WEBVTT - Surveillance: ECB Stuck in Trap, Athey Says 0:00:05.120 --> 0:00:09.200 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene, along 0:00:09.240 --> 0:00:13.200 with Jonathan Ferrell and Lisa Brownwitz Jaily. We bring you 0:00:13.320 --> 0:00:18.600 insight from the best and economics, finance, investment, and international relations. 0:00:18.960 --> 0:00:23.840 Find Bloomberg Surveillance on Apple Podcast, Suncloud, Bloomberg dot com, 0:00:23.920 --> 0:00:30.920 and of course on the Bloomberg terminal. Right now we 0:00:31.000 --> 0:00:33.680 must go to James eighty whose age listening to our 0:00:33.720 --> 0:00:38.159 analysis with Everydeen Standard this morning, James, Ah, these central 0:00:38.159 --> 0:00:41.239 banks have zero degree of freedom. They may even have 0:00:41.440 --> 0:00:44.920 negative degrees of freedom. Do you really care or when 0:00:45.000 --> 0:00:48.840 you invest? Do you really invest off what central bank 0:00:48.920 --> 0:00:54.520 headlines say? Morning Tom, That's not really what the headlines say. 0:00:54.560 --> 0:00:57.680 I think the headlines can often miss, you know, the detail, 0:00:57.800 --> 0:01:01.400 the new on the reality of the policy. See. Unfortunately, 0:01:01.760 --> 0:01:04.040 you can't invest in the markets that I invest in. 0:01:04.040 --> 0:01:07.440 You probably can't invest in any markets without considering to 0:01:07.520 --> 0:01:10.240 a pretty significant degree what what central banks are up to. 0:01:10.360 --> 0:01:13.160 But I agree with you, they have no degrees of freedom. Really, 0:01:13.160 --> 0:01:16.520 they've dugged themselves a massive trap and they're now stuck 0:01:16.560 --> 0:01:19.200 in that trap. And there is no central bank that's 0:01:19.200 --> 0:01:22.280 suffering that problem to a greater degree than the ECB. 0:01:22.680 --> 0:01:24.320 Do you think they're stuck down here for the whole 0:01:24.319 --> 0:01:30.080 of the cycle, James, and beyond. There's literally the ECBs 0:01:30.160 --> 0:01:32.640 problem is that it's trying to use cyclical policy to 0:01:32.680 --> 0:01:37.600 deal with massive, massive structural issues. There is there's no 0:01:37.640 --> 0:01:40.399 economic theory that says that monetary policy has anything more 0:01:40.400 --> 0:01:43.399 than inter temporal effects. And even fiscal policy to the 0:01:43.440 --> 0:01:46.959 extent that it's current spending and not investment, only has 0:01:47.120 --> 0:01:50.440 a temporal effect. It brings forward to demand from the 0:01:50.480 --> 0:01:52.880 future to today. It does not in and of itself 0:01:53.040 --> 0:01:58.360 create demand through the cycle. So ECB is absolutely trapped. 0:01:58.400 --> 0:02:00.440 Its job really at the moment seem to be just 0:02:00.560 --> 0:02:05.240 keeping financial markets from pricing a much more terrifying future 0:02:05.320 --> 0:02:08.800 and hoping that that politicians can can get their act together. 0:02:08.840 --> 0:02:10.840 But I see no evidence so that's occurring on I'm 0:02:10.919 --> 0:02:13.519 just working through this statement right now and I'm trying 0:02:13.560 --> 0:02:15.560 to find the big change, and James, I've got to 0:02:15.560 --> 0:02:17.000 be honest with you, it just feels like a bunch 0:02:17.040 --> 0:02:19.840 of twigs around the margins. As far as the forward 0:02:19.840 --> 0:02:23.480 guidance is concerned. This market market participants and the ECB 0:02:23.600 --> 0:02:25.480 is going to be well aware of this. They want 0:02:25.520 --> 0:02:30.000 to understand what happens after the emergency ends, what happens 0:02:30.000 --> 0:02:32.560 with PET, what happens to all that flexibility and to 0:02:32.680 --> 0:02:35.320 the hawks push back significantly enough that in the asset 0:02:35.400 --> 0:02:39.080 purchased program, beyond the crisis, beyond the emergency, we lose 0:02:39.120 --> 0:02:43.200 some flexibility. You're hearing anything about that this morning, and 0:02:43.280 --> 0:02:46.600 not in the market doesn't really care about the underlying 0:02:46.600 --> 0:02:49.440 economic reality. To be honest, the market wants some certainty 0:02:49.480 --> 0:02:53.000 around asset purchases because it makes for a very asymmetric 0:02:53.639 --> 0:02:56.920 market environment and one in which that you can disregard 0:02:57.120 --> 0:03:00.120 actual fundamentals and risk and valuation. And by the is 0:03:00.160 --> 0:03:02.360 on the basis that syndram case you back, that's what 0:03:02.360 --> 0:03:05.120 the market would like to see. Obviously, the ECB Government 0:03:05.120 --> 0:03:09.359 Council has significant disagreement amongst these members, such that there 0:03:09.400 --> 0:03:11.560 may come a time in the future where that disagreement 0:03:11.600 --> 0:03:15.000 really does impinge on their policy setting. I just don't 0:03:15.000 --> 0:03:17.760 think we're there yet, because we're still relatively early in 0:03:17.800 --> 0:03:20.800 the European recovery, and obviously with the delta variant that 0:03:20.919 --> 0:03:23.600 there are threats to that recovery that are already emerging. 0:03:23.639 --> 0:03:27.200 But you know, I'm minded to quote the Bgs or 0:03:27.280 --> 0:03:30.000 boy Zone if you're of a younger generation and say 0:03:30.200 --> 0:03:33.000 it's only words. I don't know if Tom knows who 0:03:33.360 --> 0:03:40.240 boy Zone are? The Bejs though, do you know boys are? Tom? No? No, No, 0:03:40.320 --> 0:03:42.160 I don't think he's missing out. They did a cover 0:03:42.200 --> 0:03:45.920 of the Begs. Tom awhile ago, Kelly go on, I'm 0:03:45.920 --> 0:03:47.320 going to plead the fifth on whether or not I 0:03:47.360 --> 0:03:50.960 know who that is. Just carry on, James, that was 0:03:51.000 --> 0:03:53.440 a conversation killer. Don't worry, Kelly's going to pick this up. 0:03:54.720 --> 0:03:56.080 I want to know when you think the market is 0:03:56.080 --> 0:03:58.440 going to get some answers. I was. I was speaking 0:03:58.440 --> 0:04:01.000 with economist over at Berkeleys yesterday saying this meeting maybe 0:04:01.120 --> 0:04:03.000 was overhyped and that yes, we were going to get, 0:04:03.000 --> 0:04:05.280 as John says, some tweaks around the margins. But the 0:04:05.320 --> 0:04:07.520 real answers to what the market's looking for is not 0:04:07.600 --> 0:04:10.280 going to be coming until September or December. When do 0:04:10.320 --> 0:04:12.920 you expect us to have a clue what the post 0:04:12.920 --> 0:04:17.440 PEP world is going to look like? Wow? I mean, 0:04:17.480 --> 0:04:19.960 that's that's really difficult to say, because obviously it will 0:04:20.000 --> 0:04:23.440 depend on economic outturns, and honestly, it will depend on 0:04:23.520 --> 0:04:26.120 what's happening outside the Eurozone as much as it is 0:04:26.160 --> 0:04:28.960 what's happening within the Eurozone. Again, I don't expect to 0:04:29.000 --> 0:04:32.560 see any material shift in the structural outlook for the Eurozone. 0:04:32.600 --> 0:04:35.359 But of course bond markets are highly correlated. So in 0:04:35.400 --> 0:04:39.120 this world where the ECB is managing monetary conditions to 0:04:39.200 --> 0:04:43.520 whatever that, that actually means that there is always the 0:04:43.520 --> 0:04:47.160 the real danger that typening from the Federal Reserve can 0:04:47.240 --> 0:04:50.320 lead to an unwarranted, unwanted typing from the ECB, and 0:04:50.360 --> 0:04:54.200 they will seek to offset that almost regardless of the 0:04:54.279 --> 0:04:57.400 domestic economic data. That is to say, again the way 0:04:57.440 --> 0:05:01.320 central banks run their mandates, they're not really two concerned 0:05:02.040 --> 0:05:05.640 until they get to the steady states as they see it, 0:05:05.720 --> 0:05:07.960 which is to say that the non accelerating inflation, right 0:05:08.000 --> 0:05:10.760 of unemployment the NERU. When the economy has reached its capacity, 0:05:10.800 --> 0:05:13.479 then they care about title policy. Up until that point, 0:05:13.480 --> 0:05:17.039 they have absolutely no interest in making marginal adjustments to 0:05:17.080 --> 0:05:19.640 the policy as they get there. So ECB, until it 0:05:19.680 --> 0:05:21.720 gets there, it's not going to want to tighten policy, 0:05:21.720 --> 0:05:24.159 and it may have to loosen policy to offset a 0:05:24.200 --> 0:05:27.039 titan which is coming externally. James early Pine or you 0:05:27.080 --> 0:05:30.479 watch this news conference. In thirty five minutes, I've got 0:05:30.480 --> 0:05:34.600 a meeting, and there we go. Message John James, how 0:05:34.680 --> 0:05:37.760 unfortunate it's going to see you James at Aberdeen Standardestment 0:05:37.839 --> 0:05:47.280 Senior investment Manager. We kept a secret from Julia Cornado 0:05:47.320 --> 0:05:49.400 because we knew that if she knew I was going here, 0:05:49.520 --> 0:05:52.919 she wouldn't have an excuse. You do not have to 0:05:52.960 --> 0:05:57.560 come on, ye, Dr Cornado joins us to mercro policy perspectives. Julia. 0:05:57.640 --> 0:06:00.479 This came up as I was having a beverage of 0:06:00.520 --> 0:06:03.640 my choice and someone said to me, Okay, I get 0:06:03.720 --> 0:06:07.360 I s l M going back to Hicks and the 0:06:07.680 --> 0:06:11.120 real economy and the money economy. And now none of 0:06:11.120 --> 0:06:14.240 this theory is working right now given the fiscal stimulus 0:06:14.240 --> 0:06:17.800 and the insanity of his natural disaster that we're all living. 0:06:18.600 --> 0:06:24.800 But then it folds over into aggregate supply and aggregate demand. 0:06:25.640 --> 0:06:31.200 Dr Coronado, could you explain to our audience how these 0:06:31.279 --> 0:06:36.120 dynamics affect them when we go from Central Bank mumbo 0:06:36.200 --> 0:06:41.120 jumbo like I s l M over to America's aggregate 0:06:41.200 --> 0:06:47.560 supply and America's aggregate demand. Yeah, and those dynamics are 0:06:47.600 --> 0:06:52.320 incredibly complex even in normal times, let alone when we're 0:06:52.480 --> 0:06:56.120 sort of rebooting the global economy and dealing with a 0:06:56.120 --> 0:06:59.760 lot of liquidity slashing around. So you know, for example, 0:07:00.240 --> 0:07:04.159 even when the cycle was running very strong, uh last 0:07:04.520 --> 0:07:09.080 before the pandemic, we didn't see any inflationary pressures. Why well, 0:07:09.600 --> 0:07:12.120 you know, we had wage gains that were solid but 0:07:12.280 --> 0:07:16.880 not really accelerating. We saw consumers that were pretty price sensitive. 0:07:16.880 --> 0:07:19.280 They were very budget conscious, even as they were feeling 0:07:19.320 --> 0:07:23.000 good about the world. We think an older economy, consumers 0:07:23.000 --> 0:07:27.760 that have been through multiple crises just are more cautious. 0:07:27.800 --> 0:07:30.320 And that's one of the big questions going forward, is 0:07:30.440 --> 0:07:35.480 to consumers return to those cautious, price sensitive, budget conscious 0:07:35.480 --> 0:07:40.440 ways that limit how much of these supply chain bottleneck 0:07:40.480 --> 0:07:43.040 price pressures can be passed through at the retail level. 0:07:43.160 --> 0:07:46.080 Their lines on the page, my eyes used to glaze over. 0:07:46.200 --> 0:07:49.920 Cornado's nailed this stuff in the school, and there were 0:07:50.000 --> 0:07:54.200 shifts along the line and the great debate where these 0:07:54.240 --> 0:08:02.040 two strange words endogenous within the system and exogenous outside 0:08:02.080 --> 0:08:07.640 the system. Is a pandemic endogenous or exogenous? I know 0:08:07.720 --> 0:08:10.280 that it's exogenous. I mean, this couldn't be a better 0:08:10.400 --> 0:08:13.920 example of sort of an exogenous shock in the sense 0:08:14.120 --> 0:08:17.960 of you know, without getting into the origins of the virus. 0:08:18.360 --> 0:08:21.160 You know, for the most of the people in the economy, 0:08:21.240 --> 0:08:23.840 most of the businesses and consumers, this just hit us 0:08:23.960 --> 0:08:28.280 like lightning. Uh. You know, early we weren't sort of 0:08:28.320 --> 0:08:31.280 preparing for a pandemic. We were preparing for another year 0:08:31.320 --> 0:08:35.720 that looked sort of like so uh. It really caught 0:08:35.760 --> 0:08:40.040 everybody off guard. And then the complicating factor, Tom, is 0:08:40.120 --> 0:08:44.280 that many businesses saw the crisis and sort of pulled 0:08:44.280 --> 0:08:47.920 out the crisis playbook. Okay, I know that demand is 0:08:47.920 --> 0:08:50.720 going to collapse. I'm going to sell off my inventories. 0:08:50.760 --> 0:08:55.520 I'm going to ramp down operations uh and hoarde liquidity 0:08:55.520 --> 0:08:58.280 and just get real cautious. But then we went into 0:08:58.360 --> 0:09:04.160 a good sending boom supported by the fiscal stimulus, and 0:09:04.400 --> 0:09:07.240 you know, that caught homebuilders off guard, and it caught 0:09:07.280 --> 0:09:11.520 a lot of you know, goods sellers and producers off guard. 0:09:11.559 --> 0:09:14.440 And now they're scrambling to catch up. Uh. And that, 0:09:14.720 --> 0:09:17.120 and and therein lies a lot of the frictions that 0:09:17.679 --> 0:09:22.959 you hear uh la Guard and Powell talking about. They 0:09:22.960 --> 0:09:26.160 expect these things to be transitory because you know, if 0:09:26.200 --> 0:09:29.120 anything we learned during the pandemic, and we expect it 0:09:29.160 --> 0:09:32.240 to be true after the pandemic or as we move forward. 0:09:33.120 --> 0:09:37.560 We're pretty resilient and creative and you know, we find 0:09:37.640 --> 0:09:41.760 ways to get things done even through these challenges. So, um, 0:09:41.800 --> 0:09:44.680 it's not going to happen overnight, but we do expect 0:09:45.080 --> 0:09:48.480 ship manufacturing to ramp up and some of those bottlenecks 0:09:48.480 --> 0:09:51.480 to ease, and then competition is going to play its 0:09:51.600 --> 0:09:54.280 role and drive prices back down in fault. To me, 0:09:54.400 --> 0:09:59.000 what Dr Cornato says there is the absolute foundational thing 0:09:59.080 --> 0:10:04.199 that corporations adept. Yes, they're mailieable and they make decisions 0:10:04.240 --> 0:10:06.320 as the information is given to them. Yeah, we're seeing 0:10:06.360 --> 0:10:09.600 that in the earnings that are just being reported this period. Uh, 0:10:09.679 --> 0:10:11.360 Julian love to get your thoughts. We just heard from 0:10:11.400 --> 0:10:15.000 Christine Lagard this morning. She is she had some comments. Uh, 0:10:15.240 --> 0:10:17.320 you know, I guess the takeaway is lower for longer 0:10:17.440 --> 0:10:21.160 or somewhat even suggests lower forever. Given what we heard 0:10:21.160 --> 0:10:24.319 from Christine Lagarde, what do you expect to hear from 0:10:24.360 --> 0:10:29.760 this Federal Reserve coming up for the July meeting? Well, look, 0:10:29.800 --> 0:10:32.480 I think the FED is in a different place than 0:10:33.040 --> 0:10:35.920 the ECB uh, and so I do think that Chair 0:10:36.000 --> 0:10:41.240 Power will confirm that the discussions around the modalities and 0:10:41.360 --> 0:10:44.199 specifics of tapering got underway. I think they're going to 0:10:44.240 --> 0:10:46.920 get underway in July. They're going to get briefings from 0:10:46.960 --> 0:10:49.559 the New York Said staff and the Board staff on 0:10:49.920 --> 0:10:52.160 different choices that they need to make and what are 0:10:52.200 --> 0:10:54.200 the pros and cons, and they're going to have a 0:10:54.240 --> 0:10:58.360 detailed discussion, and I think he'll confirm that. Um I think, 0:10:58.520 --> 0:11:01.720 you know, in in the next months, maybe with the 0:11:01.800 --> 0:11:06.000 July minutes, maybe at Jackson Hall. You know, last cycle, 0:11:06.120 --> 0:11:09.079 we got this kind of blueprint, sort of a statement 0:11:09.160 --> 0:11:13.960 of normalization principles and plans, and so that's one question 0:11:14.000 --> 0:11:17.080 where we get kind of a blueprint from the Fed. 0:11:17.200 --> 0:11:19.360 These are the things that we've a creek agreed upon. 0:11:19.480 --> 0:11:23.200 For example, we expect to taper and end bond purchases 0:11:23.280 --> 0:11:26.760 before raising rates is one thing they said last time. 0:11:27.160 --> 0:11:29.920 I would expect them to reiterate that this time. They 0:11:30.000 --> 0:11:33.040 may sort of specify that they're going to have an 0:11:33.120 --> 0:11:37.320 even handed, uh sort of tapering between treasuries and mbs. 0:11:37.360 --> 0:11:40.160 I'm not sure if they get that specific, but something 0:11:40.280 --> 0:11:43.560 that provides this guidance along those lines to resolve some 0:11:43.640 --> 0:11:46.840 of the debates we've been having in markets and provide 0:11:46.880 --> 0:11:50.040 some clarity. That's that's what share Powell wants to do 0:11:50.160 --> 0:11:57.040 is lay the groundwork for markets steadily, methodically, well ahead 0:11:57.080 --> 0:12:00.760 of the actual announcement, which we still expect to come 0:12:00.800 --> 0:12:05.480 in December maybe November. Of the data run well, but 0:12:05.600 --> 0:12:07.480 we don't think they're in a hurry. But at the 0:12:07.520 --> 0:12:11.680 same so it's kind of start the signaling process, start 0:12:11.800 --> 0:12:15.480 the planning process, and give plenty of runway to market 0:12:15.720 --> 0:12:19.120 to adapt to the fact that the set is going 0:12:19.160 --> 0:12:21.520 to be withdrawing some of the liquidity support it's been 0:12:21.520 --> 0:12:25.680 pumping in over the last year plus. You know, it's interesting. 0:12:25.679 --> 0:12:27.600 We were just talking to a guest earlier, Julia, and 0:12:27.640 --> 0:12:29.960 just kind of he was bemoaning the fact that in Europe, yes, 0:12:30.000 --> 0:12:34.679 they have lots of monetary easing in support, but really uh, 0:12:35.000 --> 0:12:37.439 too little and too late on the fiscal statements side. 0:12:37.880 --> 0:12:39.880 That's certainly not the case here in the US. Plenty 0:12:39.960 --> 0:12:42.800 of students has been pumped into this economy. How critical 0:12:42.840 --> 0:12:46.439 is it to get even more well. I think that 0:12:46.559 --> 0:12:49.600 there's what we're talking about now on fiscal policy in 0:12:49.720 --> 0:12:53.040 terms of the infrastructure packages is very different from what 0:12:53.080 --> 0:12:56.559 we put in over the last year, which was multiple 0:12:56.640 --> 0:13:00.600 injections of big liquidity directly to consumers and businesses. They 0:13:00.600 --> 0:13:04.640 were one time payments to get people through the pandemic, 0:13:04.679 --> 0:13:08.040 to build a bridge of financing effectively, which it did 0:13:08.160 --> 0:13:11.560 very well, maybe maybe too well in some in some cases, 0:13:11.600 --> 0:13:15.040 but definitely got a lot of people through. What we're 0:13:15.080 --> 0:13:18.319 talking about now is much more structural. We're talking about 0:13:18.320 --> 0:13:22.320 a ten year spending plan of building capacity in certain 0:13:22.360 --> 0:13:27.560 areas that we think we need repairing, you know, physical infrastructure, 0:13:28.360 --> 0:13:33.480 addressing certain um sort of structural shortcomings in our economy 0:13:33.920 --> 0:13:37.040 and again over a longer horizon, and by the way, 0:13:37.120 --> 0:13:41.000 mostly paid for. That does not fall under the category 0:13:41.080 --> 0:13:45.400 of fiscal stimulus. That's more of a you know, retooling 0:13:45.640 --> 0:13:51.280 and uh structural adjustment in uh certain areas of the economy. 0:13:51.559 --> 0:13:53.960 You know, I do think it won't fully be paid for, 0:13:54.080 --> 0:13:57.960 so there will be some fistical tail winds, but you know, 0:13:58.000 --> 0:14:00.680 in terms of the dynamics of that, the timing of that, 0:14:01.800 --> 0:14:03.920 it's not at all like what we what we are 0:14:03.960 --> 0:14:07.440 emerging from now. Okay, let's leave with her Julia Cornodle 0:14:07.480 --> 0:14:15.720 think as much particularly clinic early on he was knighted 0:14:15.840 --> 0:14:18.240 or at least made a lord by Cleveland at one 0:14:18.280 --> 0:14:22.560 point after staring down a utility with some great threat 0:14:22.600 --> 0:14:25.760 to his life. He's going on to do all sorts 0:14:25.760 --> 0:14:28.040 of things within the American dialogue. And this is a 0:14:28.040 --> 0:14:31.720 guy out of Cleveland who became identified with Cleveland and 0:14:31.760 --> 0:14:36.000 struggling Cleveland and helped form Cleveland and what it is 0:14:36.600 --> 0:14:39.880 today with a pretty earnest and good recovery. Dennis Casinis 0:14:39.960 --> 0:14:43.200 joins us now. At one point, the youngest mayor I 0:14:43.240 --> 0:14:48.080 think on planet Earth joins us in celebration of the 0:14:48.200 --> 0:14:51.920 light the division of light in power. Mayeric Ca Sinis. 0:14:51.920 --> 0:14:54.240 Thank you so much for joining us at today. What 0:14:54.440 --> 0:14:58.200 I love about your book is you do the modern thing. 0:14:58.920 --> 0:15:02.720 You have these wicked short chapters of six or seven pages, 0:15:03.320 --> 0:15:07.240 which was the hardest chapter to write, of some sixties 0:15:07.320 --> 0:15:12.600 seventy of them in your book. The first chapter I 0:15:12.640 --> 0:15:17.160 started that book in November of what what You're what 0:15:17.320 --> 0:15:20.600 you're reading with the reader will see represents the seventh 0:15:20.800 --> 0:15:24.000 draft the book that was written over a period of 0:15:24.040 --> 0:15:27.000 forty years. It's yucks now and of course so many 0:15:27.000 --> 0:15:30.240 people know you from your TV efforts as well. It 0:15:30.320 --> 0:15:34.800 was deadly serious back then in Cleveland, and that you 0:15:34.880 --> 0:15:38.240 were knighted by Cleveland later for staring down the public 0:15:38.320 --> 0:15:42.080 utilities of trying to think about the city. When did 0:15:42.160 --> 0:15:46.160 you know the tide had turned in your belief in 0:15:46.280 --> 0:15:49.960 Cleveland and the ownership of the utilities would be brought 0:15:50.000 --> 0:15:55.120 out Fifteen years after I left office Cleveland announcement expanding 0:15:55.920 --> 0:15:59.880 a public power system that I saved. And it took 0:15:59.880 --> 0:16:02.640 the people of Cleveland about fifteen years to figure out 0:16:02.640 --> 0:16:05.560 what happened, and that is that if I had sold 0:16:05.560 --> 0:16:08.680 the municipal electric system, it would have cost them hundreds 0:16:08.720 --> 0:16:12.280 of millions of dollars and increased taxes and utility rates. 0:16:12.280 --> 0:16:15.640 So yeah, it took fifteen years, but if fortunately I 0:16:15.680 --> 0:16:19.640 had time to spare. So give us a sense, uh, Dennis, 0:16:19.680 --> 0:16:22.360 about really what was the heart of the matter of 0:16:22.400 --> 0:16:26.200 the initial uh challenge for you with this utility. Just 0:16:26.240 --> 0:16:28.520 give our our our listeners kind of a sense of 0:16:28.560 --> 0:16:32.240 time and space. Sure, of course, Cleveland and the Cleveland 0:16:32.280 --> 0:16:36.120 Electric Illuminating Company, I had to competing electric systems that 0:16:36.200 --> 0:16:40.760 competed side by side for over seventy five years. Municipal 0:16:40.800 --> 0:16:45.280 electric system called MUNI Light and then CEI private investor 0:16:45.320 --> 0:16:48.200 own utility. What happened, though, is that CEI made a 0:16:48.240 --> 0:16:52.280 decision at some point they wanted to take over munilife, 0:16:52.600 --> 0:16:56.360 and so they developed a plan which became public and 0:16:56.400 --> 0:16:58.600 they also used their power with the media to try 0:16:58.640 --> 0:17:01.800 to force the shore of the sale. And so the 0:17:01.880 --> 0:17:05.240 book opens up with blackouts that are occurring in downtown 0:17:05.240 --> 0:17:09.960 Cleveland over the holidays, and as the story unfaults, it's 0:17:10.040 --> 0:17:14.800 clear that we're in a story of corporate sabotage and espionage, 0:17:14.880 --> 0:17:19.080 and it takes a very dark turn beyond the blackouts, 0:17:19.160 --> 0:17:22.800 very quickly, and it ends up becoming an unprecedented sorry 0:17:22.800 --> 0:17:27.240 in American history, documented by the way about the battle 0:17:27.320 --> 0:17:31.679 between UH, you know, a public publicly owned utility and 0:17:31.760 --> 0:17:34.680 privately owned utility, the division of light and power, and 0:17:34.760 --> 0:17:39.000 part of that America synages the idea of the division 0:17:39.200 --> 0:17:44.320 of power in Washington. Your observation on what your Democratic 0:17:44.400 --> 0:17:46.879 party needs to do to keep majority in the House 0:17:47.359 --> 0:17:51.560 and grab a legitimate majority uh in the in the Senate. 0:17:51.720 --> 0:17:54.960 How do the progressives liberals of your party need to 0:17:54.960 --> 0:17:59.320 speak to more moderate Democrats? Well, the first thing I 0:17:59.359 --> 0:18:03.160 need to do is to support law enforcement in the cities, 0:18:03.800 --> 0:18:06.280 because crime rates are going up in the cities. I mean, 0:18:06.359 --> 0:18:12.480 Cleveland's had a sharp increase in homicides, colonious assaults, carjackings, 0:18:12.560 --> 0:18:15.520 and people are concerned and the Party needs to have 0:18:15.560 --> 0:18:18.919 a strong stand on public safety, you know, word for 0:18:19.000 --> 0:18:22.480 civil liberties. Everyone understands that we've got to show that. 0:18:22.560 --> 0:18:25.800 We also understand that some cities are under a siege 0:18:25.800 --> 0:18:31.120 of crime. Uh. You know, it's the old mantra of job, job, jobs, 0:18:31.200 --> 0:18:34.119 and we need to make it possible for people to 0:18:34.160 --> 0:18:36.080 get back to work and to make sure they're making 0:18:36.119 --> 0:18:38.520 a decent wage. And that, you know, is what an 0:18:38.520 --> 0:18:43.840 infrastructure bill has to be about. And you know, that's 0:18:43.880 --> 0:18:47.920 that's it's kind of like the old FDR formula, which 0:18:47.960 --> 0:18:52.560 we unfortunately got away from. So Mayor, you know, we 0:18:52.640 --> 0:18:55.280 have a president who was in the Senate for forty years. 0:18:55.320 --> 0:18:57.560 We have a vice president who just came out of 0:18:57.640 --> 0:19:01.000 the Senate. There was some expectation, it was just hope, 0:19:01.400 --> 0:19:04.879 that there would be an opportunity for some real bipartisan 0:19:04.880 --> 0:19:08.720 work in Congress. It does not appear that that's going 0:19:08.760 --> 0:19:11.960 to be the case. Should anyone be surprised? Well, you know, 0:19:12.240 --> 0:19:14.520 first of all, Joe Biden is a very pragmatic. I've 0:19:14.560 --> 0:19:19.040 known President Buying for almost shifty years, and he's you know, 0:19:19.080 --> 0:19:22.200 he's a product of the institution, and he knows almost 0:19:22.200 --> 0:19:25.840 you know, like Lyndon Jackson, he knows how the institution works. 0:19:25.840 --> 0:19:28.840 So I think we should, you know, expect some progress. 0:19:28.840 --> 0:19:33.639 But we're in an era of hyperpartisanship, which is, you know, 0:19:33.680 --> 0:19:37.800 which is resulting in in inertia, and that's bad for 0:19:37.840 --> 0:19:41.280 the country. And so you know, this battle for control 0:19:41.359 --> 0:19:46.760 of the Senate in the House is creating certain, you know, 0:19:46.840 --> 0:19:49.720 aspects of our politics which are so destructive. I think 0:19:49.720 --> 0:19:52.440 American people are getting shut up with both parties as 0:19:52.440 --> 0:19:54.840 a result of that. And you know, it's like a 0:19:54.840 --> 0:19:57.800 set of your differences. Run the government and don't screw 0:19:57.840 --> 0:20:01.400 it up. Dennis Casina. The Division of Light and Power 0:20:01.560 --> 0:20:04.080 reads like a movie script. It's like every I think 0:20:04.080 --> 0:20:06.280 the longest chapter is I gave pages. I love it, 0:20:06.359 --> 0:20:09.679 I loved boom boom boom. You get right through this 0:20:09.800 --> 0:20:13.680 on the Titanic battle he faced in Cleveland over public 0:20:14.440 --> 0:20:18.879 utilities in a political battle and involves some crime as well. 0:20:18.920 --> 0:20:22.680 I mean, it is way more than just regulated utility. 0:20:22.800 --> 0:20:32.600 Chip right, Dennis, Concenters of course Democrat as well Jennifer 0:20:32.640 --> 0:20:35.240 Neuso where it's Johns Hopkins Center for Health Security and 0:20:35.320 --> 0:20:40.159 a senior scholar. Jennifer, I want to go back to April. April, 0:20:40.920 --> 0:20:44.639 the EU was really looking at letting American tourists into Europe. 0:20:45.200 --> 0:20:50.640 There was a better tone. Hospitalizations now led by the unvaccinated, 0:20:51.119 --> 0:20:54.240 have returned to where they were April twenty six, and 0:20:54.320 --> 0:20:57.280 it is not a good trend. What is the character 0:20:57.920 --> 0:21:02.160 of those hospitalizations. Yeah, it is not a good trend. 0:21:02.240 --> 0:21:05.159 I mean it is a different patient population than had 0:21:05.200 --> 0:21:08.440 been hospitalized earlier in the pandemic. In particular, we have 0:21:08.760 --> 0:21:12.760 um fortunately seen good vaccine uptake against the populations that 0:21:12.840 --> 0:21:16.280 are most likely to become severely ill, of older adults, 0:21:16.640 --> 0:21:19.040 and so now the people who are being hospitalized UM 0:21:19.440 --> 0:21:23.080 are younger. Although age is the singlet single biggest risk factor, 0:21:23.119 --> 0:21:25.840 it's not the only risk factor. And so certainly people 0:21:25.920 --> 0:21:28.440 with underlying health conditions, and it's a list, it's a 0:21:28.520 --> 0:21:31.320 lot of people um that fit in that category. UM, 0:21:31.359 --> 0:21:33.880 but also even potentially people who have no underlying health 0:21:33.920 --> 0:21:37.719 conditions are unfortunately now being hospitalized. And it's so tragic 0:21:37.840 --> 0:21:40.560 because vaccines can prevent that from happening, Jennifer, We used 0:21:40.560 --> 0:21:43.479 to talk about trying to achieve a seventy vaccination right 0:21:43.840 --> 0:21:46.320 in this country. Can you compare and contrast the reproduction 0:21:46.440 --> 0:21:49.200 rate of this variant, the dominant variant right now, the 0:21:49.280 --> 0:21:53.040 doabta variant, compared to what we first experienced eighteen months ago, 0:21:53.400 --> 0:21:55.080 and what that means for those kind of goals, whether 0:21:55.800 --> 0:21:59.680 now needs to be seventy, etcetera. Yeah, I mean it does, 0:21:59.760 --> 0:22:02.399 like need to be higher. Um. The delta variant is 0:22:02.640 --> 0:22:05.119 spreading much more quickly, and it's potentially spreading a bit 0:22:05.160 --> 0:22:08.880 earlier um in people's illness, possibly when they're not even 0:22:08.920 --> 0:22:11.600 feeling much, um, So that complicates things. So the fact 0:22:11.680 --> 0:22:13.720 that if you're sick and you're out and about, you 0:22:13.760 --> 0:22:16.359 can infect more people than you would have with earlier 0:22:16.440 --> 0:22:19.000 forms of the virus just makes it harder for public 0:22:19.040 --> 0:22:21.680 health officials, um, you know, to outrun it, to to 0:22:21.840 --> 0:22:24.280 use other measures to try to control it. And that's 0:22:24.280 --> 0:22:26.800 why it's really important that we don't have to do that, 0:22:26.960 --> 0:22:29.080 that we can prevent those infections from occurring in the 0:22:29.160 --> 0:22:31.560 first place. And that's what vaccines are great at doing. 0:22:31.600 --> 0:22:34.840 Not perfect, but great masks. That's the conversation down in 0:22:34.960 --> 0:22:36.960 d C. Jennifer, you know it's back on the table 0:22:37.359 --> 0:22:40.120 politically this morning, return of the masks. The Washington Post, 0:22:40.200 --> 0:22:43.120 going with White House official, was debate masking push as 0:22:43.200 --> 0:22:47.159 COVID infection spike. If you've been vaccinated, Jennifer, what does 0:22:47.200 --> 0:22:52.000 a mask do for you? What does it do for others? Sure? Well, listen, 0:22:52.320 --> 0:22:54.560 As I said before, the vaccines are are pretty good 0:22:54.600 --> 0:22:57.440 at preventing you from getting infected. That said, we know 0:22:57.600 --> 0:22:59.280 that there are some people who are still going to 0:22:59.359 --> 0:23:02.560 get iill potentially, but you know, they'll keep them out 0:23:02.560 --> 0:23:04.760 of the hospital. It'll be mild, it'll be the kind 0:23:04.800 --> 0:23:07.520 of illness that if that's all the virus could do, 0:23:07.600 --> 0:23:09.280 we would have never heard of this virus in the 0:23:09.359 --> 0:23:12.400 first place. So if you're somebody in that category where 0:23:12.560 --> 0:23:14.280 you know you don't want to get that illness, then 0:23:14.520 --> 0:23:17.040 wearing a mask, even though you're vaccinated, may be helpful. 0:23:17.440 --> 0:23:20.080 Your need to do that UM is greater when you're 0:23:20.080 --> 0:23:21.959 in a place where there's just a lot more illness 0:23:22.040 --> 0:23:24.880 around you, where people are more likely to be infected, 0:23:24.880 --> 0:23:27.920 where there's lower protection overall in the community because of 0:23:28.040 --> 0:23:31.600 low vaccination rates. UM That said, don't believe that the 0:23:31.720 --> 0:23:34.240 vaccines don't UM, you know, give you some protection. I 0:23:34.280 --> 0:23:36.479 think there's been a rising narrative about that that it's 0:23:36.520 --> 0:23:38.840 really disturbing to me. Our school is one of those 0:23:38.840 --> 0:23:40.920 places where you need to be more careful. Jennifer my 0:23:41.000 --> 0:23:44.560 home state of Virginia yesterday urging everyone in an elementary school, students, 0:23:44.600 --> 0:23:47.720 teachers alike, to mask up. Given under twelve still aren't 0:23:47.800 --> 0:23:50.680