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Speaker 2: Joining us now, wasting too much time, I'm sorry, folks.
Speaker 2: Richard Clarida of Columbia University, of PIMCO and of course
Speaker 2: the former vice chairman of the FED, Professor CLARDA. Were
Speaker 2: thrilled to have you in today. Can I go nerd
Speaker 2: for a moment? Sure? Okay. I never talk about the
Speaker 2: Nobel Prize in economics. It's like bad luck, and I'm
Speaker 2: not doing that with somebody qualified to get the call
Speaker 2: from Scandinavia. But I want to go back. This is
Speaker 2: really important, Richard Clarida. There can be like in nineteen eighty,
Speaker 2: I've had the honor of talking to Joe Stiglitz about
Speaker 2: Gross and Stiglitz, which in nineteen eighty I'm not kidding, folks,
Speaker 2: it was like a four page paper. It was small,
Speaker 2: it was focused. And then with you and you know,
Speaker 2: I don't want to get into you know this or
Speaker 2: that there's Clarita Girtler and A Gali okay, up at
Speaker 2: Brown University. When you make a paper like that that
Speaker 2: is treasured by this is on DSGE folks, it's treasured
Speaker 2: by all of economics, how do you get that paper done?
Speaker 2: That ends up being like, hey, should they win a
Speaker 2: Nobel Prize? What was the process of doing? You know,
Speaker 2: name the paper, but I'll go to Girtler The Science
Speaker 2: of Monetary Policies just one example.
Speaker 3: Well, it was an interesting time because the authors Mark Gertler,
Speaker 3: Jerdi Galli and I were sort of either early or late.
Speaker 3: But we felt there was a vacuum in academic economics
Speaker 3: in that it treated monetary policy as a black box,
Speaker 3: and we thought these guys are trying to do something sensible.
Speaker 3: So we actually worked out essentially a forward looking tailor
Speaker 3: rule to describe actual monetary policy. And it turned out
Speaker 3: that it actually did a good job and it made
Speaker 3: a lot more sense than the black box. But when
Speaker 3: we wrote that paper, I don't think we had any
Speaker 3: idea that it would have the impact.
Speaker 2: That it did. We thought it could get ignored, okay,
Speaker 2: away from you. In modern economics, there's a nineteenth century
Speaker 2: what's called plug and chug which you have an equation, folks,
Speaker 2: and you fill in the little blanks of the algebraic
Speaker 2: equation the tailor rule. You can't do that because you
Speaker 2: don't know where the output gap is right right out? Yeah,
Speaker 2: is Jerome Powell flying blind?
Speaker 3: Well, he's certainly flying with an obscured vision out the cockpit,
Speaker 3: for sure. And I think there's always some uncertainty about
Speaker 3: things like what is our star? What's the full natural
Speaker 3: rate of unemployment? But it's probably elevated now. And the stakes,
Speaker 3: let's be honest, I guess, let me cut to the punchline.
Speaker 3: The stakes are higher now because of the fact that
Speaker 3: for the last four years inflation has been above target,
Speaker 3: and of course in twenty twenty one and twenty twenty
Speaker 3: two it served and was not transitory. And so I
Speaker 3: would argue that the stakes are higher now for the
Speaker 3: FED than they have been.
Speaker 2: Really, going back to Paul Volker forty years.
Speaker 4: Ago, does the government shutdown impact the Fed's ability to
Speaker 4: manage its mandate here in terms of managing interest rates?
Speaker 3: The longer it goes on, the more that becomes a factor.
Speaker 3: In particular, because a lot of the data comes from
Speaker 3: the government, including you know, inflation data and the labor
Speaker 3: market data. Now, the FED, like many other organizations and
Speaker 3: in the private sector, looks at a wide range of
Speaker 3: high frequency data. You get ADP, you get a lot
Speaker 3: of different indicators of the labor market. But yes, the
Speaker 3: longer this goes on, the more challenging it is to
Speaker 3: determine exactly where the economy is.
Speaker 4: What do you think is the bigger risk for this economy?
Speaker 4: Is it from the Fed's perspective, is it the labor market?
Speaker 4: Is this inflation? Are they evenly balanced here? What do
Speaker 4: you think the bigger risk?
Speaker 3: Well that was what was important about the September meeting
Speaker 3: because up until September, Jay Powell and many on the
Speaker 3: committee had said, look, we have dual mandate employment and inflation,
Speaker 3: and they seem to be roughly in balance. And at
Speaker 3: the September meeting they said, we're now more concerned about
Speaker 3: the balance of risk in the labor market. And I
Speaker 3: respect that, But the reality is inflation now using the
Speaker 3: FEDS preferred measures two point nine percent, that's where it
Speaker 3: was eighteen months ago. It's well above two and so
Speaker 3: there is a risk to both sides. There's a risk
Speaker 3: if you don't cut rates the unemployment rate goes up
Speaker 3: a lot. There is a risk that if you do
Speaker 3: cut rates a year from now, inflation stuck in the threes.
Speaker 2: Richard Claiter, with this talk, is a former vice chairman
Speaker 2: of the FED. For an extensive conversation. When we invented this, Paul,
Speaker 2: I mean to go from Man Deep Singh with his
Speaker 2: brilliance on AI to Professor Claiter, I mean, this is
Speaker 2: the way you roll, That's how you do it. This
Speaker 2: is how you do it. We said good morning to
Speaker 2: all of you across America worldwide as well. Okay, I'm
Speaker 2: in the basement of the of our building in London
Speaker 2: with a guy named Jean Claude Trichet, the engineer from Leon.
Speaker 2: He's brilliant. He goes Tom, I think you call me Tom.
Speaker 2: I can't remember, and he says it is about diffusion,
Speaker 2: and we're talking about productivity. I hate the phrase K
Speaker 2: shaped economy because it implies a symmetric distribution baloney. The
Speaker 2: productivity that we're all witnessing right now. Maybe Jeff Sachs
Speaker 2: would be good at this. Yeah, the productivity that we're witnessing.
Speaker 2: You can't tell me it's evenly diffused. Across some mirror.
Speaker 2: How asymmetric are we in this productivity? Boom?
Speaker 3: Well, I think you're one hundred percent right. You know
Speaker 3: the term in economics, you know, is is it labor
Speaker 3: augmenting technical change?
Speaker 2: And I think the answer is yes.
Speaker 3: But more labor is augmented, another lager over time may
Speaker 3: be substituted for. And I think that is really the
Speaker 3: potential disruption from AI is not only does it lift
Speaker 3: out at per hour, but it also could result in
Speaker 3: at some point in some displacement as well. So I
Speaker 3: think it's too soon to tell, but the minimum we
Speaker 3: know it's not evenly distributed.
Speaker 2: Dominic Constume over at Missou and now Brilliant out of Oxford,
Speaker 2: Doctor Constum would say, there's a capital deepening issue here.
Speaker 2: Explain to our audience this wall of AI money and
Speaker 2: what that does to the capital dynamics of America.
Speaker 3: Well, the interesting point is, you remember a couple decades ago,
Speaker 3: the talk in the US was about the witless economy,
Speaker 3: that we could get all this GDP without bricks and mortar.
Speaker 3: And it turns out that at least for this part
Speaker 3: of the new economy, you need a lot of bricks,
Speaker 3: a lot of mortar, a lot of servers, and a
Speaker 3: lot of power generation. So in some ways to get
Speaker 3: to the very new economy, you need old economy capital spending.
Speaker 3: And that's a pretty interesting period to be in. We
Speaker 3: think it's going to go on for five to ten years,
Speaker 3: but it's a different economy than we were used to
Speaker 3: thinking about in the last twenty years.
Speaker 4: You strip out the AI spend, a lot of folks
Speaker 4: will tell you this economy not that strong. Capital spending
Speaker 4: is not that good.
Speaker 2: How do you think about that arithmetically? That's correct.
Speaker 3: You know, in the first half of the year GDP
Speaker 3: growth was about one point six one point seven. If
Speaker 3: you strip out tech investment then it was somewhere between
Speaker 3: zero and half of that, and you have to adjust
Speaker 3: for imports. But clearly in the first half of the
Speaker 3: year it's really been an AI driven capex economy.
Speaker 4: So one of the issues out there that I guess
Speaker 4: it's got to push the background a little bit, maybe
Speaker 4: just because fatigue is tariffs and the impact on the economy.
Speaker 4: We have not necessarily seen meaningful inflation resulting from the tariffs.
Speaker 4: Growth seems to be kind of hanging in everything. Strong
Speaker 4: gd for in a few weeks ago. How do you
Speaker 4: think tariffs will impact the economy if at all.
Speaker 3: The economy has been refreshingly and surprisingly resilient. I don't
Speaker 3: think there's any doubt about that. So at PIMCO, we've
Speaker 3: revised up our outlook. You know, Atlanta Fed is now
Speaker 3: saying Q three could come in north of three percent.
Speaker 2: So I actually think it actually in part.
Speaker 3: Is because of at the same time we've had the
Speaker 3: tariff hit to the economy, we've also had a justifiable
Speaker 3: optimism about tech and capital spending, so that that's been
Speaker 3: an important feature. I think the other important feature is that,
Speaker 3: you know, some of the tariffs have been absorbed either
Speaker 3: by the profits of US companies that had a lot
Speaker 3: of profits to absorb or foreign exporters. And then the
Speaker 3: third piece is we're probably not yet at the at
Speaker 3: the endpoint of teriffs. They will continue to show up
Speaker 3: in the inflation data at least for a while, but
Speaker 3: I think increasingly I and the Federal of the view,
Speaker 3: and that the FEDS what's important that this is really
Speaker 3: not going to be an inflationary story. It's a price
Speaker 3: level adjustment that we're sort of in the middle innings
Speaker 3: of getting through.
Speaker 2: Against some nerd knowledge here, folks, Good morning Global Wall Street.
Speaker 2: Richard Clara with this with PIMCO, and of course forever
Speaker 2: with his Columbia University. Okay, my path in foreign exchange
Speaker 2: is Mundel, Mundel, Fleming, Jacob Frankel. Out of Chicago, a
Speaker 2: guy named Rogoff shows up, No excuse me than Rudy
Speaker 2: Dornbush up at Amputeen this upstart Rogoff and so getting
Speaker 2: ops felt out at Berkeley. They show up and it
Speaker 2: goes on and on and on. Let's take it back
Speaker 2: to Colombia, where you have this incredible that you helped build,
Speaker 2: this incredible synthesis of international economics. Explain to America with
Speaker 2: Xavier Salah, m Lartin or Robert Mundel the Giant would
Speaker 2: say about how screwed up, messed up Japan is. With
Speaker 2: weekend log convex interest rates moving higher, the real rage
Speaker 2: chart published out of Tokyo today by Bloomberg is grim.
Speaker 2: Explain why our listeners and viewers should care about the
Speaker 2: fragility of Japan.
Speaker 3: Well, because Japan is obviously a major economy, but it's
Speaker 3: also an even bigger part of you know, international financial system.
Speaker 3: With the yen an important currency, especially in risk off episodes.
Speaker 2: Somebody has to hold all the jgbs.
Speaker 3: That the government has been issuing, and so what happens
Speaker 3: in Japan also spills over into US capital markets and
Speaker 3: the global economy. And I think what's important for the
Speaker 3: listeners to understand now is that markets and investors have
Speaker 3: had sort of a rule of thumb about Japan, which
Speaker 3: is it sort of goes off in its own it's
Speaker 3: got deflation. Eventually they'll figure out their fiscal situation. And
Speaker 3: now Japan has broken out of deflation. They now have inflation,
Speaker 3: they have positive interest rates, and they're now very much
Speaker 3: a player in the global financial system.
Speaker 5: Is there is there.
Speaker 2: Any precedent for a successful reflation. I don't see it
Speaker 2: in the literature. It's original to Japan, isn't it.
Speaker 3: Well, Japan was went through about a two decade period
Speaker 3: where they had deflation. It wasn't a spiral, but prices
Speaker 3: were negative. I think to me, Tom, one of the
Speaker 3: interesting things about Japan is although the boj was trying
Speaker 3: to reflate the economy, the politicians in the public actually
Speaker 3: didn't get a vote. They actually liked deflation. You know,
Speaker 3: if you've got you've got your savings in yen under
Speaker 3: the mattress. You know, deflation is good for you. So
Speaker 3: I think a challenge right now in Japan is they finally,
Speaker 3: after twenty five years, achieved the positive two or three
Speaker 3: percent inflation. But it's creating substantial political tension as well.
Speaker 2: Well, I can't emphasize that that was brilliant. We'll try
Speaker 2: to do that single best idea. We'll see if the
Speaker 2: interns get the cut today. Well, the societal change. I
Speaker 2: was at the White House correspondence dinner and you got
Speaker 2: this whole security idiocy because the President's there and Martin
Speaker 2: Feldstein's standing in front of me. I think rogue off
Speaker 2: was my guest. Martin Feldstein's standing in front of me.
Speaker 2: We'd all had six martinis. And he turns around and
Speaker 2: he says, Tom, Japan has been lost for two decades. Yep,
Speaker 2: that was a societal struggle.
Speaker 5: Is Japan now found?
Speaker 4: Is it out of the wilderness at this point?
Speaker 6: Do you think?
Speaker 3: Well, as I mentioned, you know, narrowly, it certainly is
Speaker 3: no longer in deflation.
Speaker 2: It has positive interests.
Speaker 3: I will say, just an anecdote, if I'm allowed an anecdote,
Speaker 3: I visit Japan almost every year for the last thirty years.
Speaker 2: And most recently this summer.
Speaker 3: I was struck by not only the boom in the economy,
Speaker 3: but it is a real tourist magnet now. In fact,
Speaker 3: if anything, in Japan, the politics is such that there
Speaker 3: are too many tour right, which is a problem they
Speaker 3: did not have for twenty five years.
Speaker 2: Professor, I got to ask you, or I should say
Speaker 2: Vice Chairman, I've got to ask you. Lisa Cook gets
Speaker 2: an extended stay at the Fed. What is the significance
Speaker 2: of Lisa Cook remaining at the Federal Reserved table.
Speaker 3: Well, obviously the case is at the Supreme Court, and
Speaker 3: so we'll know next year where they end up. But
Speaker 3: what's important is, you know, she continues to serve as
Speaker 3: a governor and continues to vote on monetary policy.
Speaker 2: And I think that that is right. I think that's appropriate.
Speaker 2: Did Columbia pay for Sala E. Martin's bright colored jackets?
Speaker 2: Is that part of his deal?
Speaker 3: During my time as chair, we did not subsidize the
Speaker 3: jackets or the m and ms that he distributes to class.
Speaker 2: But I'm not sure about the current practice. This is
Speaker 2: your dovo. Sally Martin's like three quarters of a mile away,
Speaker 2: and he's there in bright orange, just like there's the
Speaker 2: growth guy from Columbia, Richie Claire brilliant. Thank you so much, really,
Speaker 2: treasure of the comments there. Maybe we'll get him back
Speaker 2: once we figure out who Scandinavia annoints this week as well.
Speaker 2: Clarida is with Pimco. Stay with us. More from Bloomberg
Speaker 2: Surveillance coming up after this.
Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us Live
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Speaker 2: Joining us now. Finally, Jane Foley out of FX strategy
Speaker 2: at Robbo Bank in London. I can't say enough, folks
Speaker 2: about the difference here in the Rabobank of the Netherlands.
Speaker 2: They go back to commercial hedging utilizing foreign exchange back centuries.
Speaker 2: It's a whole different twist here on the dynamics. Jane Fowley,
Speaker 2: I want you to explain the sowhat to our American
Speaker 2: listeners and viewers and those in London frankly as well
Speaker 2: of a week Japanese yen our two point nine standard deviations,
Speaker 2: What why do I care that dollar yen could go
Speaker 2: to one fifty five shockingly week Japan?
Speaker 7: Well, I mean, gently excuse me. That's the talk this
Speaker 7: morning that we could see a move back to one
Speaker 7: fifty five. And it is all because the market thinks, well,
Speaker 7: you know, the end characterve is back on. You know,
Speaker 7: we're going to not get the Bank of the Bank
Speaker 7: of Japan interest rate hiking October after But I would
Speaker 7: warn but I think this is a really dangerous strategy
Speaker 7: in it. Why is it dangerous because if you think
Speaker 7: about the position of the LDP leader now, and she
Speaker 7: is of course quite likely to be voted in as
Speaker 7: the Prime minister maybe next week, although there's some issues
Speaker 7: there with her coalition, But assuming she is the prime minister,
Speaker 7: you've got to wonder does she actually want a weaker yen?
Speaker 7: Now the market is assuming that she is going to
Speaker 7: follow the policies of her mental Aarby. But of course
Speaker 7: when Abe was the prime minister, things were very different
Speaker 7: in Japan. They were still trying to fight deflation. Now
Speaker 7: Japan has got inflation, and she is very concerned that
Speaker 7: a lot of this inflation is because of important inflation.
Speaker 7: And of course, if you are worried about important inflation.
Speaker 7: Why would you want a weaker currency, particularly when you
Speaker 7: want to build a strong relationship with President Trump, who,
Speaker 7: according to the Japanese prayers, may start Japan in his
Speaker 7: visits to Asia and perhaps at the end of this time.
Speaker 7: So I think this could be quite a dangerous strategy.
Speaker 7: I'm not quite so certain that beat the carriage trade
Speaker 7: will be on so long.
Speaker 2: In Paul Toro Fujioko off for Tokyo Desk has a
Speaker 2: brilliant story today showing the in the new inflation, the
Speaker 2: inflation justed wages. The japan people are flat on If
Speaker 2: that happened in America, they'll literally be revolt. They're flat
Speaker 2: on their back with a negative real wage growth.
Speaker 4: Absolutely, Jane, we've got I think the story maybe this
Speaker 4: week over it. Certainly this year has been gold. We've
Speaker 4: got gold north of four thousand dollars per ounce. A
Speaker 4: lot of folks are saying, hey, this is a safe haven,
Speaker 4: maybe more so than the US dollar. What are folks
Speaker 4: in your world thinking about the relationship between the US
Speaker 4: dollar and gold.
Speaker 7: Well, certainly that seems to be you know, the fashion
Speaker 7: trade right now. But I do think that there is
Speaker 7: room for both and I do think that if we
Speaker 7: did have, say a sudden step up of geopolitician, I
Speaker 7: think we'd see the dollar and we'd see gold gold rallying,
Speaker 7: although over time the dollar, you know, if the dollar
Speaker 7: were to recover significantly, of course, I think there would
Speaker 7: be forfit taking first of.
Speaker 2: All in gold.
Speaker 7: Now, gold I think is a real true diversification trade
Speaker 7: this year, and I think this is where a lot
Speaker 7: of the buying has come from. You know, if we
Speaker 7: go back to the first five months of this year,
Speaker 7: that there was this rotation trade away from the US
Speaker 7: assets and maybe that's stop now bores turned around because
Speaker 7: we do see you know, the AI trade, the S
Speaker 7: and P making you such strong gains really since since June.
Speaker 7: But I think there is diversification still amongst that. We've
Speaker 7: seen various different stock markets, including the perform quite well
Speaker 7: this year, and we've seen silver do well, We've seen
Speaker 7: bitcoin do well, and I think there is a want
Speaker 7: by many investors really to diversify their portfolios, and I
Speaker 7: think that's where the strength in gold is coming from.
Speaker 4: Jane, We've we've seen the Bloomberg dollar index, you know,
Speaker 4: kind of stabilize here over the last month, or two
Speaker 4: here the dollars stabilized. Is this kind of a a
Speaker 4: new level you think for the dollar?
Speaker 7: Yeah, you know, the dollar is the best performing G
Speaker 7: ten currency on the one month view, despite the fact
Speaker 7: that it's still the worst performing on the year to date.
Speaker 7: And we have seen a lot of stability really over
Speaker 7: the summer months. Really sort of July is and you know,
Speaker 7: a lot has been said over the spring about the
Speaker 7: hedging strategies or the change in hedging strategies by non
Speaker 7: US dollar based fund managers, and that probably accelerated the
Speaker 7: downside of the donor certainly through the spring. But if
Speaker 7: we assume that for now, you know, that's done, maybe
Speaker 7: it could start again. But if we assume it's done,
Speaker 7: you know, I think what we've got now is short
Speaker 7: covering in the dollar because there's an awful lot of
Speaker 7: fed easine in the price. The market's still whether or
Speaker 7: not inflation will come through.
Speaker 2: Tours jargon here, let's let's translate this. Jane. You're saying,
Speaker 2: everybody bet the bank, bet the farm that there would
Speaker 2: be strong dollar, and now they're turning that trade around
Speaker 2: and going the other way.
Speaker 7: It seems that's what happened in the spring. So if
Speaker 7: we go back to the global financial crisis, we've seen
Speaker 7: you since then, a massive rally out performance of the
Speaker 7: S and P five foundred and really a massive rally
Speaker 7: in the value of the US dollars. So everyone was
Speaker 7: buying American assets and during that period non dollar based assets,
Speaker 7: so really Asian European fund managers, they were investing in
Speaker 7: a lot more money. There was a lot more money
Speaker 7: to be invested, and a lot of that was finding
Speaker 7: its way into the US. And I think come the
Speaker 7: beginning of this year, the market, okay, the dollar's done
Speaker 7: so well in recent years, we weren't that hedged, and
Speaker 7: at the start of this year they started to hedge
Speaker 7: the dollars.
Speaker 2: Jane, we're running out of time. First of all, we
Speaker 2: got to get you in the studio in New York
Speaker 2: to do like a double barrel, like a whole hair
Speaker 2: four with Jane Folly, a raval bank. Jane. People think
Speaker 2: I got hired at Bloomberg because I'm like bow tie.
Speaker 2: It's not true, folks. I mean meetings with like Matt Winkler,
Speaker 2: Peter Grauer retiring chairman, and they're going dance all our
Speaker 2: rods and cones. Where do you do that, You do
Speaker 2: that in Jane Foley space. Foreign exchange, Jane, I'm seeing
Speaker 2: huge tension. If I look at something obscure like sterling swissy,
Speaker 2: I'm out strong, Swiss franc to new territory, new points
Speaker 2: of tension. If I look at euro yen back up
Speaker 2: to a one seventy seven week en, points of tension
Speaker 2: in your world, What do those tensions mean in foreign exchange,
Speaker 2: for the stock market, for the bond market.
Speaker 7: Well, I mean the Nikai T two five has perform
Speaker 7: really quite well this year. But if you're an overseas
Speaker 7: investor investing in Japanese assets, well, you're not going to
Speaker 7: really like the en going lower. Now.
Speaker 2: The yen again.
Speaker 7: Seems out of place here because what we've seen is
Speaker 7: some Safeyvin Ausset's doing quite well, the dollar stabilizing, the
Speaker 7: Swiss frank doing well, goal doing well, but the yen
Speaker 7: again on the back foot, and that to me is
Speaker 7: another reason why this yen selloff is probably overdone.
Speaker 2: Okay, Jane Foley, thank you, thank you so much. Stay
Speaker 2: with us. More from Bloomberg Surveillance coming up after this.
Speaker 1: This is the Bloomberg Surveillance podcast. Listen live each weekday
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Speaker 1: say Alexa play Bloomberg eleven thirty.
Speaker 2: Here's the way it rolls, folks, Economics, finance, investment, international relations.
Speaker 2: It's no different than sports entertainment. Taylor Swift, did you
Speaker 2: know she has a new album out?
Speaker 6: I heard that.
Speaker 2: I think we're efforting her right now, Miss Swift. If
Speaker 2: you're listening, bring Jack with you as well. Taylor. Anyways,
Speaker 2: people keep score and as a young kid that came
Speaker 2: out of York University of York in England and all
Speaker 2: of a sudden things are working. He's with Capital Economics,
Speaker 2: which is a really wonderful firm writing clear stuff. He's
Speaker 2: global group, such a group Chief Economistic Capital Economics, but
Speaker 2: really made us a splash, like with the ft and
Speaker 2: the thinking within England of what in God's name is
Speaker 2: going on? The summary of it is a wonderful two
Speaker 2: hundred and fifty pages. The Fractured Age Martin Wolf warbles
Speaker 2: gaily on the cover. A guy named Robert Nibleta Chathamhouse
Speaker 2: shows up so does bread sets her Neil shearing with
Speaker 2: us in celebration of the fractured age? Did you time
Speaker 2: the book release for the world falling apart?
Speaker 6: Some things with the book that you need an idea,
Speaker 6: you need the support of your friends and family, and
Speaker 6: you need a bit of luck. I'm luck in space.
Speaker 2: What is the distinction of this fractured age that's not
Speaker 2: in the zeitgeist? Now, all the blood, the eighteen newspapers,
Speaker 2: the media, people like us, what are we missing of
Speaker 2: this fracture?
Speaker 6: So I think that the genesis the book was that
Speaker 6: the rhetoric of deglobalization was everywhere right. Tariff's going up,
Speaker 6: trade barriers going up, this idea that we're returning to
Speaker 6: the nineteen thirties, countries are turning inwards. And when we
Speaker 6: at capst Economics looked at the data, we saw global
Speaker 6: trade volumes going up year on year on year. So
Speaker 6: this idea, the thing that everyone's missing is the idea
Speaker 6: that the world isn't deglobalizing. But clearly something is changing.
Speaker 6: And as I argue in the Burke, and as we've
Speaker 6: written about a cap of Economics, the thing that has
Speaker 6: shifted is the relationship between the world's two major economies,
Speaker 6: the US and China, they've become superpower rivals, and that's
Speaker 6: causing those economies to both put apart or fracture, and
Speaker 6: then other economies to have to pick aside.
Speaker 4: Essentially, So again, we all grew up in a world
Speaker 4: of globalization. That's just that's several generations have grown up
Speaker 4: in that world. Is that still the world we're in
Speaker 4: in terms of globalization, because it again it doesn't feel
Speaker 4: that way.
Speaker 6: Well, globalization has certainly shifted, and if you look at
Speaker 6: trade flows you can see them see the evidence that
Speaker 6: shifting globalization. So up to about four years ago, about
Speaker 6: three quarters of US cell phones came from China. Less
Speaker 6: than one in four cell phones are going to be
Speaker 6: produced in China that are consumed in the US this year,
Speaker 6: with more coming from Vietnam and India. So we're still
Speaker 6: consuming vast amounts of cell phones and imported vast amounts
Speaker 6: of cell phones, but the location of the production is shifting,
Speaker 6: and it's shifting for these security reasons.
Speaker 4: Can the global economy truly be global if there is
Speaker 4: this seemingly broadening divide between China and the West.
Speaker 6: Well, there's going to be greater frictions within global trade
Speaker 6: and capital flows and technology flows, maybe people flows too.
Speaker 6: As I argue in the book, the key economic, key
Speaker 6: driver of the economic consequences of this fracturing it's going
Speaker 6: to be twofold. One is how do other countries align?
Speaker 6: Can the US block, which is enormous, kind of hold
Speaker 6: together or does Trump push everyone apart?
Speaker 5: And then the second, as you allude.
Speaker 6: To Poored, is the contours of the fracturing. If it's
Speaker 6: contained to things like cell phones and batteries and chips
Speaker 6: and semiconductors and pharmaceutical products, then I think the economic
Speaker 6: costs are going to be quite limited to be manageable.
Speaker 6: If we get a much wider fracturing that encompasses many
Speaker 6: more areas than the economic costs will be much larger.
Speaker 6: And if the two sides ever come to conflict, then
Speaker 6: all bets are off. We shouldn't worry about the economic costs.
Speaker 2: We're sharing with us. The fractured age is the book
Speaker 2: two hundred and fifty pages. Mister wolf Over at Financial
Speaker 2: Time says an exceptionally sensible, clear headed, and original thinker.
Speaker 2: I'll vote for that is well. One of your Catholic
Speaker 2: economics essays Europe flat and is back. We see that
Speaker 2: with the politics of France and I looked at it's
Speaker 2: sterling swissy today and my word, it looks like Britain
Speaker 2: after World War Two. How fragile is the continental and
Speaker 2: United Kingdom economy right now?
Speaker 6: I think about the UK to one side. The UK
Speaker 6: we have our own fiscal challenges, but actually I don't
Speaker 6: think they're quite as a cut as say France. Yeah,
Speaker 6: there's plans on the way to reduce the deficit in
Speaker 6: the UK. The question is, really you're optimistic the UK
Speaker 6: can get it det I think we can get to
Speaker 6: kind of muddle our way through. There's enough fiscal fudge
Speaker 6: going around that we can kind of muddle our way.
Speaker 2: Through this one.
Speaker 6: France, it seems to me, is a bit more intractable.
Speaker 6: They've had four governments now of four on the back
Speaker 6: of efforts to try to reduce the budget deficit. The
Speaker 6: parliament is fractured, there's a presidential election due in twenty
Speaker 6: twenty seven. All of this political dysfunction is fodder for
Speaker 6: nationalists populist and let's see what happens in the twenty
Speaker 6: twenty seven election. I don't think that we're going to
Speaker 6: have a repeat of the Eurozone crisis. I don't think
Speaker 6: we're going to get big debt to faults in banking crises.
Speaker 6: The banks in France look pretty well capitalized. They don't
Speaker 6: hold much government debt, but it's a fiscal crisis that
Speaker 6: is brewing.
Speaker 2: Albums. If the right takes over in France, I mean
Speaker 2: within the five party parliamentary system, the right in Hungry,
Speaker 2: the right in Poland, the right, I mean there's a
Speaker 2: huge fear almost of it. I'll call it a Trumpian
Speaker 2: right in.
Speaker 6: Europe, absolutely, and we're seeing it happen. That's what we're
Speaker 6: seeing this play out in real life. That I think
Speaker 6: the question is what type of rights that might might
Speaker 6: govern Italy is an interesting example here. We've had a
Speaker 6: kind of populist right wing government for the last couple
Speaker 6: of years under Georgia Maloney. Actually they've governed in economic
Speaker 6: matters in their relatively orthodox way. So I think it
Speaker 6: depends as much upon how they govern in if they
Speaker 6: win power as to what the rhetoric do.
Speaker 4: You think This is a seminal point for France right
Speaker 4: now to either stay the course and hope for the best,
Speaker 4: or make it some significant changes. Is this a pivot moment.
Speaker 6: I think we are kind of we're approaching one of
Speaker 6: those pivot moments, certainly when it comes to the political
Speaker 6: structure of France. If you look at the rise of
Speaker 6: the right, and you look at the rise of the
Speaker 6: right across Europe, I mean, the center is kind of
Speaker 6: holding so far. The center health in the German elections
Speaker 6: last year. The center's held so far in France. The
Speaker 6: question is would it continue to hold through to twenty
Speaker 6: twenty seven in those elections you're sharing.
Speaker 2: And the government shutdown of the United States.
Speaker 5: Of America, well, I've just spent two hours.
Speaker 6: I came. I flew into Dallas on Monday evening. I
Speaker 6: spent two and a half hours at immigration.
Speaker 2: Yeah, did you say hello to Lisamated?
Speaker 6: Exactly. So it's so it's having a real world consequence
Speaker 6: now in terms of the impact on the economy. When
Speaker 6: we look through the history of government shutdowns, we can't
Speaker 6: really see them in the economic data. It tends to
Speaker 6: be a bit of dislocation that gets made up in
Speaker 6: subsequent months. But again, a bit like France, this speaks
Speaker 6: to political dysfunction, and it is as acute here in
Speaker 6: the US as it is in Europe.
Speaker 2: Congratulations, you're sharing the fractured age. Can't say enough about it.
Speaker 2: Really an abrupt read in well timed to say the least.
Speaker 2: Stay with us. More from Bloomberg Surveillance coming up after this.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto
Speaker 1: with the Bloomberg Business app. You can also watch us
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Speaker 2: That special moment here for Bloomberg Surveillance this morning, our
Speaker 2: essay of the year I'm thrilled to announces, will do
Speaker 2: that here in a moment. Stay with us across America
Speaker 2: around the work. Can I just suggest this hour of
Speaker 2: Bloomberg Surveillance sponsored by generous.
Speaker 5: Electric Shorts Finances Chins.
Speaker 2: We'll do that maybe as well. Futures up, ten down,
Speaker 2: Futures up, one hundred and thirty eight. Bloomberg Surveillance this
Speaker 2: Morning brought you by IBKR. Well the US Consumer Sentiment
Speaker 2: Index it seeds sixty in October twenty twenty five at
Speaker 2: IBKR Forecast Trader. The yes was recently at thirty three percent.
Speaker 2: Start predicting today at ibkr dot com slash forecast. Last
Speaker 2: training day for this contract is October twenty five, So
Speaker 2: over a decade ago. David Brooks did an essay in
Speaker 2: the New York Times. It was my essay of the
Speaker 2: year on the nerds in the smooth Guys on Wall Street.
Speaker 2: It was brilliant on the cultural divide on Wall Street.
Speaker 2: I still quote it in speeches all the time. Brilliant essay.
Speaker 2: This year, My essay of the year is on the
Speaker 2: generational divide that we live every single day. Paul's limited,
Speaker 2: I'm limited, Tucker. Do you have offspring?
Speaker 6: Ah?
Speaker 2: Yeah, okay, altering as well, joining us now with my
Speaker 2: essay of the year. This was out of the Wall
Speaker 2: Street Journal a number of days ago, and she's made
Speaker 2: a huge splash with it. Is Professor Susie Welch of
Speaker 2: NYU is gen z unemployable. It has created a firestorm
Speaker 2: of comment. And I have to go to this because
Speaker 2: the last time Susie, I think I saw you was
Speaker 2: with a guy named Jack Welch. When did you decide
Speaker 2: to go into the dark caver and of academics at NYU?
Speaker 2: What was the pat You didn't have to do this?
Speaker 8: I did not I had been in broadcast journalism for
Speaker 8: a bunch of years, and then I was running a
Speaker 8: small tech music tech company, and the pandemic brought it
Speaker 8: to its knees. And then Jack passed away, and I
Speaker 8: went up to the woods of upstate New York with
Speaker 8: all my kids and all their spouses and all of
Speaker 8: our dogs. And then the pandemic ended and everybody went
Speaker 8: back to life. I had been cooking up in my
Speaker 8: mind a class called Becoming You, which was going to
Speaker 8: help people figure out what to do with their lives,
Speaker 8: which was what I was trying to figure out what
Speaker 8: to do with my life.
Speaker 5: And I brought it to n Yu Stern and to.
Speaker 8: The dean there, who I knew from my previous life,
Speaker 8: and I said, I've got this class I wish I
Speaker 8: had taken in business school that has a methodology that
Speaker 8: helps you figure out what to do with your life.
Speaker 8: And he said, well, let's try it as an experiment.
Speaker 2: Before we get to the essay. Yes, what reeks in
Speaker 2: this essay is academic rigidity. This is not some fancy
Speaker 2: person like Susie Welch who decided to get some cushy thing.
Speaker 2: There are some real work of often here. This is
Speaker 2: like legit, accountable academic research, isn't it.
Speaker 5: Yes, I'm proud to say that it is.
Speaker 8: I mean it was conducted by myself and my team,
Speaker 8: which includes all of the usual suspects of psychometricians and
Speaker 8: data analysts and so forth. So we the research, I
Speaker 8: think is I'm really proud of it.
Speaker 5: It's rock solid.
Speaker 2: Forty thousand people, seven thousand plus gen Z types. Yeah,
Speaker 2: when did the shock set in over your outcome? And
Speaker 2: describe there?
Speaker 8: Well, there's a bunch of you know, Look, I teach
Speaker 8: gen Z every single day, I mean every semester. Are
Speaker 8: hundreds of students, So my shock was perhaps less than
Speaker 8: the rest of the team because I'm in the room
Speaker 8: with them. Now, NYU students are not quite as representative
Speaker 8: of gen Z as outside of NYU. These are MBAs,
Speaker 8: so they tend to have a little bit more ger
Speaker 8: going on. I think that when we saw the two
Speaker 8: percent number which we can get to, we were all like,
Speaker 8: we checked it about thirty five timesoose.
Speaker 5: We thought that is too much in that number.
Speaker 8: So what we did is we have a tool called
Speaker 8: the Values Bridge, which we developed in our labs, and
Speaker 8: what it does is it ranks your values from one
Speaker 8: to sixteen, your personal values from one to sixteen. And
Speaker 8: so we now seventy five thousand people have taken this test,
Speaker 8: but at the time we did the research, it was
Speaker 8: forty five thousand people. And we were able to cut
Speaker 8: it by generation and we were able to see gen
Speaker 8: Z's values ranked from one to sixteen. And their number
Speaker 8: one value is something we call you ammonia, which encompasses
Speaker 8: self care, recreation, leisure, fun employment. You know, just so
Speaker 8: John Tucker, But I think we all know somebody who
Speaker 8: was in eutamonia is their number one value. Number two
Speaker 8: was authentic self expression voice as we call it, and
Speaker 8: number three was the desire to organize their life around
Speaker 8: helping other people, which is very admirable, I would say.
Speaker 8: But after I saw those top three values, I thought,
Speaker 8: I wonder what hiring managers are looking for, because my
Speaker 8: students are going out into the world to get hired.
Speaker 8: I have four adult children who are fighting out there
Speaker 8: in the world every day. So we did a separate
Speaker 8: study and we replicated it twice after that to say, okay,
Speaker 8: here the definitions of all the values hiring managers in
Speaker 8: knowledge industries mainly business, It was tech, it was accounting, finance,
Speaker 8: and so forth. The consulting what values are you looking for?
Speaker 5: And lo and behold.
Speaker 8: They were looking for the number one value of achievement,
Speaker 8: the desire to have success that other people can see.
Speaker 8: Number two was a desire for learning, stimulation and growth.
Speaker 8: And the third value was work centrism, the desire to
Speaker 8: work hard. And when you cross reference those two data sets,
Speaker 8: it ends up that it's just two percent of gen
Speaker 8: Z that have the values that hiring managers are looking for.
Speaker 5: It's interesting.
Speaker 4: I've for gen Z adjacent kind of offspring. They're all employed,
Speaker 4: but they tell me their first memories of my oldest
Speaker 4: were nine to eleven. That's their first memory. Yeah, and
Speaker 4: then they had, you know, the great financial crisis, right,
Speaker 4: their parents are impact that everybody's parents are impact. And
Speaker 4: then they had the pandemic. So they've had some stuff,
Speaker 4: you know, and I wonder have that influence is kind
Speaker 4: of how they look the view of the world.
Speaker 8: Yeah, I think they don't want to buy into a
Speaker 8: deal that their parents bought into that didn't work out
Speaker 8: for a lot of their parents.
Speaker 5: I mean, you can you can come up with.
Speaker 8: A hundred reasons why they have these values and they're
Speaker 8: entitled to them. I think that the problem is values
Speaker 8: have consequences, and so some of them also have affluence
Speaker 8: as a top value, and then they are very frustrated
Speaker 8: and frustrated to the point of kind of anger that
Speaker 8: they don't get the they don't get to have affluence
Speaker 8: also as an output. If you have the value of
Speaker 8: self care number one, so they can have their value.
Speaker 8: I don't you know how they can buy their values.
Speaker 8: I get it, there's a million reasons. I mean, their
Speaker 8: parents might be to blame. I mean, with the torrent
Speaker 8: of letters that came to the letters to the editor
Speaker 8: after the article ran, a lot of people had a
Speaker 8: lot of people they wanted to blame for this phenomenon.
Speaker 4: What does corporate America do here? Is corporate America adjust?
Speaker 7: You think that?
Speaker 2: Or do the students adjust or do they.
Speaker 4: Just find to find some common ground?
Speaker 5: Maybe this is a million dollar questions.
Speaker 8: So I've talked to a lot of business leaders since
Speaker 8: the piece came out, and so the companies with brand
Speaker 8: equity who can go higher the two percent are out
Speaker 8: looking for them earlier, and they one executive said to me,
Speaker 8: this is a cage match. We're willing to fight all right,
Speaker 8: they're going to go find that two percent. They're going
Speaker 8: to they know where they are, they're going to go
Speaker 8: get them earlier, and they're going to lock them down.
Speaker 8: And then other companies are going to have to figure
Speaker 8: out what to do about the fact that they're not
Speaker 8: going to be hiring young people who share their company values.
Speaker 8: And do they accommodate them or do they try to
Speaker 8: slowly move them over to a different.
Speaker 5: Way of thinking. It's very hard to talk people out
Speaker 5: of their values.
Speaker 4: However, Yeah, what do you find in the NBA program,
Speaker 4: Because you said those people kind of self select, they
Speaker 4: want to achieve, presumably, but again I would suspect you
Speaker 4: see some of that in your class.
Speaker 8: I mean, I see a preponderance of pneumonia, self care
Speaker 8: being a top value. I do have MBAs, okay and so,
Speaker 8: and in particular the nbas we're majoring in finance. Those
Speaker 8: they have a lot of the values that companies are
Speaker 8: looking for, and they're picked off pretty early.
Speaker 5: But I don't think this.
Speaker 8: Is true in colleges in general, and I think there's
Speaker 8: a few And this is what I mean is that
Speaker 8: companies are going to figure out where the two percent
Speaker 8: are and they're going to come get them and they're
Speaker 8: going to at them early.
Speaker 4: So how about for these these kids, though, I mean,
Speaker 4: do they recognize that maybe they are in fact different
Speaker 4: from certainly maybe their parents and maybe their grandparents and others,
Speaker 4: and they they're defiant and they're okay with them.
Speaker 8: No, they're defiant. I mean they're not just okay. They're
Speaker 8: they're they're defiant. They're like you, I mean what the
Speaker 8: letters from gen Z that I got, the emails were like, hey,
Speaker 8: shut up over there, lady, because you ruined the world.
Speaker 8: You boomer people ruined the world. And our response is this,
Speaker 8: and why would we want your values? Look what you
Speaker 8: did to us with climate change and terrorism and school shootings.
Speaker 5: You created this world? Why would we buy your version
Speaker 5: of events?
Speaker 2: Welcome all of you across America. It is my essay
Speaker 2: of the year. Susie Welch, professor at New York University.
Speaker 2: Where that's it's in the Wall Street journals. Created a
Speaker 2: firestorm of comment, including from the kids in my family
Speaker 2: as well. Susie, I had the honor of talking to
Speaker 2: a guy named Jack Welch and frankly on it fmled
Speaker 2: as well. Is the magic of the corridor from Pittsfield, Massachusetts,
Speaker 2: through Albany out the Mohawk River Valley every single nineteenth
Speaker 2: early twentieth century industrial X exercise out to the Great
Speaker 2: Eastman Kodec Company GE nineteen twelve invented a fine benefit
Speaker 2: pension plan. Those companies Carrier in Syracuse, Coodek, and Rochester.
Speaker 2: They took care of their employees. What you're going to
Speaker 2: hear in your classroom, what I hear every day is
Speaker 2: the loyalty has been broken because of the employers. What
Speaker 2: do employers need to do to increase that two percent
Speaker 2: to a much larger number.
Speaker 8: I think that they can't do what they would need
Speaker 8: to do, which is promise a long term employment. I mean,
Speaker 8: people feel loyal when they feel like, Okay, I'm investing
Speaker 8: my time in a company, and I'm going to be
Speaker 8: here in two or three years and my boss is
Speaker 8: going to be here.
Speaker 2: Disclosure Bloomberg LP every day. It's a privilege. I mean,
Speaker 2: that's where we come from, right, the three of us
Speaker 2: in this were right.
Speaker 8: Well, you probably a sense that, look, this company is
Speaker 8: healthy and it's thriving, and we're all going to be here,
Speaker 8: and I'm willing to give myself to this organization and
Speaker 8: to work the extra hours because we're all going to
Speaker 8: be here together. And but for most people going into organizations,
Speaker 8: there's this constant sense of fragility and we may not
Speaker 8: be here.
Speaker 5: I could be gone tomorrow.
Speaker 8: Why would you invest in yourself in that? And so
Speaker 8: that contract is pretty much over now. There are places
Speaker 8: I think JP Morgan, Goldman Zachs you can go and
Speaker 8: think I could try to build my whole career here.
Speaker 5: But there's not a lot of companies like that anymore.
Speaker 4: A lot of it is technology. There's so much technology
Speaker 4: out there, there's so much. Is that a net positive?
Speaker 4: Like do the kids in your class like that's a
Speaker 4: net positive? AI is probably all over your daily issues
Speaker 4: with your dealings with your students. Is that is technology
Speaker 4: with the hindsight a net positive or net negative?
Speaker 8: This is I don't know the answer. Sometimes I think
Speaker 8: it's a real net negative and what it's done to
Speaker 8: how much we talk to each other. But I will
Speaker 8: say that my students are terrified because of AI. Like right,
Speaker 8: AI is taking the job they would do AI. You know,
Speaker 8: a first year consultant or a first year analyst, they're
Speaker 8: like deer in headlights, like what jobs are left for us?
Speaker 8: How where are our entry points? That's why technology is scary.
Speaker 8: Now when it comes to using AI for.
Speaker 5: Homework, that's a totally what is your experience? What do
Speaker 5: you say?
Speaker 8: When it first came out, they were using it a lot,
Speaker 8: and then as teachers we got very savvy about how
Speaker 8: to phrase the homework, you know, from your personal experience.
Speaker 8: And then I look at my students, I say, you know,
Speaker 8: it's against the rules to use this on exams, and
Speaker 8: I'm asking you personally, for reasons of integrity, do not
Speaker 8: use AI.
Speaker 5: And generally they.
Speaker 2: Comb aerospace engineering At Boulder, I got through the Great
Speaker 2: Books English course off the cliff notes. Did you mean
Speaker 2: is there any difference between the cliff notes and AI?
Speaker 8: That's a good point. I think that AI does the
Speaker 8: thinking for them. With the cliff notes, usually you would
Speaker 8: then go into a classroom and you'd be forced to
Speaker 8: discuss issues. But AI, right, you know, does the thinking
Speaker 8: and the talking.
Speaker 2: Explain to me what I I also see, particularly what
Speaker 2: I'm giving speeches between the American gen z yeah and
Speaker 2: the hungry four is a stereotype the hungry for in
Speaker 2: a kid's recent immigrants. Second they're not buying the gen
Speaker 2: Z thing. They're focused and they're killing it in differential equations.
Speaker 2: It's stern, all right.
Speaker 8: So this is what I want to say to that,
Speaker 8: and I want to wait to the data comes in.
Speaker 8: But we are currently running the exact same study in
Speaker 8: three different places, one with first generation immigrants as part
Speaker 8: of the gen Z and then we are attempting in
Speaker 8: a collaboration with a different school to do it for
Speaker 8: this exact study in India, and I don't know if
Speaker 8: we'll be able to do it, but in China. And
Speaker 8: I think that has implications for American competitiveness because if
Speaker 8: it comes back, then in India eighty two percent of
Speaker 8: gen Z has hiring managers values.
Speaker 5: Right, that's worriesome that.
Speaker 2: Susie Welcher is my essay of the year. It's in
Speaker 2: the Wall Street Journal on gen Z. Thrilled could come
Speaker 2: in to celebrate the research of it at New York University,
Speaker 2: Paul finished it up. Please.
Speaker 4: I wonder if gen Z, because I live with them
Speaker 4: every day, will be if their values will change as
Speaker 4: they age and they say, ooh, I got a mortgage now, Okay, So.
Speaker 8: Values generally don't change, Okay, right, values are generally set
Speaker 8: by time we're twenty five years old, because a lot
Speaker 8: of things go into that too. What changes is how
Speaker 8: much we express them or repress them. So I think
Speaker 8: what will happen is gen Z will keep these values
Speaker 8: because unless you have a seismic event, your values generally
Speaker 8: stay the same your whole life. The seismic event may
Speaker 8: be not getting a job, and then therefore they'll repress
Speaker 8: certain values or they'll suppress them not happily.
Speaker 4: Do you see that as again, you're the one of
Speaker 4: the top NBA programs in the world.
Speaker 2: Here my first sponsor, first people to step up.
Speaker 4: My point is half of Global Wall Street came out
Speaker 4: of the Stern program.
Speaker 2: Everywhere.
Speaker 5: Absolutely, that's ever really true. I mean, as a student
Speaker 5: body changed there? Do you think my students who I.
Speaker 8: Don't want to make generalizations, but my students who are
Speaker 8: first generation generally are in that two percent, so they're
Speaker 8: not changing anything. They're like, they've got their parents' values
Speaker 8: and they're there to win, and they are clearly already there.
Speaker 8: I don't see the change yet right now, I just
Speaker 8: see a shock, you know, Okay, nobody doubts the research, right,
Speaker 8: they don't know what they're going to do.
Speaker 2: Do you give out c's? Okay, I just you know,
Speaker 2: just a vignette, folks. I had a privilege of Ruth
Speaker 2: Rebecca Stroic in mathematics one hundred million years ago. It
Speaker 2: was a curved grade, right like in England where it's
Speaker 2: much tougher. Could you give Professor Walch a Tito's and
Speaker 2: tang that's good morning? Drink here, Susie, Susie, I look
Speaker 2: at the great inflation and it's a joke. I mean,
Speaker 2: I killed myself for quality C in organic chemistry.
Speaker 5: Yes, I did too. I have I want you to
Speaker 5: know something. I have given a C.
Speaker 8: It's not a very common thing, but what the student
Speaker 8: maybe should have gotten was different than a C. But
Speaker 8: I gave a CE. It felt like a very brave
Speaker 8: and daring thing to do. I spoke to the academic
Speaker 8: dean beforehand, setting I'm giving a CI.
Speaker 2: No kidding me?
Speaker 8: Yeah, because look there's a there's great devlation everywhere. You know,
Speaker 8: I'd be lying to say there wasn't. Should we be
Speaker 8: giving c's the students to say, no, no, no, we
Speaker 8: got to get jobs.
Speaker 5: Please don't do that to us. But lawyers are not
Speaker 5: allowed to ask your.
Speaker 2: Gpsh no one in the control room has ever gotten
Speaker 2: a C. That's what. No, Let's go around the room.
Speaker 4: Business School back in the early nineties, you had twenty
Speaker 4: classes and if you passed all twenty, they stamped your
Speaker 4: passport and I could go back to a Wall Street
Speaker 4: at twice the pay. So though, saying was twenty p's
Speaker 4: equals sixty G.
Speaker 5: My grades mattered.
Speaker 8: My grades at Harvard Busines School, my grades at Harvard,
Speaker 8: they both mattered a lot. And I worked so hard,
Speaker 8: and I did ask do they work the.
Speaker 2: Same hard today that you lived at HBS.
Speaker 5: I don't know. I don't know because I'm not.
Speaker 2: I've asked these kids get through Michael.
Speaker 8: Porter at HBS right now. I got to believe it
Speaker 8: they can. I mean, I don't know because I'm not
Speaker 8: in that classroom. I ask my friends there.
Speaker 4: Here's what my friend, this Bloomberg LP is managed by
Speaker 4: twenty and thirty somethings, So we're the outliers.
Speaker 7: Yeah, and the.
Speaker 4: Smartest people running these businesses are to me kids. But
Speaker 4: they're so smart, they're so driven, they're so creative. I
Speaker 4: hired a bunch of them from boom Bloombir Intelligence.
Speaker 2: Yes, yeah, I'm not.
Speaker 4: I'm fine. I'm comfortable with this.
Speaker 5: The kids are all right.
Speaker 2: The kids are all right. One final question of twenty seconds,
Speaker 2: how much hate mail have you gotten?
Speaker 5: It's a good portion of it. I have to say.
Speaker 5: You know, people always like to kill the messenger.
Speaker 8: And you know, it's as if I stood up and
Speaker 8: said gen Z is unemployable at me and they did.
Speaker 2: What you've done is phenomenal. Susie Welch, thank you so much.
Speaker 2: My essay of the year is gen Z Unemployed.
Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify,
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