1 00:00:00,160 --> 00:00:03,360 Speaker 1: This is Bloomberg Wall Street Week. What's the state of 2 00:00:03,400 --> 00:00:06,360 Speaker 1: corporate governance? The deficit is a real issue. The US 3 00:00:06,400 --> 00:00:09,920 Speaker 1: economy continues to send mixed signals, the financial stories that 4 00:00:10,039 --> 00:00:13,560 Speaker 1: keep our world fed, action to con concerns over dollar liquidity, 5 00:00:13,600 --> 00:00:16,599 Speaker 1: and encouraging China data. The five hundred wealthiest people in 6 00:00:16,640 --> 00:00:19,560 Speaker 1: the world. Through the eyes of the most influential voices 7 00:00:19,880 --> 00:00:23,320 Speaker 1: Larry Summers, the former Treasury Secretary, star Ward CEO, Kevin Johnson, 8 00:00:23,440 --> 00:00:27,040 Speaker 1: sec Chairman J Clayton. Bloomberg Wall Street Week with David 9 00:00:27,080 --> 00:00:31,640 Speaker 1: Weston from Bloomberg Radio. The issue is joined. Republicans lay 10 00:00:31,640 --> 00:00:34,120 Speaker 1: out a very different view of where we're headed, but 11 00:00:34,240 --> 00:00:36,879 Speaker 1: equity markets will They just seemed to keep on climbing 12 00:00:36,920 --> 00:00:40,000 Speaker 1: no matter what they hear. This is a special election 13 00:00:40,120 --> 00:00:43,280 Speaker 1: edition of Wall Street Week. I'm David Weston. President Trump 14 00:00:43,280 --> 00:00:47,000 Speaker 1: began rolling back Obama era regulations early in his administration 15 00:00:47,080 --> 00:00:49,120 Speaker 1: when he took the United States out of the Paris 16 00:00:49,120 --> 00:00:53,800 Speaker 1: Climate Accord. In order to fulfill my solemn duty to 17 00:00:53,880 --> 00:00:58,920 Speaker 1: protect America and its citizens, the United States will withdraw 18 00:01:01,600 --> 00:01:07,920 Speaker 1: from the Paris Climate a Court. The Trump administration also 19 00:01:08,000 --> 00:01:11,559 Speaker 1: lowered US vehicle emission standards, saying it would save automakers 20 00:01:11,600 --> 00:01:15,320 Speaker 1: one billion dollars in compliance costs. But just last week, 21 00:01:15,400 --> 00:01:19,640 Speaker 1: California finalized its own fuel efficiency agreements with five automakers 22 00:01:19,720 --> 00:01:22,800 Speaker 1: that are more closely in line with the Obama era standards. 23 00:01:23,120 --> 00:01:26,920 Speaker 1: The Trump administration has placed big emphasis on increasing use 24 00:01:26,959 --> 00:01:30,880 Speaker 1: and production of fossil fuels. Republicans and Democrats are far 25 00:01:30,959 --> 00:01:34,760 Speaker 1: apart on their climate policies, but Dan Briette, Secretary of Energy, 26 00:01:34,800 --> 00:01:37,880 Speaker 1: says it is possible to have a bipartisan energy plan. 27 00:01:38,240 --> 00:01:40,200 Speaker 1: Sure you can. I mean, natural gas is a very 28 00:01:40,240 --> 00:01:42,840 Speaker 1: clean source, and we're developing technologies here at the at 29 00:01:42,880 --> 00:01:44,960 Speaker 1: the U. S. Department of Energy to make it even cleaner. 30 00:01:45,200 --> 00:01:48,440 Speaker 1: We're also developing technologies to make you know, carbon intense 31 00:01:48,480 --> 00:01:51,720 Speaker 1: fuels like coal, even cleaner. And of course we always 32 00:01:51,800 --> 00:01:54,639 Speaker 1: you know, have had nuclear power for the last seventy years, 33 00:01:54,880 --> 00:01:58,120 Speaker 1: which is entirely emissions free. So I mean, you can 34 00:01:58,240 --> 00:02:01,160 Speaker 1: do both. You can have a renewal generation base and 35 00:02:01,200 --> 00:02:05,840 Speaker 1: you can have an emissions free baseload generation available to you. 36 00:02:05,840 --> 00:02:08,239 Speaker 1: Said to choose to do it, and I think that's 37 00:02:08,280 --> 00:02:11,560 Speaker 1: what the fundamental problem is in places like California, they've 38 00:02:11,560 --> 00:02:14,600 Speaker 1: relied too heavily or focused too heavily on renewable power 39 00:02:14,960 --> 00:02:18,040 Speaker 1: like wind and solar, at the exclusion of some of 40 00:02:18,040 --> 00:02:21,760 Speaker 1: this baseload power which you absolutely need in today's world 41 00:02:21,760 --> 00:02:24,800 Speaker 1: to ensure that you have the energy you need when 42 00:02:24,840 --> 00:02:27,440 Speaker 1: you need it. Prisoner Trump's administration has done a fair 43 00:02:27,480 --> 00:02:31,160 Speaker 1: amount and trying to really, as I say, reinforce energy 44 00:02:31,160 --> 00:02:34,160 Speaker 1: independence of United States, relying in part and significant partner 45 00:02:34,200 --> 00:02:36,960 Speaker 1: fossil fuels. What's left to be done if he's elected 46 00:02:37,000 --> 00:02:40,040 Speaker 1: for a second term, what's on your agenda, Well, we 47 00:02:40,040 --> 00:02:42,519 Speaker 1: need to continue to build out infrastructure. So you know, 48 00:02:42,600 --> 00:02:44,280 Speaker 1: as you and I have discussed in the past, we 49 00:02:44,360 --> 00:02:47,359 Speaker 1: have done a great job in America of increasing our production, 50 00:02:47,720 --> 00:02:51,960 Speaker 1: making ourselves energy independent, relying on new technologies, are new 51 00:02:51,960 --> 00:02:56,160 Speaker 1: work technologies like horizontal frack, horizontal drilling and fracking to 52 00:02:56,240 --> 00:02:59,680 Speaker 1: allow us to increase production of of these resources here 53 00:02:59,680 --> 00:03:02,520 Speaker 1: in the States. Our challenge today is actually getting the 54 00:03:02,520 --> 00:03:06,200 Speaker 1: product to market. It's building out pipeline infrastructure to get 55 00:03:06,200 --> 00:03:08,320 Speaker 1: it to the oceans, to get it to the coastlines. 56 00:03:08,680 --> 00:03:11,280 Speaker 1: It's building export facilities so that we can make this 57 00:03:11,400 --> 00:03:13,519 Speaker 1: oil and gas available to the rest of the world, 58 00:03:13,720 --> 00:03:15,720 Speaker 1: because they're going to continue to use these types of 59 00:03:15,760 --> 00:03:19,400 Speaker 1: fuels for the foreseeable future, perhaps as many as forty 60 00:03:19,400 --> 00:03:22,120 Speaker 1: to fifty years out. And I think it's important that 61 00:03:22,160 --> 00:03:24,480 Speaker 1: as we do this, we maintain our posture in the 62 00:03:24,480 --> 00:03:27,600 Speaker 1: world as the number one producer of oil and gas. 63 00:03:27,919 --> 00:03:29,800 Speaker 1: And the reason we'd like to do that is because 64 00:03:29,800 --> 00:03:32,760 Speaker 1: it gives us four policy options. The whole notion that 65 00:03:32,800 --> 00:03:35,400 Speaker 1: we are able to, you know, for instance, of Secretary 66 00:03:35,440 --> 00:03:39,040 Speaker 1: of State traveling to Sudan to perhaps normalize relations between 67 00:03:39,040 --> 00:03:42,120 Speaker 1: Sudan and Israel, to work on deals like the U 68 00:03:42,160 --> 00:03:44,920 Speaker 1: a E And Israel. Those things couldn't have happened forty 69 00:03:45,000 --> 00:03:47,840 Speaker 1: years ago because we would have been afraid of the 70 00:03:47,880 --> 00:03:50,520 Speaker 1: reaction in the Middle East, and perhaps we would have 71 00:03:50,640 --> 00:03:54,560 Speaker 1: endangered our national security by putting our oil supply at risk. 72 00:03:54,640 --> 00:03:57,160 Speaker 1: We were entirely dependent upon them. The fact that we 73 00:03:57,200 --> 00:04:00,600 Speaker 1: are independent today allows us to pursue these types of 74 00:04:00,640 --> 00:04:04,360 Speaker 1: foreign policy options. Energy is important in our society for 75 00:04:04,440 --> 00:04:06,600 Speaker 1: all sorts of reasons, but it also is the source 76 00:04:06,640 --> 00:04:08,080 Speaker 1: of a lot of employment. There are a lot of 77 00:04:08,160 --> 00:04:10,840 Speaker 1: jobs in the energy industry. And one place where the 78 00:04:10,880 --> 00:04:13,160 Speaker 1: repolis of the Democrats seem to be two ships passing 79 00:04:13,200 --> 00:04:16,039 Speaker 1: the night is how we're going to create more jobs. 80 00:04:16,320 --> 00:04:18,880 Speaker 1: We heard uh for Vice President Biden say he's going 81 00:04:18,920 --> 00:04:21,640 Speaker 1: to create millions and more jobs by going to green energy. 82 00:04:21,960 --> 00:04:24,400 Speaker 1: We heard Republicans criticize his positis for saying, you're gonna 83 00:04:24,440 --> 00:04:26,360 Speaker 1: lose a lot of jobs, Which is it, aren't we 84 00:04:26,400 --> 00:04:28,760 Speaker 1: adding more jobs and renewables right now that we're adding 85 00:04:28,760 --> 00:04:32,280 Speaker 1: in traditional energy? Yeah? Well, I can't really comment on 86 00:04:32,400 --> 00:04:34,960 Speaker 1: Mr Biden's comments. As part of the campaign, I'm prohibited 87 00:04:34,960 --> 00:04:37,039 Speaker 1: from doing that, so I'll stay away from that. But 88 00:04:37,120 --> 00:04:39,120 Speaker 1: what I will comment on is that, you know, when 89 00:04:39,160 --> 00:04:41,280 Speaker 1: we look at the technologies that have put us at 90 00:04:41,279 --> 00:04:43,600 Speaker 1: the top of the world in terms of energy production, 91 00:04:43,880 --> 00:04:47,000 Speaker 1: hydraulic fraction we just mentioned, you know, the US Chamber 92 00:04:47,000 --> 00:04:49,240 Speaker 1: of Commerce tells me that if we were to do 93 00:04:49,279 --> 00:04:52,880 Speaker 1: away with that technology, we would lose approximately nineteen million 94 00:04:53,000 --> 00:04:56,000 Speaker 1: jobs over the next few years. And you know, it's 95 00:04:56,000 --> 00:04:58,960 Speaker 1: not a question of retraining those people and putting them 96 00:04:59,000 --> 00:05:03,239 Speaker 1: into renewable technologies. Certainly you can do that, and people 97 00:05:03,279 --> 00:05:05,080 Speaker 1: may be forced to do that if you if you 98 00:05:05,240 --> 00:05:08,000 Speaker 1: if you do away with this technology. But the challenge 99 00:05:08,040 --> 00:05:10,680 Speaker 1: with that, David, is that the salaries, according to the 100 00:05:10,800 --> 00:05:13,320 Speaker 1: unions that we have talked to, the salaries in the 101 00:05:13,360 --> 00:05:16,520 Speaker 1: oil and gas business are about twice what we're seeing 102 00:05:16,560 --> 00:05:19,240 Speaker 1: in the renewable energy space. So it's one thing to 103 00:05:19,279 --> 00:05:21,600 Speaker 1: suggest that you might retrain people and put them into 104 00:05:21,640 --> 00:05:23,679 Speaker 1: a new role, which are also giving them a fifty 105 00:05:23,720 --> 00:05:27,480 Speaker 1: percent pay cut according to these Unionsas just briefly here 106 00:05:27,480 --> 00:05:29,120 Speaker 1: at the end, give us something of the investment you're 107 00:05:29,160 --> 00:05:32,720 Speaker 1: making a new technology of the Department Energy, Well, it's enormous. 108 00:05:32,800 --> 00:05:35,440 Speaker 1: I mean, we're across the board. We spend about sixteen 109 00:05:35,440 --> 00:05:40,039 Speaker 1: billion dollars a year just in basic science, basic research 110 00:05:40,320 --> 00:05:43,479 Speaker 1: that leads to these technologies that we just discussed. I'm 111 00:05:43,560 --> 00:05:46,240 Speaker 1: very excited about what's just over the horizon with regard 112 00:05:46,279 --> 00:05:49,160 Speaker 1: to advanced nuclear reactors. I think we're right on the 113 00:05:49,200 --> 00:05:53,520 Speaker 1: cusp of not only smaller reactors, higher density energy sources 114 00:05:53,560 --> 00:05:56,479 Speaker 1: for America that will be connected to micro grids in 115 00:05:56,520 --> 00:05:59,760 Speaker 1: some cases. We're also excited about moving perhaps even beyond 116 00:06:00,000 --> 00:06:02,480 Speaker 1: fision energy nuclear energy as we know it today, to 117 00:06:02,680 --> 00:06:06,120 Speaker 1: fusion energy. So it's a very exciting world that we're 118 00:06:06,120 --> 00:06:07,720 Speaker 1: about to face. Is there a real process with the 119 00:06:07,760 --> 00:06:11,560 Speaker 1: fusion energy people and talking about that forever? That's true, Yeah, 120 00:06:11,640 --> 00:06:13,880 Speaker 1: they have been, but we've made real progress. We've turned 121 00:06:13,880 --> 00:06:16,680 Speaker 1: around some of the management issues around a large facility 122 00:06:16,720 --> 00:06:20,279 Speaker 1: in France known as the Eater Facility. But we also 123 00:06:20,320 --> 00:06:22,800 Speaker 1: have private sector companies here in the United States who 124 00:06:22,800 --> 00:06:27,680 Speaker 1: have made tremendous advances, General Atomic, several others out in California. 125 00:06:27,720 --> 00:06:30,120 Speaker 1: They're doing a great job. That was Secretary of Energy 126 00:06:30,200 --> 00:06:33,359 Speaker 1: Dan Briett. Coming up. President Trump is running on his 127 00:06:33,480 --> 00:06:36,920 Speaker 1: record of talking tough on trade. We talked with Secretary 128 00:06:36,960 --> 00:06:39,920 Speaker 1: of Commerce Wilburg Ross on what the President has accomplished 129 00:06:40,000 --> 00:06:49,040 Speaker 1: so far. That's next on walstret Week on Bloomberg. This 130 00:06:49,520 --> 00:06:54,080 Speaker 1: is Bloomberg Wall Street Week with David Weston from Bloomberg Radio. 131 00:06:54,400 --> 00:06:57,440 Speaker 1: As a candidate in two thousand sixteen, President Trump promised 132 00:06:57,480 --> 00:06:59,679 Speaker 1: to make trade deals that would be fair to American 133 00:06:59,720 --> 00:07:03,200 Speaker 1: workers and businesses. Over the past three years, he raised 134 00:07:03,240 --> 00:07:06,599 Speaker 1: harrifs on imports, renegotiated a trade deal with Canada, Mexico, 135 00:07:06,839 --> 00:07:09,560 Speaker 1: and broke in a Phase one deal with China. In 136 00:07:09,600 --> 00:07:11,880 Speaker 1: spite of some of the progress on the trade deal, 137 00:07:12,040 --> 00:07:14,640 Speaker 1: US exports to China fell by nearly eight percent from 138 00:07:16,560 --> 00:07:19,000 Speaker 1: and China continues to fall short of its promises to 139 00:07:19,080 --> 00:07:23,200 Speaker 1: buy US goods. The US trade deficit narrowed slightly in 140 00:07:23,320 --> 00:07:27,000 Speaker 1: June as global lockdown restrictions from COVID nineteen East, but 141 00:07:27,040 --> 00:07:30,560 Speaker 1: the recovery is expected to be uneven. We asked Secretary 142 00:07:30,560 --> 00:07:33,560 Speaker 1: of Commerce Wilburt Ross what President Trump has accomplished on 143 00:07:33,640 --> 00:07:37,440 Speaker 1: his trade agenda so far. Well, in terms of China, 144 00:07:37,880 --> 00:07:42,960 Speaker 1: a lot has been accomplished. On the enforcement side, we 145 00:07:43,040 --> 00:07:47,640 Speaker 1: really have been enforcing quite vigorously. You're familiar with the 146 00:07:47,640 --> 00:07:51,320 Speaker 1: actions we've taken on wild Way, You're familiar with the 147 00:07:51,360 --> 00:07:57,000 Speaker 1: actions that we've taken on ZTE, two major telecom companies. 148 00:07:57,640 --> 00:08:00,920 Speaker 1: Most recently, we've been working very hard are on the 149 00:08:01,000 --> 00:08:06,760 Speaker 1: semiconductive part of things, because while China does have technology, 150 00:08:06,960 --> 00:08:11,440 Speaker 1: we still have the best software design and the best 151 00:08:11,480 --> 00:08:19,000 Speaker 1: fabrication equipment for semiconductors, so we're trying to avoid them 152 00:08:19,040 --> 00:08:25,600 Speaker 1: taking unfair advantage of our technology. Technology is really important 153 00:08:26,080 --> 00:08:30,960 Speaker 1: because while protecting things like steel and aluminum help take 154 00:08:31,000 --> 00:08:36,400 Speaker 1: care of today's world, technology is tomorrow's world, So that's 155 00:08:36,400 --> 00:08:40,440 Speaker 1: a big deal. Very recently, we put on the entity 156 00:08:40,640 --> 00:08:46,800 Speaker 1: list of five hundred companies since two thousand and seventeen. 157 00:08:47,559 --> 00:08:52,200 Speaker 1: Awful lot of those are Chinese companies, and that's because 158 00:08:52,640 --> 00:08:55,440 Speaker 1: they are the ones that seem to be doing the 159 00:08:55,480 --> 00:09:01,839 Speaker 1: most to violate sanctions, to violate human rights, and most 160 00:09:01,920 --> 00:09:07,240 Speaker 1: recently also to create problems in Hong Kong. So that's 161 00:09:07,280 --> 00:09:10,280 Speaker 1: been a big, big series. And then of course you 162 00:09:10,360 --> 00:09:14,360 Speaker 1: have the tariffs, the Section three Old one tariffs that 163 00:09:14,640 --> 00:09:20,200 Speaker 1: USTR imposed on China. So the cumulative effect of ball 164 00:09:20,360 --> 00:09:25,880 Speaker 1: this is enormously greater than the long term camulative effect 165 00:09:25,920 --> 00:09:29,880 Speaker 1: of everything that had been done pre Trump, Mr Secretary, 166 00:09:29,920 --> 00:09:32,640 Speaker 1: As you think about a second for your term for 167 00:09:32,679 --> 00:09:35,040 Speaker 1: President Trump, there's a lot of concern that we may 168 00:09:35,040 --> 00:09:37,240 Speaker 1: be entering into what some people call a tech cold 169 00:09:37,280 --> 00:09:39,200 Speaker 1: war with China. Do you believe at the end of 170 00:09:39,240 --> 00:09:41,880 Speaker 1: four years with President Trump still in office, we would 171 00:09:41,880 --> 00:09:45,959 Speaker 1: be more disengaged with China when it comes to technology. Well, 172 00:09:46,040 --> 00:09:49,680 Speaker 1: first of all, in the Cold War and technology started 173 00:09:49,760 --> 00:09:54,960 Speaker 1: long before President Trump. It wasn't only under President Trump 174 00:09:55,040 --> 00:09:59,640 Speaker 1: that the Chinese was stealing intellectual property. Wasn't only under 175 00:09:59,679 --> 00:10:03,480 Speaker 1: President it in Trump that the Chinese were requiring joint 176 00:10:03,559 --> 00:10:07,760 Speaker 1: ventures and lo and behold, the joint venture partners required 177 00:10:07,800 --> 00:10:14,240 Speaker 1: technology transfers. So this abuse of technology, which you've called 178 00:10:14,280 --> 00:10:19,040 Speaker 1: the technology cold War, really had its origins many years 179 00:10:19,200 --> 00:10:25,319 Speaker 1: before the differences. President Trump is mounting the ramparts and 180 00:10:25,360 --> 00:10:30,560 Speaker 1: starting to defend US against the technology war. Then he's 181 00:10:30,600 --> 00:10:34,000 Speaker 1: doing it with the whole variety of measures that I've 182 00:10:34,160 --> 00:10:38,600 Speaker 1: described before. But he's doing it also in another way 183 00:10:38,920 --> 00:10:42,559 Speaker 1: in terms of the big initiative that was just announced 184 00:10:42,920 --> 00:10:48,880 Speaker 1: about a billion dollars for further artificial intelligence research and 185 00:10:49,040 --> 00:10:53,840 Speaker 1: quantum computing research. Those are two of the most significant 186 00:10:54,240 --> 00:10:59,040 Speaker 1: technological advances yet to come, and so putting money here 187 00:11:00,160 --> 00:11:04,200 Speaker 1: helping our companies go further is a very good thing. 188 00:11:04,720 --> 00:11:08,040 Speaker 1: So there are two edges to what we're doing. The 189 00:11:08,120 --> 00:11:12,520 Speaker 1: one is clamping down on their abuses, and the other 190 00:11:13,080 --> 00:11:19,560 Speaker 1: is fostering US technology we've been helping to propagate in 191 00:11:19,679 --> 00:11:28,200 Speaker 1: the Congress Senator Cornyn's legislation relating to semiconductor funding so 192 00:11:28,240 --> 00:11:32,200 Speaker 1: that we can bring more fabs back to the US. 193 00:11:32,360 --> 00:11:35,400 Speaker 1: I hope the Congress will go along with that when 194 00:11:35,400 --> 00:11:38,360 Speaker 1: they go back into session, and if they do, that 195 00:11:38,440 --> 00:11:41,480 Speaker 1: will be a very very good thing for America. Secretary 196 00:11:41,640 --> 00:11:43,200 Speaker 1: was one of the things that we have heard a 197 00:11:43,240 --> 00:11:45,280 Speaker 1: good deal out of out of the Trump administration is 198 00:11:45,320 --> 00:11:48,160 Speaker 1: the fact that the coronavirus originated in China. There is 199 00:11:48,200 --> 00:11:50,560 Speaker 1: a lot of concern that they were not forthcoming and 200 00:11:50,600 --> 00:11:53,079 Speaker 1: disclosing what happened, a lot of blame and finger point. 201 00:11:53,200 --> 00:11:56,840 Speaker 1: Let's be frank, is there any serious contemplation of possible 202 00:11:56,880 --> 00:11:59,400 Speaker 1: sanctions against China coming out of the coronavirus and how 203 00:11:59,400 --> 00:12:01,840 Speaker 1: they handle it seen sanctions for the Trunk Administration in 204 00:12:01,840 --> 00:12:06,960 Speaker 1: other situations. We believe that they did not handle the 205 00:12:07,040 --> 00:12:13,360 Speaker 1: coronavirus very well. Nobody knows right now whether the original 206 00:12:13,520 --> 00:12:18,400 Speaker 1: outburst was something deliberate, was it leakage from a laboratory 207 00:12:18,520 --> 00:12:22,800 Speaker 1: that was inadvertent, or how it exactly started. But what 208 00:12:22,960 --> 00:12:26,440 Speaker 1: we do know is that at the same time as 209 00:12:26,480 --> 00:12:32,480 Speaker 1: they blocked air travel from Wuhan to Beijing, Shanghai and 210 00:12:32,600 --> 00:12:37,640 Speaker 1: other big Chinese cities, they didn't block travel to the US, 211 00:12:38,040 --> 00:12:42,040 Speaker 1: to Europe and to Africa. That was a deliberate decision, 212 00:12:42,559 --> 00:12:47,959 Speaker 1: and obviously that contributed mightily to the spread of coronavirus 213 00:12:48,000 --> 00:12:53,760 Speaker 1: to the United States. Second, they've not been very forthcoming 214 00:12:53,800 --> 00:12:57,760 Speaker 1: to our health authorities about what was actually going on 215 00:12:58,040 --> 00:13:02,560 Speaker 1: over there, and in fact, designed to stand it. They've 216 00:13:02,640 --> 00:13:08,520 Speaker 1: now prohibited their virologists from doing joint papers with American 217 00:13:08,679 --> 00:13:13,960 Speaker 1: virologists trying to sort through coronavirus, So those are not 218 00:13:14,240 --> 00:13:19,240 Speaker 1: very helpful things. There's those some severe question as to 219 00:13:19,360 --> 00:13:23,240 Speaker 1: how forthcoming they were in their relations with the w 220 00:13:23,440 --> 00:13:26,560 Speaker 1: t O. So there's a lot to worry about in 221 00:13:26,679 --> 00:13:31,200 Speaker 1: their handling of coronavirus. But be that as it may, 222 00:13:31,920 --> 00:13:36,440 Speaker 1: it's pretty clear on a national basis, and incidents of 223 00:13:36,480 --> 00:13:39,839 Speaker 1: new cases is coming down quite a bit. Had been 224 00:13:39,960 --> 00:13:44,040 Speaker 1: up around seventy six thousand on a seven day average. 225 00:13:44,440 --> 00:13:48,160 Speaker 1: Now it's down into forty thousand, so it's still too many, 226 00:13:48,679 --> 00:13:52,960 Speaker 1: but direction of change is a very good one. Plus 227 00:13:53,440 --> 00:13:58,439 Speaker 1: every day we're having announcements about a potential cure, every 228 00:13:58,520 --> 00:14:02,720 Speaker 1: day we're having announcements about a potential vaccine. We're going 229 00:14:02,800 --> 00:14:05,480 Speaker 1: to get there and want to get there pretty quickly. 230 00:14:05,960 --> 00:14:10,319 Speaker 1: We will get this ugly monster under control. And the 231 00:14:10,400 --> 00:14:15,000 Speaker 1: decisive action taken by the President both cutting off travel 232 00:14:16,120 --> 00:14:22,480 Speaker 1: to China early on despite the objections of Nancy Pelosi 233 00:14:22,520 --> 00:14:26,000 Speaker 1: and Joe Biden, was a very wise thing. That was 234 00:14:26,120 --> 00:14:29,840 Speaker 1: U s Commerce Secretary Wilburt Ross coming up. The US 235 00:14:29,880 --> 00:14:33,560 Speaker 1: healthcare system is facing its biggest test from COVID nineteen. 236 00:14:34,080 --> 00:14:36,280 Speaker 1: We talked with Ken Langon, chairman of the n y 237 00:14:36,400 --> 00:14:39,600 Speaker 1: U Langon Medical Center about what the pandemic says about 238 00:14:39,600 --> 00:14:42,720 Speaker 1: our health care system. That's next on Wall Street Week 239 00:14:43,000 --> 00:14:52,120 Speaker 1: on Bloomberg. This is Bloomberg Wall Street Week with David 240 00:14:52,160 --> 00:14:56,040 Speaker 1: Weston from Bloomberg Radio. COVID nineteen is shining a light 241 00:14:56,080 --> 00:14:59,080 Speaker 1: on the state of healthcare in the United States. President 242 00:14:59,080 --> 00:15:01,320 Speaker 1: Trump has made no secret of what he thinks of 243 00:15:01,320 --> 00:15:07,160 Speaker 1: the Affordable Care Act. We have to repeal and replace Obamacare. 244 00:15:08,640 --> 00:15:12,520 Speaker 1: We can repeal it, but the best is repeal and 245 00:15:12,560 --> 00:15:16,360 Speaker 1: replace and let's get going. President Trump's Jobs and Tax 246 00:15:16,440 --> 00:15:20,600 Speaker 1: Cuts Active seventeen scrapped the c A individual mandate, but 247 00:15:20,680 --> 00:15:22,920 Speaker 1: his request for the Supreme Court to strike down the 248 00:15:23,080 --> 00:15:26,600 Speaker 1: entire law is still pending. Healthcare spending grew four point 249 00:15:26,640 --> 00:15:31,400 Speaker 1: six two eighteen, reaching three point six trillion dollars. Healthcare 250 00:15:31,440 --> 00:15:34,200 Speaker 1: expenditures as a share of the nation's GDP has been 251 00:15:34,200 --> 00:15:37,480 Speaker 1: growing steadily as tax revenue as a share of GDP 252 00:15:37,720 --> 00:15:41,000 Speaker 1: comes down. We asked Ken Langne, chair of the board 253 00:15:41,000 --> 00:15:42,880 Speaker 1: of Trustees of n y U Land Gone and co 254 00:15:42,960 --> 00:15:46,320 Speaker 1: founder of home Depot, what COVID nineteen taught us about 255 00:15:46,440 --> 00:15:53,080 Speaker 1: US healthcare. The virus to me is rapidly receding an 256 00:15:53,080 --> 00:15:58,000 Speaker 1: impact and importance. For example, the results in New York 257 00:15:58,000 --> 00:16:01,400 Speaker 1: City hospitals are dramatically lower than they were back in April. 258 00:16:01,800 --> 00:16:06,760 Speaker 1: We whether it's heard immunity, whether it's compliance or not, 259 00:16:06,920 --> 00:16:10,440 Speaker 1: if you wear a mask, everybody wore a mask, the 260 00:16:10,440 --> 00:16:14,000 Speaker 1: problem would go away, because that's the easiest way to 261 00:16:14,120 --> 00:16:19,000 Speaker 1: convey inflections. So I am very optimistic about how we're 262 00:16:19,080 --> 00:16:21,000 Speaker 1: learning to deal with it. For example, one of the 263 00:16:21,080 --> 00:16:24,160 Speaker 1: things we learned about an m y U was we 264 00:16:24,240 --> 00:16:28,760 Speaker 1: had patients who have IT lying prone, lying on their bellies, 265 00:16:29,760 --> 00:16:32,560 Speaker 1: and believe it or not, it had a significant effect 266 00:16:33,440 --> 00:16:37,120 Speaker 1: on their dependence on a ventilator, which if you don't 267 00:16:37,160 --> 00:16:39,440 Speaker 1: have to put somebody in the ventilator, God, please don't. 268 00:16:40,680 --> 00:16:46,800 Speaker 1: I think we've addressed the issue of supply of PPE successfully, 269 00:16:46,880 --> 00:16:49,360 Speaker 1: and I think the pharmaceutical industry, by the way, deserves 270 00:16:49,360 --> 00:16:52,440 Speaker 1: a lot of credit the effort they've all made collectively, 271 00:16:52,920 --> 00:16:57,880 Speaker 1: not with a profit motive. Uh. I believe, based upon 272 00:16:58,640 --> 00:17:02,160 Speaker 1: hearing people smarter than me, that will have at least 273 00:17:02,240 --> 00:17:08,160 Speaker 1: one successful vaccine by Christmas, and maybe more, maybe more, 274 00:17:08,240 --> 00:17:12,879 Speaker 1: maybe multiples are one. Uh. I think there's there's there's 275 00:17:12,920 --> 00:17:18,560 Speaker 1: the anybody therapy, which looks very promising and that could 276 00:17:18,600 --> 00:17:22,000 Speaker 1: be now. That doesn't prevent you from getting it, but 277 00:17:22,160 --> 00:17:24,480 Speaker 1: God forbid, if you get it, it's going to be 278 00:17:24,600 --> 00:17:28,800 Speaker 1: very helpful in treating you. And and if you haven't 279 00:17:28,800 --> 00:17:31,679 Speaker 1: had it, it might give you an immunity for a 280 00:17:31,680 --> 00:17:34,320 Speaker 1: couple of months of the vaccine obviously is meant to 281 00:17:34,320 --> 00:17:39,720 Speaker 1: have a longer duration as with any issue. I think 282 00:17:39,720 --> 00:17:43,280 Speaker 1: the President made some good decisions. I think he made 283 00:17:43,320 --> 00:17:48,320 Speaker 1: some unwise decisions. The good decision was jumping on it 284 00:17:48,400 --> 00:17:52,600 Speaker 1: right away regarding flights in from China. I wish she 285 00:17:52,680 --> 00:17:55,520 Speaker 1: had a different stand on mask because I said earlier, 286 00:17:55,920 --> 00:17:59,960 Speaker 1: but mass to me a very critical part of the defense. Again, 287 00:18:00,000 --> 00:18:03,879 Speaker 1: it's a pandemic, so I wish that he had embraced 288 00:18:04,280 --> 00:18:09,440 Speaker 1: masks sooner and more enthusiastically. I would feel better if 289 00:18:09,440 --> 00:18:13,440 Speaker 1: he had a little higher regard for the pharmaceutical industry. 290 00:18:13,440 --> 00:18:15,320 Speaker 1: Not let me say this to you, David, and I 291 00:18:15,359 --> 00:18:17,960 Speaker 1: want to warn you when I in a spirit offul disclosure, 292 00:18:18,520 --> 00:18:22,000 Speaker 1: I am a very major investment in healthcare industry, in 293 00:18:22,119 --> 00:18:26,200 Speaker 1: a number of companies, my biggest position in the industry 294 00:18:26,240 --> 00:18:30,840 Speaker 1: being Eli Lily. I give the industry straight aged for 295 00:18:30,960 --> 00:18:33,840 Speaker 1: pulling together in the last four months and doing what 296 00:18:33,960 --> 00:18:35,639 Speaker 1: they could to help the country out of this more 297 00:18:35,720 --> 00:18:40,479 Speaker 1: ask uh. I think the effort they're all making now 298 00:18:40,560 --> 00:18:44,760 Speaker 1: on a vaccine, it's very good, and I think the motive, 299 00:18:44,880 --> 00:18:48,679 Speaker 1: thank god, it is not their bottom line, but alleviate 300 00:18:49,080 --> 00:18:52,920 Speaker 1: the tragedy that it's had on humanity around the world. 301 00:18:53,080 --> 00:18:56,240 Speaker 1: And that's that's the name one of the redeeming features 302 00:18:56,280 --> 00:19:00,679 Speaker 1: of the pharmaceuticals. So I would He's done a lot 303 00:19:00,720 --> 00:19:06,000 Speaker 1: of great things, and I wish he had done his 304 00:19:06,359 --> 00:19:11,320 Speaker 1: his passion for this hydrochloric quam for me. Uh, I'm not. 305 00:19:11,640 --> 00:19:14,360 Speaker 1: I don't think it was merrited. I don't think it's 306 00:19:14,359 --> 00:19:17,200 Speaker 1: I don't even like the drug that they thought it 307 00:19:17,240 --> 00:19:21,200 Speaker 1: would be. It has purposes, it's been around a long time, 308 00:19:21,280 --> 00:19:24,360 Speaker 1: and it's effective for different conditions that it might help 309 00:19:24,760 --> 00:19:29,679 Speaker 1: a few people through the through the infection of COVID. 310 00:19:30,480 --> 00:19:33,480 Speaker 1: But so what I'm saying is I liked some of 311 00:19:33,560 --> 00:19:38,680 Speaker 1: the things he did. I like the fact that because 312 00:19:38,720 --> 00:19:40,600 Speaker 1: they were they were arguing with each other in the 313 00:19:40,760 --> 00:19:43,440 Speaker 1: last couple of weeks, that he issued an executive order 314 00:19:44,480 --> 00:19:49,840 Speaker 1: to help out. I'm I'm thrilled with his compassion and 315 00:19:49,960 --> 00:19:53,760 Speaker 1: a sensitivity to the health care delivery system we have 316 00:19:53,880 --> 00:19:56,600 Speaker 1: in America. Because n y U we lost in one 317 00:19:56,680 --> 00:20:00,440 Speaker 1: month million dollars. There were hospitals in New York that 318 00:20:00,560 --> 00:20:04,199 Speaker 1: lost even more than we did. And thank god they 319 00:20:04,280 --> 00:20:10,760 Speaker 1: got that first bill through and nominally it's alone. Uh, 320 00:20:11,280 --> 00:20:13,040 Speaker 1: if it is a loan, we have to play it back. 321 00:20:13,440 --> 00:20:15,520 Speaker 1: That means we lost five of a million because don't 322 00:20:15,520 --> 00:20:18,840 Speaker 1: forget in that period of time we stopped doing everything 323 00:20:18,920 --> 00:20:23,600 Speaker 1: except dealing with COVID patients. We will overwhelmed the number 324 00:20:23,600 --> 00:20:25,760 Speaker 1: of people that came in, so we had nothing. We 325 00:20:25,840 --> 00:20:29,280 Speaker 1: could do nothing but focus on dealing for the epidemic 326 00:20:29,359 --> 00:20:32,840 Speaker 1: of the pandemic. So that's the best dancer I can 327 00:20:32,880 --> 00:20:35,440 Speaker 1: give it. That was Ken Lane Gone Home Depot, co 328 00:20:35,600 --> 00:20:37,920 Speaker 1: founder and chairman of the n y U Land Gone 329 00:20:38,240 --> 00:20:41,159 Speaker 1: Medical Center. Coming up, we wrap up the week with 330 00:20:41,240 --> 00:20:45,120 Speaker 1: our special contributor Larry Summers. This is Wall Street Week 331 00:20:45,640 --> 00:20:54,440 Speaker 1: on Bloomberg. This is Bloomberg Wall Street Week with David 332 00:20:54,520 --> 00:20:57,800 Speaker 1: Weston from Bloomberg Radio to take us through the economy 333 00:20:57,880 --> 00:21:00,480 Speaker 1: under President Trump. We convene now our virtual round table 334 00:21:00,560 --> 00:21:03,800 Speaker 1: contributors Larry Summers, who served under President Clinton as treasure 335 00:21:03,840 --> 00:21:06,440 Speaker 1: Secretary and then as the Director of the National Economic 336 00:21:06,440 --> 00:21:09,359 Speaker 1: Council under President Obama and Glenn Hubbard, who served as 337 00:21:09,440 --> 00:21:12,680 Speaker 1: Chairman of the Council of Economic Advisors under President George W. Bush. 338 00:21:12,840 --> 00:21:15,639 Speaker 1: So let me start since we're telling a candidate for 339 00:21:15,760 --> 00:21:17,920 Speaker 1: President Trump on the Republican side, Glen, let me start 340 00:21:17,920 --> 00:21:20,880 Speaker 1: with you. When you hear the plans that were being 341 00:21:20,920 --> 00:21:22,919 Speaker 1: told for the second four years, will they get us 342 00:21:23,000 --> 00:21:27,040 Speaker 1: that full employment? The President Trump that really promised. Well. 343 00:21:27,119 --> 00:21:29,920 Speaker 1: I think conventions are obviously great theater. The President was 344 00:21:30,000 --> 00:21:32,360 Speaker 1: pointing back to the pre COVID world, and he could 345 00:21:32,440 --> 00:21:35,600 Speaker 1: point to some good successes. He did have success with 346 00:21:35,720 --> 00:21:40,120 Speaker 1: the economy. Unemployment was very low, market valuations were very high. 347 00:21:40,520 --> 00:21:44,280 Speaker 1: GDP growth was solid. I think he could well point 348 00:21:44,359 --> 00:21:47,440 Speaker 1: to the Tax Cut and Jobs Act, and he could 349 00:21:47,480 --> 00:21:51,720 Speaker 1: point to his regulatory agenda, having said that there's uncertainty 350 00:21:51,760 --> 00:21:55,440 Speaker 1: about trade policy, and what missing was missing to me 351 00:21:55,840 --> 00:21:58,560 Speaker 1: was a sense more of the future. He talks about 352 00:21:58,640 --> 00:22:02,000 Speaker 1: make America great again, to see make America flourish again, 353 00:22:02,119 --> 00:22:05,160 Speaker 1: what would it take to get every American to participate 354 00:22:05,359 --> 00:22:09,000 Speaker 1: and prosper. I think their ideas there on the Republican side, 355 00:22:09,080 --> 00:22:10,960 Speaker 1: but I wish more of them had been at the 356 00:22:11,000 --> 00:22:13,680 Speaker 1: geop convention. So Larry, let me bring you in on 357 00:22:13,760 --> 00:22:16,080 Speaker 1: the other side of this, as it were, is what 358 00:22:16,240 --> 00:22:19,119 Speaker 1: you heard from foreign Vice President Biden going against the 359 00:22:19,119 --> 00:22:21,119 Speaker 1: full employment either when he's talking about something a three 360 00:22:21,160 --> 00:22:23,359 Speaker 1: point eight trillion dollars in new taxes. Is that what 361 00:22:23,440 --> 00:22:26,720 Speaker 1: this economy needs right now? This economy needs a serious 362 00:22:26,800 --> 00:22:30,800 Speaker 1: program of public investment. And some part of that public 363 00:22:31,119 --> 00:22:35,520 Speaker 1: investment program will pay for itself. And some part of 364 00:22:35,600 --> 00:22:39,480 Speaker 1: that public investment program is rational to finance with debt, 365 00:22:40,160 --> 00:22:43,600 Speaker 1: but some part of that public investment program probably should 366 00:22:43,640 --> 00:22:48,080 Speaker 1: be paid for with tax increases, especially when those taxes 367 00:22:48,160 --> 00:22:52,440 Speaker 1: increases would make the economy fairer and would also make 368 00:22:52,480 --> 00:22:57,920 Speaker 1: the economy more efficient. We don't serve any useful purpose 369 00:22:58,680 --> 00:23:03,119 Speaker 1: by failing to elect billion dollars a year, most of 370 00:23:03,200 --> 00:23:06,200 Speaker 1: it from the highest income people, because we don't do 371 00:23:06,320 --> 00:23:10,760 Speaker 1: a competent job of enforcing the tax law. We could 372 00:23:10,800 --> 00:23:13,600 Speaker 1: move towards fixing that and raise a trillion dollars over 373 00:23:13,640 --> 00:23:18,040 Speaker 1: the next decade from high income people and close tax shelters. 374 00:23:18,119 --> 00:23:21,880 Speaker 1: At the same time, we've got a variety of loopholes 375 00:23:21,960 --> 00:23:27,280 Speaker 1: and special breaks that divert resources into inefficient uses and 376 00:23:27,760 --> 00:23:32,080 Speaker 1: cost the government a ton of revenue. The famous carried 377 00:23:32,119 --> 00:23:38,080 Speaker 1: interest provision is one example. UH. In that regard, those 378 00:23:38,119 --> 00:23:43,480 Speaker 1: are candidates for rational tax reform that at the same 379 00:23:43,600 --> 00:23:48,760 Speaker 1: time would finance government doing what it UH needs to do. 380 00:23:49,560 --> 00:23:53,040 Speaker 1: I'm for that. I think there are people who have 381 00:23:53,240 --> 00:23:56,920 Speaker 1: the idea that, caused by envy, we should have tax 382 00:23:57,040 --> 00:24:00,320 Speaker 1: increases in order to tear down the rich. I think 383 00:24:00,359 --> 00:24:03,119 Speaker 1: that would be a mistake. There are people who have 384 00:24:03,280 --> 00:24:06,080 Speaker 1: the idea that we should have tax increases for the 385 00:24:06,200 --> 00:24:09,719 Speaker 1: sake of having tax increases, or just as a device 386 00:24:09,920 --> 00:24:14,440 Speaker 1: for reducing the deficit. I think that's a mistake. But 387 00:24:14,960 --> 00:24:18,560 Speaker 1: should we pay for some portion over time of the 388 00:24:19,560 --> 00:24:24,320 Speaker 1: huge public investment we need? Yes, I think uh we should. 389 00:24:24,440 --> 00:24:27,120 Speaker 1: And I think that's the spirit in which Vice President 390 00:24:27,200 --> 00:24:31,639 Speaker 1: Biden has talked about tax increases. And so Glenn, what 391 00:24:31,680 --> 00:24:33,399 Speaker 1: about it year from Larry that it's a matter of 392 00:24:33,440 --> 00:24:35,800 Speaker 1: public investment, which really is what we need right now. 393 00:24:36,240 --> 00:24:38,240 Speaker 1: On the Republican side, for President Trump, we said let's 394 00:24:38,240 --> 00:24:40,920 Speaker 1: cut the cattital gains tax. Well, private investment is that 395 00:24:41,119 --> 00:24:43,720 Speaker 1: the most efficient way really of getting investment? Where is 396 00:24:43,840 --> 00:24:47,120 Speaker 1: Larry right? Well? I think public investment is very important. 397 00:24:47,200 --> 00:24:50,440 Speaker 1: We need a strong infrastructure program, not just physical but 398 00:24:50,600 --> 00:24:53,840 Speaker 1: also technological. We're seeing that play out before our very eyes. 399 00:24:54,359 --> 00:24:57,600 Speaker 1: It's hard to disagree with Larry on issues like avoiding 400 00:24:57,880 --> 00:25:00,760 Speaker 1: tax avoidance. Of course we should do that. Having said that, 401 00:25:01,400 --> 00:25:05,040 Speaker 1: is Vice President Biden serious about a large tax increase 402 00:25:05,119 --> 00:25:08,520 Speaker 1: on business and business owners in a recession or an 403 00:25:08,560 --> 00:25:12,320 Speaker 1: incipient recovery. We've got very large proposed increases in the 404 00:25:12,400 --> 00:25:16,359 Speaker 1: corporation tax and individual tax rates, and the most radical 405 00:25:16,440 --> 00:25:18,920 Speaker 1: expansion of the payroll tax. Not to be used for 406 00:25:19,000 --> 00:25:21,960 Speaker 1: seal security, but do you be used for other purposes? 407 00:25:22,480 --> 00:25:24,440 Speaker 1: So the Biden plan may have been developed at a 408 00:25:24,520 --> 00:25:26,560 Speaker 1: time and a place, but we're not at that time 409 00:25:26,640 --> 00:25:28,840 Speaker 1: in that place. So while I don't disagree with Larry, 410 00:25:29,400 --> 00:25:32,320 Speaker 1: it's not really the Biden plan. Okay, so fairly quickly, 411 00:25:32,440 --> 00:25:34,520 Speaker 1: Larry sort of more or less yes or no? Do 412 00:25:34,600 --> 00:25:37,520 Speaker 1: you think Vice President Biden is serious about that three 413 00:25:37,560 --> 00:25:40,720 Speaker 1: point a trillion dollar tax increase? I think Vice President 414 00:25:40,800 --> 00:25:46,560 Speaker 1: Biden is serious about a major increase in public investment 415 00:25:47,240 --> 00:25:50,159 Speaker 1: and paying for an important part of it, though not 416 00:25:50,359 --> 00:25:53,760 Speaker 1: necessarily all of it, and I think that's the right 417 00:25:53,880 --> 00:25:57,400 Speaker 1: thing to do. I do not think that it's anybody's 418 00:25:57,520 --> 00:26:01,640 Speaker 1: intention to impose a may your new set of austerity 419 00:26:02,320 --> 00:26:06,440 Speaker 1: on the current economy. Glenn and I may have a disagreement. 420 00:26:06,840 --> 00:26:11,000 Speaker 1: Uh the business community before the Trump tax cuts thought 421 00:26:11,080 --> 00:26:13,840 Speaker 1: it would be fantastic if the corporate tax rate were 422 00:26:13,880 --> 00:26:19,640 Speaker 1: cut to. In fact it was cut to. There were 423 00:26:19,960 --> 00:26:23,400 Speaker 1: a set of tax cuts proposed for non corporate businesses 424 00:26:23,480 --> 00:26:27,080 Speaker 1: that nobody was even asking for. I think we should 425 00:26:27,119 --> 00:26:31,359 Speaker 1: repeal and replace some of that and use the revenues 426 00:26:31,880 --> 00:26:36,840 Speaker 1: to push the economy forward for everyone. And I think 427 00:26:36,920 --> 00:26:39,440 Speaker 1: that is the right thing to do, and that's the 428 00:26:39,520 --> 00:26:42,480 Speaker 1: spirit of the of the Biden plan. As I understand, Larry, 429 00:26:42,520 --> 00:26:44,639 Speaker 1: I think you get old victory lap this week, because 430 00:26:44,840 --> 00:26:46,960 Speaker 1: over five years ago you wrote in the Financial Times 431 00:26:47,000 --> 00:26:49,480 Speaker 1: and I'll quote it, the FED could inject much needed 432 00:26:49,560 --> 00:26:52,879 Speaker 1: confidence in the economy today and minimize future risks by 433 00:26:52,920 --> 00:26:55,960 Speaker 1: announcing and following a strategy of not raising rates until 434 00:26:56,000 --> 00:26:58,800 Speaker 1: it sees the whites of inflations eyes now as best 435 00:26:58,880 --> 00:27:01,320 Speaker 1: I understand. That's sore. Know what j Pal said this week, 436 00:27:01,359 --> 00:27:03,240 Speaker 1: isn't it? I think it's more or less exactly what 437 00:27:03,400 --> 00:27:06,520 Speaker 1: he said. I think he said two important things. He 438 00:27:06,800 --> 00:27:10,520 Speaker 1: made clear that the two percent figure was a two 439 00:27:10,600 --> 00:27:14,480 Speaker 1: sided target, and after a decade of being below two percent, 440 00:27:14,680 --> 00:27:16,440 Speaker 1: it would be okay with him if we were above 441 00:27:16,480 --> 00:27:19,840 Speaker 1: two percent for a while and we weren't being religious 442 00:27:19,880 --> 00:27:22,920 Speaker 1: about two percent as the ceiling. That's what I and 443 00:27:23,040 --> 00:27:26,480 Speaker 1: many others have been advocating for a long time. And 444 00:27:27,160 --> 00:27:31,239 Speaker 1: he also said that he was gonna reject what has 445 00:27:31,320 --> 00:27:34,960 Speaker 1: been a FED staff preoccupation for a long time, the 446 00:27:35,000 --> 00:27:40,560 Speaker 1: Phillips curve idea that we should stop the party before 447 00:27:40,600 --> 00:27:44,840 Speaker 1: it gets started by raising rates when it looks like 448 00:27:45,000 --> 00:27:47,919 Speaker 1: the economy is going to be really strong and unemployment 449 00:27:48,119 --> 00:27:51,159 Speaker 1: is going to be low, and wages are gonna rise fast, 450 00:27:51,400 --> 00:27:55,120 Speaker 1: and the last last people to be hired are gonna 451 00:27:55,200 --> 00:27:58,760 Speaker 1: be hired, and employers are going to be reaching for 452 00:27:59,560 --> 00:28:05,720 Speaker 1: less guild workers and those with some blot on their backgrounds. UH, 453 00:28:05,960 --> 00:28:10,760 Speaker 1: that we're not gonna cut off economies growth when those 454 00:28:10,880 --> 00:28:17,320 Speaker 1: kinds of things happen until we actually see inflation materialized. 455 00:28:17,359 --> 00:28:21,360 Speaker 1: And I think those are too welcome, welcome and frankly 456 00:28:21,480 --> 00:28:27,240 Speaker 1: overdue changes in UH perspective from the fat there are 457 00:28:27,320 --> 00:28:32,119 Speaker 1: things that I've been calling for for half a dozen years, 458 00:28:32,600 --> 00:28:36,760 Speaker 1: UH in recognition of the fact that our economy's basic 459 00:28:36,920 --> 00:28:42,840 Speaker 1: problem isn't an inflationary gap. It's a deflationary gap where 460 00:28:43,360 --> 00:28:48,240 Speaker 1: savings succeeds investment, and that pushes interest rates too far down, 461 00:28:48,960 --> 00:28:53,920 Speaker 1: causes UH money to flow into liquid assets that then 462 00:28:54,000 --> 00:28:58,920 Speaker 1: get inflated and caused bubbles, and UH risks too much 463 00:28:59,000 --> 00:29:02,000 Speaker 1: sluggishness in the economy. So I think the FED has 464 00:29:02,680 --> 00:29:06,680 Speaker 1: moved to substantial distance in the right direction. I think 465 00:29:06,760 --> 00:29:10,760 Speaker 1: they've still got some way to go UH in terms 466 00:29:10,800 --> 00:29:13,520 Speaker 1: of recognizing the limits of what they're able to do 467 00:29:13,840 --> 00:29:17,320 Speaker 1: and putting the right kind of pressure on other policies 468 00:29:17,800 --> 00:29:21,160 Speaker 1: to push demand forward. Well, let's talk about those limits exactly, Gland. 469 00:29:21,360 --> 00:29:24,120 Speaker 1: Let's assume you agree with Larry essentially more or less 470 00:29:24,240 --> 00:29:25,960 Speaker 1: better late than never. But at the same time, is 471 00:29:26,120 --> 00:29:28,880 Speaker 1: this the cure for what ails us right now? Because 472 00:29:28,920 --> 00:29:30,800 Speaker 1: this doesn't get rid of the coronavirus, it doesn't get 473 00:29:30,840 --> 00:29:33,680 Speaker 1: increased productivity, it doesn't get growth going necessarily, does it. 474 00:29:34,440 --> 00:29:36,520 Speaker 1: I think it's a it's a good step. I too 475 00:29:36,600 --> 00:29:39,800 Speaker 1: have called for average inflation targeting for some time, but 476 00:29:39,920 --> 00:29:42,040 Speaker 1: it's not a free launch. I mean, it does give 477 00:29:42,080 --> 00:29:44,320 Speaker 1: the FED room to let the economy run hot. It's 478 00:29:44,320 --> 00:29:47,240 Speaker 1: a good thing. It gives room for interest rates and 479 00:29:47,400 --> 00:29:49,560 Speaker 1: you curve to steepen that too, would be a good 480 00:29:49,600 --> 00:29:54,200 Speaker 1: thing in the present environment. However, it may cause misallocation 481 00:29:54,760 --> 00:29:58,920 Speaker 1: in capital markets relative to say, a fiscal policy response, 482 00:29:59,000 --> 00:30:02,400 Speaker 1: and it isn't going to cure the coronavirus for supply side. 483 00:30:02,480 --> 00:30:05,760 Speaker 1: So yes, we can say good job to the FED 484 00:30:05,920 --> 00:30:08,840 Speaker 1: for the Jackson Whole announcement, but I don't think it's 485 00:30:08,880 --> 00:30:10,480 Speaker 1: time for the FED at least to be taking a 486 00:30:10,600 --> 00:30:14,400 Speaker 1: victory lap. I think Washington needs to focus on fiscal policy. 487 00:30:14,720 --> 00:30:17,640 Speaker 1: Share Powell's doing his part, but it's only a part. 488 00:30:18,320 --> 00:30:20,320 Speaker 1: Is there another danger, Larry actually which we met called 489 00:30:20,440 --> 00:30:22,560 Speaker 1: mission creep bar from the military, and I think in 490 00:30:22,720 --> 00:30:25,320 Speaker 1: Vietnam is there mission creep here? Because as you read 491 00:30:25,360 --> 00:30:27,160 Speaker 1: what j. Pow had to say, he was talking about 492 00:30:27,160 --> 00:30:30,680 Speaker 1: all sorts of things like really fixing inequalities and income 493 00:30:30,760 --> 00:30:34,000 Speaker 1: and a wayes addressing problems with municipalities. Is that something 494 00:30:34,040 --> 00:30:36,440 Speaker 1: really the FED is competent to do. I think Glenn 495 00:30:36,520 --> 00:30:41,040 Speaker 1: and I are again in violent agreement. Uh, what the 496 00:30:41,160 --> 00:30:44,520 Speaker 1: Fed did is necessary, it is a long way from 497 00:30:44,600 --> 00:30:51,040 Speaker 1: sufficient to address America's economic challenges. Because the FED, frankly, 498 00:30:51,120 --> 00:30:53,920 Speaker 1: has been more successful and more competent in the last 499 00:30:54,000 --> 00:30:58,280 Speaker 1: few years. The other parts of the government, there's a 500 00:30:58,360 --> 00:31:01,440 Speaker 1: tendency to turn to the FED to solve every problem. 501 00:31:02,000 --> 00:31:06,280 Speaker 1: I don't think the FED can fix the environment and 502 00:31:06,400 --> 00:31:09,400 Speaker 1: make America green. I don't think the FED is the 503 00:31:09,520 --> 00:31:14,160 Speaker 1: right instrument for dealing with struggling municipalities. I don't think 504 00:31:14,240 --> 00:31:19,640 Speaker 1: the FED is the right instrument for addressing racial inequality. 505 00:31:20,120 --> 00:31:25,240 Speaker 1: So I think the feds new emphasis on a strong economy, 506 00:31:25,800 --> 00:31:30,120 Speaker 1: it's move away from a single minded UH focus on 507 00:31:30,440 --> 00:31:38,000 Speaker 1: preempting inflation, is overdue and appropriate. But I don't think 508 00:31:38,360 --> 00:31:45,000 Speaker 1: we should turn ourselves into an economy run by the FED. 509 00:31:45,520 --> 00:31:48,320 Speaker 1: Are many thanks right now? So Larry Summers of Harvard 510 00:31:48,360 --> 00:31:51,400 Speaker 1: and Glenn Hubbard of Colombia, and both of them are 511 00:31:51,440 --> 00:31:54,400 Speaker 1: contributors to Wall Street Week for this virtual round table. 512 00:31:54,720 --> 00:31:56,840 Speaker 1: And that does it for this edition of Wall Street Week. 513 00:31:57,160 --> 00:32:05,280 Speaker 1: I'm David Weston. This is Bloomberg. See next week. M HM.