WEBVTT - Bloomberg Wall Street Week: Kaplan, Jarrett, Corwin 0:00:00.160 --> 0:00:03.360 This is Bloomberg Wall Street Week. What's the state of 0:00:03.400 --> 0:00:06.360 corporate governance? The deficit is a real issue. The US 0:00:06.400 --> 0:00:09.880 economy continues to send mixed signals. The financial stories that 0:00:10.000 --> 0:00:13.000 cheap our world fed action to con concerns over dollar 0:00:13.039 --> 0:00:16.520 liquidity and encouraging China data. The five hundred wealthiest people 0:00:16.520 --> 0:00:19.160 in the world. Through the eyes of the most influential 0:00:19.239 --> 0:00:22.520 voices Larry Summers, the former Treasury Secretary, star Ward CEO, 0:00:22.640 --> 0:00:26.360 Kevin Johnson sec Chairman J Clayton. Bloomberg wool Street Week 0:00:26.480 --> 0:00:30.280 with David Weston from Bloomberg Radio. A light at the 0:00:30.440 --> 0:00:33.080 end of the tunnel, But how long is the tunnel? 0:00:33.159 --> 0:00:36.640 And what lies between us and the light? Welcome to 0:00:36.680 --> 0:00:40.320 Bloomberg Wall Street Week. I'm David Weston. New York went 0:00:40.360 --> 0:00:43.240 through what we thought was the worst of the coronavirus 0:00:43.320 --> 0:00:47.920 last spring, as hospital beds filled, intensive care units were overwhelmed, 0:00:48.240 --> 0:00:52.000 and the elderly died in nursing homes. Dr Stephen Corman 0:00:52.120 --> 0:00:54.360 was in the vanguard of trying to protect New Yorkers 0:00:54.400 --> 0:00:57.800 as President and CEO of New York Presbeterian Hospital, the 0:00:57.920 --> 0:01:01.360 leading medical center in the area. As difficult as it 0:01:01.440 --> 0:01:03.840 was in March and April. There are some ways in 0:01:03.880 --> 0:01:07.680 which this new wave maybe even worse. Last March and 0:01:07.720 --> 0:01:11.360 April you saw really it concentrated in the Northeast, and 0:01:11.400 --> 0:01:14.920 it was more sporadic. Now you're seeing this across the 0:01:15.080 --> 0:01:19.039 entire country, which is worrisome in terms of how stretched 0:01:19.040 --> 0:01:22.720 we're going to be, particularly on issues like staffing. Recall 0:01:22.840 --> 0:01:25.640 that when New York went through this crisis, we received 0:01:25.680 --> 0:01:28.559 help from around the country. Uh, staffing help from around 0:01:28.600 --> 0:01:32.520 the country. That's not gonna be available for many of 0:01:32.520 --> 0:01:35.160 the health systems now because we're seeing it across the 0:01:35.319 --> 0:01:38.680 entire country. Testing and testing re agents are going to 0:01:38.760 --> 0:01:42.760 be stretched as well. So I think that it's it's 0:01:42.800 --> 0:01:47.080 it's somewhat different now. Having said that, the demography is 0:01:47.080 --> 0:01:49.920 is more favorable. Younger people tend to do better than 0:01:49.960 --> 0:01:54.040 older people. The mortality is less, the number of people 0:01:54.160 --> 0:01:57.960 requiring ventilators throughout the country is less than when we 0:01:58.040 --> 0:02:02.280 first saw it, and at the March and April time frame, uh, 0:02:02.320 --> 0:02:04.320 and in the July August time frame in the in 0:02:04.360 --> 0:02:08.840 the Southwest, So those are somewhat comforting. I do think 0:02:09.000 --> 0:02:12.839 that despite all the rhetoric around mask wearing and so 0:02:12.919 --> 0:02:17.200 on the people paying attention to mask wearing. Social distancing 0:02:17.840 --> 0:02:20.920 has helped. So I think we're in somewhat better shape, 0:02:20.919 --> 0:02:23.680 but there are different challenges this go around. What kind 0:02:23.680 --> 0:02:26.440 of surgery are you seeing in your hospital center? As 0:02:26.440 --> 0:02:31.120 a practicmenter for hospitalizations, So at the at the Natier, 0:02:31.200 --> 0:02:34.360 we were at about two percent of our peak UH. 0:02:34.560 --> 0:02:37.200 Now we're at about ten to fifteen percent of our 0:02:37.240 --> 0:02:40.200 peak UH, and we expected to go up to about 0:02:41.160 --> 0:02:44.680 of the peak depending on exactly what happens over the 0:02:44.720 --> 0:02:48.600 Thanksgiving holiday and then of course Christmas time, so we 0:02:48.680 --> 0:02:52.960 are preparing for it. We do have adequate ventilators, we 0:02:53.040 --> 0:02:58.359 do have adequate masks, ppe, etcetera. We do worry about 0:02:59.080 --> 0:03:02.560 the number of re agents that we will have for 0:03:02.720 --> 0:03:05.799 adequate testing. But I feel that we're in better shape 0:03:05.800 --> 0:03:07.840 than March and April, and we're hopeful that it will 0:03:07.919 --> 0:03:12.480 be less strenuous than March and April for sure. And look, 0:03:12.520 --> 0:03:18.600 we have the the likelihood of the vaccines UH not 0:03:18.680 --> 0:03:21.680 only being approved but starting to be distributed at the 0:03:21.760 --> 0:03:24.600 end of December and January and then hopefully ramping up 0:03:25.000 --> 0:03:27.720 by the April May time frames. So you can see 0:03:27.720 --> 0:03:29.520 the goal line in sight. If we can just get 0:03:29.520 --> 0:03:31.960 through the next few months, well, okay, to follow that analogy, 0:03:32.040 --> 0:03:33.480 you see the goal line. The question is how do 0:03:33.520 --> 0:03:35.920 we not fumble the ball in the meantime because there's 0:03:35.920 --> 0:03:38.880 some people who feel tired about wearing those masks you 0:03:38.960 --> 0:03:41.600 set help and social distancing. How long do we have 0:03:41.640 --> 0:03:44.000 to keep that up in your estimation before we really 0:03:44.040 --> 0:03:48.760 have effective protection from the vaccine few months. I think 0:03:48.800 --> 0:03:52.000 you're looking at the rest of November, December, January into 0:03:52.080 --> 0:03:55.400 February hopefully, but in the February March time frame, you're 0:03:55.440 --> 0:03:59.920 starting to see widespread availability of the vaccine. And David, 0:04:00.080 --> 0:04:02.840 I can put a plug in. We must insist on 0:04:02.960 --> 0:04:06.400 mass vaccination. The pain that we've gone through as a country, 0:04:06.880 --> 0:04:10.080 the deaths that we've had, the effect on so many 0:04:10.120 --> 0:04:15.120 different industries and businesses, We've got to insist on mass vaccination. 0:04:15.280 --> 0:04:17.919 We've got to make sure that we educate our population 0:04:17.960 --> 0:04:20.080 about it. I tell you I would be the first 0:04:20.120 --> 0:04:23.200 in line for either the visor of the moderna vaccine. 0:04:23.960 --> 0:04:27.600 I think it's been a remarkable accomplishment, and with all 0:04:27.640 --> 0:04:32.320 of the negatives about how the administration has handled this, 0:04:33.279 --> 0:04:36.160 I think that Operation Warp Speed was a success. And 0:04:36.200 --> 0:04:39.719 the private sector really stepped up here in a major way. 0:04:39.760 --> 0:04:43.480 This is the shortest time to get a vaccine in 0:04:43.520 --> 0:04:46.080 the in the history of vaccines, and it is really 0:04:46.120 --> 0:04:50.599 a remarkable scientific accomplishment. So, dr the question now is 0:04:50.680 --> 0:04:53.600 how the baton will be passed from the Trump administration 0:04:53.600 --> 0:04:55.520 of what really everybody agrees is going to be the 0:04:55.560 --> 0:04:58.359 Biden administration. What would you hope to see from a 0:04:58.360 --> 0:05:00.800 Biden administration that might be from from what you've seen 0:05:00.800 --> 0:05:03.360 from a Trump administration. Well, the first thing is, I 0:05:03.400 --> 0:05:07.560 think this transition is critical. Uh. The initial distribution of 0:05:07.560 --> 0:05:10.760 the vaccine is let's say, going to be, uh, twenty 0:05:10.760 --> 0:05:14.600 million doses or thirty million doses. Uh, if you require 0:05:14.640 --> 0:05:17.279 two doses for vaccine, you're only talking about fifteen million 0:05:17.320 --> 0:05:21.480 Americans getting it. So the coordination between the outgoing administration 0:05:21.520 --> 0:05:25.359 and the Biden administration becomes critical so that everybody's on 0:05:25.400 --> 0:05:27.960 the same page. How is it going to get distributed? 0:05:28.080 --> 0:05:31.000 What is the I T system associated with this? What 0:05:31.040 --> 0:05:33.960 are the state allocations? Do the states have plans that 0:05:34.040 --> 0:05:37.040 makes sense? How do you prioritize this, how do you 0:05:37.080 --> 0:05:42.039 make it equitable? That should be being discussed right now. Uh, 0:05:42.080 --> 0:05:45.760 And I know that you spoke to the Congressman before. Yes, 0:05:46.600 --> 0:05:49.880 the election needs to be certified, but we there is 0:05:49.920 --> 0:05:53.000 a clear winner here, and at the very least there 0:05:53.000 --> 0:05:57.839 should be widespread support for sharing of information and allowing 0:05:58.000 --> 0:06:01.839 for an effective transition to happen. If it turns out 0:06:02.120 --> 0:06:06.719 that the president actually one which no one thinks is likely, okay, 0:06:06.800 --> 0:06:10.920 then there's no harm, no foul. But not doing this handoff, 0:06:10.960 --> 0:06:13.960 I think is is really critical. As you said, you 0:06:14.000 --> 0:06:16.200 don't want to fumble it when you're inside of the 0:06:16.200 --> 0:06:19.120 goal line, and we need an effective passing at the baton. 0:06:19.640 --> 0:06:22.520 That was Dr Stephen Corwin, President and CEO of New 0:06:22.600 --> 0:06:25.839 York Presbyterian Hospital, coming up, What it takes to put 0:06:25.839 --> 0:06:28.680 a White House together? From the woman who was President 0:06:28.720 --> 0:06:33.000 Obama's senior advisor through his eight years there, Valerie Jared. 0:06:33.600 --> 0:06:45.280 That's next on Wall Street Week on Bloomberg. This is 0:06:45.320 --> 0:06:49.679 Bloomberg Wall Street Week with David Weston from Bloomberg Radio. 0:06:50.000 --> 0:06:52.359 One of the biggest issues in Washington these days is 0:06:52.360 --> 0:06:54.160 how we're going to get for a President Trump to 0:06:54.200 --> 0:06:56.920 a President Biden. We have a president elect, but no 0:06:57.040 --> 0:06:59.480 transition has begun, at least not as of now, which 0:06:59.520 --> 0:07:02.800 means the income administration can't fully get up and running 0:07:02.960 --> 0:07:06.960 despite pressing issues such as the pandemic. I have no budget. 0:07:07.000 --> 0:07:09.800 I can't do any of this until I'm sworn in, 0:07:10.040 --> 0:07:13.160 or I could convince the President now to do things 0:07:13.200 --> 0:07:17.880 that should be being done already. I mean, there's hardly 0:07:17.920 --> 0:07:21.080 been a meeting that's taken place in the White House 0:07:21.080 --> 0:07:24.000 about any of this. We're welcome now someone who has 0:07:24.080 --> 0:07:27.440 run a presidential transition team before. Valery Jared served for 0:07:27.520 --> 0:07:29.680 eight years as senior advisor to President Obama. She was 0:07:29.760 --> 0:07:32.400 co chair of the Obama Transition Team into this Nate, 0:07:32.480 --> 0:07:34.960 all of which she wrote about in her book Finding 0:07:34.960 --> 0:07:38.320 My Voice. When the perfect Plan crumbles, the adventure begins. 0:07:38.360 --> 0:07:40.160 So M Jed, thank you so much for being back 0:07:40.160 --> 0:07:42.600 with us. Really appreciated. As I say, you've actually run 0:07:42.680 --> 0:07:45.280 one of these. You know what a gargent shuan task. 0:07:45.360 --> 0:07:47.960 This is. How much more difficult is it because we've 0:07:47.960 --> 0:07:51.840 been delayed at least sometime getting it started needlessly more Now? 0:07:51.840 --> 0:07:55.640 I will say, obviously his team is the president lex 0:07:55.720 --> 0:07:58.760 team has been assembled. They have been working diligently on 0:07:59.000 --> 0:08:03.920 policies and generating staffing recommendations for the President elect. Both 0:08:03.960 --> 0:08:06.240 in the White House, he's already named his chief of staff, 0:08:06.640 --> 0:08:08.840 and also in the cabinet. They go through a vetting 0:08:08.880 --> 0:08:13.280 process for that. But but in the midst of a pandemic, 0:08:13.640 --> 0:08:16.920 with millions of Americans losing their jobs, it is more 0:08:17.000 --> 0:08:20.480 important than ever that the agencies be available to the 0:08:20.520 --> 0:08:23.600 transition team. And I always say that one of the 0:08:23.600 --> 0:08:27.320 things that surprised me, but President of a Wellness Transition 0:08:27.880 --> 0:08:32.600 was the unbelievable degree of cooperation we received from President Bush. 0:08:32.600 --> 0:08:34.719 Now we may not have agreed with him on policies, 0:08:35.080 --> 0:08:38.240 but what President Bush believed is in the smooth and 0:08:38.360 --> 0:08:43.880 orderly transition of power. And when President Obabou was leaving office, 0:08:43.920 --> 0:08:46.680 we did the exact same thing in his direction for 0:08:46.760 --> 0:08:50.240 President Trump, because this isn't about politics. It's about keeping 0:08:50.240 --> 0:08:53.120 our country safe, keeping him healthy. And if you think 0:08:53.120 --> 0:08:55.920 about you know there's been a focus on the presidential 0:08:56.040 --> 0:08:58.439 daily briefing that the president elect is of getting. But 0:08:58.600 --> 0:09:03.080 we have sixteen different intelligence agencies, and the team that 0:09:03.120 --> 0:09:06.680 the President assembled should be in each of those agencies 0:09:06.800 --> 0:09:09.560 right now finding out the information that won't make it 0:09:09.600 --> 0:09:13.520 to the presidential grouping for another six months. But what 0:09:13.840 --> 0:09:16.600 we'll need to be acted upon on day one, and 0:09:16.679 --> 0:09:20.760 so we are at peril. It's totally irresponsible, it's putting 0:09:20.840 --> 0:09:23.800 us at risk. And what there's no need for this. 0:09:24.040 --> 0:09:27.040 The election has been called. And even if the president 0:09:27.080 --> 0:09:30.160 wanted to pursue his lawsuits that there is nothing that 0:09:30.240 --> 0:09:33.599 prevents him from, by the same token, going down a 0:09:33.679 --> 0:09:37.000 path for a transition. Well, well, sooner or later there 0:09:37.000 --> 0:09:39.760 will be a transition. I think it's uncomfortable saying, and 0:09:39.920 --> 0:09:41.719 we're here from some Republicans, they're starting to move in 0:09:41.760 --> 0:09:44.160 that direction that we're getting towards that time. Let's talk 0:09:44.200 --> 0:09:46.760 about that transition. And you refer to the team around 0:09:46.760 --> 0:09:49.920 the president. You helped President Obama really put together that team. 0:09:49.960 --> 0:09:52.400 You help pick those people. When you're putting together a 0:09:52.400 --> 0:09:54.400 team like that, what are you looking for? How do 0:09:54.480 --> 0:09:57.480 you get a team together that here it really consistent 0:09:57.520 --> 0:09:59.120 with your views, but at the same time brings a 0:09:59.160 --> 0:10:02.319 diversity of you points. Well, that's something that's very important 0:10:02.360 --> 0:10:04.440 to the president of life. He's made that clear that 0:10:04.520 --> 0:10:07.320 he wants a team that reflects the rich diversity of 0:10:07.320 --> 0:10:10.360 our country because he believes he will make better decisions 0:10:10.400 --> 0:10:13.520 if he's advised by people who don't just think like him. 0:10:13.720 --> 0:10:17.080 They share his values, that's important, but they have different 0:10:17.120 --> 0:10:20.040 life experiences and that began with the selection of his 0:10:20.160 --> 0:10:26.599 vices president. Obviously the vice president elect Harris qualified experienced 0:10:27.320 --> 0:10:31.200 track record of leadership, but she has a different life experience, 0:10:31.240 --> 0:10:33.800 and he wanted to make sure that the last person 0:10:33.840 --> 0:10:36.880 who talks to him is somebody who he trust. But 0:10:37.679 --> 0:10:39.599 it doesn't always see the world the same way that 0:10:39.679 --> 0:10:42.320 he does. I'm not sure, Vario, whether we've all fully 0:10:42.360 --> 0:10:45.880 absorbed the significancy, historic significance of that vice presidential pick. 0:10:46.240 --> 0:10:50.680 The first black vice president, the first Indian American vice president, 0:10:50.840 --> 0:10:53.240 first woman, as a matter of fact. So so what 0:10:53.400 --> 0:10:55.880 is that going to symbolize for the country, but also 0:10:56.040 --> 0:10:59.040 what effect might Kamala Harris have within the White House. 0:10:59.320 --> 0:11:01.520 I think she's gonna be a powerful voice, and that's 0:11:01.559 --> 0:11:03.599 what he said he wanted, which I think reflects not 0:11:03.679 --> 0:11:07.200 only well on her, but also well on him. She's 0:11:07.240 --> 0:11:10.880 shattering what very glass ceilings of all kinds. As you mentioned, David, 0:11:11.160 --> 0:11:13.680 She's will be a role model for people all across 0:11:13.720 --> 0:11:16.520 the country in the world about the way the new 0:11:16.559 --> 0:11:20.120 look of leadership. But she also is going to help 0:11:20.200 --> 0:11:23.839 him make really tough decisions and bring her life experiences 0:11:23.880 --> 0:11:26.400 to bear on that. And that's what he says he wants, 0:11:26.440 --> 0:11:30.440 not just as his vice president, but throughout the administration. Already, 0:11:30.480 --> 0:11:34.559 the transition team is majority women, is near majority people 0:11:34.559 --> 0:11:37.360 of color, and so he's off to a very good start. 0:11:37.400 --> 0:11:39.800 And I think that you can tell a lot about 0:11:39.800 --> 0:11:42.520 a person by who they surround themselves with. And since 0:11:42.559 --> 0:11:44.680 I know so many of the folks on the team, well, 0:11:45.200 --> 0:11:47.520 I am really impressed. I know that he will hit 0:11:47.559 --> 0:11:50.240 the ground running. But to return again, David, it would 0:11:50.240 --> 0:11:53.480 be so much easier if we have the full cooperation 0:11:53.640 --> 0:11:56.000 of the Trump administration, where I say we I'm in 0:11:56.040 --> 0:11:58.840 our country, because this is really about putting country first. 0:11:59.440 --> 0:12:02.120 Every new president comes in with a very full inbox. 0:12:02.160 --> 0:12:04.240 I think it's fair to say, but this president, in particular, 0:12:04.480 --> 0:12:06.480 the President Biden, when he takes office, is going to 0:12:06.559 --> 0:12:09.440 have the coronavirus. He's got economic issues. He has a 0:12:09.480 --> 0:12:12.440 lot of issues domestically before he gets the international issues. 0:12:12.800 --> 0:12:15.440 At the same time, there are pressing issues that you 0:12:15.559 --> 0:12:17.600 really took some ownership of when you were in the 0:12:17.600 --> 0:12:20.760 White House, things like racial justice, things like how we're 0:12:20.760 --> 0:12:23.319 dealing with working mothers who are particularly a hard hit 0:12:23.400 --> 0:12:25.760 right now. For example, here in New York City, as 0:12:25.800 --> 0:12:28.120 their kids are not in school, the working mothers have 0:12:28.160 --> 0:12:30.800 a very difficult time. What can the White House? What 0:12:30.840 --> 0:12:33.920 can the administration do without the cooperation of the Congress 0:12:33.920 --> 0:12:36.320 in those areas well? Tom starts at the top, and 0:12:36.400 --> 0:12:39.480 I think he's already signaled that his first priority is 0:12:39.520 --> 0:12:42.840 to get his arms around this COVID nineteen pandemic. He's 0:12:42.880 --> 0:12:46.200 already assembled a task force. It's hard work. We'll be 0:12:46.280 --> 0:12:49.599 making recommendations to him about steps to go forward to 0:12:49.720 --> 0:12:52.480 not only to contain it, but once we have the vaccine, 0:12:52.559 --> 0:12:54.840 to make sure that people actually get vaccinated in a 0:12:54.920 --> 0:12:58.760 fair and equitable way. He has always been an advocate 0:12:59.000 --> 0:13:02.080 for working family, and I think the pandemic has laid 0:13:02.120 --> 0:13:04.559 bare a challenges that have existed for a long time. 0:13:05.120 --> 0:13:08.400 Pay people, pay paid leave, paid sick days. We know 0:13:08.520 --> 0:13:13.040 that women are suffering disproportionately in this pandemic, and that's 0:13:13.080 --> 0:13:15.400 why he said, well, we build America back, we have 0:13:15.480 --> 0:13:17.640 to build it back better. So what are the levers 0:13:17.679 --> 0:13:21.360 we can turn as we craft a recovery package? And look, 0:13:21.559 --> 0:13:24.640 when he came in in two thousand and nine, President 0:13:24.679 --> 0:13:27.840 Obama asked is then vice president to be responsible for 0:13:27.880 --> 0:13:30.840 that eight hundred billion dollar Recovery Act and make sure 0:13:30.880 --> 0:13:33.240 that the resources were going where they were needed most. 0:13:33.600 --> 0:13:35.720 And so he is well prepared to do this again. 0:13:35.720 --> 0:13:37.920 And in fact, his cheapest staff that he just selected 0:13:38.280 --> 0:13:40.400 was the same person who was this cheapest staff at 0:13:40.440 --> 0:13:43.320 that time. So he has got to He said, the 0:13:43.320 --> 0:13:45.560 only way we're going to grow our economy is to 0:13:45.559 --> 0:13:48.239 get our arms around this pandemic. And I would say, 0:13:48.440 --> 0:13:51.880 sitting here watching it spiral out of control with no 0:13:52.320 --> 0:13:55.800 leadership coming from the White House day after day after day, 0:13:56.000 --> 0:13:59.040 with reaching to them to the fifty pound and people dead. 0:13:59.320 --> 0:14:02.599 Just think of those Thanksgiving tables where they're going to 0:14:02.640 --> 0:14:05.080 be so many empty seats in our country. And so 0:14:05.120 --> 0:14:08.079 again that's why this is a critical time as that 0:14:08.280 --> 0:14:10.880 virus is spiking. So yes, yes, to get on his 0:14:11.080 --> 0:14:13.320 arms around it. And to the point you've raised in 0:14:13.400 --> 0:14:17.120 terms of the racial healing and criminal justice reform, that's 0:14:17.120 --> 0:14:19.880 also priority for Here's a good news. One thing I 0:14:19.960 --> 0:14:23.120 know about President Left finds he can multitask and his 0:14:23.280 --> 0:14:26.640 policy shops will be working on all of the issues 0:14:26.640 --> 0:14:29.400 that he articulated in his campaign. To be true to 0:14:29.480 --> 0:14:32.640 his worth thanks to Valry Jared, former senior adviser to 0:14:32.680 --> 0:14:36.160 President Barack Obama. Coming up, the view from the FED 0:14:36.400 --> 0:14:39.400 on how the pandemic may be changing the very structure 0:14:39.480 --> 0:14:42.400 of our economy over the long term from Dallas FED 0:14:42.440 --> 0:14:46.840 President Robert Kaplan. That's next on Wall Street Week on Bloomberg. 0:14:50.000 --> 0:14:54.000 This is Bloomberg Wall Street Week with David Weston from 0:14:54.120 --> 0:14:57.280 Bloomberg Radio, and regret to say that we're in the 0:14:57.320 --> 0:15:01.360 worst economic mess since the Great Depression. Together, we must 0:15:01.400 --> 0:15:06.240 chart a different course. We must increase productivity. That means 0:15:06.560 --> 0:15:09.520 making it possible for industry to modernize and make use 0:15:09.560 --> 0:15:13.480 of the technology which we ourselves invented. That means putting 0:15:13.480 --> 0:15:17.120 Americans back to work, and that means, above all, bringing 0:15:17.160 --> 0:15:21.320 government spending back within government revenues. That was President Reagan 0:15:22.720 --> 0:15:26.520 talking about the economic crisis he faced back then. Now 0:15:26.640 --> 0:15:29.480 we're facing a new crisis, a crisis born not of 0:15:29.600 --> 0:15:33.600 runaway inflation and high oil prices, but of a pandemic 0:15:33.720 --> 0:15:37.080 that may have farther reaching consequences on the way we work, 0:15:37.480 --> 0:15:40.200 the way we learn, the way we live, all of 0:15:40.240 --> 0:15:42.320 which are very much on the mind of Dallas FED 0:15:42.360 --> 0:15:48.240 President Robert Kaplan. So so The irony is we think, UH, 0:15:48.360 --> 0:15:51.560 over the horizon is going to be a very strong 0:15:51.680 --> 0:15:56.120 year with GDP growth probably three and a percent or greater, 0:15:56.920 --> 0:15:59.320 although a lot of that growth will be in the 0:15:59.360 --> 0:16:02.360 back half of the year. That the challenges, as you mentioned, 0:16:02.640 --> 0:16:05.800 is getting through the next six months, and we're seeing 0:16:05.880 --> 0:16:11.040 resurgence intensify all through the country, and we're seeing mobility 0:16:11.040 --> 0:16:16.600 and engagement UH fall off in those places where the 0:16:16.680 --> 0:16:22.440 resurgence is affecting or threatening the health healthcare capacity, hospital capacity. 0:16:22.800 --> 0:16:25.840 If that continues, which it looks like it is continuing, 0:16:26.120 --> 0:16:29.040 you're going to see more and more cities UH fall 0:16:29.080 --> 0:16:33.920 off El Paso as an example, Wisconsin, Chicago, Utah, Colorado. 0:16:34.360 --> 0:16:37.040 We're all seeing that kind of mobility engagement fall off, 0:16:37.080 --> 0:16:41.960 which indicates growth will slow and so UH we'll we'll 0:16:41.960 --> 0:16:44.000 have to see what the fourth quarter looks like. We 0:16:44.360 --> 0:16:47.400 it is possible we could have negative growth if this 0:16:47.520 --> 0:16:51.400 resurgence gets bad enough and mobility falls off enough so 0:16:51.440 --> 0:16:53.800 that local officials, even though don't they don't want to 0:16:53.840 --> 0:16:57.040 do more restrictions, they don't have a choice. So the 0:16:57.080 --> 0:17:00.120 next couple of quarters is going to be very challenging. 0:17:00.520 --> 0:17:04.520 The good news is over the horizon, things will get better, 0:17:04.560 --> 0:17:06.639 but we've got to get through the next six months, 0:17:07.160 --> 0:17:10.040 and we've got to do more on masks, wearing, social distancing, 0:17:10.080 --> 0:17:13.879 because a vaccine will help us eventually, but it's not 0:17:13.920 --> 0:17:15.840 going to help us get through the next three months. 0:17:15.960 --> 0:17:18.480 So negative growth and for a couple of months that 0:17:18.520 --> 0:17:20.760 adds up to a recession is as I understand it. 0:17:20.840 --> 0:17:23.520 So you're you're not ruling out that possibility. I'm not 0:17:23.640 --> 0:17:25.560 ruling out If you had asked me a month ago, 0:17:25.640 --> 0:17:27.119 I would have said we're going to grow in the 0:17:27.160 --> 0:17:30.440 fourth quarter as much as four or five percent annualized. 0:17:31.000 --> 0:17:34.399 But I think with this resurgence, um, I think the 0:17:34.520 --> 0:17:37.880 risks are all the downside. The only good news if 0:17:37.880 --> 0:17:40.199 there is and if there is negative growth and the 0:17:40.240 --> 0:17:44.080 rebound stalls, we our own view as it will be temporary, 0:17:44.119 --> 0:17:46.320 it'll last for a quarter or two, but it's a 0:17:46.359 --> 0:17:50.800 possibility at this point. Might that prompt fed action? Could you, 0:17:50.880 --> 0:17:52.840 for example, increase your bond buying or is that just 0:17:52.880 --> 0:17:54.679 not the right response to the problem we're looking at. 0:17:55.600 --> 0:17:58.040 I don't I don't know if that's the right response. 0:17:58.119 --> 0:18:02.119 I do think it's critical that the thirteen three programs, 0:18:02.160 --> 0:18:07.480 these public market, backstock programs and programs like that support 0:18:07.560 --> 0:18:10.840 Main Street and the PPP that they continue beyond your end. 0:18:11.080 --> 0:18:15.440 I think that's very important. I would continue our bomb 0:18:15.440 --> 0:18:18.560 buying at the same pace that we're buying if we 0:18:18.640 --> 0:18:22.639 needed to. If this got bad enough, we could extend maturities. 0:18:22.640 --> 0:18:26.760 But I wouldn't increase the size. Uh, But I think 0:18:26.760 --> 0:18:28.560 there are tools we have and we're gonna have to 0:18:28.560 --> 0:18:31.200 watch this very very carefully. So you said maybe three 0:18:31.280 --> 0:18:35.520 and a half percent GP growth in back end loaded 0:18:35.720 --> 0:18:38.360 or better or better, fair enough or better, but back 0:18:38.440 --> 0:18:42.320 end loaded is that entirely contingent upon an effective vaccine 0:18:42.440 --> 0:18:45.399 sometime in the middle of the year. Yes, it is, 0:18:45.880 --> 0:18:49.159 And so what we're assuming is our base case is 0:18:49.200 --> 0:18:51.800 we'll we'll have a good vaccine or more than one 0:18:51.920 --> 0:18:55.760 vaccine by the end of this year. But the first 0:18:55.880 --> 0:18:58.199 order of business is going to be to immunize about 0:18:58.520 --> 0:19:01.880 twenty million healthcare worker in the United States. That could 0:19:01.880 --> 0:19:04.800 take up until say March or April, and then in 0:19:04.880 --> 0:19:10.159 March or April, our expectation is that you'll have broad 0:19:10.240 --> 0:19:13.680 dissemination that will take a number of months to get 0:19:14.000 --> 0:19:16.880 the population inoculated. So we're going to spend a good 0:19:16.880 --> 0:19:22.240 part of socially distancing mask wearing. But the back half 0:19:22.240 --> 0:19:25.840 of the year is going to be better and better 0:19:25.880 --> 0:19:28.800 times will be ahead again, but we've got to get through. 0:19:29.040 --> 0:19:32.040 We've got to get through a very difficult period first, 0:19:32.640 --> 0:19:34.920 and that's where our focus is right now. And then 0:19:34.960 --> 0:19:38.080 the news of these two or three promising vaccine candidates 0:19:38.119 --> 0:19:40.040 really encouraged I think all of us to believe what 0:19:40.119 --> 0:19:41.720 you just said, that we will get through it, although 0:19:41.720 --> 0:19:44.000 it's gonna be hard between here and there. When we 0:19:44.040 --> 0:19:47.040 get through it, what will be the long term changes 0:19:47.080 --> 0:19:49.360 do you think to the very structure of our economy 0:19:49.520 --> 0:19:53.080 from the pandemic or will they go away? So we're 0:19:53.080 --> 0:19:55.520 gonna have a number of issues that we're gonna we're 0:19:55.520 --> 0:19:58.959 gonna have to deal with. The number one, technology and 0:19:59.000 --> 0:20:03.359 technology and inable disruption was a fact of life pre pandemic, 0:20:03.720 --> 0:20:07.680 and the pandemic has accelerated it. People are now even 0:20:07.720 --> 0:20:12.440 more comfortable shopping remotely, working remotely, and just conducting their 0:20:12.480 --> 0:20:15.600 lives differently. Some of that will swing back, but I 0:20:15.640 --> 0:20:18.199 think some of it will not. You could see in 0:20:18.240 --> 0:20:21.959 the future less business travel, You'll see reconfigured office space, 0:20:22.440 --> 0:20:25.879 maybe less office space for some companies. That was Dallas 0:20:25.920 --> 0:20:29.960 FED President Robert Kaplan. Coming up, we wrap up the 0:20:29.960 --> 0:20:33.720 week with our special contributor Larry Summers. This is Wall 0:20:33.720 --> 0:20:47.760 Street Week on Bloomberg. This is Bloomberg Wall Street Week 0:20:47.960 --> 0:20:51.199 with David Weston from Bloomberg Radio. We're gonna wrap up 0:20:51.240 --> 0:20:54.000 the week. We welcome now our special contributor Larry Summers 0:20:54.040 --> 0:20:56.920 of Harvard. So, Larry, great to have you here, particularly 0:20:56.960 --> 0:20:59.080 because at the very end of the week we had 0:20:59.080 --> 0:21:02.040 a fair amount of secretaria treasury action there. One of 0:21:02.080 --> 0:21:05.119 your successors took some action. Secretary Manuchin wrote a letter 0:21:05.320 --> 0:21:07.840 to the head of the Fed, J. Pow, saying, please 0:21:07.880 --> 0:21:09.440 give us back that money we gave you for those 0:21:09.480 --> 0:21:12.639 emergency lending facilities. And you had something to say about that. 0:21:12.680 --> 0:21:14.520 In fact, you had a tweet in which you said 0:21:14.560 --> 0:21:20.000 Secretary Paulson talk, referring to Hank Paulson. Another predecessor understood 0:21:20.560 --> 0:21:24.119 in a transition it was his job to help the 0:21:24.160 --> 0:21:26.960 FED and the incoming administration established a basis for strong 0:21:27.040 --> 0:21:31.040 cooperative efforts to contain the crisis. Secretary Manuchin has done 0:21:31.119 --> 0:21:35.280 just the opposite. So drawing a contrast between these two secretaries, 0:21:35.400 --> 0:21:41.280 what is going on here? Larry and two Shepherd points one, Uh, 0:21:41.280 --> 0:21:44.919 every previous government. I mean, there was plenty of bitterness 0:21:44.920 --> 0:21:48.440 in the Bush Gore campaign, really there was. I mean, 0:21:48.480 --> 0:21:52.360 we all thought that election was stolen. But it didn't 0:21:52.359 --> 0:21:55.680 occur to me, or to anyone who worked with me, 0:21:55.840 --> 0:21:59.720 or to any other cabinet officer in the Clinton administration 0:22:00.320 --> 0:22:05.359 not to cooperate fully in helping the government be ready 0:22:05.840 --> 0:22:10.280 to do whatever our successors wanted to do. The last 0:22:10.359 --> 0:22:14.480 thing we envisioned doing was thwarting their ability to carry 0:22:14.480 --> 0:22:20.160 out their policies. What Steven nuchen uh did in writing 0:22:20.400 --> 0:22:25.080 uh that letter and making those demands and reducing the 0:22:25.160 --> 0:22:31.760 authorization was thwart what it's clear and incoming Biden administration 0:22:31.880 --> 0:22:36.359 wants to do. So that's just wrong on process terms. 0:22:37.119 --> 0:22:43.840 The second problem is it's just incredibly imprudent and reckless 0:22:44.720 --> 0:22:48.760 at a time when the pandemic is getting far worse, 0:22:49.760 --> 0:22:53.120 at a time when we don't really know where this 0:22:53.160 --> 0:22:57.639