 405 00:20:51,200 --> 00:20:51,920 Speaker 14: middle class. 406 00:20:52,400 --> 00:20:53,200 Speaker 13: That's changed. 407 00:20:53,480 --> 00:20:56,639 Speaker 14: Factories and the jobs that were done there have disappeared 408 00:20:56,720 --> 00:21:01,920 Speaker 14: all over America. Blame China, Blame globalization. The presidential candidates do, 409 00:21:02,200 --> 00:21:05,280 Speaker 14: and they're doing a lot of talking about changing things back. 410 00:21:06,000 --> 00:21:08,639 Speaker 14: The number of factory jobs has been falling for almost 411 00:21:08,760 --> 00:21:11,920 Speaker 14: fifty years, and for a lot of people, the middle 412 00:21:11,920 --> 00:21:17,159 Speaker 14: class paycheck has disappeared. Simply slapping tariffs on important factory 413 00:21:17,160 --> 00:21:20,119 Speaker 14: goods or subsidizing the construction of new plants in the 414 00:21:20,240 --> 00:21:23,880 Speaker 14: US might work in some isolated cases, but. 415 00:21:23,880 --> 00:21:25,520 Speaker 13: They can't bring back the past. 416 00:21:26,000 --> 00:21:30,600 Speaker 14: Manufacturing itself has changed, and it's not going to change back. 417 00:21:31,320 --> 00:21:33,760 Speaker 14: As a share of GDP, it peaked in nineteen fifty 418 00:21:33,840 --> 00:21:37,760 Speaker 14: three and has been falling ever since. In terms of output, though, 419 00:21:38,080 --> 00:21:42,400 Speaker 14: industrial production is higher than ever. We're making more stuff, 420 00:21:42,640 --> 00:21:45,640 Speaker 14: but we're doing it with far fewer workers and much 421 00:21:45,720 --> 00:21:50,840 Speaker 14: more productive equipment. What we make has also changed, less steel, 422 00:21:51,119 --> 00:21:52,280 Speaker 14: more semiconductors. 423 00:21:53,000 --> 00:21:53,560 Speaker 8: George W. 424 00:21:53,640 --> 00:21:56,600 Speaker 14: Bush, Donald Trump, and Joe Biden put or kept tariffs 425 00:21:56,640 --> 00:22:00,000 Speaker 14: on important steel. The idea was to make important steel 426 00:22:00,000 --> 00:22:05,280 Speaker 14: feel more expensive than domestically produced. What happened, American steel 427 00:22:05,320 --> 00:22:09,000 Speaker 14: mills just raised their prices. Imports of steel dipped, but 428 00:22:09,080 --> 00:22:13,800 Speaker 14: are now higher than ever. Wages for technology workers are 429 00:22:13,960 --> 00:22:17,560 Speaker 14: higher than for those in old line manufacturing, but the 430 00:22:17,720 --> 00:22:20,840 Speaker 14: rising even on the assembly line. As what we make 431 00:22:21,000 --> 00:22:24,920 Speaker 14: in America now becomes even more advanced. That's creating a 432 00:22:25,040 --> 00:22:29,200 Speaker 14: shortage of the skilled workers needed in this new manufacturing world, 433 00:22:29,400 --> 00:22:33,640 Speaker 14: suggesting perhaps policies based on education for the future will 434 00:22:33,680 --> 00:22:35,879 Speaker 14: do more than nostalgia for the past. 435 00:22:36,600 --> 00:22:40,000 Speaker 2: David to explain how US trade policy affects the labor market, 436 00:22:40,080 --> 00:22:42,560 Speaker 2: we welcome now Bob Zelik, He's senior advisor to the 437 00:22:42,600 --> 00:22:45,720 Speaker 2: Brunswick Group. Ambassador of Zelk served as President of the 438 00:22:45,760 --> 00:22:48,480 Speaker 2: World Bank and is the United States Trade Representative under 439 00:22:48,520 --> 00:22:51,840 Speaker 2: President George W. Bush. So, Ambassador, thanks so much for 440 00:22:51,880 --> 00:22:54,960 Speaker 2: being Becka has appreciated. We just have had the visit 441 00:22:55,080 --> 00:22:59,280 Speaker 2: from Prime Minister Kishita of Japan to Washington overhanging that 442 00:22:59,800 --> 00:23:03,240 Speaker 2: was this dispute or possible dispute about the Nippon Steel 443 00:23:03,280 --> 00:23:07,080 Speaker 2: acquisition of US steel. Give us your views about that 444 00:23:07,280 --> 00:23:10,560 Speaker 2: issue and how much of that is really legitimate policy 445 00:23:10,560 --> 00:23:13,040 Speaker 2: as opposed to and I don't say it's illegitimate questions 446 00:23:13,040 --> 00:23:14,680 Speaker 2: about politics in Pennsylvania. 447 00:23:14,760 --> 00:23:16,760 Speaker 5: Well, clearly the politics are dominant, David. 448 00:23:17,440 --> 00:23:20,840 Speaker 3: And you know, this is really an example of first 449 00:23:20,840 --> 00:23:25,399 Speaker 3: time we've had two presidents that are economically isolationist in 450 00:23:25,440 --> 00:23:29,240 Speaker 3: their policies back to back, and they're sort of competing 451 00:23:29,880 --> 00:23:32,400 Speaker 3: to try to figure out how we can add protections. 452 00:23:32,440 --> 00:23:33,119 Speaker 13: Now, in the case of. 453 00:23:33,119 --> 00:23:36,639 Speaker 3: The steel industry, Trump put on a twenty five percent 454 00:23:36,760 --> 00:23:41,360 Speaker 3: tariff that Biden kept in place, and so you're already 455 00:23:41,840 --> 00:23:44,399 Speaker 3: well if people ask about inflation, well, you know, that 456 00:23:44,480 --> 00:23:46,840 Speaker 3: gives you a pretty good example of why steel prices 457 00:23:46,880 --> 00:23:47,680 Speaker 3: were going to go up. 458 00:23:47,920 --> 00:23:49,439 Speaker 8: But this case is a little different. 459 00:23:49,480 --> 00:23:53,080 Speaker 3: This case is Nippon Steel, a Japanese company wanting to 460 00:23:53,119 --> 00:23:57,320 Speaker 3: come in and buy US steel. Frankly, invest more capital, 461 00:23:57,520 --> 00:24:02,199 Speaker 3: keep the jobs, add technology, add the competition, but the 462 00:24:02,200 --> 00:24:06,040 Speaker 3: steel workers super President Biden wants to court, have resisted, 463 00:24:06,600 --> 00:24:10,160 Speaker 3: along with one other US company that wanted to pay 464 00:24:10,200 --> 00:24:13,159 Speaker 3: about half as much for US steel and have a 465 00:24:13,200 --> 00:24:16,080 Speaker 3: monopoly position. So it gives you an example of the 466 00:24:16,119 --> 00:24:19,639 Speaker 3: politics now that is sort of running the economic and 467 00:24:19,640 --> 00:24:20,160 Speaker 3: great palls. 468 00:24:20,640 --> 00:24:23,159 Speaker 2: Bubb Block put one more complicate ef factor on that 469 00:24:23,240 --> 00:24:25,600 Speaker 2: is national security. I mean, there was a time, as 470 00:24:25,600 --> 00:24:28,840 Speaker 2: I understand, where the seal industry was critical to the 471 00:24:29,000 --> 00:24:31,640 Speaker 2: US national security and we were very protective of that. 472 00:24:31,800 --> 00:24:33,760 Speaker 2: I think that time has largely gone by as we've moved, 473 00:24:33,760 --> 00:24:36,600 Speaker 2: frankly into semiconductors, which are so much more important to defense. 474 00:24:36,880 --> 00:24:40,160 Speaker 2: How do you overlay national security concerns to maybe come 475 00:24:40,160 --> 00:24:42,000 Speaker 2: out in a different place when it comes to trade 476 00:24:42,000 --> 00:24:44,119 Speaker 2: policy than you otherwise would. 477 00:24:44,400 --> 00:24:47,280 Speaker 3: Well, the case that you started with is an excellent example. 478 00:24:47,359 --> 00:24:50,040 Speaker 3: So we've just had the Japanese Prime minister come to town. 479 00:24:50,359 --> 00:24:53,920 Speaker 3: He's a close ally. They're increasing their defense expenditures. We're 480 00:24:53,920 --> 00:24:57,680 Speaker 3: trying to deepen the security relationship with Japan to deal 481 00:24:57,720 --> 00:25:00,600 Speaker 3: with the dangers of China. Then we say that the 482 00:25:00,720 --> 00:25:05,640 Speaker 3: Japanese can't produce steel in the United States. Remember this 483 00:25:05,760 --> 00:25:07,560 Speaker 3: is steel produced in America. 484 00:25:07,720 --> 00:25:09,840 Speaker 5: They're not going to move the plants. 485 00:25:10,080 --> 00:25:12,920 Speaker 3: When if you're trying to think about security, you want 486 00:25:12,920 --> 00:25:15,480 Speaker 3: to have a variety of sources, but certainly you want 487 00:25:15,520 --> 00:25:17,840 Speaker 3: to work with your allied partners and countries. You don't 488 00:25:17,840 --> 00:25:20,760 Speaker 3: want to tell the Japanese, oh, yeah, you're our security 489 00:25:20,760 --> 00:25:23,480 Speaker 3: partner in military things, but we can't have you invest 490 00:25:23,520 --> 00:25:24,440 Speaker 3: in America. 491 00:25:24,600 --> 00:25:26,439 Speaker 2: Well, thank you so very much for being a wilsary. 492 00:25:26,520 --> 00:25:29,199 Speaker 2: We really appreciate that. Is investor Bob Zelich of the 493 00:25:29,240 --> 00:25:33,919 Speaker 2: Brunswick Group coming up. ESG has gone from all the 494 00:25:34,040 --> 00:25:36,960 Speaker 2: rage to hardly mentioned in some quarters. We go through 495 00:25:36,960 --> 00:25:41,040 Speaker 2: what happened and why with Anthon Ucan, chair of Rubicon Capital. 496 00:25:41,600 --> 00:25:44,000 Speaker 5: The top companies are there. 497 00:25:46,240 --> 00:25:48,600 Speaker 2: That's next on Wall Street Week on Bloomberg. 498 00:25:50,080 --> 00:25:54,320 Speaker 1: This is Bloomberg Wall Street Week with David Weston from 499 00:25:54,440 --> 00:26:00,199 Speaker 1: Bloomberg Radio. 500 00:26:01,800 --> 00:26:04,920 Speaker 2: This is Wall Street Week. I'm David Weston. ESG. After 501 00:26:04,960 --> 00:26:08,080 Speaker 2: becoming all the rage, the very term has suffered something 502 00:26:08,119 --> 00:26:11,280 Speaker 2: of a decline as it became a political rallying cry. 503 00:26:11,320 --> 00:26:13,679 Speaker 2: For some to bring us up to date on worthings 504 00:26:13,680 --> 00:26:16,359 Speaker 2: san today. Welcome back now, Anne Fanuca. She's chair of 505 00:26:16,440 --> 00:26:19,280 Speaker 2: Rubicon and Capital and former vice chair of Bank of 506 00:26:19,280 --> 00:26:21,679 Speaker 2: America and always great to have you on. If you 507 00:26:21,760 --> 00:26:23,919 Speaker 2: just read the front pages of the newspaper, you think 508 00:26:24,080 --> 00:26:26,760 Speaker 2: ESG is almost dead because some people sort of running 509 00:26:26,760 --> 00:26:28,400 Speaker 2: away from it. Where are we right now? Is there 510 00:26:28,400 --> 00:26:30,320 Speaker 2: a reduction enthusiasm or commitment. 511 00:26:31,400 --> 00:26:34,280 Speaker 4: I think there's some confusion around it. Let's just sort 512 00:26:34,280 --> 00:26:35,480 Speaker 4: of go back here for a minute. 513 00:26:35,880 --> 00:26:39,400 Speaker 5: The real genesis of DSG was post. 514 00:26:39,080 --> 00:26:43,440 Speaker 4: Financial crisis and the Great Recession, when there was certainly 515 00:26:43,640 --> 00:26:48,360 Speaker 4: ample reason for the world to wish that corporations were 516 00:26:48,359 --> 00:26:52,240 Speaker 4: a little clear on their value proposition to their shareholders, 517 00:26:52,280 --> 00:26:56,400 Speaker 4: to their communities, to their employees, to their customers, etc. 518 00:26:57,400 --> 00:27:01,119 Speaker 4: So ESG is kind of a sort of next generation 519 00:27:01,240 --> 00:27:07,080 Speaker 4: of corporate responsibility, and everybody had some version of corporate 520 00:27:07,119 --> 00:27:11,520 Speaker 4: responsibility in their frameworks. So what we're really talking about 521 00:27:11,560 --> 00:27:15,879 Speaker 4: that changed is the E, and the E is largely 522 00:27:16,040 --> 00:27:20,840 Speaker 4: a part of I think a pretty universal acceptance that 523 00:27:22,119 --> 00:27:25,320 Speaker 4: climate change is real. The scientific community has been very 524 00:27:25,359 --> 00:27:32,480 Speaker 4: compelling Most of global corporations, local corporations, and most governments 525 00:27:32,480 --> 00:27:36,920 Speaker 4: in the world agree we need to address climate change. Now, 526 00:27:36,960 --> 00:27:39,160 Speaker 4: how we do it, the pace we do it at 527 00:27:40,680 --> 00:27:45,480 Speaker 4: that's become somewhat politicized. And then the other thing is is, 528 00:27:45,520 --> 00:27:49,560 Speaker 4: so there's the ESG how you behave and then there 529 00:27:49,640 --> 00:27:52,840 Speaker 4: is the ESG funds. Well, the ESG funds are a 530 00:27:52,840 --> 00:27:56,360 Speaker 4: whole other things. ESG funds mean a fund and how 531 00:27:56,359 --> 00:27:59,119 Speaker 4: it performs, and it's like any other fund. 532 00:28:00,440 --> 00:28:03,879 Speaker 2: That distinction and Finucan makes between ESG tied to how 533 00:28:03,920 --> 00:28:07,439 Speaker 2: a particular company behaves and ESG simply reflecting how a 534 00:28:07,480 --> 00:28:10,640 Speaker 2: company is affected by climate change regardless of what it does, 535 00:28:11,000 --> 00:28:13,840 Speaker 2: is an important one that is often confused. According to 536 00:28:13,880 --> 00:28:16,920 Speaker 2: professor Andy King of Boston University. 537 00:28:17,160 --> 00:28:21,640 Speaker 15: Most ESG funds are what I call light green funds, 538 00:28:21,680 --> 00:28:26,640 Speaker 15: which they're using ESG scores to pick stocks and put 539 00:28:26,680 --> 00:28:29,280 Speaker 15: them in their portfolio, and most of them are not 540 00:28:29,720 --> 00:28:33,359 Speaker 15: very different from other comparable types of funds. If I 541 00:28:33,400 --> 00:28:37,440 Speaker 15: think about what a manager might do with ESG funds. 542 00:28:37,320 --> 00:28:39,160 Speaker 8: That I think is very valuable. 543 00:28:39,360 --> 00:28:41,840 Speaker 15: And you can be looking at what you're doing in 544 00:28:41,960 --> 00:28:43,880 Speaker 15: terms of the risks that you face, and you could 545 00:28:43,920 --> 00:28:46,280 Speaker 15: be making good investments. 546 00:28:45,800 --> 00:28:47,640 Speaker 8: On how to change your firm. 547 00:28:47,960 --> 00:28:51,720 Speaker 15: At the public assets level, I think the effect is 548 00:28:51,840 --> 00:28:54,360 Speaker 15: much more minor, and it's very difficult to have a 549 00:28:54,400 --> 00:28:57,520 Speaker 15: higher return, and as we said, it's very difficult to 550 00:28:57,560 --> 00:28:58,360 Speaker 15: have in any impact. 551 00:28:58,400 --> 00:28:58,680 Speaker 13: With that. 552 00:29:00,240 --> 00:29:03,400 Speaker 2: Point, the problem is not a lack of voluntary commitments 553 00:29:03,440 --> 00:29:06,560 Speaker 2: on the part of companies trying to address climate change. 554 00:29:06,760 --> 00:29:10,640 Speaker 4: The top ten companies in the US, whether you're looking 555 00:29:10,680 --> 00:29:17,120 Speaker 4: at revenue, market cap, net income, however you want to 556 00:29:17,160 --> 00:29:20,920 Speaker 4: divine it, most of those companies have made commitments to 557 00:29:21,360 --> 00:29:27,440 Speaker 4: decarbonizing their companies demonstrating the decarbonization. Most are committed to 558 00:29:27,520 --> 00:29:30,560 Speaker 4: net zero. Their sort of end dates may be a 559 00:29:30,560 --> 00:29:33,600 Speaker 4: little different, and their descriptions may be a little different. 560 00:29:33,800 --> 00:29:37,280 Speaker 5: But the top companies are there. 561 00:29:37,960 --> 00:29:41,320 Speaker 4: Even the fossil fuel companies, which I know is more controversial, 562 00:29:41,760 --> 00:29:45,320 Speaker 4: are making commitments now. Their focus is more on carbon 563 00:29:45,520 --> 00:29:51,360 Speaker 4: capture and sequestration storage and less about new forms of 564 00:29:51,480 --> 00:29:55,640 Speaker 4: clean energy. But you know, I defy you to mention 565 00:29:55,760 --> 00:29:59,640 Speaker 4: a company that hasn't put something forward in this effort. 566 00:30:00,000 --> 00:30:03,040 Speaker 5: And you know, twenty twenty three was the hottest year 567 00:30:03,200 --> 00:30:05,160 Speaker 5: in history of recorded history. 568 00:30:05,800 --> 00:30:08,160 Speaker 4: I don't think there's much argument that we're looking at 569 00:30:08,200 --> 00:30:14,640 Speaker 4: extreme weather, water shortages, food shortages arise in sort of 570 00:30:15,120 --> 00:30:19,200 Speaker 4: climate related diseases like asthma. So I don't think there's 571 00:30:19,240 --> 00:30:24,240 Speaker 4: an argument about the science. I think most companies are committed. 572 00:30:24,320 --> 00:30:26,440 Speaker 5: But some of the tools they thought they were going 573 00:30:26,480 --> 00:30:29,360 Speaker 5: to have have been held back a little bit. 574 00:30:29,520 --> 00:30:32,800 Speaker 4: And what I mean by that is everyone talked about 575 00:30:32,840 --> 00:30:37,360 Speaker 4: blended finance, so that meant that companies and governments and 576 00:30:37,520 --> 00:30:41,360 Speaker 4: multilateral development banks would work together. So that would mean 577 00:30:41,440 --> 00:30:44,560 Speaker 4: multilateral development banks would actually have to change considerably. 578 00:30:44,680 --> 00:30:46,280 Speaker 5: Those changes are slow coming. 579 00:30:47,360 --> 00:30:51,520 Speaker 4: Companies thought that they would have carbon credits or carbon offsets, 580 00:30:51,520 --> 00:30:53,120 Speaker 4: and you know, I'm focused. 581 00:30:52,720 --> 00:30:54,360 Speaker 5: On that in my own work. 582 00:30:54,760 --> 00:30:57,160 Speaker 4: Well, those have been slow to come because the NGO 583 00:30:57,160 --> 00:31:01,360 Speaker 4: community has really resisted them, and really is sort of 584 00:31:01,760 --> 00:31:05,920 Speaker 4: problematic because there's plenty of proof that it's those companies 585 00:31:05,960 --> 00:31:08,880 Speaker 4: that are doing the most and just using carbon credits 586 00:31:08,880 --> 00:31:12,600 Speaker 4: as a delta to close the gap that are that 587 00:31:12,640 --> 00:31:15,840 Speaker 4: are making the most progress. So some of the tools 588 00:31:15,880 --> 00:31:19,520 Speaker 4: companies thought they would have are no longer either not 589 00:31:19,640 --> 00:31:21,200 Speaker 4: there or they're slow coming. 590 00:31:21,960 --> 00:31:24,840 Speaker 2: One of the tools Professor King says could help companies 591 00:31:24,880 --> 00:31:27,560 Speaker 2: meet their climate commitments would be something adopted by the 592 00:31:27,600 --> 00:31:29,480 Speaker 2: European Union two years ago. 593 00:31:30,000 --> 00:31:33,320 Speaker 15: A carbon tax would help the great thing about things 594 00:31:33,440 --> 00:31:36,000 Speaker 15: like that is that then the information is carried in 595 00:31:36,040 --> 00:31:39,600 Speaker 15: the price and so people able to make much better decisions. 596 00:31:40,080 --> 00:31:42,440 Speaker 8: Or carbon tradable permits or something like that would be 597 00:31:42,480 --> 00:31:43,240 Speaker 8: wonderful as. 598 00:31:43,080 --> 00:31:47,560 Speaker 2: Well, absent governmental actions such as a carbon tax. He 599 00:31:47,720 --> 00:31:52,360 Speaker 2: worries that unstructured and unregulated voluntary commitments to limit emissions 600 00:31:52,400 --> 00:31:55,959 Speaker 2: may mask the need for more fundamental change. 601 00:31:56,440 --> 00:31:58,840 Speaker 15: That is a big fear of mine, and we've seen 602 00:31:58,880 --> 00:32:03,520 Speaker 15: that before in other areas. After the famous Bopaul accident 603 00:32:03,520 --> 00:32:06,960 Speaker 15: which killed so many people in India, the chemical industry 604 00:32:07,000 --> 00:32:09,840 Speaker 15: tried to self regulate and it didn't really work. I 605 00:32:09,840 --> 00:32:12,960 Speaker 15: have to say, as an academic, the research suggesting that 606 00:32:13,040 --> 00:32:17,120 Speaker 15: the ESG is substituting for political activity is not very strong. 607 00:32:17,440 --> 00:32:20,960 Speaker 8: But it is my experience that says I think that 608 00:32:21,040 --> 00:32:21,800 Speaker 8: could be happening. 609 00:32:23,240 --> 00:32:26,440 Speaker 15: I'm looking out the window at the Charles River and 610 00:32:26,520 --> 00:32:28,959 Speaker 15: it is clean because of the Clean Water Act that 611 00:32:29,120 --> 00:32:32,600 Speaker 15: was passed in the seventies, actually under a Republican president, 612 00:32:32,960 --> 00:32:36,960 Speaker 15: and it's a marvelous thing. I'm breathing better air because 613 00:32:37,000 --> 00:32:41,040 Speaker 15: we had a tradeable permit system for a sulfur from 614 00:32:41,120 --> 00:32:44,200 Speaker 15: coal burning, and that's a marvelous thing. And if we 615 00:32:44,320 --> 00:32:47,080 Speaker 15: had a carbon tax, people would be moving away from 616 00:32:47,760 --> 00:32:51,800 Speaker 15: a carbon intensive kind of fuels and things that they're doing. 617 00:32:51,960 --> 00:32:54,240 Speaker 8: So all three work. Well, you've got to do one. 618 00:32:55,480 --> 00:32:58,360 Speaker 2: So have we made progress? Let's take the e in 619 00:32:58,400 --> 00:33:00,960 Speaker 2: the environment. Have we seen extra results in terms of 620 00:33:00,960 --> 00:33:04,400 Speaker 2: carbon emissions coming, because I've seen conflicting reports about that 621 00:33:04,480 --> 00:33:07,480 Speaker 2: exactly how it's worked thus far. It's been mainly voluntary, 622 00:33:07,480 --> 00:33:10,000 Speaker 2: if I'm not mistaken. Have we made progress in the 623 00:33:10,000 --> 00:33:10,560 Speaker 2: real world? 624 00:33:11,040 --> 00:33:12,240 Speaker 5: Yeah, we have made progress. 625 00:33:12,240 --> 00:33:16,160 Speaker 4: Well, it's voluntary in the US, it's not voluntary in Europe, 626 00:33:16,320 --> 00:33:19,840 Speaker 4: and it is sort of double sided in China. So 627 00:33:19,920 --> 00:33:24,440 Speaker 4: let's just go out to end farthest out. China is 628 00:33:24,480 --> 00:33:31,480 Speaker 4: making enormous progress in green technologies, batteries, rare minerals, winds, solar, 629 00:33:31,560 --> 00:33:34,240 Speaker 4: et cetera. I mean, they own the market in terms 630 00:33:34,240 --> 00:33:41,640 Speaker 4: of solar paneling, but they also erect co plants at 631 00:33:41,680 --> 00:33:44,360 Speaker 4: a pace that is just remarkable as well. So they 632 00:33:44,400 --> 00:33:47,760 Speaker 4: are a tale of two cities, and their commitment is 633 00:33:47,800 --> 00:33:50,920 Speaker 4: that they will start to reduce their carbon footprint after 634 00:33:51,040 --> 00:33:53,520 Speaker 4: twenty thirty, whereas the rest. 635 00:33:53,280 --> 00:33:55,680 Speaker 5: Of the world is really making real progress. The United 636 00:33:55,720 --> 00:33:57,560 Speaker 5: States has made real progress since. 637 00:33:57,320 --> 00:34:00,320 Speaker 4: Two thousand and five, two thousand and seven, and by 638 00:34:00,320 --> 00:34:04,160 Speaker 4: twenty and thirty they hoped to be about half of 639 00:34:04,240 --> 00:34:07,400 Speaker 4: what they were in their early two thousands, and we 640 00:34:07,480 --> 00:34:08,839 Speaker 4: seem to be on pace for that. 641 00:34:09,600 --> 00:34:10,720 Speaker 5: This is a journey. 642 00:34:10,920 --> 00:34:14,359 Speaker 4: We're talking about the end of this century. We're talking 643 00:34:14,440 --> 00:34:16,440 Speaker 4: about net zero by twenty fifty. 644 00:34:16,880 --> 00:34:17,799 Speaker 5: Could we miss that? 645 00:34:17,960 --> 00:34:22,040 Speaker 4: By both temperatures this one point five degrees cap I 646 00:34:22,080 --> 00:34:22,440 Speaker 4: think so. 647 00:34:22,760 --> 00:34:26,920 Speaker 5: Could we be post twenty fifty? Maybe? 648 00:34:27,040 --> 00:34:27,279 Speaker 3: Okay? 649 00:34:27,320 --> 00:34:28,960 Speaker 2: And it's a real treat to have you back with this, 650 00:34:29,080 --> 00:34:32,600 Speaker 2: Thank you so very much. That's an nukin of rubicon capital. 651 00:34:33,040 --> 00:34:36,440 Speaker 2: I think the printing press, the steam engine, electricity, computing, 652 00:34:36,520 --> 00:34:40,080 Speaker 2: and the Internet. That's what JP Morgan's Jamie Diamond compared 653 00:34:40,200 --> 00:34:43,560 Speaker 2: artificial intelligence to in his shareholder letter this week, and 654 00:34:43,640 --> 00:34:46,279 Speaker 2: our own Wall Street Week contributor Larry Summers has gone 655 00:34:46,320 --> 00:34:46,880 Speaker 2: even farther. 656 00:34:47,280 --> 00:34:52,000 Speaker 7: This could be the most important general purpose technology since 657 00:34:52,160 --> 00:34:53,640 Speaker 7: the wheel or fire. 658 00:34:54,120 --> 00:34:57,040 Speaker 2: There's no question but that the AI transformation is big 659 00:34:57,160 --> 00:35:00,760 Speaker 2: and getting bigger and doing it fast. As computing power 660 00:35:00,800 --> 00:35:04,080 Speaker 2: increases geometrically and machines take over some of the thinking 661 00:35:04,120 --> 00:35:07,360 Speaker 2: for us humans. It's going to be widely available to 662 00:35:07,600 --> 00:35:10,120 Speaker 2: hundreds of millions of people. In fact, we're starting to 663 00:35:10,160 --> 00:35:12,359 Speaker 2: wonder whether a good number of us may be out 664 00:35:12,360 --> 00:35:13,719 Speaker 2: of our jobs altogether. 665 00:35:14,120 --> 00:35:15,960 Speaker 5: Where's this going to have its immediate impact. 666 00:35:16,000 --> 00:35:17,600 Speaker 3: It's going to be in the knowledge economy. 667 00:35:17,840 --> 00:35:20,879 Speaker 2: We've seen versions of this before, as automation over the years, 668 00:35:20,880 --> 00:35:23,360 Speaker 2: as eliminated entire categories of jobs. 669 00:35:23,880 --> 00:35:26,480 Speaker 16: We had four hundred and fifty thousand telephone operators in 670 00:35:26,520 --> 00:35:28,960 Speaker 16: this country in the nineteen fifties. You tell me the 671 00:35:29,080 --> 00:35:31,359 Speaker 16: last time you're talking to a telephone operator. We had 672 00:35:31,400 --> 00:35:33,440 Speaker 16: close to two million people. I assume most of them 673 00:35:33,480 --> 00:35:36,560 Speaker 16: women classified as typists. That's not even a job category 674 00:35:36,600 --> 00:35:37,680 Speaker 16: anymore in the BLS. 675 00:35:38,120 --> 00:35:39,680 Speaker 2: I saw it in my law firm back in the 676 00:35:39,840 --> 00:35:42,239 Speaker 2: late nineteen seventies. When I went to work as a 677 00:35:42,320 --> 00:35:44,880 Speaker 2: summer associate at Wilmer, Cutler and Pickering in the summer 678 00:35:44,920 --> 00:35:47,840 Speaker 2: of nineteen seventy six, I was introduced to the wonders 679 00:35:47,880 --> 00:35:50,520 Speaker 2: of the Steno pool. The firm kept a teuen of 680 00:35:50,600 --> 00:35:53,279 Speaker 2: typists and yes, as I recall, they were all women 681 00:35:53,760 --> 00:35:56,160 Speaker 2: on duty twenty four hours a day, seven days a week. 682 00:35:56,600 --> 00:35:59,560 Speaker 2: That meant we lawyers could call in and dictate memoranda 683 00:35:59,719 --> 00:36:02,239 Speaker 2: and draft brief sat any time of day or night 684 00:36:02,719 --> 00:36:05,120 Speaker 2: to have them magically appear on our desks before we 685 00:36:05,200 --> 00:36:07,880 Speaker 2: got in the next morning. And then the word processor 686 00:36:07,920 --> 00:36:10,600 Speaker 2: came along a few years later, and the steno pool 687 00:36:10,880 --> 00:36:14,640 Speaker 2: simply disappeared. Now, after the pandemic taught us all how 688 00:36:14,680 --> 00:36:17,120 Speaker 2: to zoom all the time, the office building that used 689 00:36:17,120 --> 00:36:19,680 Speaker 2: to hold the steno pool may be disappearing as well, 690 00:36:20,239 --> 00:36:23,000 Speaker 2: as employers struggle to get their employees back into the 691 00:36:23,120 --> 00:36:24,560 Speaker 2: office even for part. 692 00:36:24,440 --> 00:36:24,799 Speaker 13: Of the week. 693 00:36:25,000 --> 00:36:27,960 Speaker 2: We do believe in flexibility. We want people to be 694 00:36:28,040 --> 00:36:32,160 Speaker 2: able to mix their lives and that work properly. Steve 695 00:36:32,280 --> 00:36:35,040 Speaker 2: Cohen has said that the four day work week, whether 696 00:36:35,120 --> 00:36:37,640 Speaker 2: from home or from the office, may be next up. 697 00:36:38,040 --> 00:36:40,520 Speaker 2: But then again, don't be too sure that this will 698 00:36:40,600 --> 00:36:43,840 Speaker 2: mean less work for us. Those word processors that eliminated 699 00:36:43,920 --> 00:36:46,279 Speaker 2: our stenopool didn't cut back on the amount of work 700 00:36:46,320 --> 00:36:48,799 Speaker 2: we lawyers did one bit. To the contrary. It made 701 00:36:48,840 --> 00:36:51,239 Speaker 2: it possible to do more drafts of those memos, with 702 00:36:51,400 --> 00:36:55,160 Speaker 2: more revisions showing up instantaneously, and instead of dialing into 703 00:36:55,239 --> 00:36:57,680 Speaker 2: a pool of typhus, we did our own typing on 704 00:36:57,760 --> 00:37:00,759 Speaker 2: computers on our desks and in our homes. In our 705 00:37:00,920 --> 00:37:03,600 Speaker 2: lapse on the road, and don't even get me started 706 00:37:03,680 --> 00:37:06,840 Speaker 2: on smartphones delivering NonStop emails that people expect us to 707 00:37:06,880 --> 00:37:09,640 Speaker 2: respond to around the clock, all of which puts that 708 00:37:09,760 --> 00:37:13,759 Speaker 2: stenopool to shame. But even as technology feels like it 709 00:37:13,840 --> 00:37:16,120 Speaker 2: lets many of us work harder, word comes out of 710 00:37:16,160 --> 00:37:19,239 Speaker 2: Germany that there may be relief in sight. No, not 711 00:37:19,440 --> 00:37:21,840 Speaker 2: for us, but for the machines that were supposed to 712 00:37:21,920 --> 00:37:25,000 Speaker 2: make our lives easier. It seems that Germany has a 713 00:37:25,120 --> 00:37:28,280 Speaker 2: hard and fast rule against stores being open on Sundays, 714 00:37:28,360 --> 00:37:32,680 Speaker 2: dating back seventeen hundred years when Roman emperor Constantine the 715 00:37:32,760 --> 00:37:36,040 Speaker 2: Great first became a Christian and decided everyone should observe 716 00:37:36,160 --> 00:37:39,120 Speaker 2: that day of rest God took after creating the world 717 00:37:39,280 --> 00:37:41,920 Speaker 2: that's according to Genesis. Until now, that's meant that you 718 00:37:42,040 --> 00:37:44,759 Speaker 2: can't go out and buy pretty much anything and on 719 00:37:44,920 --> 00:37:48,719 Speaker 2: Sunday in Germany. But four years ago, regional supermarket chain 720 00:37:48,800 --> 00:37:51,920 Speaker 2: Tegut thought it had a way around that band. It 721 00:37:52,040 --> 00:37:56,640 Speaker 2: opened some small, fully automated convenience stores staffed by robots. 722 00:37:57,239 --> 00:38:00,359 Speaker 2: The German union representing service workers took one look at 723 00:38:00,400 --> 00:38:03,680 Speaker 2: it and cried foul. It took Tega to court and 724 00:38:03,960 --> 00:38:06,120 Speaker 2: won in the highest court of the state of Hesse. 725 00:38:06,760 --> 00:38:09,959 Speaker 2: So much for shopping in Hesse on Sundays. But then again, 726 00:38:10,320 --> 00:38:12,719 Speaker 2: maybe the Service Union was getting at something more than 727 00:38:12,760 --> 00:38:15,680 Speaker 2: giving robots their day of rest. Now that it's won 728 00:38:15,760 --> 00:38:18,239 Speaker 2: the day off for the next generation of workers, can 729 00:38:18,320 --> 00:38:21,280 Speaker 2: getting them into the union to agitate for other benefits 730 00:38:21,440 --> 00:38:25,440 Speaker 2: be far behind? To paraphrase Karl Marx, Robots of the 731 00:38:25,520 --> 00:38:28,840 Speaker 2: World unite. Mur there's a new trick for a robot 732 00:38:29,080 --> 00:38:35,480 Speaker 2: respron I'm gonna miss the good old days. That does 733 00:38:35,520 --> 00:38:37,960 Speaker 2: it for this episode of Wall Street Week, I'm David Weston. 734 00:38:38,040 --> 00:38:39,839 Speaker 2: This is Bloomberg. See you next week.