1 00:00:02,680 --> 00:00:05,360 Speaker 1: Welcome to the Bloomberg Penl podcast on Paul swing you. 2 00:00:05,360 --> 00:00:07,720 Speaker 1: Along with my co host Lisa Brahma Wicks. Each day 3 00:00:07,760 --> 00:00:10,280 Speaker 1: we bring you the most noteworthy and useful interviews for 4 00:00:10,320 --> 00:00:12,560 Speaker 1: you and your money, whether at the grocery store or 5 00:00:12,600 --> 00:00:15,520 Speaker 1: the trading floor. Find a Bloomberg Penl podcast on Apple 6 00:00:15,560 --> 00:00:18,000 Speaker 1: podcast or wherever you listen to podcasts, as well as 7 00:00:18,000 --> 00:00:21,520 Speaker 1: at Bloomberg dot com. It does appear that the unrest 8 00:00:21,760 --> 00:00:25,040 Speaker 1: has been dying down in cities across the nation, Paul. 9 00:00:25,480 --> 00:00:28,600 Speaker 1: For the most part, anecdotally, we have heard that protests 10 00:00:28,840 --> 00:00:31,800 Speaker 1: have been peaceful, although there has been an element that 11 00:00:31,840 --> 00:00:35,080 Speaker 1: has come in and been incredibly violent and destructive in 12 00:00:35,159 --> 00:00:39,160 Speaker 1: cities across the board, particularly in New York right now, 13 00:00:39,200 --> 00:00:41,839 Speaker 1: to bring us in about the legal implications and what 14 00:00:42,000 --> 00:00:45,400 Speaker 1: can be done from an executive power perspective with the 15 00:00:45,479 --> 00:00:48,159 Speaker 1: threat of bringing in military troops as well as on 16 00:00:48,240 --> 00:00:51,479 Speaker 1: the local level with the National Guard, and just how 17 00:00:51,520 --> 00:00:54,640 Speaker 1: you deploy your cops. Noah felim And joining us, professor 18 00:00:54,680 --> 00:00:57,560 Speaker 1: of law at Harvard University, also a Bloomberg opinion columnist, 19 00:00:57,800 --> 00:01:02,280 Speaker 1: joining us from Boston, Massachusetts. No Professor Feldman, I'm curious 20 00:01:02,320 --> 00:01:05,920 Speaker 1: about your take on President Trump's declaration that he would 21 00:01:05,920 --> 00:01:10,560 Speaker 1: send military troops into the large cities if states and 22 00:01:10,720 --> 00:01:12,920 Speaker 1: cities did not get their act together. Does he have 23 00:01:12,959 --> 00:01:15,240 Speaker 1: the power to do that? Well, like a lot of 24 00:01:15,520 --> 00:01:19,040 Speaker 1: declarations that President Trump has planned to make but never 25 00:01:19,080 --> 00:01:21,840 Speaker 1: actually made, we first have to, you know, keep our 26 00:01:22,319 --> 00:01:24,280 Speaker 1: heads about us, and remember that he may actually not 27 00:01:24,319 --> 00:01:26,880 Speaker 1: do this. It may just be more symbolism than practice. 28 00:01:27,640 --> 00:01:29,680 Speaker 1: If he does choose to do it, he would have 29 00:01:29,720 --> 00:01:32,920 Speaker 1: to have specific statutory authority. And the reason for that 30 00:01:33,200 --> 00:01:35,119 Speaker 1: is that there's a law which a lot of people 31 00:01:35,160 --> 00:01:37,959 Speaker 1: have probably heard of, called the Posse Commentatus Act, and 32 00:01:38,000 --> 00:01:40,080 Speaker 1: that law says that the only way the president can 33 00:01:40,120 --> 00:01:43,640 Speaker 1: deploy federal troops to execute the laws and enforce the 34 00:01:43,720 --> 00:01:47,080 Speaker 1: laws is when Congress has specifically authorized him to do so. 35 00:01:47,080 --> 00:01:48,520 Speaker 1: So the basic framework is there has to be a 36 00:01:48,560 --> 00:01:51,120 Speaker 1: law that says he can. The law that the President 37 00:01:51,200 --> 00:01:54,480 Speaker 1: said he would deploy is a very old law, originally 38 00:01:54,480 --> 00:01:58,120 Speaker 1: pass a seven called the Insurrection Act, and I think 39 00:01:58,160 --> 00:02:00,840 Speaker 1: reasonable lawyers could differ about it, but my own view 40 00:02:01,560 --> 00:02:04,880 Speaker 1: is that one part of that act almost certainly would 41 00:02:04,920 --> 00:02:09,680 Speaker 1: allow the president to deploy troops to the cities if 42 00:02:09,880 --> 00:02:13,120 Speaker 1: and it's a big if if he could determine that 43 00:02:13,240 --> 00:02:15,880 Speaker 1: they were unable to enforce the law federal law on 44 00:02:15,919 --> 00:02:19,919 Speaker 1: their own. So, professor, how does that's active troops? Ho 45 00:02:19,919 --> 00:02:22,640 Speaker 1: about National Guard? Isn't the National Hasn't the National Guard 46 00:02:22,720 --> 00:02:25,840 Speaker 1: in the past been deployed for some of these types 47 00:02:25,880 --> 00:02:28,920 Speaker 1: of operations. Yes, and in fact it's deployed in lots 48 00:02:28,919 --> 00:02:31,320 Speaker 1: of places now. And here's where you know, things get 49 00:02:31,360 --> 00:02:35,160 Speaker 1: a little technical. National Guard troops are in the first instance, 50 00:02:35,200 --> 00:02:37,960 Speaker 1: called out by the state governors. That is to say, 51 00:02:38,040 --> 00:02:40,120 Speaker 1: they work for the governor. The governor gives the orders 52 00:02:40,200 --> 00:02:45,040 Speaker 1: and they're arranged by state. When the president designates them 53 00:02:45,080 --> 00:02:48,880 Speaker 1: as federal forces, they can be turned into federal troops 54 00:02:49,360 --> 00:02:51,959 Speaker 1: and then the president would command them. And that hasn't 55 00:02:51,960 --> 00:02:56,639 Speaker 1: happened yet here, and that's actually extraordinarily unusual, to be technical. 56 00:02:57,040 --> 00:03:00,880 Speaker 1: I was actually reading up yesterday on the actual process 57 00:03:00,919 --> 00:03:04,920 Speaker 1: of getting military troops into local areas. I'm speaking as 58 00:03:04,919 --> 00:03:06,960 Speaker 1: somebody who lives in New York City, and I'm wondering 59 00:03:07,120 --> 00:03:11,640 Speaker 1: how there would even be coordination between the military, potentially 60 00:03:11,680 --> 00:03:14,799 Speaker 1: the National Guard, and then the police force, and how 61 00:03:14,840 --> 00:03:17,119 Speaker 1: that would all be ruled out. I mean, is there 62 00:03:17,160 --> 00:03:20,000 Speaker 1: any precedent given the fact that this is an eighteen 63 00:03:20,120 --> 00:03:25,160 Speaker 1: oh seven law that we're siting here. Well, with the 64 00:03:25,200 --> 00:03:30,280 Speaker 1: request of state and local officials. Federal troops were called 65 00:03:30,280 --> 00:03:34,160 Speaker 1: out in the Los Angeles riots, in the early the 66 00:03:34,240 --> 00:03:37,160 Speaker 1: Rodney after the riots that broke out, after the brutal 67 00:03:37,160 --> 00:03:40,440 Speaker 1: attack on Rodney King, and then after the police were acquitted. 68 00:03:41,000 --> 00:03:45,160 Speaker 1: So it has happened. And if there's consent by state 69 00:03:45,200 --> 00:03:47,840 Speaker 1: and local authorities, or request by state and local authorities, 70 00:03:48,080 --> 00:03:51,920 Speaker 1: then it's possible to coordinate all of the different figures 71 00:03:51,960 --> 00:03:54,400 Speaker 1: that you were thinking about. I mean, another example for 72 00:03:54,480 --> 00:03:57,720 Speaker 1: New Yorkers, which did not involve an invocation of the 73 00:03:58,320 --> 00:04:01,560 Speaker 1: of this particular act, but which involved coordination, was the 74 00:04:01,560 --> 00:04:04,320 Speaker 1: post nine eleven arrangements. You know, everyone who lived in 75 00:04:04,320 --> 00:04:05,960 Speaker 1: New York then at the time, as I did for 76 00:04:06,000 --> 00:04:08,560 Speaker 1: some of that time, remembers that there were many, many, 77 00:04:08,600 --> 00:04:12,440 Speaker 1: many different authorities and troops and people who were deployed 78 00:04:12,440 --> 00:04:15,800 Speaker 1: in Lower Manhattan. And you know, it is possible to coordinate. 79 00:04:15,800 --> 00:04:18,839 Speaker 1: It can be done. It's a very serious undertaking, but 80 00:04:18,960 --> 00:04:22,480 Speaker 1: it can be done. So Professor. Just today, Secretary of 81 00:04:22,480 --> 00:04:26,320 Speaker 1: Defense Esper says that he does not support invoking the 82 00:04:26,360 --> 00:04:30,880 Speaker 1: insurrection at how important is that statement there that seems 83 00:04:31,480 --> 00:04:34,720 Speaker 1: I think it's pretty I think it's pretty important. Obviously, 84 00:04:34,800 --> 00:04:37,320 Speaker 1: the buck stops with the president, not the Secretary of Defense, 85 00:04:38,120 --> 00:04:41,240 Speaker 1: but since the idea would be to deploy troops, you 86 00:04:41,360 --> 00:04:43,120 Speaker 1: need the Secretary of Defense to be involved in it. 87 00:04:43,200 --> 00:04:45,360 Speaker 1: So I would read that as a signal from the 88 00:04:45,400 --> 00:04:48,800 Speaker 1: Trump administration that they're probably not going to do this. 89 00:04:49,080 --> 00:04:52,760 Speaker 1: That as again, as very characteristic of President Trump. He 90 00:04:52,920 --> 00:04:56,400 Speaker 1: wanted to have the moment on the cameras where he 91 00:04:56,480 --> 00:05:00,360 Speaker 1: said I'm prepared to call out the troops, but didn't 92 00:05:00,360 --> 00:05:02,440 Speaker 1: actually want to do that. I mean, I think one 93 00:05:02,440 --> 00:05:06,640 Speaker 1: of the profound insights of the Trump era is that, um, 94 00:05:06,839 --> 00:05:09,200 Speaker 1: the president believes that he can get most of the 95 00:05:09,480 --> 00:05:14,000 Speaker 1: bang for his buck by saying something without actually subsequently 96 00:05:14,040 --> 00:05:15,760 Speaker 1: having to do it, and then the rest of us 97 00:05:15,800 --> 00:05:18,760 Speaker 1: and this is probably my job run around explaining is 98 00:05:18,760 --> 00:05:20,520 Speaker 1: it lawful, it might not be lawful, and going through 99 00:05:20,520 --> 00:05:22,440 Speaker 1: all the details, just like we're all doing right now. 100 00:05:23,200 --> 00:05:25,320 Speaker 1: And in fact, he never intended to do it in 101 00:05:25,360 --> 00:05:27,640 Speaker 1: the first place. And so you know, this is not 102 00:05:27,680 --> 00:05:29,159 Speaker 1: the first or the second, or the third or the 103 00:05:29,200 --> 00:05:31,560 Speaker 1: fifth time that this has happened, So you know, it 104 00:05:32,000 --> 00:05:34,200 Speaker 1: raises a real question. I feel that our job is 105 00:05:34,200 --> 00:05:36,520 Speaker 1: still to explain to people what the law is. So 106 00:05:36,560 --> 00:05:38,720 Speaker 1: I think we're doing the right thing, but we should 107 00:05:38,760 --> 00:05:41,760 Speaker 1: always add that caveat that in fact, it may not happen, 108 00:05:41,800 --> 00:05:44,400 Speaker 1: and here the statement by the Secretary of Defense and 109 00:05:44,480 --> 00:05:47,839 Speaker 1: hints to me that it probably won't. I'm wondering the 110 00:05:47,880 --> 00:05:52,440 Speaker 1: altercation that has become very controversial with protesters being cleared 111 00:05:52,440 --> 00:05:56,679 Speaker 1: away for President Trump to walk over to a church 112 00:05:56,720 --> 00:05:59,279 Speaker 1: across the street. A lot of people have been pointing 113 00:05:59,360 --> 00:06:03,240 Speaker 1: that too unfair suppression of First Amendment rights people who 114 00:06:03,240 --> 00:06:08,159 Speaker 1: basically were violently removed in order for the president to 115 00:06:08,600 --> 00:06:12,000 Speaker 1: walk in that way. What's your take on that? You know, 116 00:06:12,160 --> 00:06:16,000 Speaker 1: I watched it on I watched it on television like 117 00:06:16,080 --> 00:06:18,400 Speaker 1: a lot of other people, and I don't have more 118 00:06:18,440 --> 00:06:20,480 Speaker 1: information than what I saw on the screen in terms 119 00:06:20,520 --> 00:06:23,200 Speaker 1: of what actually happened. So that's the first caveat. But 120 00:06:23,240 --> 00:06:28,240 Speaker 1: what I saw looked like, um, what may have been 121 00:06:29,080 --> 00:06:35,120 Speaker 1: unconstitutional violation of the free speech rights of peaceful protesters 122 00:06:35,200 --> 00:06:38,080 Speaker 1: who were in what's called a public forum. That is 123 00:06:38,200 --> 00:06:41,039 Speaker 1: a park, a place that's open to the public and 124 00:06:41,080 --> 00:06:44,080 Speaker 1: which had not been closed off for any particular reason. 125 00:06:44,200 --> 00:06:48,280 Speaker 1: And who were then summarily moved off. There might be 126 00:06:48,320 --> 00:06:53,720 Speaker 1: some circumstances where safety requires it, where it's constitutionally permissible 127 00:06:53,760 --> 00:06:57,680 Speaker 1: to move protesters. I mean that there's sometimes circumstance when 128 00:06:57,680 --> 00:06:59,600 Speaker 1: the present's got to go somewhere and he really has 129 00:06:59,640 --> 00:07:02,600 Speaker 1: to go there, there could be circumstances where protesters might 130 00:07:02,640 --> 00:07:05,600 Speaker 1: have to be requested to move or made to move. 131 00:07:06,040 --> 00:07:09,760 Speaker 1: This watching the video did not seem like such a circumstance, 132 00:07:10,280 --> 00:07:12,400 Speaker 1: and so you know, at a minimum, I would say 133 00:07:12,440 --> 00:07:15,320 Speaker 1: it violated the spirit of the First Amendment very clearly, 134 00:07:15,600 --> 00:07:19,200 Speaker 1: and it may also have violated the letter of the law. No. Feldman, 135 00:07:19,240 --> 00:07:21,600 Speaker 1: thanks so much for joining us. As always, we appreciate 136 00:07:21,880 --> 00:07:26,440 Speaker 1: your commentary. NOA. Feldman, Professor of Lord Harvard University, also 137 00:07:26,560 --> 00:07:32,760 Speaker 1: a Bloomberg opinion. Colums joining us from Boston, Massachusetts. We 138 00:07:32,840 --> 00:07:36,080 Speaker 1: did get that ADP report out earlier today that showed 139 00:07:36,240 --> 00:07:39,920 Speaker 1: a much better than expected or less terrible report than 140 00:07:39,920 --> 00:07:42,280 Speaker 1: people were expecting when it comes to job losses for 141 00:07:42,320 --> 00:07:44,800 Speaker 1: the month of May. A big question though, is the 142 00:07:44,840 --> 00:07:48,040 Speaker 1: composition of job losses, as well as what may come 143 00:07:48,440 --> 00:07:51,360 Speaker 1: if the economy doesn't recover in a v as many 144 00:07:51,400 --> 00:07:53,640 Speaker 1: people don't expect that it will. Joining us now to 145 00:07:53,680 --> 00:07:57,240 Speaker 1: discuss as Jolena Shogekiva, she's a senior U S economist 146 00:07:57,320 --> 00:08:00,480 Speaker 1: with Bloomberg Economics, you had to report that I found 147 00:08:00,560 --> 00:08:03,400 Speaker 1: fascinating about how the bulk of the job losses so 148 00:08:03,440 --> 00:08:06,600 Speaker 1: far I've been blue color workers, but that could change 149 00:08:06,680 --> 00:08:08,840 Speaker 1: any upcoming months. Can you give us a sense of 150 00:08:08,880 --> 00:08:12,880 Speaker 1: how yes, high Li says, so, as you pointed out, 151 00:08:13,240 --> 00:08:16,920 Speaker 1: we all know that you know, in terms of overall 152 00:08:17,040 --> 00:08:22,120 Speaker 1: job losses, we may see a smaller job losses coming up. 153 00:08:22,200 --> 00:08:26,080 Speaker 1: And the ADP report this morning was uh, just one 154 00:08:26,080 --> 00:08:29,120 Speaker 1: piece of a puzzle. The question, the big question to 155 00:08:29,320 --> 00:08:34,000 Speaker 1: us is how much this weakness that we observed in 156 00:08:34,120 --> 00:08:38,560 Speaker 1: March and April is going to spread across different sectors 157 00:08:38,559 --> 00:08:43,599 Speaker 1: of the economy and across different roles in those sectors 158 00:08:43,640 --> 00:08:48,120 Speaker 1: that were already hit hard. So, for example, if you 159 00:08:48,400 --> 00:08:52,640 Speaker 1: see UM, there was a lot of layoffs among blue 160 00:08:52,640 --> 00:08:58,959 Speaker 1: collar jobs in the sectors such as lesion, hospitality, and accommodation. Uh, 161 00:08:59,200 --> 00:09:04,679 Speaker 1: those sectors did not see UM comparable decline in terms 162 00:09:04,720 --> 00:09:09,600 Speaker 1: of white color positions. So we expect that if we 163 00:09:09,640 --> 00:09:12,480 Speaker 1: don't see much of an improvement in those sectors UH 164 00:09:13,320 --> 00:09:18,560 Speaker 1: activity that some of this white collar jobs at risk 165 00:09:19,200 --> 00:09:23,760 Speaker 1: of being UM lost. So another thing that we looked 166 00:09:23,760 --> 00:09:28,320 Speaker 1: at in our report that we published recently is that 167 00:09:28,840 --> 00:09:33,520 Speaker 1: UH a lot of UH the impact UH is coming 168 00:09:33,679 --> 00:09:36,360 Speaker 1: from the industries that will already hit hard, as they 169 00:09:36,400 --> 00:09:42,400 Speaker 1: mentioned legion, hospitality trade, retail trade in particular. So how 170 00:09:42,600 --> 00:09:48,959 Speaker 1: this sector's weakness is impacted is impacting demand for other 171 00:09:49,160 --> 00:09:54,080 Speaker 1: industries services and products, and we found out that as 172 00:09:54,120 --> 00:09:59,000 Speaker 1: maybe as six million jobs are at risk on that front. 173 00:10:00,080 --> 00:10:03,840 Speaker 1: So Elena, looking at today's ADP jobs numbers came in 174 00:10:03,880 --> 00:10:06,079 Speaker 1: at two point seven six million jobs lost in the 175 00:10:06,160 --> 00:10:09,520 Speaker 1: consensus was nine million. That seems like a big miss 176 00:10:09,520 --> 00:10:13,040 Speaker 1: to me. Is this something strange in the numbers this month? 177 00:10:13,280 --> 00:10:17,240 Speaker 1: Or was the jobs market? Is the jobs market maybe 178 00:10:17,480 --> 00:10:22,200 Speaker 1: less bad than we had anticipated? UH, Let's bed is 179 00:10:22,280 --> 00:10:25,640 Speaker 1: probably what you would like to call it. So the 180 00:10:25,679 --> 00:10:29,640 Speaker 1: improvement was expected, the question is to what extent. So 181 00:10:29,679 --> 00:10:34,080 Speaker 1: we already saw some improvements in terms of the claims data. 182 00:10:34,880 --> 00:10:39,560 Speaker 1: Last week, continuing claims declined for the first time in 183 00:10:39,920 --> 00:10:44,360 Speaker 1: UH since February essentially, and UH tomorrow we will see 184 00:10:44,520 --> 00:10:49,200 Speaker 1: that trend continues. So it was pretty obvious that the 185 00:10:49,280 --> 00:10:55,400 Speaker 1: label market is starting to to recover to some extent. Again, 186 00:10:55,480 --> 00:10:59,360 Speaker 1: the big question is how how much it spreads across 187 00:10:59,400 --> 00:11:03,480 Speaker 1: different roles in industries and how much loss in aggregate 188 00:11:03,520 --> 00:11:08,480 Speaker 1: demand will impact the job market going forward. So you 189 00:11:08,559 --> 00:11:11,960 Speaker 1: brought up the ADP report this morning, but if you 190 00:11:12,000 --> 00:11:16,720 Speaker 1: look at the details, we see declines all across different sectors. 191 00:11:16,800 --> 00:11:20,680 Speaker 1: Financial activities declined, that was not that different from the 192 00:11:20,800 --> 00:11:25,160 Speaker 1: previous months decline, professional and business services. And this is 193 00:11:25,200 --> 00:11:30,480 Speaker 1: what we found. UH is at the highest risk going forward. 194 00:11:30,600 --> 00:11:34,880 Speaker 1: So UH will we see consumers continue to spend at 195 00:11:34,880 --> 00:11:38,520 Speaker 1: the same rate. Probably not, because there was a lot 196 00:11:38,600 --> 00:11:44,400 Speaker 1: of income laws over this UH a few last few months. 197 00:11:44,720 --> 00:11:51,400 Speaker 1: So I think unfortunately, despite all this relatively positive news, 198 00:11:52,000 --> 00:11:56,320 Speaker 1: there's still a lot of jobs at risk in the 199 00:11:56,360 --> 00:11:59,720 Speaker 1: next few months. Helena, I was really struck by just 200 00:12:00,360 --> 00:12:02,680 Speaker 1: better than expected it was, or less bad than expected. 201 00:12:02,720 --> 00:12:05,400 Speaker 1: It was the ADP report. And I'm wondering if this 202 00:12:05,440 --> 00:12:07,760 Speaker 1: tells us something about either the pace of our hiring, 203 00:12:07,760 --> 00:12:09,800 Speaker 1: which is a really fuzzy metric that doesn't have a 204 00:12:09,800 --> 00:12:13,240 Speaker 1: lot of hard data around it, or another measure that 205 00:12:13,320 --> 00:12:15,560 Speaker 1: perhaps analysts are getting wrong. Or I wonder if the 206 00:12:15,559 --> 00:12:19,800 Speaker 1: takeaway is it is just incredibly difficult to pinpoint with 207 00:12:19,880 --> 00:12:23,080 Speaker 1: any accuracy what's going on right now in the economy, 208 00:12:23,120 --> 00:12:26,080 Speaker 1: because the job losses have been so swift and so 209 00:12:26,120 --> 00:12:29,680 Speaker 1: severe that when you're talking millions, it's throwing a dart 210 00:12:29,720 --> 00:12:33,720 Speaker 1: at a dartboard. Is that the takeaway here? I think 211 00:12:33,800 --> 00:12:37,480 Speaker 1: you are quite right, Lisa, So like, think about what 212 00:12:37,640 --> 00:12:40,480 Speaker 1: we did before the crisis, right, we were talking about 213 00:12:40,880 --> 00:12:45,000 Speaker 1: difference in the forecast in terms of thousands, but now 214 00:12:45,040 --> 00:12:50,200 Speaker 1: we talk in terms of millions. And obviously today's report 215 00:12:50,920 --> 00:12:54,600 Speaker 1: ADP report is one step in the right direction. And 216 00:12:54,640 --> 00:13:00,000 Speaker 1: again I mentioned claims data is something that we really 217 00:13:00,240 --> 00:13:03,360 Speaker 1: take a close look at as well, and that is 218 00:13:03,400 --> 00:13:08,240 Speaker 1: also showing we at this turning point. So uh Perrolls 219 00:13:08,360 --> 00:13:12,600 Speaker 1: report will will probably show a smaller decline in terms 220 00:13:12,640 --> 00:13:16,560 Speaker 1: of uh the number of jobs from the Establishment survey, 221 00:13:16,880 --> 00:13:20,720 Speaker 1: but one thing that will worsen in in May, and 222 00:13:20,760 --> 00:13:23,520 Speaker 1: it seems to be a consensus view as well, that 223 00:13:23,679 --> 00:13:27,800 Speaker 1: the unemployment rate will get to the level's last scene 224 00:13:28,559 --> 00:13:32,000 Speaker 1: during the Great Depression, So we're probably going to see 225 00:13:32,000 --> 00:13:37,720 Speaker 1: the unemployment rate close to so on that front, it's 226 00:13:37,760 --> 00:13:40,160 Speaker 1: probably not that much of an improvement. And again, the 227 00:13:40,240 --> 00:13:43,079 Speaker 1: breadth of job losses is what really worried me at 228 00:13:43,080 --> 00:13:45,520 Speaker 1: this point. Helena, thanks so much for joining us. We 229 00:13:45,559 --> 00:13:49,679 Speaker 1: always appreciate your thoughts on the economy. Helena Shuglietiva, senior 230 00:13:49,880 --> 00:13:53,439 Speaker 1: US economist for Bloomberg Economics, giving us her thoughts on 231 00:13:53,679 --> 00:13:58,079 Speaker 1: the jobs market. Again, better than expected ADP jobs numbers today. 232 00:13:58,080 --> 00:14:01,520 Speaker 1: We're gonna have jobless claims tomorrow, Sorrow, Thursday as always, 233 00:14:01,520 --> 00:14:04,480 Speaker 1: and then Friday the job number from the federal government. 234 00:14:08,120 --> 00:14:09,959 Speaker 1: At least. I'm looking at my screen right here, I've 235 00:14:09,960 --> 00:14:12,520 Speaker 1: got the two year treasury yield at zero point one. 236 00:14:13,120 --> 00:14:15,240 Speaker 1: It's up about three basis points today, But we're really 237 00:14:15,280 --> 00:14:18,560 Speaker 1: talking about, you know, zero interest rates effectively on the 238 00:14:18,559 --> 00:14:20,360 Speaker 1: short end of the curve here and get a sense 239 00:14:20,400 --> 00:14:23,640 Speaker 1: of kind of what that means near term and long 240 00:14:23,760 --> 00:14:26,880 Speaker 1: term for the markets. Were really fortunate to have Chris Ailment. 241 00:14:27,160 --> 00:14:30,320 Speaker 1: Chris is a Chief Investment Officers Officer for the California 242 00:14:30,360 --> 00:14:33,880 Speaker 1: State Teachers Retirement System. That's a big one thirty nine 243 00:14:34,040 --> 00:14:38,160 Speaker 1: billion dollars under management, based in Sacramento. They take care 244 00:14:38,160 --> 00:14:41,360 Speaker 1: of all the teachers retirements. Uh so they are all 245 00:14:41,400 --> 00:14:43,680 Speaker 1: over the market. Chris, thanks so much for joining us here. 246 00:14:44,160 --> 00:14:46,120 Speaker 1: What is your thought of kind of when you look 247 00:14:46,160 --> 00:14:48,080 Speaker 1: at the yield curve here and you see the short 248 00:14:48,160 --> 00:14:50,840 Speaker 1: end of the curve darn near zero percent, what does 249 00:14:50,880 --> 00:14:54,040 Speaker 1: that mean to you? Well, Paul, good to talk to you. 250 00:14:54,120 --> 00:14:57,960 Speaker 1: And first let me say, behalf of all the regular listeners, 251 00:14:58,000 --> 00:15:00,120 Speaker 1: of which I am apart, I am sad. I have 252 00:15:00,160 --> 00:15:04,040 Speaker 1: to see the Paul and lesa team separated thing we 253 00:15:04,120 --> 00:15:09,880 Speaker 1: are to um. You know, it's uh, we're back to 254 00:15:09,920 --> 00:15:12,160 Speaker 1: where we were in two thousand and ten and eleven, 255 00:15:12,240 --> 00:15:16,360 Speaker 1: where it's zero interest rates. And I don't think it's 256 00:15:16,400 --> 00:15:18,160 Speaker 1: for a short term. I think this is for a 257 00:15:18,200 --> 00:15:20,680 Speaker 1: long term because we're gonna have a very bumpy recovery. 258 00:15:21,240 --> 00:15:25,760 Speaker 1: You know. The FED actually talking about manipulating the curve 259 00:15:26,160 --> 00:15:29,320 Speaker 1: is just shocking language to me, but it shows Remember 260 00:15:29,360 --> 00:15:33,120 Speaker 1: back with QUEI one, two and three, we said the 261 00:15:33,120 --> 00:15:36,760 Speaker 1: FED was out of tools, and each of those quantity 262 00:15:36,800 --> 00:15:41,240 Speaker 1: of easings was less effective. I think the FED has 263 00:15:41,360 --> 00:15:44,680 Speaker 1: used all their AMMO at this point um and they're 264 00:15:44,720 --> 00:15:50,040 Speaker 1: really not able to do much so for investors again, unfortunately, 265 00:15:50,080 --> 00:15:52,400 Speaker 1: it's going to be another couple of years I think 266 00:15:52,440 --> 00:15:54,360 Speaker 1: where you're not gonna get much return out of fixed 267 00:15:54,400 --> 00:15:57,480 Speaker 1: income at all, but you are going to see opportunities 268 00:15:57,760 --> 00:15:59,880 Speaker 1: because the FED is pumping money into the system and 269 00:16:00,040 --> 00:16:03,600 Speaker 1: saying risks on Now that said, I don't expect corporate 270 00:16:03,640 --> 00:16:07,200 Speaker 1: earnings to improve very much at all. We've got some 271 00:16:07,320 --> 00:16:11,720 Speaker 1: serious damage to this market. Chris, this is the conundrum. 272 00:16:11,960 --> 00:16:15,200 Speaker 1: And you have a front row seat to this conundrum 273 00:16:15,240 --> 00:16:18,040 Speaker 1: on both sides because you oversee the second biggest US 274 00:16:18,120 --> 00:16:22,720 Speaker 1: public pension with two forty billion dollars of assets under management, 275 00:16:23,000 --> 00:16:25,120 Speaker 1: and you have to earn income in order to meet 276 00:16:25,160 --> 00:16:27,920 Speaker 1: your obligations at a time when interest rates are this low, 277 00:16:28,200 --> 00:16:32,000 Speaker 1: when corporate bond yields are near record lows. But because 278 00:16:32,040 --> 00:16:34,240 Speaker 1: of what the Federal Reserve has done, and with a 279 00:16:34,560 --> 00:16:38,280 Speaker 1: not that great outlook economically for some of these companies, 280 00:16:38,640 --> 00:16:40,920 Speaker 1: do you feel like you're being pushed to take risk 281 00:16:41,040 --> 00:16:45,520 Speaker 1: that you're not comfortable with given the valuations. We were 282 00:16:45,560 --> 00:16:48,520 Speaker 1: faced with that challenge Leaks it back in oh nine, 283 00:16:48,640 --> 00:16:51,440 Speaker 1: and we made the very strong decision not to take 284 00:16:51,480 --> 00:16:55,120 Speaker 1: additional risk, and I would encourage people not to try 285 00:16:55,160 --> 00:16:58,560 Speaker 1: and do that again. Now, for institutional investors, we've got 286 00:16:58,560 --> 00:17:03,560 Speaker 1: other investment opportunities. We've got real estate surprising during this crisis, 287 00:17:03,960 --> 00:17:06,960 Speaker 1: leases have been strong our real estate team has said 288 00:17:06,960 --> 00:17:10,280 Speaker 1: that our buildings, the rent payments are being made, so 289 00:17:10,560 --> 00:17:14,840 Speaker 1: we're very comfortable and those are good income returns. Infrastructure, 290 00:17:15,200 --> 00:17:17,800 Speaker 1: even though it's been slow, that's a great place to 291 00:17:17,800 --> 00:17:20,320 Speaker 1: to earn a cash slow return. But I think when 292 00:17:20,320 --> 00:17:22,600 Speaker 1: you look at endowments and a lot of the pension 293 00:17:22,600 --> 00:17:26,359 Speaker 1: plans were very low in our allocation, our percentage allocation 294 00:17:26,440 --> 00:17:29,000 Speaker 1: to fixed income. If you're in a four oh one K, 295 00:17:29,960 --> 00:17:31,720 Speaker 1: you're in tough luck because you don't have a lot 296 00:17:31,720 --> 00:17:34,560 Speaker 1: of options. You really, you know, the traditional sixty fort 297 00:17:35,240 --> 00:17:39,680 Speaker 1: stock bond portfolio at is going to be pretty darn 298 00:17:39,760 --> 00:17:43,560 Speaker 1: close to a zero maybe a three return, which isn't 299 00:17:43,600 --> 00:17:46,359 Speaker 1: going to perform uh and four owin K investors don't 300 00:17:46,359 --> 00:17:48,520 Speaker 1: have a lot of other options, so they will probably 301 00:17:48,520 --> 00:17:50,720 Speaker 1: have to bile on risk, and that may be part 302 00:17:50,720 --> 00:17:52,920 Speaker 1: of the reason we're seeing money flowing into this equity 303 00:17:52,960 --> 00:17:57,000 Speaker 1: market at this ridiculous level. Chris, you say real estate 304 00:17:57,560 --> 00:18:00,399 Speaker 1: very interesting at a time when people are talking about 305 00:18:00,400 --> 00:18:03,520 Speaker 1: offices becoming somewhat obsolete with the work from home movement, 306 00:18:03,760 --> 00:18:06,400 Speaker 1: when people are wondering with the future of large cities 307 00:18:06,440 --> 00:18:09,920 Speaker 1: will be how do you think about real estate investments 308 00:18:10,000 --> 00:18:14,320 Speaker 1: as an opportunity right now where well, it is not 309 00:18:14,440 --> 00:18:17,520 Speaker 1: a great opportunity to come in and buy because things 310 00:18:17,600 --> 00:18:21,520 Speaker 1: have not repriced much where equity. You know, back in March, 311 00:18:21,600 --> 00:18:26,240 Speaker 1: equity was down. Now we're almost back to flat. Real 312 00:18:26,359 --> 00:18:29,520 Speaker 1: estate is going to look across that that that valley 313 00:18:29,560 --> 00:18:32,439 Speaker 1: and recovery and basically say, well, our buildings should be 314 00:18:32,440 --> 00:18:36,040 Speaker 1: priced about where they were. You're seeing that in in 315 00:18:36,520 --> 00:18:40,399 Speaker 1: retail at a single family home level, and we're just 316 00:18:40,440 --> 00:18:43,480 Speaker 1: not seeing a lot of transactions at the office. In 317 00:18:43,520 --> 00:18:46,320 Speaker 1: the office market, You're right, it will cause people to 318 00:18:46,400 --> 00:18:50,200 Speaker 1: rethink how you structure and how densely you pack an 319 00:18:50,240 --> 00:18:53,600 Speaker 1: office UM. But I think that real estate is still 320 00:18:53,640 --> 00:18:56,960 Speaker 1: going to be strong. Retail has definitely been harmed. The 321 00:18:57,000 --> 00:19:00,440 Speaker 1: big malls, which are owned by a concentrated few come benese. 322 00:19:01,040 --> 00:19:04,600 Speaker 1: The big malls will come back, but they are very 323 00:19:04,720 --> 00:19:08,560 Speaker 1: damaged by this U four month five month gap of activity, 324 00:19:08,600 --> 00:19:11,440 Speaker 1: and it may be longer UM, but I think industrial 325 00:19:12,119 --> 00:19:16,639 Speaker 1: UM office apartment continues to be very strong areas in 326 00:19:16,640 --> 00:19:19,400 Speaker 1: that market. Again, I wouldn't go rushing out to buy 327 00:19:19,560 --> 00:19:23,440 Speaker 1: because prices aren't a cheap, but if you own and 328 00:19:23,480 --> 00:19:26,240 Speaker 1: you can build to own UM, then you're going to 329 00:19:26,320 --> 00:19:29,320 Speaker 1: get a steadied lease income. That's a nicer turn on 330 00:19:29,359 --> 00:19:33,680 Speaker 1: your portfolio. And we have seen that through this cycle. Hey, Chris, 331 00:19:33,680 --> 00:19:37,720 Speaker 1: we've we've had some good fiscal stimulus coming out of Washington, 332 00:19:38,160 --> 00:19:42,680 Speaker 1: fairly bipartisan here um. And I guess the next one 333 00:19:43,320 --> 00:19:45,119 Speaker 1: that people are looking out over the markets looking at 334 00:19:45,200 --> 00:19:48,880 Speaker 1: is this, uh, maybe a three trillion dollar plan put 335 00:19:48,920 --> 00:19:52,239 Speaker 1: back put out by the House. A lot of are 336 00:19:52,280 --> 00:19:55,480 Speaker 1: some of that's going to include fiscal stimulus for states 337 00:19:55,480 --> 00:19:59,040 Speaker 1: and local municipalities. How important is it for these states 338 00:19:59,040 --> 00:20:02,600 Speaker 1: to get some support here? Well, Paul, i'd correct I 339 00:20:02,800 --> 00:20:07,159 Speaker 1: very seldom correctly, but you said a fair amount of stimulus. 340 00:20:07,160 --> 00:20:11,000 Speaker 1: I'd say a ridiculous amount of I mean it is 341 00:20:11,160 --> 00:20:14,280 Speaker 1: it is two times what was done in two thousand 342 00:20:14,320 --> 00:20:18,600 Speaker 1: and eight. Basically, the government has socialized losses and is 343 00:20:18,640 --> 00:20:22,639 Speaker 1: bailing out the stock market and bailing out corporations trying 344 00:20:22,680 --> 00:20:25,439 Speaker 1: to help individuals. I mean, like you've heard the stories, 345 00:20:25,480 --> 00:20:28,439 Speaker 1: anecdotal stories over and over about people who now have 346 00:20:28,480 --> 00:20:30,480 Speaker 1: a bigger paycheck by staying at home than they do 347 00:20:30,520 --> 00:20:32,760 Speaker 1: by working. We're Hannah, the idea that we have to 348 00:20:32,760 --> 00:20:35,240 Speaker 1: give a bonus for somebody to go back to work 349 00:20:35,280 --> 00:20:39,760 Speaker 1: to get off basically welfare is a shocking position. But 350 00:20:39,920 --> 00:20:43,280 Speaker 1: the question about the states and the cities and the counties, um, 351 00:20:43,520 --> 00:20:46,320 Speaker 1: they do need help. Now, it all depends on where 352 00:20:46,320 --> 00:20:48,880 Speaker 1: they get their revenue from. Now, I'm going to pick 353 00:20:49,119 --> 00:20:52,240 Speaker 1: a state like Florida or even New York City where 354 00:20:52,240 --> 00:20:55,680 Speaker 1: you've got a lot of income from hotel occupancy tax, 355 00:20:55,760 --> 00:20:59,600 Speaker 1: so you need visitors. That's been zero for four months 356 00:20:59,640 --> 00:21:02,280 Speaker 1: and it may be very low or I think until 357 00:21:02,400 --> 00:21:05,600 Speaker 1: the end of the year, so they're going to be hurting. Now, 358 00:21:05,640 --> 00:21:09,679 Speaker 1: if you're a state that survives on property taxes, you're 359 00:21:09,680 --> 00:21:12,880 Speaker 1: going to be in good shape. Income taxes obviously will 360 00:21:12,920 --> 00:21:15,680 Speaker 1: have taken a hit and are going to see a decline. 361 00:21:16,640 --> 00:21:21,640 Speaker 1: Our state in California does survive on income tax as 362 00:21:21,680 --> 00:21:24,280 Speaker 1: well as sales tax, which is lower, but all the 363 00:21:24,440 --> 00:21:27,920 Speaker 1: stimulus people have been saving. Average person has been saving 364 00:21:27,960 --> 00:21:30,280 Speaker 1: a lot of that stimulus money. So I think you 365 00:21:30,320 --> 00:21:33,199 Speaker 1: will see a rebound in retail sales when you can 366 00:21:33,200 --> 00:21:36,359 Speaker 1: get out and move around. But if you're a state 367 00:21:36,440 --> 00:21:39,760 Speaker 1: or city or a county that's been trying to survive 368 00:21:39,960 --> 00:21:44,480 Speaker 1: on that hotel occupancy tax, retail sales from car sales 369 00:21:45,600 --> 00:21:48,080 Speaker 1: you've got a gap in your budget that yes, you 370 00:21:48,160 --> 00:21:52,159 Speaker 1: need help filling. And now with an added stress of 371 00:21:52,200 --> 00:21:57,920 Speaker 1: the police fire safety overtime due to the riots, it 372 00:21:58,080 --> 00:22:02,280 Speaker 1: stretched their budgets. Paper then, Chris Aleman, thank you so much. 373 00:22:02,359 --> 00:22:05,560 Speaker 1: Unfortunately we'll have to have you back again. Uh, we 374 00:22:05,640 --> 00:22:08,119 Speaker 1: love it speaking with you. Chris Aleman, chief investment officer 375 00:22:08,160 --> 00:22:11,399 Speaker 1: at California State Teachers Retirement System with two forty billion 376 00:22:11,400 --> 00:22:14,600 Speaker 1: dollars of assets under management. Who is before his time 377 00:22:14,840 --> 00:22:20,199 Speaker 1: riding his bicycle? This is Bloomberg Markets, Bloomberg Opinion, informed 378 00:22:20,280 --> 00:22:25,440 Speaker 1: perspectives and expert data driven commentary on breaking news. Well, 379 00:22:25,440 --> 00:22:29,119 Speaker 1: the big social media companies, most notably Facebook and Twitter, 380 00:22:29,160 --> 00:22:32,000 Speaker 1: are grappling with the concept of free speech and what 381 00:22:32,080 --> 00:22:35,720 Speaker 1: they should do to manage or regulate the speech that 382 00:22:35,840 --> 00:22:38,360 Speaker 1: is on their platforms. Are they media companies with all 383 00:22:38,359 --> 00:22:41,520 Speaker 1: the obligations associated with being a media company or they 384 00:22:41,560 --> 00:22:46,640 Speaker 1: simply technologically technology platforms for third party content. Tim O'Brien, 385 00:22:46,720 --> 00:22:49,560 Speaker 1: senior columns for Bloomberg Opinion, joins us to kind of 386 00:22:49,600 --> 00:22:52,119 Speaker 1: talk about this issue. Tim, so give us a sense 387 00:22:52,200 --> 00:22:56,200 Speaker 1: about Facebook. Mark Zuckerberg is getting a lot of criticism 388 00:22:56,240 --> 00:23:00,520 Speaker 1: by saying, hey, it's not our job to police free speech. 389 00:23:00,600 --> 00:23:04,359 Speaker 1: What's the status. Well, you know, it has come to 390 00:23:04,400 --> 00:23:07,919 Speaker 1: the floor right now, Paul, because we have protests in 391 00:23:07,960 --> 00:23:12,960 Speaker 1: the streets over the George Floyd killing. Um Uh, we're 392 00:23:13,000 --> 00:23:15,879 Speaker 1: instill in the grips of a pandemic. People are hurting. 393 00:23:16,440 --> 00:23:22,240 Speaker 1: And recently President Trump took to Twitter to essentially say, 394 00:23:22,280 --> 00:23:26,199 Speaker 1: if you know, if the protests can continued, he was 395 00:23:26,240 --> 00:23:28,240 Speaker 1: prepared to unleash the military on the streets of the 396 00:23:28,359 --> 00:23:33,320 Speaker 1: United States and um uh. He had been on Twitter 397 00:23:33,400 --> 00:23:38,320 Speaker 1: prior to that making false claims about voter fraud. Twitter 398 00:23:38,480 --> 00:23:41,399 Speaker 1: was prompted by those posts to put warning labels and 399 00:23:41,440 --> 00:23:47,359 Speaker 1: fact checks on them. Mark Zuckerberg and Facebook demured uh. 400 00:23:47,359 --> 00:23:51,720 Speaker 1: And Zuckerberg's view on this is a classic and well 401 00:23:51,800 --> 00:23:56,280 Speaker 1: regarded free speech position, which is, uh, let a thousand 402 00:23:56,280 --> 00:23:59,399 Speaker 1: flowers bloom. Uh. You know, we we have to have 403 00:23:59,640 --> 00:24:03,520 Speaker 1: levery everyone have their voice. The problem with that perspective, 404 00:24:03,920 --> 00:24:08,080 Speaker 1: because there is an exception to an absolutist approached to 405 00:24:08,160 --> 00:24:11,520 Speaker 1: free speech, is you know, you can't go into a 406 00:24:11,680 --> 00:24:14,960 Speaker 1: theater and scream fire if it's crowded, because you will 407 00:24:15,080 --> 00:24:19,159 Speaker 1: endanger people doing so, and in that circumstance, their safety 408 00:24:19,160 --> 00:24:23,000 Speaker 1: outweighs your free speech. This whole debate has come home 409 00:24:23,040 --> 00:24:25,480 Speaker 1: to roust this week at Facebook in a very deep way. 410 00:24:25,520 --> 00:24:27,320 Speaker 1: At the end of last week and this week, UM 411 00:24:27,840 --> 00:24:32,960 Speaker 1: employees there are staging virtual walkouts. UM Zuckerberg has met 412 00:24:32,960 --> 00:24:35,919 Speaker 1: with outside civil rights groups to talk through it, and 413 00:24:35,920 --> 00:24:38,920 Speaker 1: he's holding onto the position he's maintained. Can you talk 414 00:24:38,960 --> 00:24:43,520 Speaker 1: about the difference between Facebook's approach and Twitter's approach and 415 00:24:43,560 --> 00:24:48,199 Speaker 1: the rationale for each, Well, you know, I think I 416 00:24:48,240 --> 00:24:50,280 Speaker 1: think a little of it is is they're also in 417 00:24:50,320 --> 00:24:55,760 Speaker 1: the good company of Silicon Valley magical thinkers, I think, 418 00:24:55,760 --> 00:24:59,240 Speaker 1: who have always believed that the machines they've built our 419 00:24:59,320 --> 00:25:02,439 Speaker 1: forces for good in an absolute way, and of course 420 00:25:02,840 --> 00:25:06,359 Speaker 1: they've been great sources for innovation, job creation, growth in 421 00:25:06,440 --> 00:25:11,080 Speaker 1: the economy. UM. But they're not friction free. There's obviously 422 00:25:11,680 --> 00:25:17,560 Speaker 1: downsides that we're well aware of around platforms, specifically information 423 00:25:17,600 --> 00:25:21,600 Speaker 1: based platforms getting gamed and and I think really the 424 00:25:21,640 --> 00:25:26,119 Speaker 1: twenty sixteen election was the first reckoning in in in 425 00:25:26,200 --> 00:25:29,240 Speaker 1: this new era for them, and I think the owners 426 00:25:29,240 --> 00:25:31,400 Speaker 1: of the platforms, the managers of the platforms have been 427 00:25:31,800 --> 00:25:36,879 Speaker 1: wrestling with how do you police uh information in a 428 00:25:36,920 --> 00:25:40,000 Speaker 1: way that the platform isn't being abused and it isn't 429 00:25:40,119 --> 00:25:44,440 Speaker 1: endangering others. Twitter in over the last week has decided 430 00:25:44,480 --> 00:25:46,840 Speaker 1: to take a more aggressive stance and say we will 431 00:25:47,359 --> 00:25:50,720 Speaker 1: we will mark tweets that we think are false or abusive. 432 00:25:51,480 --> 00:25:54,480 Speaker 1: Facebook is deciding not to, but it'll be interesting to 433 00:25:54,520 --> 00:25:59,480 Speaker 1: see how long Facebook can hold out of that position. 434 00:25:59,560 --> 00:26:03,080 Speaker 1: And I don't think it's just because their free free 435 00:26:03,320 --> 00:26:05,280 Speaker 1: speech advocates. I think it's because they don't want to 436 00:26:05,280 --> 00:26:07,680 Speaker 1: get regulated as a news platform. That's kind of where 437 00:26:07,680 --> 00:26:09,720 Speaker 1: I want to go. Tim, give us a sense. You know, 438 00:26:09,800 --> 00:26:13,560 Speaker 1: President Trump was talking about maybe regulating somehow some of 439 00:26:13,600 --> 00:26:16,159 Speaker 1: these social media platforms. Kind Of where are we in 440 00:26:16,240 --> 00:26:21,760 Speaker 1: terms of that regulatory oversight for some of these big platforms. Well, 441 00:26:21,760 --> 00:26:26,159 Speaker 1: it's still you know, it's still um up in the air. There. 442 00:26:26,200 --> 00:26:28,800 Speaker 1: There's a lot of lobbying and jousting going out around 443 00:26:28,800 --> 00:26:32,320 Speaker 1: this in Washington. Uh, the irony of President Trump saying 444 00:26:32,359 --> 00:26:36,640 Speaker 1: that he might try to change SEC regulations so these 445 00:26:36,640 --> 00:26:40,600 Speaker 1: platforms have to police themselves more adequately. We would probably 446 00:26:40,680 --> 00:26:42,960 Speaker 1: result in people like President Trump not being able to 447 00:26:42,960 --> 00:26:46,240 Speaker 1: write anything because he's one of the most serial abusers 448 00:26:46,560 --> 00:26:49,359 Speaker 1: of both the fact pattern and people's good will on 449 00:26:49,440 --> 00:26:55,000 Speaker 1: social media platforms. UM. I think, uh, there's no question 450 00:26:55,840 --> 00:26:59,000 Speaker 1: that that particularly Twitter and Facebook, that there that they 451 00:26:59,320 --> 00:27:02,440 Speaker 1: a lot of news crosses those sites. They've put a 452 00:27:02,480 --> 00:27:05,800 Speaker 1: lot of newspapers out of business because people have turned 453 00:27:05,840 --> 00:27:10,080 Speaker 1: to them as alternatives as news sources. And I think, UM, 454 00:27:10,240 --> 00:27:16,240 Speaker 1: newspapers and radio stations and television stations have historically been 455 00:27:16,359 --> 00:27:18,800 Speaker 1: held to a higher standard about how they vet what 456 00:27:18,880 --> 00:27:22,640 Speaker 1: gets published on their pages, and and I think that's 457 00:27:22,680 --> 00:27:25,840 Speaker 1: coming to the social media platforms too, Tim, this is 458 00:27:25,880 --> 00:27:28,800 Speaker 1: something we could be talking about for hours. I'm just 459 00:27:28,880 --> 00:27:31,840 Speaker 1: to wrap things together and quickly here. I'm wondering if 460 00:27:31,960 --> 00:27:34,600 Speaker 1: this has been a pattern at Facebook. Even some of 461 00:27:34,640 --> 00:27:38,960 Speaker 1: their internal analysts have said that they foment divide division 462 00:27:39,920 --> 00:27:42,600 Speaker 1: in the way that they operate, and yet they have 463 00:27:42,800 --> 00:27:46,040 Speaker 1: chosen not to do anything about it. Do you think 464 00:27:46,119 --> 00:27:49,440 Speaker 1: this is the tipping point that will force Mark Zarkerberg's hand. 465 00:27:50,400 --> 00:27:52,640 Speaker 1: I do think it's the tipping point least, because it's 466 00:27:52,640 --> 00:27:57,680 Speaker 1: not simply that, UM, they won't do anything about division 467 00:27:57,680 --> 00:28:01,200 Speaker 1: and polarization that occurs on Facebook. Part of its business 468 00:28:01,280 --> 00:28:06,520 Speaker 1: model actually thrives on people's attractions to going into forms 469 00:28:06,560 --> 00:28:11,320 Speaker 1: like this and getting into pugnacious confrontations. It's actually a 470 00:28:11,960 --> 00:28:15,120 Speaker 1: feature of the site, not a bug, and if they're 471 00:28:15,119 --> 00:28:16,960 Speaker 1: going to take that on, they have to really think 472 00:28:16,960 --> 00:28:19,000 Speaker 1: of what kind of business model they want going forward. 473 00:28:19,400 --> 00:28:21,679 Speaker 1: Tim O'Brien, thank you so much for being with us. 474 00:28:21,680 --> 00:28:24,879 Speaker 1: It's always enlightening. Tim O'Brien is a senior columnist with 475 00:28:24,920 --> 00:28:29,480 Speaker 1: Bloomberg Opinion, talking about his column on this issue about 476 00:28:29,520 --> 00:28:33,440 Speaker 1: Mark Zuckerberg and Facebook reaching this tipping point with staff 477 00:28:33,480 --> 00:28:38,880 Speaker 1: members staging walkouts to protest Mark Zuckerberg's approach to the issue. Although, Paul, 478 00:28:38,920 --> 00:28:41,720 Speaker 1: it is interesting to see markets are taking this the 479 00:28:41,720 --> 00:28:44,840 Speaker 1: other way, with Facebook shares doing better than Twitter as 480 00:28:44,880 --> 00:28:49,120 Speaker 1: they take opposite stance. Thanks for listening to the Bloomberg 481 00:28:49,160 --> 00:28:51,840 Speaker 1: pan l podcast. You can subscribe and listen to interviews 482 00:28:51,880 --> 00:28:55,640 Speaker 1: at Apple Podcasts or whatever podcast platform you prefer. Paul Sweeney, 483 00:28:55,720 --> 00:28:58,480 Speaker 1: I'm on Twitter at pt Sweeney. I'm Lisa Abram Woyd's 484 00:28:58,480 --> 00:29:01,520 Speaker 1: I'm on Twitter at Lisa Abrama. It's one before the podcast. 485 00:29:01,520 --> 00:29:04,160 Speaker 1: You can always catch us worldwide on Bloomberg Radio.