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Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom keene Jaily.

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Speaker 1: We bring you insight from the best in economics, finance, investment,

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Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

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Speaker 1: Bloomberg dot Com, and of course on the Bloomberg Right now,

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Speaker 1: what we're gonna do, John and Lisa is do what

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Speaker 1: we've been doing on surveillance since February and certainly from

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Speaker 1: March and it has talked to medical professionals, experts on

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Speaker 1: the pandemic, on virology about what is actually going on.

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Speaker 1: Now we can do that with a gentle lady out

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Speaker 1: of Atrium Health of the Carolinas and this is of

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Speaker 1: course Atrium Health and the claims Sanger Heart and Vascular Institute,

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Speaker 1: among others. Katie Passer ready is with infection prevention there

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Speaker 1: and of course out of the Johns Hopkins combine. Katie,

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Speaker 1: you received the vaccination and the treatment that you received.

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Speaker 1: Was there any treatment or delay or preparation for possible

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Speaker 1: shock um. Certainly there were medical professionals on site that

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Speaker 1: were prepared to respond if there were any issues with

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Speaker 1: the vaccine. Luckily that did not happen. Everything went perfectly smoothly.

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Speaker 1: But yes, the you know, everyone should be monitored immediately

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Speaker 1: after the vaccine, make sure there's no reaction and make

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Speaker 1: sure there's someone there that can help them if they

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Speaker 1: need it. With anaphylaxis, we moved from a rash onto

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Speaker 1: other things. Explain within your general education at Johns Hopkins

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Speaker 1: of anaphylaxis and there's that equivalent to this vaccination process.

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Speaker 1: So anaphylaxis is a severe allergic reaction that sometimes can

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Speaker 1: cause swelling in the airway, difficulty breathing in addition to

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Speaker 1: kind of the rash and hives that you mentioned. It

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Speaker 1: is a very rare side effect of certain medications and

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Speaker 1: including vaccines um so, you know, not a common thing

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Speaker 1: and not definitely not associated with everyone that gets a vaccine.

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Speaker 1: Can you just build on the transportation and logistics and

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Speaker 1: the effort that you guys have put in, not just

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Speaker 1: in the last twenty four hours, but I imagine the

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Speaker 1: last several months, and how smoothly things are running so far. Yeah. Absolutely,

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Speaker 1: you know, this journey has not been without challenges. At

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Speaker 1: Adrian Health, We've been working on this for several months

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Speaker 1: with a multidisciplinary team working to make sure we could

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Speaker 1: get this vaccine into people's arms as soon as it

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Speaker 1: was available. Evaluating the evidence, you know, this vaccine is

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Speaker 1: very UM needs very special handling to make sure that

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Speaker 1: it's active. So it requires ultracold freezers that we purchased

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Speaker 1: to be able to store three hundred thousand doses for

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Speaker 1: our teammates and our patients UM. And you know, working

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Speaker 1: through the logistics that are involved in keeping it cold

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Speaker 1: until the point of delivery have certainly been challenging. But

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Speaker 1: I like it's gone relatively well. And you know, our

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Speaker 1: first ghost of a vaccine yesterday went off without a hitch.

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Speaker 1: Dr Puss already. Do you get the sense that the

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Speaker 1: logistics making sure that you have all the equipment, making

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Speaker 1: sure that everything goes smoothly is entirely on Atrium's shoulders

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Speaker 1: in terms of bearing the costs and dealing with things

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Speaker 1: or do you feel like you're getting the help you

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Speaker 1: need from state and federal governmental officials. Yeah, you know

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Speaker 1: that it is certainly a team effort. I would say

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Speaker 1: there is certainly a significant cost to hospitals to you know,

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Speaker 1: put this into place. Buying an ultracold freezer is not

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Speaker 1: a cheap endeavor, and you know the amount of resources, people,

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Speaker 1: time that you have to put in to make this

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Speaker 1: work is very significant, you know. So definitely everyone's working together,

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Speaker 1: but there is you know, a non small burden on hospitals,

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Speaker 1: I would say, so, I guess that based on how

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Speaker 1: things have rolled out at this point and based on

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Speaker 1: the fact that a recent ABC IPSOS poll showed that

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Speaker 1: eight and ten Americans would be willing to take the

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Speaker 1: COVID vaccine should it be available. When do you think

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Speaker 1: they will be able to go out to their cvs

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Speaker 1: or to their hospital, their local hospital center and actually

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Speaker 1: get the vaccine at this point, yes, So it is

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Speaker 1: definitely going to take some time one as far as

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Speaker 1: you know, getting enough supply to do a broad chunk

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Speaker 1: of the population, and then those logistics that we just

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Speaker 1: mentioned will be very challenging right now to have your

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Speaker 1: you know, next door cvs administer the vaccine. So for

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Speaker 1: right now, much of the vaccine administration is in larger centers,

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Speaker 1: acute care centers. As we get more vaccine options, that

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Speaker 1: will certainly open up doors and you know, potential different

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Speaker 1: handling that will allow it to get there. So, you know,

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Speaker 1: we're thinking February is for kind of patient population day,

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Speaker 1: you can't see this, and either can the glorious people

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Speaker 1: listening on Bloomberg Radio. But we've been running on TV

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Speaker 1: like four thousand people getting the shot yesterday. Did your

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Speaker 1: arm hurt during the shot or afterwards? I mean, that's

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Speaker 1: all John, Lisa, I want to know, correction, Tom wants

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Speaker 1: to know. Tom wants to know. Okay, Um, So you know,

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Speaker 1: getting a shot. I've gotten lots of shots in my life,

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Speaker 1: so that was not an issue. It was minimally sore.

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Speaker 1: I did have pain and tenderness in my arm overnight

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Speaker 1: and you know in that muscle, um, but nothing out

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Speaker 1: of the ordinary. Nothing Ajosa Talent didn't doctor before we

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Speaker 1: let you go. I want to finish on a more

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Speaker 1: serious question if we can the group of individuals that

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Speaker 1: received this vaccination first, some of which will be the

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Speaker 1: most risk at the most risk in society, and they're

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Speaker 1: already in care homes, which means life expectancy is already

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Speaker 1: incredibly low. And I'm just trying to want to stand

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Speaker 1: out to what happens in the next several months when

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Speaker 1: people who have had this vaccine start to sadly pass

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Speaker 1: away for no reason connected to this vaccination. But the

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Speaker 1: story start to build what's the best way of managing

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Speaker 1: the message around that the inevitable likelihood that that's going

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Speaker 1: to happen anyway. Yeah, you know, certainly skilled nursing facility

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Speaker 1: patients are you know, have multiple medical issues unrelated to

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Speaker 1: the vaccine. I think it's going to be really important

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Speaker 1: to educate upfront and to keep track of the data

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Speaker 1: on what is what happened to those people, you know,

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Speaker 1: what else is going on, and make sure that's clearly

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Speaker 1: portrayed and you know by you all in the media,

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Speaker 1: because it does have the potential to put a spin

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Speaker 1: that's not necessarily reflective of truth. Well, hopefully you can

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Speaker 1: come back on the program. We can talk about it

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Speaker 1: as the vaccine I should roll out, continue to build

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Speaker 1: up dr grants to catch up. Thank you, Don't Health

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Speaker 1: Director of Infection Prevention. What have you again trying to

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Speaker 1: do is talk to pros and Robert kellef Is that

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Speaker 1: to say he's with the FDA formally to say is

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Speaker 1: that Duke University and the work he's done with Google

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Speaker 1: Health is one thing what you need to know is

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Speaker 1: he is expert in cardiology and for you curely expert

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Speaker 1: at the nitty gritty of clinical trials, and we're thrilled

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Speaker 1: that he could join us. UH this morning, Robert kel

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Speaker 1: if I want you to give a score to the

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Speaker 1: f d A on what we've seen in the recent weeks.

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Speaker 1: It seems every article the media is skewed by politics

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Speaker 1: or emotion or an angle. You're the grizzled pro How

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Speaker 1: is your f d A done. I think what's remarkable

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Speaker 1: about this is that the workforce of the FDA, seventeen

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Speaker 1: thousand strong, has done an A plus job. The politics

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Speaker 1: have swirled around, there's been a lot of stuff in

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Speaker 1: the press and pressure and all this, but fundamentally, the

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Speaker 1: FDA worked with the industry to do the right development

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Speaker 1: of the vaccines, the right clinical trials, and they've thoroughly

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Speaker 1: assessed in the public view the results of the clinical trials.

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Speaker 1: So I'll give the workforce an A plus. Within your

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Speaker 1: work in cardiology and the worries of shock and I'm

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Speaker 1: going to say, a grim thing of anaphylactic shock and

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Speaker 1: such is their cardiac risk to the taking of the vaccine.

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Speaker 1: Um you know, there's a remote possibility there might be

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Speaker 1: some tiny little cardiac risk, you know, for some people,

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Speaker 1: but it would be a very rare thing if it happened. Remember,

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Speaker 1: we have tens of thousands of people who have been

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Speaker 1: in the clinical trials, not an evidence of any toxicity

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Speaker 1: really at all, other than some side effects you would

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Speaker 1: normally see with a vaccine. So if there is a risk,

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Speaker 1: it's very very very small. But you know, when you

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Speaker 1: vaccinate millions of people, you will see, you know, some

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Speaker 1: rare events that occur with almost any vaccine. That's so

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Speaker 1: far outweighed by the benefits that we're seeing. Dr Califf.

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Speaker 1: It's sort of the heart of the question is will

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Speaker 1: this vaccine be any more dangerous because the process was expedited.

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Speaker 1: That is the fear of some people who perhaps are

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Speaker 1: unwilling to take the vaccine. What do you say to them?

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Speaker 1: We can have a confidence that is not more dangerous

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Speaker 1: for the first two months because we have the data.

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Speaker 1: I mean, although the review was expedited, the trial was

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Speaker 1: done like any other that are the trials really were

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Speaker 1: done like any other clinical trials that randomized, placebo controlled.

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Speaker 1: The patients who are very participants, are very carefully followed up.

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Speaker 1: Everything that happened was recorded, um it's there in the

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Speaker 1: public view, it's been analyzed independently by the FDA, which remember,

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Speaker 1: is a really important role for the FDA. It's not

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Speaker 1: just the company analyzing the data or even the researchers. Um,

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Speaker 1: you have this third check of the FDA itself doing

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Speaker 1: an independent analysis. So people should really be comfortable that. UM,

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Speaker 1: you know, we've got a lot of data showing that

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Speaker 1: this is a safe and effective vaccine. Dr Kellip. In

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Speaker 1: the meantime, we can see the number of cases rising dramatic,

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Speaker 1: leading to shutdowns around the world. How quickly will this

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Speaker 1: vaccine make a difference and actually change the trajectory of

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Speaker 1: the pandemic. Well, you've heard a lot of talk from people,

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Speaker 1: which I think is quite appropriate, that it's likely to

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Speaker 1: be UM late spring really before we have a major effect.

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Speaker 1: But it's not it's not right to think of this

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Speaker 1: as just sort of a binary yes or no sort

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Speaker 1: of a thing. We'll see a gradual reduction in the

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Speaker 1: transmission of the virus as a number of people who

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Speaker 1: are vaccinated increases, combined with a number of people that

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Speaker 1: have already been infected. And we can't forget probably most

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Speaker 1: important evolved during the vaccination period as we're rolling all

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Speaker 1: these people through, which has to be done carefully social

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Speaker 1: distancing and wearing a mask will make an enormous difference

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Speaker 1: and the number of people who die between now and

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Speaker 1: the time when the pandemic Robert Carliff at the margin,

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Speaker 1: and how do we convince or force anti vaxers to

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Speaker 1: get back into society with vaccinations? Is that the job

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Speaker 1: of government is that the job of business? Is it

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Speaker 1: the easy job of transportation that says you're not getting

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Speaker 1: on them whatever if you don't have a vaccine. What

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Speaker 1: do you see as the mechanism to drag anti vaxers

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Speaker 1: into a vaccination process. Well, first of all, I think

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Speaker 1: we got to separate anti vaxers from people who are

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Speaker 1: hesitant those okay groups, people who are deeply imbued in

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Speaker 1: the ideology of anti vax I don't think we're going

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Speaker 1: to change their minds. And I don't even think it's

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Speaker 1: necessary for the most part that we force them to

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Speaker 1: get vaccinated. We really need to focus on the people

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Speaker 1: who are concerned and just you know, want to be

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Speaker 1: sure that what they're doing is in the best interests

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Speaker 1: of themselves, their families and everybody else. And I think

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Speaker 1: you know they're there is a massive campaign already underway

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Speaker 1: to get knowledgeable people to speak out. UM. Very important

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Speaker 1: in all of this are the clinicians, the doctors and nurses,

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Speaker 1: respiratory therapists, people who know about healthcare and are gonna

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Speaker 1: be our first in line to get vaccinated. As we

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Speaker 1: were talking earlier in my son who's an emergency madisone

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Speaker 1: dock is getting vaccinated on Thursday. Um. These most people

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Speaker 1: I've talked with, even sophisticated professors back at the university.

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Speaker 1: What they tell me is I'm going to ask my

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Speaker 1: doctor for other people that maybe the nurse that they

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Speaker 1: see frequently. We've got to really provide the human face

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Speaker 1: to this information and about how important it is. Measured.

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Speaker 1: Conversations like this one are important as well. So we

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Speaker 1: appreciate your time, sir. Thank you. Robert Califf. That former

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Speaker 1: FDA commissioner Michael Goopan joins the style at Berkeley's their

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Speaker 1: chief US economists. Michael, you look at December and then

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Speaker 1: you've got this wonderful free looking at the hope that's

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Speaker 1: out there. What's the character of our hope right now?

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Speaker 1: And will our hopes be dashed? No, I don't think

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Speaker 1: our hopes will be dashed, but I do think the

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Speaker 1: next several months will will be difficult. That the data

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Speaker 1: is is slowing, momentum is ebbing, restrictions on activity are decreasing, mobility.

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Speaker 1: It is showing up in some of the higher frequency

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Speaker 1: data points. But obviously I think that the hope in

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Speaker 1: the optimism around the medium term is is anchored around

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Speaker 1: vaccines which are now being distributed. So we still have

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Speaker 1: this blend of of kind of near term pessimism with

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Speaker 1: medium term optimism. I've given what we know. I don't

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Speaker 1: think those hopes are going to be going to be

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Speaker 1: dashed on on the rocks of the shore. I do

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Speaker 1: think we'll get there, but it's going to be bumpy

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Speaker 1: to get there. Yeah, and certainly when you talk about bumpy,

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Speaker 1: another sign of it is that there seems to be

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Speaker 1: a little bit more weakness than the manufacturing sector. According

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Speaker 1: to data that just came at the Empire Manufacturing survey

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Speaker 1: came in at four point nine versus six point three.

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Speaker 1: It's came in lower. And this is the first read

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Speaker 1: to really get a sense of the December data. Michael,

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Speaker 1: how much are you a counting on manufacturing to main

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Speaker 1: robust as services are unable to employ people and really

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Speaker 1: take off as people try to social distance hily, So

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Speaker 1: thanks for that. Yes, we are actually depending on it.

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Speaker 1: It's our view that UM manufacturing and factory output still

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Speaker 1: has room to run to catch up with where where

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Speaker 1: demand is. Industrial productions roughly five below where we were

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Speaker 1: in February, despite the strong demand UM from households for

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Speaker 1: for good, So we are expecting the manufacturing data to

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Speaker 1: hold up even as some of that personal spending data fades.

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Speaker 1: We we think factory output still has room to pick

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Speaker 1: up as well, and not just to meet demand but

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Speaker 1: replenish inventories which have been down for four quarters. So

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Speaker 1: we are counting on it to some degree to kind

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Speaker 1: of hold things in place until services sector activity is

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Speaker 1: freed up, which is likely going to come more at

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Speaker 1: the end of the first quarter. Still, what today the

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Speaker 1: fiscal athorities and MICAU some people think maybe for the

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Speaker 1: Federal Reserve as well, What do we spanked on the

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Speaker 1: forward guidance front in twenty four hours time? I think

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Speaker 1: just something that qualitatively ties how long the Fed will

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Speaker 1: be buying assets to achieving the dual mandate. I mean,

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Speaker 1: as you know, they've anchored rate hikes around thresholds achieving

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Speaker 1: maximum employment, getting inflation to two expecting an overshoot of inflation.

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Speaker 1: So I think really all they want to say is

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Speaker 1: is we're going to keep buying until we're confident that

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Speaker 1: we're on the path to that outcome. So right now

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Speaker 1: they're just saying we're buying assets over the coming months.

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Speaker 1: That's not long enough of a time horizon. So I

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Speaker 1: think there's something qualitative in nature about confidence that the

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Speaker 1: economy is on a recovery path and we expect to

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Speaker 1: be meeting our dual mandate. To me, this is not

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Speaker 1: a big change. I mean, I think this is more

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Speaker 1: about aligning the language and the statement with where markets

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Speaker 1: are already priced and with what FED members are are

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Speaker 1: already saying. So I don't envision that this is any

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Speaker 1: any big, big change forthcoming from the FED in terms

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Speaker 1: of guidance. So just to tie this all together, Michael,

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Speaker 1: it seems like the consensus, as John and Tom have

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Speaker 1: been talking about, is looking past and now and the

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Speaker 1: pain and looking toward a post pandemic world. What would

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Speaker 1: you have to see in the higher frequency data to

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Speaker 1: change that view and account for a greater degree of scarring.

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Speaker 1: I just think that for the FED, at the end

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Speaker 1: of the day. I think they have to show up

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Speaker 1: in the labor market. And so if if as Tom mentioned,

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Speaker 1: there's that late that late report in January that's going

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Speaker 1: to come out around January eight, if that shows a

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Speaker 1: market deterioration, so we were losing jobs rather than adding

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Speaker 1: them at a slower pace than that, I do think

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Speaker 1: changes the calculus for for the FED. So if it

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Speaker 1: if we're losing jobs and and and then they may

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Speaker 1: feel more inclined to do something as we move into March.

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Speaker 1: Whether that's changed the composition or increase the pace of purchases,

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Speaker 1: my guesses that would also light a fire under fiscal

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Speaker 1: policy if we don't have a package in place by

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Speaker 1: by that point. So I think in the end it

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Speaker 1: would come back to the labor market. Michael, always appreciate

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Speaker 1: your time set, and it's great to cash shop as always,

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Speaker 1: Michael Gaype and Baccley's chief US economist. This is a joy,

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Speaker 1: in a particular joy this December to run into Peter

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Speaker 1: Orzag He's a banker now hidden in the bottles of

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Speaker 1: Lazard as their chief executive officer of Financial Advisory. But

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Speaker 1: far more than that, he is one of our truly

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Speaker 1: great academics of thinking about our fiscal policy, form of

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Speaker 1: service with omb, thinking about our ruptured retirement plan, and

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Speaker 1: also the mathematics and glide pass of where we're heading.

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Speaker 1: This is what you do when your father taught math

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Speaker 1: at Yale University. Peter wonderful to have you UH with us.

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Speaker 1: I want to get right to the glide pass. It's

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Speaker 1: a phrase I I associate only with you. Do you

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Speaker 1: see a two thousand twenty one of stability and relatively

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Speaker 1: gentle glide pass? Are we out at the tales distribution?

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Speaker 1: The problem is we've got uh two different stories. We've

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Speaker 1: got between now and let's call it April or May,

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Speaker 1: and then we've got thereafter. I think between now in

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Speaker 1: April or May, we unfortunately are in for a rough

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Speaker 1: spot both on the virus the pandemic, and on the economy.

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Speaker 1: Policymakers aren't helping, and maybe we'll turn to, for example,

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Speaker 1: the US stimulus debate in a moment, but they're not

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Speaker 1: helping at a moment of very substantial risk because the

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Speaker 1: pandemic exerts a lot of downward pressure on the economy,

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Speaker 1: and the economy therefore needs help. I want you computer

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Speaker 1: to address the stimulus now we've gone from nine hundred

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Speaker 1: jilion down to seven hundred congilion. Is you know, whatever

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Speaker 1: anybody's politics, we can all say it's a train wreck

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Speaker 1: happening in real time. I want you to speak now

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Speaker 1: to the Senator from Kentucky and people that are worried

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Speaker 1: their deficit Hawks, What do you say to the deafs

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Speaker 1: of hawks? Right now? Right now, the most important thing

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Speaker 1: that we need to do is avoid further damage to

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Speaker 1: the economy. There are three thousand jobs lost at the

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Speaker 1: state government level, more than a million jobs lost at

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Speaker 1: the local level. Small businesses are hurting. That is the

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Speaker 1: first priority. When interest rates are this low, we have

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Speaker 1: room to provide plenty of fiscal support to help offset

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Speaker 1: the permanent damage that can come from that kind of

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Speaker 1: job loss. I don't think we're appreciating how much scarring

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Speaker 1: of the economy can occur when there is that much

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Speaker 1: destruction that that happens, and so right now we have

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Speaker 1: an opportunity to try to mitigate that harm. One of

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Speaker 1: the reasons why as bad as it was, turned out

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Speaker 1: much better than people might have expected is that the

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Speaker 1: Cares Act was so massively powerful that in the middle

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Speaker 1: of a PA endemic, savings rates went up, credit card

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Speaker 1: debt went down, credit scores improved. These are amazing facts

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Speaker 1: and they helped to mitigate some of the pain, But

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Speaker 1: we are bumping up against the real constraint. Eviction rules

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Speaker 1: are scheduled to expire at the end of December. Parts

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Speaker 1: of the additional unemployment benefits that were provided as part

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Speaker 1: of the Cares Act scheduled to expire at the end

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Speaker 1: of December. State and local governments facing fift declines in

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Speaker 1: revenue for their next fiscal year, there will be more

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Speaker 1: pain coming unless we act aggressively. But so, Peter Orzak,

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Speaker 1: are you worried that Republicans are rediscovering their traditional concerns

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Speaker 1: over debts and does that mean that even if we

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Speaker 1: get a stimulus it just won't be large enough. I

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Speaker 1: am worried that it won't be large enough. And what

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Speaker 1: we are seeing overnight and this morning, the separating out

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Speaker 1: of state and local fiscal relief from this other overall package,

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Speaker 1: illustrates the problem. Um. You do not want state and

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Speaker 1: local governments in the middle of of a downturn raising

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Speaker 1: taxes and cutting spending, which is exactly what states are

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Speaker 1: going to do as their legislators come back into session

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Speaker 1: in January, looking out at their fiscal year that begins Midsummer.

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Speaker 1: They're going to enact spending cuts and and and tax

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Speaker 1: increases right when the economy doesn't need it. Um. As

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Speaker 1: one example, many states are already starting to do this.

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Speaker 1: Georgia has cut a billion dollars from its K through

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Speaker 1: twelve education budget in the middle of a downturn, when

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Speaker 1: schools are already hurting, and you know, there are there

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Speaker 1: are a lot of special circumstances that are arising. This

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Speaker 1: is not what the economy needs right now. And I

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Speaker 1: appreciate the concerns about the long term fiscal trajectory, but

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Speaker 1: this is not the time to be allowing those concerns

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Speaker 1: to prevent acting immediately and aggressively to provide what the

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Speaker 1: economy needs. What will be the main challenge for Jennet Yellen? Oh,

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Speaker 1: I think they're multiple challenges, But the first one is

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Speaker 1: to try to get UM what we were just discussing, UH,

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Speaker 1: you know, support for the economy enacted. If it doesn't

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Speaker 1: happen now, I really do have hope it happens now,

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Speaker 1: but it may spill over into Janet Yellen's UH term Secondly,

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Speaker 1: I think she faces a lot of underlying questions that

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Speaker 1: need to be resolved. So, for example, how much on

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Speaker 1: that relief are we trying to prop up firms and

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Speaker 1: kind of just hold them in place kind of freeze frame.

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Speaker 1: And how much are we trying to allow the reallocation

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Speaker 1: that needs to happen in the economy into a post

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Speaker 1: pandemic world. How much are we allowing that to happen

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Speaker 1: on China? How much are we viewing them as economic

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Speaker 1: competitors versus needing to cooperate with them on important things

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Speaker 1: like climate change. In healthcare, how much are we trying

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Speaker 1: to prop up additional capacity at hospitals to help prepare

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Speaker 1: for the next pandemic if one um were to occur,

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Speaker 1: versus ringing more efficiency of the health care system. So

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Speaker 1: you have all these kind of dualities that need to

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Speaker 1: be resolved one way or another in to set the

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Speaker 1: stage for the next several years. And that's in the

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Speaker 1: midst of an economy that is still going to be

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Speaker 1: recovering from the after effects of the pandemic. And on that.

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Speaker 1: You know, one of the things I know that she'll

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Speaker 1: be focused on is the number of people who are

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Speaker 1: unemployed for a very long time. So we're almost at

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Speaker 1: four million people who are who have been unemployed for

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Speaker 1: twenty seven weeks or more. And if you stop and

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Speaker 1: think about how much your attachment to the labor force

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Speaker 1: and your skills degrade after being out of work for

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Speaker 1: twenty seven weeks or more, I think we can appreciate

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Speaker 1: how painful that can be, not only for the families involved,

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Speaker 1: but for the economy as a whole. Dirt tour sec

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Speaker 1: I want to go a little Matthew here on a

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Speaker 1: little account to you with you as well. One of

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Speaker 1: the great treaties years ago was Heilbroner and Bernstein's The

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Speaker 1: Debt and the Deficit, where they tore to shreds the

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Speaker 1: conflation that we have in our mind between cash account

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Speaker 1: ng and a cruel accounting. When we look at our

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Speaker 1: debt and our deficit, instruct our audience on your basic premise,

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Speaker 1: which is, stop sweating about the debt and the deficit

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Speaker 1: as we account for defense programs or social services, and

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Speaker 1: in the ladder, how how we overpanic about our federal deficit.

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Speaker 1: We have the opportunity now to do what I've called

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Speaker 1: the Barbell strategy, which is I think exactly the right

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Speaker 1: strategy in this kind of situation. A lot of short

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Speaker 1: term fiscal stimulus to try to get the economy back

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Speaker 1: on its feet, reduced the number of long term unemployed people,

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Speaker 1: shore up state and local governments. You can couple that

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Speaker 1: if you're worried with some delayed fiscal action, you know

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Speaker 1: that takes effect well into the future. And what really

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Speaker 1: matters for the fiscal trajectory is that more long term

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Speaker 1: path along with what happens to interest rates. And I

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Speaker 1: think the one thing that we really do need to

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Speaker 1: take into account is when interest rates are this low,

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Speaker 1: it's a much different picture for the fiscal trajectory than

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Speaker 1: an era when interest rates were dramatically higher. So the

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Speaker 1: trade offs are also a lot different. But even if

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Speaker 1: interest rates were to go back up, we still have

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Speaker 1: this opportunity to do fiscal stimulus now and couple it

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Speaker 1: with long term fiscal action that shores up Medicare and

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Speaker 1: social security and the other long term drivers of the budget.

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Speaker 1: M Peter. We had a story yesterday actually talking about

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Speaker 1: you know, Mario dragging leading the call with other central

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Speaker 1: bankers to try and invert a global solvency crisis. Is

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Speaker 1: this the next big thing that will hit well. So far,

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Speaker 1: it's been remarkable, both on the corporate and on the

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Speaker 1: sovereign side that there has been uh, you know, there

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Speaker 1: was a first wave of corporate restructurings. There have been

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Speaker 1: some sovereign restructurings Lazard advised on Argentina and Ecuador's just

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Speaker 1: two examples. But the large scale across the board, just

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Speaker 1: waves of bankruptcies and restructuring, both on the government and

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Speaker 1: on the corporate side, um have not happened yet. And

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Speaker 1: the reason for that is that in large part central

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Speaker 1: banks have flooded the zone, provided lots of liquidity and

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Speaker 1: kept interest rates so low that even struggling businesses can

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Speaker 1: refinance at relatively attractive rates. So I think there's you know,

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Speaker 1: it's always uh, it's always a concern with significant amounts

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Speaker 1: of debt regarding whether when rates do go up, uh,

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Speaker 1: enemies will find themselves in trouble. But so far, um,

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Speaker 1: we had kind of a first wave, and there's been

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Speaker 1: a big debate about it whether a second wave willaker

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Speaker 1: hasn't happened yet. Peter ros a wonderful and Bloomberg opinion column,

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Speaker 1: has an important column out on the virus. Thanks for

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Speaker 1: listening to The Bloombergs Surveynla's podcast. Subscribe and listen to

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Speaker 1: interviews on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer.

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Speaker 1: I'm on Twitter at Tom Keene before the podcast. You

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Speaker 1: can always catch us worldwide. I'm Bloomberg Radio