Speaker 1: This is Bloomberg Wall Street Week. What's the state of
Speaker 1: corporate governance? The deficit is a real issue to use.
Speaker 1: Economy continues to send mixed signals, the financial stories that
Speaker 1: cheap our world fed action to con concerns over dollar
Speaker 1: liquidity and encouraging China data. The five hundred wealthiest people
Speaker 1: in the world. Through the eyes of the most influential
Speaker 1: voices Larry Summers, the former Treasury Secretary, star Ward CEO,
Speaker 1: Kevin Johnson, sec Chairman J Clayton. Bloomberg wool Street Week
Speaker 1: with David Weston from Bloomberg Radio. United States got a
Speaker 1: new president this week in an inauguration unlike any other,
Speaker 1: with twenty five thousand National Guard troops called in prosecurity
Speaker 1: and hardly anyone in the audience kept away because of COVID.
Speaker 1: But it was more than just a change in administration.
Speaker 1: It was a change in philosophy and tone and approach.
Speaker 1: This is Bloomberg Wall Street Week. I'm David Weston, Kennedy, London, Baines, Johnston,
Speaker 1: blue Son, George Walker Bush to solemnly that I will
Speaker 1: execute the office of President to the United States faithfully,
Speaker 1: that I will execute the faithfully. The President officer President
Speaker 1: of the United States, faithfully, so help me go. Donald
Speaker 1: John Trump, do solemnly swear that I will faithfully execute
Speaker 1: that I will faithfully execute the office of President of
Speaker 1: the United States, the office of President of the United States.
Speaker 1: That was a glimpse of inaugurations past. This inauguration was
Speaker 1: like no other, without the hundreds of thousands of people
Speaker 1: on the mall because of COVID nineteen, but with thousand
Speaker 1: National guardsmen occupying the capital to prevent a repeat of
Speaker 1: the riots from two weeks before. It did share with
Speaker 1: earlier inaugurations the attention of the entire world. And Richard has,
Speaker 1: President of the Council and Form Relations, thinks President Biden
Speaker 1: used it to start to rebuild alliance as it had
Speaker 1: suffered under his predecessor. At the back of every allies
Speaker 1: head is the concern over whether this divided country can
Speaker 1: be there for them, and also what comes in four years.
Speaker 1: And to put it bluntly, how are they to understand
Speaker 1: where America is in the ark of its history, where
Speaker 1: the last four years the aberration and this is now
Speaker 1: the restoration of the normal, or will it turn out
Speaker 1: that the last four years were a harbinger? Will have
Speaker 1: four years of Joe Biden, but then we go then
Speaker 1: we're going to return to some version of Trump is
Speaker 1: um with without demand. And that's the question mark that
Speaker 1: Mr Trump planted around the world, which I wonder if
Speaker 1: there's one place in which we shouldn't really expect too
Speaker 1: much of a deviation, because we did here in the
Speaker 1: confirmation testament from Tony Blincoln, and he seemed to indicate
Speaker 1: maybe they would be just as tough on China as
Speaker 1: President Trump had been. And by the way, Janet Yellen,
Speaker 1: the nominee for Treasury, also had some harsh things to
Speaker 1: say about China. Oh, I think there'll be more consistency
Speaker 1: than than French there. David, You're exactly right. I think
Speaker 1: it reflects a shift in American thinking about China. It's
Speaker 1: a bipartisanship, much more critical, much more skeptical. But this
Speaker 1: is a very different China. This is sij and things China.
Speaker 1: It's more repressive at home economically, it's not evolved in
Speaker 1: ways that people expected or hoped for. That's stronger militarily,
Speaker 1: it's much more assertive diplomatically. So I think you're going
Speaker 1: to get You're going to get a much more pushback
Speaker 1: from the United States. Richard, this is Rick Davis and Washington,
Speaker 1: and I wanted to get back to sort of the
Speaker 1: global point of view, because you're right. I mean, I've
Speaker 1: spent a lot of time traveling around the world and
Speaker 1: where there's a lot of questions, but heads of state
Speaker 1: over uh sort of what is the arc of the US?
Speaker 1: And and obviously I think Biden leaned into that. President
Speaker 1: Biden leaned into that by talking about re engagement and
Speaker 1: and and by the power of our example I think
Speaker 1: was his quote. And and what would those examples be
Speaker 1: in the near term? I mean, what would you like
Speaker 1: to see this administration do, either through his cabinet, members
Speaker 1: of the president or the vice president, to actually try
Speaker 1: to get back in the game and re establish that
Speaker 1: kind of global trust. Well, the biggest thing would be
Speaker 1: competence and progress versus COVID nineteen might be the single
Speaker 1: most important national security statement the United States could make.
Speaker 1: I think rebooting to some extent the American economy, American
Speaker 1: economic growth would be welcome. The demonstration that our politics,
Speaker 1: our institutions can hold you will have the United States
Speaker 1: re enter various international arrangements. We left the Paris Climate
Speaker 1: Accords the World Health Organization, and there will be a
Speaker 1: big emphasis on simply talking to allies, to consultations, and
Speaker 1: that suggests multilateralism, which which basically puts an end to
Speaker 1: two things. It puts an end to America acting on
Speaker 1: its own in the world, which was something that Mr
Speaker 1: Trump stood for. And it also puts an end to
Speaker 1: the bias towards isolationism. So this will be an administration
Speaker 1: that lean into diplomacy and foreign policy, and it will
Speaker 1: lean into a collective approach, and I think for the
Speaker 1: most part that will be welcome. So Richard Dubar Hacket
Speaker 1: expression from an old car commercial, as I recall, this
Speaker 1: ain't your father's world anymore. I mean, what gave rise
Speaker 1: to the post World War two structures doesn't obtain anymore.
Speaker 1: So it's not just a matter of going backward, right,
Speaker 1: it has to go forward. Is there a vision? Does
Speaker 1: the Biden camp have a vision of how we can
Speaker 1: rebuild better? That's a great question, David. The answer is
Speaker 1: not yet. So I think the initial thrust of the
Speaker 1: administration would be what I would describe as repair things
Speaker 1: we've just been talking about, to stabilize the home front,
Speaker 1: to get the United States back on the playing field
Speaker 1: of international organizations and diplomacy to revive alliances. And then
Speaker 1: you've got the heavy lifting. What will the United States
Speaker 1: do visa v Russia and China to manage those great
Speaker 1: power rivals? What will we actually do on climate? Can
Speaker 1: we structure the digital space, which is clearly essentially the
Speaker 1: wild West? What can we do so the world is
Speaker 1: better prepared for the next pandemic and is better able
Speaker 1: to deal with the existing one. So I think that's
Speaker 1: you know, there's a little bit of time there. That's
Speaker 1: why you gotta get everybody up to speed in their jobs,
Speaker 1: got to get the inter agency system working. But I
Speaker 1: think the the idea of innovation, of moving forward, We're
Speaker 1: not going to know that for a few months, but
Speaker 1: that'll be the ultimate test of this administration's foreign policy.
Speaker 1: That was Richard Hayes, president of the Council on Foreign
Speaker 1: Relations and author of the best selling book The World
Speaker 1: of Brief History. Coming up. What the Biden administration means
Speaker 1: for the economy and for business. That's next on Wall
Speaker 1: Street Week on Bloomberg. This is Bloomberg Wall Street Week
Speaker 1: with David Weston from Bloomberg Radio. President Biden's pick for
Speaker 1: Trayasury Secretary, Janet Yellen was one of the first of
Speaker 1: his cabinet nominees to have a confirmation hearing. In her
Speaker 1: three hour testimony to the Senate Finance Committee, the former
Speaker 1: FED Chair pressed President Biden's one point nine trillion dollar
Speaker 1: fiscal stimulus package as essential to fight the economic harm
Speaker 1: being done by the coronavirus. Neither the President, Alex nor
Speaker 1: I proposed this release relief package without an appreciation for
Speaker 1: the country's different and economists don't always agree, but I
Speaker 1: think there is a consensus now. Without further action, we
Speaker 1: risk a longer and more painful recession now and longer
Speaker 1: term scarring of the economy later. Members of the Committee,
Speaker 1: these are very ambitious goals, and I know we will
Speaker 1: need to work together. Yell and support for the President's
Speaker 1: stimulus plan met some resistance from Republican lawmakers, who expressed
Speaker 1: concern that the level of spending on top of what
Speaker 1: has come already could hurt rather than help. Here's South
Speaker 1: Carolina Senator Tim Scott. But the one point nine trade
Speaker 1: dollar package that has been presented to us is a
Speaker 1: package that focuses on some priorities that I think will
Speaker 1: actually hurt our economy as much as it would improve
Speaker 1: our economy. Yelling also showed some potential continuity with some
Speaker 1: Trump administration policies, particularly in her tough stance on China,
Speaker 1: which she called the United states most important strategic competitor.
Speaker 1: We need to take on China's abusive, unfair, and illegal practices.
Speaker 1: China's undercutting American companies by dumping products, erecting trade barriers,
Speaker 1: and giving illegal subsidies to corporations. But the Treasury Secretary
Speaker 1: nominee did not condone Trump administration suggestions that the country
Speaker 1: might benefit from a weaker dollar, saying that should be
Speaker 1: left strictly to the markets. I believe in market determined
Speaker 1: exchange rates. The value of the US dollar and other
Speaker 1: currencies should be determined by markets. It's been only a
Speaker 1: dozen years since Congress had to bail out the economy
Speaker 1: from the Great Financial Crisis, and Sheila Bear was a
Speaker 1: key official in that rescue effort as head of the
Speaker 1: Federal Deposit Insurance Corporation. She says there will come a
Speaker 1: time to be frugal, but it is not now. Well.
Speaker 1: I didn't think she's right. You need to go big
Speaker 1: right now. The country, the economy is still in serious trouble,
Speaker 1: and once again the people are beetting hit the hardest
Speaker 1: or low low income, low middle income families and the
Speaker 1: lion's share of the the assistance. You've got supplemental unemployment,
Speaker 1: you've got direct household payments. I think that's money well
Speaker 1: targeted and needs to be spent. Families need help, They're
Speaker 1: still struggling, and so I agree with her. So targeting,
Speaker 1: we talked about targeting A lives of Republicans talk about it.
Speaker 1: We never seem to quite get there. I mean, it's
Speaker 1: a practical matter. Even the PPE and things like that,
Speaker 1: it appears that it's going to the top and at
Speaker 1: the bottom. What can we do better to make sure
Speaker 1: it let's get to the people who needed well. I
Speaker 1: think the shift of fiscal away from monetary policy is
Speaker 1: hugely important, notably as one point nine trillion does not
Speaker 1: include additional money to you know, backstop the Fed of
Speaker 1: its interventions. The Fed just not equipped to get money
Speaker 1: to main street. They put money into financial markets. You know,
Speaker 1: wall streets were doing really really well since the Great
Speaker 1: Financial Crisis. Not so much for that lower eighty percent.
Speaker 1: Really that the people who work for a living and
Speaker 1: results rely on labor income, non investment income to live.
Speaker 1: So just the shifting back to fiscal that's a much
Speaker 1: better approach to get money actually in the hands of families.
Speaker 1: And you know, direct payments is a very efficient way
Speaker 1: to get money out quickly, which is really what we
Speaker 1: need to do. You know, I need a lot of bureaucracy,
Speaker 1: there's no you know, there's all this debate about whether
Speaker 1: people earn it or not, or deserve it. You know,
Speaker 1: I kind of look at all the trades that have
Speaker 1: gone to Wall Street and I kind of have disdained
Speaker 1: for that. The lower eighty percent of the population, which
Speaker 1: is well, you know, which is where these payments will reach,
Speaker 1: they've not done so well all right. It took them
Speaker 1: ten years to recover. They were finally just catching up,
Speaker 1: and we have this hit. So I think there's some
Speaker 1: inequities of the past being addressed with these payments as well.
Speaker 1: But at least we know where the money is going.
Speaker 1: It's going to households. They can spend it on consumption,
Speaker 1: they can pay rent, they can pay their bills, they
Speaker 1: can save some of it, they can budgers their emergency savings. Again,
Speaker 1: I think that's money, well spent. So one of the
Speaker 1: things that this pandemic is really exposed is some of
Speaker 1: the racial and economic injustice across the country. The black
Speaker 1: communities and the Hispanic communities and for that matter, the
Speaker 1: Native American communities have really been particularly hard hit. Is
Speaker 1: there anything that either the FED or the Congress can
Speaker 1: do to really readjust that, to really target the assistance
Speaker 1: for the people that really needed that, is to say,
Speaker 1: the minority communities. Yeah. So there's a lot of structural
Speaker 1: bias in our system. We need to, you know, fundamentally
Speaker 1: rethink policy. So the way for instance, banking my my
Speaker 1: neck of the woods, the way we think about risk
Speaker 1: and risk weate uh, you know, bank capital requirements, there's
Speaker 1: a lot out of racial bias built into the assumptions
Speaker 1: that we use. So I think that's another area where
Speaker 1: I hope Janet Ellen will take a fresh look. I
Speaker 1: hope to Fend and another bank regulators will take a
Speaker 1: fresh look how we think about credit. I think there's
Speaker 1: there's a lot of systemic bias. And there's one example
Speaker 1: of where policies generally can have um, you know, things
Speaker 1: that were not even where I should be aware of
Speaker 1: but have not been, so that in addition to them
Speaker 1: just focusing on low income families where unfortunately minorities are
Speaker 1: disproportionately represented. I fear we're gonna have it. You know,
Speaker 1: we're going to be worsening our structural and employment problem.
Speaker 1: You know, labor force participation is going again, job retraining,
Speaker 1: job growth, wage growth, job retraining. I'm I'm for you know,
Speaker 1: some kind of universal basic income to to provide some
Speaker 1: type of you know, based support for working families when
Speaker 1: we get through cycles like this that got something automatically
Speaker 1: to fault back on. There are a whole host of things.
Speaker 1: You know, let's face it, working families have been work
Speaker 1: by both parties for way too long. And so I'm
Speaker 1: hoping that that Mr Biden and Janet Yelling and others
Speaker 1: of his team are really going to be refocused on this,
Speaker 1: and I think they are. So. One of the things
Speaker 1: that you focused on during the Great Financial Crisis were
Speaker 1: really the safety and security of our financial system. As
Speaker 1: we go through this crisis and you look from the outside, now,
Speaker 1: do you see places that you're concerned about the financial system?
Speaker 1: I do. I think the the unbanked sector, excuse meb
Speaker 1: the non bank sector is a continuing source of turmoil.
Speaker 1: In last March, we had market disruptions, same suspects, right,
Speaker 1: money market funds, highly leveraged chedge funds, leveraged corporate et
Speaker 1: f s. The FAT again had to come in and
Speaker 1: provide a lot of quidity, a lot of bailouts. Whether
Speaker 1: that was right or not, I don't know. I just
Speaker 1: I do know that when we resort to bailouts as
Speaker 1: opposed to using regulation to prevent these unstable structures to
Speaker 1: begin with, we just reinforced risky bad behavior. So we
Speaker 1: need a fisher cut bait. Stop the bailouts, let them
Speaker 1: go down, let the market funish them, new away with them,
Speaker 1: or start providing some meaningful potential supervision to present to
Speaker 1: prevent these unstable structures from proliferating. Maybe some combination of both.
Speaker 1: But the end bank sector, excuse me, think of the
Speaker 1: m bank non bank sector is definitely an area of
Speaker 1: continued financial fragility. And I think again, Janet Yellen is
Speaker 1: chair of the Financial Stability Oversight Council, which has the authority,
Speaker 1: the cross cutting regulatory authority to deal with this. This
Speaker 1: I hope will be a high priority for her as well.
Speaker 1: That was Sheila Bear, former fdi C chair coming up
Speaker 1: to the President, Biden wants to increase the federal minimum
Speaker 1: wage to fifteen dollars an hour. But what would that
Speaker 1: do for the economy and what's it got to do
Speaker 1: with the pandemic? We asked contributors Larry Summers of Harvard
Speaker 1: and Glenn Hubbard of Columbia. That's next on Wall Street
Speaker 1: Week on Bloomberg. This is Bloomberg Wall Street Week with
Speaker 1: David Weston from Bloomberg Brady. President Biden wants to raise
Speaker 1: the federal minimum wage to fifteen dollars an hour, a
Speaker 1: measure he included in his day one priority of passing
Speaker 1: a stimulus bill to support the economy. People on both
Speaker 1: parties now recognized it's time to raise the minimum wage
Speaker 1: so hard working people are in at least fifteen dollars
Speaker 1: an hour minimum. A move to fifteen dollars an hour
Speaker 1: would be more than double the current minimum wage of
Speaker 1: seven dollars five cents, which hasn't been changed since two
Speaker 1: thousand nine. If passed, it would provide a pay hike
Speaker 1: to nearly four hundred thousand Americans who are earning minimum wage.
Speaker 1: Here's ever COREPS co chairman and co CEO Ralph Schlastein.
Speaker 1: I mean a fifteen minimum wage basically gets you to
Speaker 1: the poverty line for a family of four. Until now,
Speaker 1: it's been the states leading the charge in raising minimum wages,
Speaker 1: with twenty nine states and the District of Columbia already
Speaker 1: taking action. Here's former Massachusetts Daval Patrick. All of the
Speaker 1: evidence historically is that the economy grows after the minimum
Speaker 1: wage has been raised. It is not the burden that
Speaker 1: it is, and that it has been sort of told.
Speaker 1: Critics say that raising the minimum wage could come at
Speaker 1: the cost of millions of jobs. Like South Carolina Senator
Speaker 1: Tim Scott. The one thing that even the Congressional Budget
Speaker 1: Office recognizes is that by increasing the minimum wage to
Speaker 1: fifteen an hour, it could shut her somewhere around three
Speaker 1: point seven million jobs on the high end, a minimum
Speaker 1: of one point three million jobs in our economy. One
Speaker 1: of those critics is Walmart CEO Doug McMillan. At a
Speaker 1: business roundtable event this week, the CEO agreed that seven
Speaker 1: dollars cents an hour is too low, but called for
Speaker 1: a higher wage that takes into account geographic differences and
Speaker 1: small businesses. Ralph Schlastin again well I think that the
Speaker 1: CEO of Walmart is UH making a sensible statement that
Speaker 1: one size fits all. UH isn't UH perfect. Some CEOs,
Speaker 1: like some states are not waiting for the federal government
Speaker 1: to raise wages for workers. No matter what happens on
Speaker 1: the government level and federal level or the state level.
Speaker 1: We have companies and I see the signs and I
Speaker 1: see companies are coming forward. UM, we have to do
Speaker 1: what's the right, which is bringing the minimum which at
Speaker 1: least fifteen dollars to stop. That was Chobani CEO Hamdi Ulukaya.
Speaker 1: Regional differences in the cost of living and the timing
Speaker 1: of a potential hike in the minimum wage raises concerns
Speaker 1: with some economists. Here's Doug holtz Ecan, the president of
Speaker 1: American Action Forum. I don't think it belongs in here.
Speaker 1: It's it's not stimulus, it's not relief. It gets in
Speaker 1: the way of recovery and the labor market. UH, and
Speaker 1: so I expect that to drop out. Our roundtable reaction
Speaker 1: to arise in the norum wage were welcome now. Walter
Speaker 1: we contributors Larry Summers, who served as Treasury Secretary under
Speaker 1: President Clinton and then as Director of the National Economic
Speaker 1: Council under President Obama and Glenn Hubbard, who chaired the
Speaker 1: Council of Economic Advisors under President George W. Bush. Welcome
Speaker 1: to both of you. Larry miss Let's start with you.
Speaker 1: What would be the effects on the economy overall of
Speaker 1: arise to fifteen dollars an hour from the minimum wage?
Speaker 1: I read from the CBO from the Congressional Wedro office
Speaker 1: that on the one hand, you'd lose one point three
Speaker 1: million jobs. On the other hand, you take a lot
Speaker 1: of people out of poverty. I think you would take
Speaker 1: a lot of people out of poverty. I think I'm balanced.
Speaker 1: It's probably positive. I worry less about job destruction, and
Speaker 1: I worry that employers will stop paying benefits when they
Speaker 1: have to pay higher wages. I worried that employers will
Speaker 1: shift away from the most vulnerable and inexperienced workers towards
Speaker 1: uh workers with more experience and more education. And so
Speaker 1: I think I'd probably prefer to see a more gradual
Speaker 1: approach and a more differentiated approach to a major minimum
Speaker 1: wage increase. But if we're gonna have a major if
Speaker 1: we're gonna have a minimum the question is whether to
Speaker 1: do this or to do nothing. I would unbalance favor
Speaker 1: doing this. So Glenn, is there a third alternative to
Speaker 1: address perhaps some of what Larry is concerned about. I've
Speaker 1: heard it suggested that the problem with the minimum wages
Speaker 1: essentially acts as attacks on the employer. A better way
Speaker 1: would be to get money into the hands of people
Speaker 1: who needed through increasing the earned income tax credit, because
Speaker 1: that's attacks on all of us that shared equally. It
Speaker 1: doesn't penalize you for employing people. Well, I think that's right.
Speaker 1: I think President Biden got it right when he said
Speaker 1: people who worked forty hours a week should not be poor.
Speaker 1: That's a moral statement, it's an economic statement, but it's
Speaker 1: not a comment on the minimum wage per se. I
Speaker 1: would think that the e I T C and increased,
Speaker 1: particularly for childless workers who have not received much work
Speaker 1: support from the I T C. And President Biden has
Speaker 1: talked about that, and also big government support for training
Speaker 1: for community colleges. These are the kinds of things that
Speaker 1: could help raise the wages of low wage workers. So
Speaker 1: a gradual increase in the minimum wage may on balance
Speaker 1: be fine if it's gradual and not and not all
Speaker 1: the way so fast. But I think of building bridges
Speaker 1: to the future for workers is a much better idea.
Speaker 1: That's Glenn Hubbard of Columbia and Larry Summers of Harvard
Speaker 1: coming up. Our conversation on the new Biden administration continues.
Speaker 1: That's next on Wall Street Week on Bloomberg. This is
Speaker 1: Bloomberg Wall Street Week with David Weston from Bloomberg Radio.
Speaker 1: European Central Bank met this week and although I didn't
Speaker 1: surprise anyone and what it did, President Christine Lagard did
Speaker 1: warn the possibility of a double dip recession in Europe
Speaker 1: as a result of further shutdowns triggered by the pandemic
Speaker 1: and reinforcing amount of Laguard's warning, where p m I
Speaker 1: numbers showing further contracting and Yurozone and UK business activity
Speaker 1: in the month of January. We turn once again to
Speaker 1: our roundtable for a reaction to what we're seeing and
Speaker 1: continued European economics offteness. So Glenn, I'll start with you.
Speaker 1: Is there anything that Madame Legard, for that matter, fiscally
Speaker 1: they can do over there? Is this all a matter
Speaker 1: of vaccinating people? Well, it's first and foremost of public
Speaker 1: health crisis, and vaccination is important and all of the
Speaker 1: prophylactics to fight the spread of the disease. But there
Speaker 1: are fiscal policy actions that need to be taken to
Speaker 1: sustain workers, to sustain firms during this period, so that
Speaker 1: you don't have a K shaped recovery. Is the vaccine
Speaker 1: finally comes aboard. So I think for Europe, fiscal policy
Speaker 1: is going to be more important than just asking President
Speaker 1: Legard to do her jo. So so Larry's talking about
Speaker 1: how K shape recovery, I wonder if there's a different
Speaker 1: kind of case shape recovery if you take a look
Speaker 1: at China. China seems to be rebounding quite nicely, if
Speaker 1: we can say that about the pandemic. Europe is really struggling.
Speaker 1: Maybe the US is somewhere in between. Are we seeing
Speaker 1: early divergence among the nations right now in recovering their
Speaker 1: economies from the pandemic? I think we are, David, And
Speaker 1: I think ultimately what historians may notice out of this
Speaker 1: moment is how much better Asia did than the West did.
Speaker 1: And they order of magnitude, and I mean that literally
Speaker 1: by more than a factor of ten, in some cases,
Speaker 1: by more than a factor of hundred differences in performance
Speaker 1: between Asia. Large parts of Asia and large parts of
Speaker 1: the West. That's something that goes beyond Donald Trump versus
Speaker 1: somebody else as the head of state. And I think
Speaker 1: that's something that's going to get a lot of attention
Speaker 1: going forward. And I think that it's why, in addition
Speaker 1: to the human issues, um, what President Biden is able
Speaker 1: to do in the next three months is going to
Speaker 1: be so profoundly important. If there was ever a test
Speaker 1: of whether government by the people was effectively government for
Speaker 1: the people, it's in the ability to protect people from
Speaker 1: a pandemic. And right now democracies of the United States
Speaker 1: and Europe are not looking particularly good relative to more
Speaker 1: authoritarian UH States, and I think that's a very profound
Speaker 1: question going forward. Glenn, do you agree with that, and
Speaker 1: if so, do you have a hypothesis about why there
Speaker 1: is that divergence. Well, I think it differs across countries.
Speaker 1: But I think Larry is right. We do need to
Speaker 1: make sure that democracy is capable of coping with these major,
Speaker 1: major mobilization type challenges we have before, and we can
Speaker 1: do it again. I would also worry about emerging economies.
Speaker 1: We've been talking about industrial economies Europe, China, United States,
Speaker 1: but the emerging economies have huge problems, both in public
Speaker 1: health and in economics, and require our attention to Okay,
Speaker 1: we wrap up every week with a quick Summer says
Speaker 1: around here with Larry Summers about what he thinks about
Speaker 1: various things. Let's start with a hundred vaccinations in a
Speaker 1: hundred days, which is the President Biden is committed to.
Speaker 1: It's not gonna happen or not, Larry, He's gonna overperform
Speaker 1: significantly on that promise. It's we're almost out a million
Speaker 1: a day, and there's every reason to believe we can
Speaker 1: ramp up in the future. We will do substantially better
Speaker 1: than a hundred million vaccines in a hundred days. Let's
Speaker 1: talk about the U. S treasuries. We heard from Janet
Speaker 1: yelling again at our confirmation hearing they're considering at least
Speaker 1: the duration are we're gonna have a fifty year US
Speaker 1: Treasury bond before the Biden administration is over. That's a
Speaker 1: long time. We're not going to have it anytime soon,
Speaker 1: because Janet's gonna learn what all her predecessors who thought
Speaker 1: about this learned that doing that would be a major
Speaker 1: gift to all the fixed income trading desks at all
Speaker 1: the head funds at the expense of taxpayers. Given the
Speaker 1: way it's likely to be priced, it would turn out
Speaker 1: to be a major set up for arbitrage opportunity. So
Speaker 1: it won't happen anytime soon. And finally, Larry, we had
Speaker 1: a remarkable to r at the very end of the week,
Speaker 1: the company named game Stop that they actually had to
Speaker 1: stop trading twice during the day. It shot way up,
Speaker 1: I mean way way up. And apparently it's because there
Speaker 1: was an army of Reddit users who all marshaled together
Speaker 1: and go against a short seller, and basically I couldn't
Speaker 1: see any change in the underlying company at all. Uh
Speaker 1: As social media are gonna really do damage not only
Speaker 1: to our political system but to our market system. I
Speaker 1: suspect our market system will survive social media, but God,
Speaker 1: this points up the need for as we used to
Speaker 1: say in the Treasury in the nineties, a regulatory system
Speaker 1: is modern as the markets, and there's always uh a
Speaker 1: need to regulate bucket shops and to regulate various ways
Speaker 1: and would retail investors are taking advantage of And we're
Speaker 1: in a situation where there are where it's an old
Speaker 1: theme and an old story, but there are new ways
Speaker 1: of doing it. So I'm glad that we're having an
Speaker 1: administration and a set of financial regulators. I was glad
Speaker 1: about the appointment of people like Michael Barr at the
Speaker 1: Controller of the Currency UM that will Gary Ginstler at
Speaker 1: the SEC, that UH will be committed to regulating where
Speaker 1: regulation is necessary. But Larry briefly here at the end,
Speaker 1: I must say, I'm surprised. I thought if there was
Speaker 1: gonna be a regulatory body in sarch of social media,
Speaker 1: it would be the FTC. It could be maybe Department
Speaker 1: of Justice, than I trust, maybe it'll be the SEC
Speaker 1: actually has to regulate social media. Look, I think there
Speaker 1: are a whole set of issues that are outside my
Speaker 1: expertise on you know, inflammatory tweets, on monopoly power in
Speaker 1: social media platforms, in privacy issues that are the FTCs
Speaker 1: UH remit. But when I look at things like what
Speaker 1: happened it read it, that's a kind of dysfunctional market,
Speaker 1: and I think that's something the SECS get to have
Speaker 1: to UH pay a lot of attention to, just as day,
Speaker 1: just as there were a whole set of practices that
Speaker 1: produced balloon bubble stocks prior to the nineteen Thank you
Speaker 1: so much to Wall Street. We continues Larry Summers of
Speaker 1: Harvard and also Glenn Hubbard of Columbia. It's time now
Speaker 1: for a look ahead on global Wall Street, David. Next
Speaker 1: week brings us a virtual Davos, and we will hear
Speaker 1: from more government and corporate leaders on the global outlook
Speaker 1: with Joe Biden in the White House. And here in Asia,
Speaker 1: we have a busy week of Ernie's ahead. From Japan,
Speaker 1: more than four hundred companies listed on the Topics report,
Speaker 1: including prominent tech players Spanic and Tokyo Electron, along with
Speaker 1: Tokyo Disney operator Oriental Land. South Korea's lineup includes Senday
Speaker 1: Motors and Tesla battery supplier LG Chemical. Will also get
Speaker 1: results from India's largest lender, the State Bank of India,
Speaker 1: which will give us clues into the recovery ahead of
Speaker 1: the Indian parliament kicking off its budget session on Friday,
Speaker 1: Danny thanks Sophie. In Europe, there are increasing fears about
Speaker 1: a double dip recession. We got data on Friday that
Speaker 1: showed the economy in the Euro Area is slipping further
Speaker 1: into a contraction. You have more lockdowns hurting the services
Speaker 1: sector and at the same time regisit increasing delivery delays
Speaker 1: hurting the manufacturing sector. How the government responds to this
Speaker 1: over the next week is going to be crucial, and
Speaker 1: their plans on how much longer economies will continue to
Speaker 1: be lockdown. Scarlett Thanks Danny. Week two of Joe Biden's presidency,
Speaker 1: they bring more executive orders and updates on his one
Speaker 1: point nine trillion dollar COVID relief plan. The pandemic has
Speaker 1: generally been a big positive for tech, and their latest
Speaker 1: earning support will likely show the spoil industry giants Apple, Facebook,
Speaker 1: and Microsoft all expected to indicate that the trend will
Speaker 1: continue well into The Federal Reserve holds a two day meeting.
Speaker 1: Chairman j Powell expected to stress the need to wait
Speaker 1: and see on how physical support and the vaccine rollout
Speaker 1: shape up before making any changes to its outlook. And
Speaker 1: we get an initial read on fourth quarter economic growth
Speaker 1: with GDP probably slowing to a four point three percent rate.
Speaker 1: David BECKAVERDEO thanks to Sophie, Danny and Scarlett. Finally, one
Speaker 1: more thought. It's not easy being president. You have the
Speaker 1: weight of the free world on your shoulders. You have
Speaker 1: a pesky Congress that gives you a tough time over
Speaker 1: just about anything you want to do, and you need
Speaker 1: to protect the country from possible attack at any time
Speaker 1: of day or of night. But the job is not
Speaker 1: without its perks. You get a big house, you get
Speaker 1: a seven forty seven is your personal airplane, and a
Speaker 1: limo so big that they call it the Beast. And
Speaker 1: of course you do have four million employees committed to
Speaker 1: giving you anything you want. Right, Well, not so fast.
Speaker 1: It turns out that all those people charged with keeping
Speaker 1: you safe have their own ideas about what you can
Speaker 1: and cannot do. So when President Barack Obama took office,
Speaker 1: he fought for two months to keep his BlackBerry. Sure.
Speaker 1: He ultimately got his way, but only after a two
Speaker 1: month battle. And when he got his precious BlackBerry back,
Speaker 1: he could only reach a small circle of people, and
Speaker 1: even those couldn't forward any of his messages. And now
Speaker 1: it's President Biden's turn. His simple pleasure is getting on
Speaker 1: his peloton and working out every morning to get the
Speaker 1: day started right. But there is a problem. The peloton
Speaker 1: connects to the internet, letting you get inspiration from your
Speaker 1: favorite trainer and compete with others on the leaderboard. Well,
Speaker 1: the secret service is none too happy with the idea
Speaker 1: of foreign adversaries getting access into the new president's innermost sanctum,
Speaker 1: not to mention his exercise routeam. I'm sure President Biden
Speaker 1: will get some version of his beloved peloton back at
Speaker 1: some point point, but we shall all take heart that
Speaker 1: even though we can't protect untold government computer assistance from
Speaker 1: Russian hackers, we can make sure they can't get at
Speaker 1: one lonely peloton now located at Pennsylvania Avenue. That does it.
Speaker 1: For this episode of Wall Street Week, I'm David Weston.
Speaker 1: This is Bloomberg. See you next week. One of three
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