1
00:00:00,040 --> 00:00:02,480
Speaker 1: Brought to you by Bank of America, Merrill Lynch investing

2
00:00:02,520 --> 00:00:05,680
Speaker 1: in local communities, economies and a sustainable future. That's the

3
00:00:05,680 --> 00:00:08,400
Speaker 1: power of global connections. Merrill Lynch, Pierce Fenner and Smith

4
00:00:08,440 --> 00:00:23,079
Speaker 1: Incorporated Member s i PC. Welcome to the Bloomberg Surveillance Podcast.

5
00:00:23,520 --> 00:00:27,200
Speaker 1: I'm Tom Keene with David Gura. Daily we bring you

6
00:00:27,280 --> 00:00:32,280
Speaker 1: insight from the best in economics, finance, investment, and international relations.

7
00:00:32,720 --> 00:00:37,280
Speaker 1: Find Bloomberg Surveillance on iTunes, SoundCloud, Bloomberg dot Com, and

8
00:00:37,360 --> 00:00:45,000
Speaker 1: of course on the Bloomberg Tom Keene, as I mentioned

9
00:00:45,040 --> 00:00:48,919
Speaker 1: in Boston last night at Fenway Park, a frozen Fenway Park,

10
00:00:48,960 --> 00:00:51,160
Speaker 1: I should had were Bentley defeated Army for the second

11
00:00:51,240 --> 00:00:54,040
Speaker 1: year in a row. You were there, Tom uh an

12
00:00:54,040 --> 00:00:57,240
Speaker 1: eventful second period. He actually he was put out a

13
00:00:57,400 --> 00:01:01,600
Speaker 1: graph of the plot of the puck as it made

14
00:01:01,640 --> 00:01:05,120
Speaker 1: its way around. Then it was great about it. That

15
00:01:05,200 --> 00:01:07,560
Speaker 1: was very good, John. What was great about it, as

16
00:01:07,600 --> 00:01:11,120
Speaker 1: we saw with Detroit and Toronto, Uh in that fabulous

17
00:01:11,280 --> 00:01:15,119
Speaker 1: NHL game in Toronto the other day, is there's no substitute,

18
00:01:15,200 --> 00:01:18,080
Speaker 1: David Girl for outdoor hockey. It's just different. The ice

19
00:01:18,160 --> 00:01:22,800
Speaker 1: is harder, everything is faster, Everything moves faster. And if

20
00:01:22,800 --> 00:01:26,280
Speaker 1: it's some guy making seven million dollars for the Toronto

21
00:01:26,360 --> 00:01:29,640
Speaker 1: maple Leafs or some kid worried about the organic chemistry

22
00:01:29,640 --> 00:01:34,120
Speaker 1: exam at Bentley University this coming Thursday, they're both the same.

23
00:01:34,160 --> 00:01:37,759
Speaker 1: They've got smiles on their faces even within the heat

24
00:01:37,800 --> 00:01:40,960
Speaker 1: of the game. I will say this, there's something and

25
00:01:41,280 --> 00:01:43,440
Speaker 1: you know John Tucker and David Garno this, but for

26
00:01:43,480 --> 00:01:48,240
Speaker 1: our international audience it is. It's the Sistine Chapel of baseball,

27
00:01:48,360 --> 00:01:52,320
Speaker 1: is the way I put it, remarkably unchanged from my childhood,

28
00:01:52,640 --> 00:01:54,800
Speaker 1: and then to see a hockey game stretched from third

29
00:01:54,840 --> 00:01:57,840
Speaker 1: base to first base, David, it was just extraordinary. Were

30
00:01:57,920 --> 00:02:01,080
Speaker 1: calling the game, but you were providing color you often do, Tom,

31
00:02:01,920 --> 00:02:07,040
Speaker 1: How was it? How was it in your face? I'm

32
00:02:07,040 --> 00:02:09,840
Speaker 1: sitting in a joke of Stigleyon's chair, the giant of

33
00:02:09,919 --> 00:02:13,120
Speaker 1: Red Sox Radio, and I made a joke. I did

34
00:02:13,120 --> 00:02:15,240
Speaker 1: not go back and forth with Ken Danico of the

35
00:02:15,240 --> 00:02:18,600
Speaker 1: New Jersey Devils. I am in awe of what Mr

36
00:02:18,680 --> 00:02:22,680
Speaker 1: Micheletti and Mr Daniko do in New York is color commentators.

37
00:02:22,800 --> 00:02:27,560
Speaker 1: It is John Tucker. It is so darn hard to

38
00:02:27,680 --> 00:02:32,000
Speaker 1: come off a play and say something intelligent about what

39
00:02:32,240 --> 00:02:35,079
Speaker 1: just happened. It looks easy. We all sit at home

40
00:02:36,600 --> 00:02:39,760
Speaker 1: every every come on. Paul McNamara's joining me. Grizzled pro

41
00:02:39,919 --> 00:02:43,240
Speaker 1: does Harvard Hockey up here in Boston. At one point

42
00:02:43,320 --> 00:02:46,640
Speaker 1: Johnny spit out his coffee. I was so inept it

43
00:02:46,680 --> 00:02:49,160
Speaker 1: froze on the way down to the desk, I might

44
00:02:49,200 --> 00:02:52,920
Speaker 1: point out, but it was it was a struggle, to

45
00:02:53,000 --> 00:02:55,760
Speaker 1: say the least. How is the crowd, Tom, You know,

46
00:02:55,880 --> 00:02:58,840
Speaker 1: I'm glad you bring that up. Thirty four thousand seats

47
00:02:58,840 --> 00:03:01,880
Speaker 1: in the traditional red Ox. There's a little more attendance now,

48
00:03:01,960 --> 00:03:04,919
Speaker 1: seats on the Green Monster out of the left field,

49
00:03:04,960 --> 00:03:07,040
Speaker 1: and they're building new seats actually for this year to

50
00:03:07,080 --> 00:03:10,480
Speaker 1: pay for all their high priced talent. I would suggest

51
00:03:10,600 --> 00:03:13,919
Speaker 1: three thousand people towards one end of the rink, the

52
00:03:13,960 --> 00:03:16,800
Speaker 1: third base side of Fenway Park. But it was a

53
00:03:16,919 --> 00:03:20,000
Speaker 1: joyous crowd, many people of course on Bentley, which is

54
00:03:20,440 --> 00:03:23,880
Speaker 1: based out of Greater Boston. But it was quite something

55
00:03:23,960 --> 00:03:26,880
Speaker 1: to see Army attend as well. And it was just

56
00:03:26,960 --> 00:03:31,760
Speaker 1: the joyous crowd with Bentley surprising Armies a better hockey team,

57
00:03:31,800 --> 00:03:34,639
Speaker 1: and Bentley just put the spirit into it and really

58
00:03:34,720 --> 00:03:37,680
Speaker 1: just decisively beat them over one, two and three periods

59
00:03:37,840 --> 00:03:39,320
Speaker 1: you go again three to one the final score. They

60
00:03:39,400 --> 00:03:41,880
Speaker 1: just want to break the India GDP figures crossing the

61
00:03:41,880 --> 00:03:44,400
Speaker 1: Bloomberg right now. The expectation, the estimate there was for

62
00:03:44,520 --> 00:03:47,360
Speaker 1: six point eight percent growth. In fact, GDP growth at

63
00:03:47,360 --> 00:03:50,440
Speaker 1: seven point one percent for the year ending in March.

64
00:03:50,480 --> 00:03:54,040
Speaker 1: System news there about the Indian economy. Time. Yeah, it

65
00:03:54,360 --> 00:03:57,040
Speaker 1: has been an odd first week. We've been honored with

66
00:03:57,080 --> 00:04:00,600
Speaker 1: all the guests that we've had on Bloomberg Radio Bloomberg

67
00:04:00,600 --> 00:04:04,640
Speaker 1: Television for surveillance starting off the year. But the backdrop

68
00:04:04,720 --> 00:04:08,320
Speaker 1: and David, my theme has been the butterflies and the

69
00:04:08,360 --> 00:04:12,520
Speaker 1: butterfly effect. That is a pretty ancient concept, nothing new,

70
00:04:13,400 --> 00:04:18,400
Speaker 1: but the real concept of it is the idea from M. I. T.

71
00:04:18,600 --> 00:04:22,960
Speaker 1: And Edward Lorenz of fifty years ago of uh if

72
00:04:23,160 --> 00:04:26,920
Speaker 1: if Mr Trump says something, the wings flap and koala lumpar.

73
00:04:27,360 --> 00:04:30,800
Speaker 1: And we continue to see this on this Friday morning. Absolutely. Yeah.

74
00:04:30,800 --> 00:04:32,440
Speaker 1: And I know you've been looking at emerging markets, looking

75
00:04:32,440 --> 00:04:34,520
Speaker 1: at the Turkish lira as well throughout the morning, and

76
00:04:34,600 --> 00:04:36,240
Speaker 1: that's still your focus. That's when your focus through the

77
00:04:36,279 --> 00:04:38,840
Speaker 1: week here emerging market currencies. It has been the e

78
00:04:39,000 --> 00:04:42,400
Speaker 1: M and Turkey with all their politics as well. Uh,

79
00:04:42,400 --> 00:04:46,720
Speaker 1: it is a pleasure to speak to the mayor, Mayor Walsh.

80
00:04:46,800 --> 00:04:51,039
Speaker 1: For years it has been Mayor Menino and Marty Walsh.

81
00:04:51,080 --> 00:04:55,440
Speaker 1: Whatever anyone would say, as supporters, as critics, what large

82
00:04:55,720 --> 00:04:57,680
Speaker 1: shoes he had to fill and he has done it

83
00:04:58,000 --> 00:05:01,520
Speaker 1: with a wonderful grace. Mayor Walsh, good morning. What was

84
00:05:01,520 --> 00:05:05,560
Speaker 1: it like the first day filling the shoes of Tom Anino? Well,

85
00:05:05,600 --> 00:05:07,560
Speaker 1: you know, the first walking in, I wasn't sure what

86
00:05:07,640 --> 00:05:09,840
Speaker 1: to expect. I think that the one thing that that

87
00:05:10,000 --> 00:05:13,320
Speaker 1: was that was not expected with people in Boston, not

88
00:05:13,440 --> 00:05:15,080
Speaker 1: that they were looking for a change, but they were

89
00:05:15,160 --> 00:05:19,200
Speaker 1: kind of curious on what life would be without a Minmnino.

90
00:05:19,320 --> 00:05:22,400
Speaker 1: And I think that that helped in a way. Um

91
00:05:22,440 --> 00:05:24,240
Speaker 1: the fact that he did so many great things in

92
00:05:24,279 --> 00:05:27,120
Speaker 1: his twentie as mayor of the city, and people, you

93
00:05:27,120 --> 00:05:28,800
Speaker 1: know a lot of young people only grew up with

94
00:05:28,920 --> 00:05:30,600
Speaker 1: him and know they didn't know anyone else. They didn't

95
00:05:30,600 --> 00:05:33,919
Speaker 1: know Kevin White, they didn't know the race plane. So

96
00:05:33,960 --> 00:05:35,240
Speaker 1: it was kind of it was it was a nice

97
00:05:35,240 --> 00:05:38,120
Speaker 1: transition because people gave the leeway to see, but what's

98
00:05:38,120 --> 00:05:40,480
Speaker 1: going to be different? And I think people like what

99
00:05:40,520 --> 00:05:43,320
Speaker 1: they've seen in three years there. Oh, I would agree

100
00:05:43,360 --> 00:05:45,320
Speaker 1: with that. I mentioned last night to Gloria Larson and

101
00:05:45,400 --> 00:05:48,760
Speaker 1: Bentley University. This idea of courage occurage to Tip O'Neill,

102
00:05:49,200 --> 00:05:53,039
Speaker 1: Joe Moakley. Uh, selected there's like four Marty helping. There's

103
00:05:53,120 --> 00:05:56,000
Speaker 1: like four Republicans in Boston or is there they up

104
00:05:56,000 --> 00:05:58,720
Speaker 1: at the six four for about four three and a half.

105
00:05:58,760 --> 00:06:03,720
Speaker 1: Maybe that's when Mitt Romney's in town mayor when when

106
00:06:03,760 --> 00:06:05,560
Speaker 1: I look at the courage of Boston to do the

107
00:06:05,560 --> 00:06:09,279
Speaker 1: big dig big projects, big vision. The payoff is General

108
00:06:09,279 --> 00:06:12,800
Speaker 1: Electric choosing to come to Boston. Give us an update

109
00:06:13,279 --> 00:06:17,839
Speaker 1: on the entrepreneurial momentum, the fancy guys, he elites, the

110
00:06:17,880 --> 00:06:21,480
Speaker 1: service sector dyningism of this city. Give us an update

111
00:06:21,520 --> 00:06:24,919
Speaker 1: after that big win with General Electric. You know, even

112
00:06:24,960 --> 00:06:28,440
Speaker 1: before she came to Boston, you know, innovation and and

113
00:06:28,560 --> 00:06:31,200
Speaker 1: you know, obviously we have medical here because of the hospitals,

114
00:06:31,320 --> 00:06:34,040
Speaker 1: hospitals that we have. But g really to summon up

115
00:06:34,279 --> 00:06:36,960
Speaker 1: Jeff em Ox when he came here, talked about the

116
00:06:37,000 --> 00:06:40,520
Speaker 1: political atmosphere in Boston. He liked how it was going. Uh,

117
00:06:40,560 --> 00:06:42,719
Speaker 1: he loved the talent that we have in our city

118
00:06:43,240 --> 00:06:45,560
Speaker 1: with the college students, about two hundred and fifty thousand

119
00:06:45,600 --> 00:06:48,600
Speaker 1: college students every school year come here, some from Boston,

120
00:06:48,720 --> 00:06:51,520
Speaker 1: some from all over the country, all over the world's plane. Honestly,

121
00:06:51,800 --> 00:06:54,160
Speaker 1: he talked about that talent. He talked about the cultural

122
00:06:54,160 --> 00:06:57,280
Speaker 1: of our city. He spoke about the beauty of what's

123
00:06:57,320 --> 00:06:59,840
Speaker 1: happening in Boston. And you can get from one side

124
00:06:59,880 --> 00:07:02,480
Speaker 1: of the the city to the other actually walking around and

125
00:07:02,600 --> 00:07:05,560
Speaker 1: and and we have all the amenities that big cities

126
00:07:05,560 --> 00:07:08,560
Speaker 1: in America have, and then we also have the the

127
00:07:08,720 --> 00:07:11,280
Speaker 1: the innovation and technology is just incredible. You know, we

128
00:07:11,280 --> 00:07:14,040
Speaker 1: have mass challenge here, we have we work here. We

129
00:07:14,080 --> 00:07:17,600
Speaker 1: have so much biotech antic and it's really you know,

130
00:07:17,640 --> 00:07:19,680
Speaker 1: what's happening. A lot of it is going down to

131
00:07:19,720 --> 00:07:22,280
Speaker 1: the South Boston waterfront, but a lot of it also

132
00:07:22,320 --> 00:07:24,800
Speaker 1: settling in the downtown area. So it's kind of it's

133
00:07:24,800 --> 00:07:27,720
Speaker 1: the economy of the future that Boston is really building upon.

134
00:07:27,800 --> 00:07:30,640
Speaker 1: And g E is g having in that city is

135
00:07:30,680 --> 00:07:33,920
Speaker 1: just an incredible victory for the city. But it's also

136
00:07:33,960 --> 00:07:36,640
Speaker 1: good for g UM. You know, it's not just about

137
00:07:36,680 --> 00:07:39,360
Speaker 1: it's not just the one way relationship. Ge gets a

138
00:07:39,360 --> 00:07:42,080
Speaker 1: lot of benefits particularly with the with the with the

139
00:07:42,080 --> 00:07:45,400
Speaker 1: the education city. I want to jump in here, Mayor

140
00:07:45,400 --> 00:07:47,160
Speaker 1: Wash David Girl, I want you to jump in with

141
00:07:47,200 --> 00:07:48,840
Speaker 1: the Mayor, but I want to point out, folks, this

142
00:07:48,920 --> 00:07:51,880
Speaker 1: is important with the medical excellence of this city. You

143
00:07:52,000 --> 00:07:54,400
Speaker 1: get that if you're a kid with cancer and you

144
00:07:54,400 --> 00:07:57,920
Speaker 1: have to utilize the facilities of the Boston medical community.

145
00:07:57,920 --> 00:08:00,960
Speaker 1: And that's what Mamarti Walsh did a million years ago. David,

146
00:08:01,040 --> 00:08:02,880
Speaker 1: you called it a victory there, Mayor Walsh, and I

147
00:08:02,880 --> 00:08:04,920
Speaker 1: I know that it was competitive. It's hard to get

148
00:08:04,920 --> 00:08:07,160
Speaker 1: these companies to to come to your city, to go

149
00:08:07,200 --> 00:08:10,560
Speaker 1: to any any city. How fiercely competitive was it. How

150
00:08:10,560 --> 00:08:12,160
Speaker 1: hard is it for you to compete for other companies?

151
00:08:12,160 --> 00:08:13,480
Speaker 1: And are you going to roll out the carpet in

152
00:08:13,480 --> 00:08:15,080
Speaker 1: the same way you did for Ge for for other

153
00:08:15,080 --> 00:08:17,920
Speaker 1: companies going forward? Well, I think it was key here

154
00:08:17,960 --> 00:08:20,240
Speaker 1: is that the state and the city came together as

155
00:08:20,320 --> 00:08:23,160
Speaker 1: one team. There was no ego, there was no who

156
00:08:23,160 --> 00:08:26,320
Speaker 1: gets the credit. Um, it was the state, which is

157
00:08:26,760 --> 00:08:29,960
Speaker 1: you know, the Governor, Charlie Baker, myself and our teams

158
00:08:30,000 --> 00:08:33,320
Speaker 1: really worked very closely together. Uh, and the business community

159
00:08:33,320 --> 00:08:35,760
Speaker 1: came into it a little bit and so didn't some

160
00:08:35,840 --> 00:08:38,640
Speaker 1: of the higher education facilities. So I think if if

161
00:08:38,640 --> 00:08:40,960
Speaker 1: you if companies will look, you know, look your for stability.

162
00:08:41,240 --> 00:08:43,559
Speaker 1: They're not looking for risk and government, they're not looking

163
00:08:43,600 --> 00:08:46,080
Speaker 1: for for headaches. I don't think every company that you

164
00:08:46,280 --> 00:08:48,559
Speaker 1: bring through a city you need to quite honestly put

165
00:08:48,559 --> 00:08:50,600
Speaker 1: a tax and send us together. You shouldn't need to

166
00:08:50,640 --> 00:08:53,719
Speaker 1: do that because you just you can't afford it. Over

167
00:08:53,760 --> 00:08:56,719
Speaker 1: the long rune or at least short run. You kind

168
00:08:56,760 --> 00:08:58,839
Speaker 1: of you almost say, bankrupt the city. But you put

169
00:08:58,880 --> 00:09:01,720
Speaker 1: the city the competitors or anda because it is about growth,

170
00:09:01,760 --> 00:09:04,360
Speaker 1: it is about revenue. It's about getting real estate tax

171
00:09:04,400 --> 00:09:07,360
Speaker 1: and in income tax to the city to degenerate some

172
00:09:07,440 --> 00:09:09,560
Speaker 1: of the ability things you have to do. But I

173
00:09:09,600 --> 00:09:12,559
Speaker 1: think you have to have that that team approach that

174
00:09:12,720 --> 00:09:14,679
Speaker 1: you see exports all the time. The teams that win

175
00:09:14,760 --> 00:09:18,319
Speaker 1: the championships, although once with the offense and defense and

176
00:09:18,360 --> 00:09:21,040
Speaker 1: special teams or whatever it might be, come together. And

177
00:09:21,080 --> 00:09:24,120
Speaker 1: that's what happened in this particular case. Tom Keenan Boston,

178
00:09:24,200 --> 00:09:26,800
Speaker 1: David Guray in New York Job's day, but with us

179
00:09:26,840 --> 00:09:31,560
Speaker 1: now the fifty four mayor of Boston, Marty Walsh, and

180
00:09:31,600 --> 00:09:33,640
Speaker 1: of course Marty Wash comes to us on the Spectrum

181
00:09:33,800 --> 00:09:38,240
Speaker 1: Enterprise phone line, Spectrum Enterprise nationwide fiber based network and

182
00:09:38,360 --> 00:09:42,960
Speaker 1: I T infrastructure solutions. Marty, you have a different view

183
00:09:43,360 --> 00:09:46,120
Speaker 1: from most of the plutocracy. You are part of the

184
00:09:46,200 --> 00:09:49,120
Speaker 1: Labor's Local two to three. You were there as a

185
00:09:49,240 --> 00:09:52,960
Speaker 1: kid twenty one years old. What's the view of our

186
00:09:53,040 --> 00:09:57,680
Speaker 1: president elect of laborers Local two to three? Did they

187
00:09:57,720 --> 00:10:02,000
Speaker 1: turn out and vote for Donald Trump? No? I would

188
00:10:02,000 --> 00:10:04,400
Speaker 1: think that a lot of the building trades in Boston

189
00:10:04,640 --> 00:10:08,240
Speaker 1: UM floated for Hillary Clinton's. But I'm okay to kid

190
00:10:08,280 --> 00:10:11,720
Speaker 1: myself that there's a large faction of members, uh, not

191
00:10:11,880 --> 00:10:14,120
Speaker 1: just of unions, but at a lot of different areas

192
00:10:14,120 --> 00:10:17,640
Speaker 1: around the country. The votes for Donald Trump. UM. And

193
00:10:17,679 --> 00:10:19,840
Speaker 1: I try to say, Man, I don't want to go

194
00:10:19,960 --> 00:10:23,400
Speaker 1: right to the negative on what the presidents he's gonna beate. UM.

195
00:10:23,440 --> 00:10:26,640
Speaker 1: You know, there's some questions around so some of the

196
00:10:26,679 --> 00:10:29,320
Speaker 1: social programs that he has. I think people are unsure

197
00:10:29,360 --> 00:10:32,600
Speaker 1: exactly what all this talk on bringing jobs back to

198
00:10:32,640 --> 00:10:35,280
Speaker 1: America means and how can he do that. I think

199
00:10:35,320 --> 00:10:37,679
Speaker 1: every president tries to do that. No president goes into

200
00:10:37,720 --> 00:10:40,040
Speaker 1: office to say we want to exploit jobs. But it'll

201
00:10:40,040 --> 00:10:42,240
Speaker 1: be interesting to see how does he bring these jobs back,

202
00:10:42,600 --> 00:10:44,040
Speaker 1: and if they come back, are there going to be

203
00:10:44,080 --> 00:10:46,560
Speaker 1: good page jobs for workers or are they gonna try

204
00:10:46,600 --> 00:10:49,520
Speaker 1: and you know, get workers to work for minimum wage

205
00:10:49,520 --> 00:10:51,640
Speaker 1: to some of these some of these places may Well.

206
00:10:51,720 --> 00:10:54,760
Speaker 1: You've talked a lot about inequality as an issue in Boston,

207
00:10:54,880 --> 00:10:56,679
Speaker 1: is an issue in the country. I looked at the

208
00:10:56,960 --> 00:10:59,520
Speaker 1: Globe yesterday, Tom probably saw in hard copy rents are

209
00:10:59,559 --> 00:11:02,320
Speaker 1: down in Boston only by one point seven percent, or

210
00:11:02,320 --> 00:11:05,400
Speaker 1: thirty six bucks a month on average. How big an

211
00:11:05,400 --> 00:11:07,080
Speaker 1: issue is this for you in Boston and how do

212
00:11:07,120 --> 00:11:09,040
Speaker 1: you as a mayor do something about it? Something Tom

213
00:11:09,040 --> 00:11:10,640
Speaker 1: and I talk a lot about in the context of

214
00:11:10,720 --> 00:11:13,520
Speaker 1: New York, of course, how particular is the situation there

215
00:11:13,520 --> 00:11:16,040
Speaker 1: in Boston. No, it's a big issue, and I think

216
00:11:16,080 --> 00:11:17,960
Speaker 1: what's happening is people being pushed out of the city

217
00:11:18,040 --> 00:11:22,520
Speaker 1: Boston to Boston, New York, San Francisco, Chicago our expensive

218
00:11:22,520 --> 00:11:24,960
Speaker 1: places to live. And what I'm doing in Boston is

219
00:11:25,000 --> 00:11:27,839
Speaker 1: we watched a housing plan in two thousand fourteen to

220
00:11:27,960 --> 00:11:31,800
Speaker 1: create fifty three thousand units new housing. By they were

221
00:11:31,880 --> 00:11:33,880
Speaker 1: way ahead of our plan. We have about forty tho

222
00:11:34,160 --> 00:11:38,000
Speaker 1: units under construction in the permuting process so complete in Boston,

223
00:11:38,480 --> 00:11:42,400
Speaker 1: and there's about those of moderate low income housing units,

224
00:11:42,440 --> 00:11:44,199
Speaker 1: and I think that what we're seeing a little bit

225
00:11:44,240 --> 00:11:47,439
Speaker 1: in the drop and ranch stabilization and it's called stabilization,

226
00:11:47,480 --> 00:11:50,200
Speaker 1: but we're starting to see, you know, getting more supply

227
00:11:50,400 --> 00:11:52,920
Speaker 1: on the market. There's such a high demand in Boston

228
00:11:53,000 --> 00:11:55,880
Speaker 1: right now people moving in. Our population is going to

229
00:11:56,000 --> 00:11:59,160
Speaker 1: be at seven hundred thousand people in the next two years,

230
00:11:59,160 --> 00:12:01,959
Speaker 1: and we haven't in that population since the nineteen east.

231
00:12:02,480 --> 00:12:04,520
Speaker 1: So we're really you know, a lot of people want

232
00:12:04,520 --> 00:12:06,880
Speaker 1: to be here, but we have to continue to to

233
00:12:07,280 --> 00:12:09,559
Speaker 1: work on two things I think that we've done in

234
00:12:09,559 --> 00:12:11,760
Speaker 1: the last couple of years. One one is working on

235
00:12:12,200 --> 00:12:14,600
Speaker 1: making surely build more housing and the second is we'll

236
00:12:14,679 --> 00:12:17,360
Speaker 1: really focus on pay equity for women in the city.

237
00:12:17,440 --> 00:12:21,720
Speaker 1: A lot of a lot of households of female at households,

238
00:12:21,800 --> 00:12:23,920
Speaker 1: and we put out of a plot yesterday about a

239
00:12:23,920 --> 00:12:26,840
Speaker 1: wage gap and working to try and close that wage gap.

240
00:12:26,880 --> 00:12:28,760
Speaker 1: And people might not see that as one of the

241
00:12:28,800 --> 00:12:32,360
Speaker 1: ways of closing income inequality, but it's a big way,

242
00:12:32,400 --> 00:12:34,560
Speaker 1: particularly with the deeper cent of the households of way

243
00:12:34,600 --> 00:12:37,640
Speaker 1: by women. Mayor we spend most of them. We spend

244
00:12:37,679 --> 00:12:40,760
Speaker 1: most of our time worldwide and coast to coast talking

245
00:12:40,760 --> 00:12:45,360
Speaker 1: to fancy guys with fancy degrees. You didn't take that path.

246
00:12:45,559 --> 00:12:49,480
Speaker 1: You took a different, uh path, right from your childhood.

247
00:12:49,840 --> 00:12:53,920
Speaker 1: What's your message to the plutocracy today? How everybody wants

248
00:12:54,000 --> 00:12:58,400
Speaker 1: America to get together away from what many describe as

249
00:12:58,400 --> 00:13:03,000
Speaker 1: a new guilded age. What's the wassh prescription to get

250
00:13:03,080 --> 00:13:06,559
Speaker 1: us away from the negative outcomes of a guilt of day?

251
00:13:06,920 --> 00:13:10,000
Speaker 1: You know, America is a great country. And I'm you know,

252
00:13:10,000 --> 00:13:12,160
Speaker 1: I'm the typical of American story to some degree, in

253
00:13:12,200 --> 00:13:14,320
Speaker 1: some way I'm not. My mother and father came to

254
00:13:14,400 --> 00:13:17,160
Speaker 1: this country from Ireland. I went to school at Boston College,

255
00:13:17,200 --> 00:13:19,240
Speaker 1: but I went to school at night. I worked during

256
00:13:19,280 --> 00:13:22,160
Speaker 1: the day, Um, you know, and I think we were

257
00:13:22,280 --> 00:13:24,840
Speaker 1: My family work cond vers it has and they taught

258
00:13:24,840 --> 00:13:26,679
Speaker 1: me how to work out for what I have. And

259
00:13:26,800 --> 00:13:29,040
Speaker 1: I still believe in the American dream. And I still

260
00:13:29,040 --> 00:13:30,920
Speaker 1: think there is an American dream out there, and I

261
00:13:30,960 --> 00:13:33,640
Speaker 1: think that as a society, you know, we're just gonna

262
00:13:33,640 --> 00:13:36,079
Speaker 1: continue and move forward. I'm not sure the next four

263
00:13:36,160 --> 00:13:38,760
Speaker 1: years are going to bring in this country. Certainly, I

264
00:13:38,720 --> 00:13:41,720
Speaker 1: support Hillary Clins for President. Um, some people didn't think

265
00:13:41,800 --> 00:13:44,240
Speaker 1: Hillery is the right person. Sometimes Donald's the right person.

266
00:13:44,480 --> 00:13:46,040
Speaker 1: But at the end of the day, America is still

267
00:13:46,120 --> 00:13:48,600
Speaker 1: the greatest country in the world and we can continue

268
00:13:48,600 --> 00:13:51,319
Speaker 1: to or cords. So people listening out there, um that

269
00:13:51,640 --> 00:13:54,400
Speaker 1: are struggling, just just keep moving forward. I mean, this

270
00:13:54,520 --> 00:13:56,440
Speaker 1: is gonna It's a day to time and that's my

271
00:13:56,480 --> 00:13:58,760
Speaker 1: approach in life is a day to time and uh,

272
00:13:58,960 --> 00:14:01,160
Speaker 1: and we're going to America is going to continue to

273
00:14:01,200 --> 00:14:04,040
Speaker 1: be the best country in the world's because it's because

274
00:14:04,040 --> 00:14:07,160
Speaker 1: of his people. He is a fifty four mayor of Boston.

275
00:14:07,280 --> 00:14:09,599
Speaker 1: His goal this year is to get David Ortiz to

276
00:14:09,640 --> 00:14:12,920
Speaker 1: do one more Marty Walsh, thank you so much. He

277
00:14:13,080 --> 00:14:16,959
Speaker 1: is the mayor of Boston. Bloomberg Surveillance this morning from

278
00:14:17,000 --> 00:14:32,480
Speaker 1: New York from Boston. This job stay David Gura, New

279
00:14:32,560 --> 00:14:35,520
Speaker 1: York on Tom Keene and Boston. And I might add

280
00:14:35,560 --> 00:14:38,040
Speaker 1: that with all the worthies that we speak through through

281
00:14:38,120 --> 00:14:41,000
Speaker 1: the year in Davos and in London and New York,

282
00:14:41,800 --> 00:14:44,080
Speaker 1: this is the most important interview of the year. We

283
00:14:44,120 --> 00:14:47,200
Speaker 1: do it on January six because it's about your non

284
00:14:47,320 --> 00:14:51,680
Speaker 1: retirement account. Alicia Mannell is with a Center for retirement

285
00:14:51,720 --> 00:14:58,200
Speaker 1: research at Boston College. It barely describes her contribution to thinking, analyzing,

286
00:14:58,200 --> 00:15:02,040
Speaker 1: and checking the data of all of our miserable retirement programs.

287
00:15:02,280 --> 00:15:05,840
Speaker 1: Professor Manella joins us in our Boston studios. At least,

288
00:15:05,840 --> 00:15:08,240
Speaker 1: she's just honored to have you here. A risk in

289
00:15:08,360 --> 00:15:11,760
Speaker 1: nineteen seventy four. Really, going back to JFK in nineteen

290
00:15:11,840 --> 00:15:15,320
Speaker 1: sixty one, almost everybody I know says this is a failure.

291
00:15:15,560 --> 00:15:18,840
Speaker 1: How much of a failure is our work of nineteen

292
00:15:18,880 --> 00:15:21,920
Speaker 1: seventy four that we're all living in two thousand seventeen.

293
00:15:22,280 --> 00:15:28,240
Speaker 1: It was well intentioned legislation to strengthen the traditional pension plan. Uh,

294
00:15:28,280 --> 00:15:31,360
Speaker 1: it also made the pension plan very costly and a

295
00:15:31,360 --> 00:15:33,560
Speaker 1: lot of other things change that made four one K

296
00:15:33,760 --> 00:15:37,880
Speaker 1: plans much more attractive to employers and and to employees

297
00:15:37,920 --> 00:15:41,280
Speaker 1: at the time than the typical pension plan. I remember

298
00:15:41,320 --> 00:15:43,560
Speaker 1: reading one of your research pieces, and folks go to

299
00:15:43,600 --> 00:15:47,280
Speaker 1: the Center for Retirement Research website with just tons of

300
00:15:47,360 --> 00:15:51,000
Speaker 1: research by people dead serious about where we are. A

301
00:15:51,040 --> 00:15:54,360
Speaker 1: few years ago, you basically said eighty one percent of

302
00:15:54,400 --> 00:15:57,560
Speaker 1: Americans are not where they need to be for retirement.

303
00:15:57,880 --> 00:15:59,920
Speaker 1: Give us an update. What's the vector? Are we doing

304
00:16:00,200 --> 00:16:02,480
Speaker 1: better or is it? Is it worse? So we put

305
00:16:02,520 --> 00:16:05,160
Speaker 1: out something called the National Retirement with Skin Dex that

306
00:16:05,360 --> 00:16:07,360
Speaker 1: measures the percent of households that are not going to

307
00:16:07,400 --> 00:16:10,320
Speaker 1: be able to maintain their standard of living in retirement.

308
00:16:10,600 --> 00:16:15,520
Speaker 1: And that number is in was fifty two um and

309
00:16:15,560 --> 00:16:18,840
Speaker 1: that's shocking. That's more than half the population that are

310
00:16:18,960 --> 00:16:24,240
Speaker 1: at risk. So sorry, David, So, I mean, and that's

311
00:16:24,280 --> 00:16:29,040
Speaker 1: ups substantially from the nineties. That's up, and that's startling.

312
00:16:29,040 --> 00:16:31,240
Speaker 1: What are the consequences of that. We were talking with

313
00:16:31,280 --> 00:16:34,280
Speaker 1: Danny Blanche Flower of Dartmouthrie in the week about how

314
00:16:34,360 --> 00:16:37,320
Speaker 1: much part time work we're seeing and how much later

315
00:16:37,400 --> 00:16:40,840
Speaker 1: people are working into their lives. Is that correlation there?

316
00:16:40,840 --> 00:16:44,200
Speaker 1: Do you see that? So I'm a big fan of

317
00:16:44,320 --> 00:16:47,080
Speaker 1: working later. I was talking to Tom before the program.

318
00:16:47,240 --> 00:16:50,560
Speaker 1: Yes we are, uh And I mean, I think that's

319
00:16:50,560 --> 00:16:52,880
Speaker 1: actually a very good thing. That's very different than raising

320
00:16:52,880 --> 00:16:56,240
Speaker 1: the Social Security full retirement age. But if people can

321
00:16:56,600 --> 00:16:59,280
Speaker 1: stay in the labor force, they have a high higher,

322
00:16:59,360 --> 00:17:03,000
Speaker 1: much higher mobility of being secure in retirement. How do

323
00:17:03,040 --> 00:17:07,400
Speaker 1: you respond to the idea that those that have means

324
00:17:07,800 --> 00:17:10,359
Speaker 1: should be able to put aside a lot more because

325
00:17:10,359 --> 00:17:12,520
Speaker 1: not only are they going to fund their own retirements,

326
00:17:12,760 --> 00:17:14,399
Speaker 1: but they end up writing checks for a lot of

327
00:17:14,440 --> 00:17:18,919
Speaker 1: family members. Why do we limit retirement contributions? Are we

328
00:17:18,920 --> 00:17:24,520
Speaker 1: trying to get the rich people? So the there's a

329
00:17:24,520 --> 00:17:28,800
Speaker 1: tax benefit associated with retirement savings, so to the extent

330
00:17:28,880 --> 00:17:31,359
Speaker 1: the individual benefits the treasure. Come on, I pay the

331
00:17:31,400 --> 00:17:34,760
Speaker 1: taxes down the road when I'm a hundred four. But Tom,

332
00:17:34,840 --> 00:17:38,520
Speaker 1: you know that deferral has a real benefit and and

333
00:17:38,640 --> 00:17:42,040
Speaker 1: the the that means that puts the treasury behind. And

334
00:17:42,080 --> 00:17:45,280
Speaker 1: it's trying to target these incentives for people who really

335
00:17:45,680 --> 00:17:48,280
Speaker 1: need to say. If the notion is that super rich

336
00:17:48,320 --> 00:17:52,560
Speaker 1: people can almost don't need to save and make make

337
00:17:52,600 --> 00:17:54,720
Speaker 1: the decisions. My point on this, David, not that you

338
00:17:54,720 --> 00:17:58,280
Speaker 1: would understand this, young lad. The definition is super rich

339
00:17:58,840 --> 00:18:01,680
Speaker 1: for me and Professor know is a lot different than

340
00:18:01,720 --> 00:18:05,399
Speaker 1: the super rich of the Congress. What's what said that

341
00:18:05,440 --> 00:18:07,960
Speaker 1: the notion of retirement today? I mean, do we regard

342
00:18:08,000 --> 00:18:10,639
Speaker 1: retirement differently? Are we seeing a change in how we

343
00:18:10,680 --> 00:18:15,600
Speaker 1: define what retirement is? So you're right, retirements a relatively

344
00:18:15,680 --> 00:18:20,440
Speaker 1: recent phenomena, and it's a twentieth century phenomena. People are

345
00:18:20,520 --> 00:18:23,439
Speaker 1: still going to be able to retire. The key to

346
00:18:23,960 --> 00:18:27,080
Speaker 1: making the whole situation better other than fixing the programs,

347
00:18:27,080 --> 00:18:29,240
Speaker 1: and I like to talk about that for a second.

348
00:18:29,560 --> 00:18:32,760
Speaker 1: I have a chance. It is to encourage people to

349
00:18:32,840 --> 00:18:34,600
Speaker 1: stay in the labor force, and that means they have

350
00:18:34,680 --> 00:18:37,400
Speaker 1: to plan ahead. They need to tell their employer they're

351
00:18:37,400 --> 00:18:40,320
Speaker 1: not going to, you know, leave at sixty two, and

352
00:18:40,359 --> 00:18:43,280
Speaker 1: they want to be included in training programs, and they

353
00:18:43,320 --> 00:18:45,119
Speaker 1: want to be considered for promotion, all that kind of

354
00:18:45,200 --> 00:18:49,400
Speaker 1: thing that comes from the employee. We also need to

355
00:18:49,440 --> 00:18:52,240
Speaker 1: fix the four one case system so it works better.

356
00:18:52,640 --> 00:18:56,040
Speaker 1: We need to fix social security because it has a deficit,

357
00:18:56,359 --> 00:18:59,080
Speaker 1: and we need to expand coverage because if you take

358
00:18:59,080 --> 00:19:01,680
Speaker 1: a snapshot of the workforce at any moment in time,

359
00:19:02,040 --> 00:19:05,399
Speaker 1: half the population has no for oh one K, no

360
00:19:05,680 --> 00:19:08,720
Speaker 1: defined benefit plan, nothing at all. So I mean it

361
00:19:08,880 --> 00:19:12,240
Speaker 1: really need a three part fix. Here are colleg Carol

362
00:19:12,280 --> 00:19:14,439
Speaker 1: Haimritz wrote what I thought was a great piece about

363
00:19:15,000 --> 00:19:18,159
Speaker 1: people working longer and the difficulty that that comes up.

364
00:19:18,160 --> 00:19:20,159
Speaker 1: They're getting employers to go along with that. How do

365
00:19:20,200 --> 00:19:22,000
Speaker 1: we finesse that? How do we make it something that's

366
00:19:22,000 --> 00:19:27,560
Speaker 1: more widely acceptable. So employers are a skeptical of people

367
00:19:27,560 --> 00:19:31,199
Speaker 1: with gray hair. I think that's really. Yes, I'm shocked

368
00:19:31,200 --> 00:19:34,280
Speaker 1: to hear that. I think that's true, and so I

369
00:19:34,840 --> 00:19:38,760
Speaker 1: the employee really needs to develop this relationship with the employer,

370
00:19:39,119 --> 00:19:43,120
Speaker 1: emphasizing how committed to the work that they are. They

371
00:19:43,160 --> 00:19:46,000
Speaker 1: can't spend time on the computer looking at property in Florida.

372
00:19:46,400 --> 00:19:50,760
Speaker 1: This is employees need to persuade employers that they are

373
00:19:50,840 --> 00:19:53,480
Speaker 1: going to be valuable well into their sixties if you're

374
00:19:53,480 --> 00:19:57,560
Speaker 1: just joining us. Alicia Minnell of Boston College holding court

375
00:19:57,600 --> 00:19:59,920
Speaker 1: at the Center for Retirement Research. He is the dry

376
00:20:00,000 --> 00:20:04,720
Speaker 1: Professor of Management Sciences. What would Peter Drucker say of

377
00:20:04,880 --> 00:20:08,520
Speaker 1: our totally messed up retirement plan? I mean, he was legendary.

378
00:20:08,640 --> 00:20:12,000
Speaker 1: He would have been outspoken about the mess we're in.

379
00:20:12,440 --> 00:20:14,840
Speaker 1: I think he would. I think that he would say

380
00:20:14,880 --> 00:20:18,119
Speaker 1: that there are enormous holes in this system and the

381
00:20:18,160 --> 00:20:20,639
Speaker 1: only way for people to be secure is to have

382
00:20:20,720 --> 00:20:23,280
Speaker 1: those holes fixed. So you have the voice of Democrats

383
00:20:23,280 --> 00:20:27,520
Speaker 1: and I believe selective Republicans. When you bring Monelle urgency

384
00:20:27,600 --> 00:20:31,800
Speaker 1: to Washington, how do our elected officials respond? I think

385
00:20:31,840 --> 00:20:37,000
Speaker 1: it should be a non a political issue, um the

386
00:20:37,840 --> 00:20:40,960
Speaker 1: but it is not in the sense that to make

387
00:20:41,000 --> 00:20:44,520
Speaker 1: four one K plans work better, we need to make

388
00:20:44,600 --> 00:20:48,080
Speaker 1: him automatic. That means people have to be automatically enrolled.

389
00:20:48,440 --> 00:20:52,320
Speaker 1: They have to have a contribution rate that's reasonable when

390
00:20:52,320 --> 00:20:55,199
Speaker 1: they're put in. They need some auto escalation in the

391
00:20:55,280 --> 00:20:59,760
Speaker 1: default contribution rate. And there's a resistance too, and and

392
00:21:00,000 --> 00:21:02,960
Speaker 1: all that stuff is encouraged under current law, but it's

393
00:21:03,040 --> 00:21:05,719
Speaker 1: time it's gone to the encouragement has gone as far

394
00:21:05,760 --> 00:21:08,320
Speaker 1: as it can at this point, it's time to say,

395
00:21:08,440 --> 00:21:10,160
Speaker 1: if you want to have a four oh one K plan,

396
00:21:10,480 --> 00:21:12,680
Speaker 1: you have to make it automatic. And that's the only

397
00:21:12,720 --> 00:21:14,720
Speaker 1: way the four oh one K plans are going to work.

398
00:21:15,600 --> 00:21:18,440
Speaker 1: Go ahead. No, You've just want to say, we haven't

399
00:21:18,440 --> 00:21:20,399
Speaker 1: talked about healthcare costs here, and there is such a

400
00:21:20,400 --> 00:21:22,960
Speaker 1: conversation going on now in Washington about the future of

401
00:21:23,000 --> 00:21:25,399
Speaker 1: the Affordable Care Act, and a component part of that

402
00:21:25,520 --> 00:21:28,800
Speaker 1: was doing something to address costs. Overlay that with us

403
00:21:29,000 --> 00:21:31,320
Speaker 1: on retirement and and sort of the role that that

404
00:21:32,000 --> 00:21:34,680
Speaker 1: escalating healthcare costs have had. So I mean, you're really

405
00:21:34,680 --> 00:21:36,600
Speaker 1: going back to the big picture. Why are we in

406
00:21:36,680 --> 00:21:40,200
Speaker 1: such trouble. We're in such trouble because we are needs

407
00:21:40,240 --> 00:21:43,520
Speaker 1: for retirement income are increasing, and they're increasing because we're

408
00:21:43,520 --> 00:21:47,919
Speaker 1: living longer, and because we have high and rapidly rising

409
00:21:47,960 --> 00:21:50,399
Speaker 1: healthcare costs. There's also this fact we have very low

410
00:21:50,440 --> 00:21:52,760
Speaker 1: interest rates, so you need a bigger pile at the

411
00:21:52,800 --> 00:21:56,639
Speaker 1: same time that needs are increasing resources and are declining.

412
00:21:57,240 --> 00:21:59,560
Speaker 1: I have one more question. Let you go on with

413
00:21:59,600 --> 00:22:03,679
Speaker 1: your day. Those of us in the real world have

414
00:22:03,840 --> 00:22:06,560
Speaker 1: tutition bills to pay unless we can play hockey for

415
00:22:06,720 --> 00:22:10,199
Speaker 1: Jerry York at Boston College. And those of us in

416
00:22:10,240 --> 00:22:14,080
Speaker 1: the real world dip into our retirement accounts to write

417
00:22:14,160 --> 00:22:19,119
Speaker 1: tuition checks to esteem schools. Should we stop that? Should

418
00:22:19,160 --> 00:22:23,520
Speaker 1: we sacrifice our kids education and fix the racket instead

419
00:22:23,560 --> 00:22:26,960
Speaker 1: of dipping into our future retirement. I think it's a

420
00:22:27,040 --> 00:22:30,760
Speaker 1: little bit like the notification in the airplane put the

421
00:22:30,760 --> 00:22:33,800
Speaker 1: mask on yourself first and then put it on your child.

422
00:22:34,080 --> 00:22:38,040
Speaker 1: So I think protecting retirement income is really important. But

423
00:22:38,160 --> 00:22:41,879
Speaker 1: also these tutition numbers I am a professor, are really

424
00:22:41,960 --> 00:22:45,240
Speaker 1: out of sight and um even the public universities are

425
00:22:45,440 --> 00:22:48,159
Speaker 1: very expensive, and I don't see how any middle income

426
00:22:48,240 --> 00:22:50,679
Speaker 1: person can make it. We would be pleased for you

427
00:22:50,720 --> 00:22:54,560
Speaker 1: to attend our New York studios ever darkened, if you

428
00:22:54,600 --> 00:22:56,760
Speaker 1: ever come to New York City, And of course Alicia

429
00:22:56,800 --> 00:23:00,320
Speaker 1: Minel at Boston College. I can't say enough folk about

430
00:23:00,359 --> 00:23:04,920
Speaker 1: the Center for Retirement Research. You'll look at twelve papers there,

431
00:23:05,000 --> 00:23:06,960
Speaker 1: You'll see six you'll go, yeah, yeah, I really don't

432
00:23:06,960 --> 00:23:09,040
Speaker 1: want to read that. So you'll see two or three

433
00:23:09,080 --> 00:23:11,879
Speaker 1: more that are like yeah maybe, And there will be

434
00:23:11,920 --> 00:23:15,800
Speaker 1: one on your topic, your emotion that will hit you

435
00:23:15,880 --> 00:23:29,800
Speaker 1: over there. Alicia Minel Drucker, Professor, Boston College. Brought to

436
00:23:29,800 --> 00:23:32,240
Speaker 1: you by Bank of America. Meryll Lynch Dedicated to bringing

437
00:23:32,240 --> 00:23:34,800
Speaker 1: our clients insights and solutions to meet the challenges of

438
00:23:34,800 --> 00:23:38,200
Speaker 1: a transforming world. That's the power of global connections. Meryll Lynch,

439
00:23:38,240 --> 00:23:40,879
Speaker 1: Pierre Spenner and Smith Incorporated Member s I p C.

440
00:23:48,200 --> 00:23:50,680
Speaker 1: Bill Gross will be along. Is always on Jobs Day,

441
00:23:50,880 --> 00:23:53,480
Speaker 1: but we have a mystery guest, David Gray in New York.

442
00:23:53,640 --> 00:23:56,280
Speaker 1: Mystery gets to New York push ahead to the Job's

443
00:23:56,320 --> 00:23:58,160
Speaker 1: members at a thirty Wall Street time, a thirty Storo

444
00:23:58,320 --> 00:24:01,960
Speaker 1: drive time. Let's say, well, you're in Boston. Jim Jim

445
00:24:01,960 --> 00:24:03,920
Speaker 1: Glasman joins us now in studio. He's the head economist

446
00:24:04,000 --> 00:24:05,880
Speaker 1: to chase a commercial bank. And as he said, joins

447
00:24:05,960 --> 00:24:08,400
Speaker 1: us here in New York. Let me ask you first

448
00:24:08,400 --> 00:24:10,760
Speaker 1: of all, here we had this big diminishment the last

449
00:24:10,760 --> 00:24:12,320
Speaker 1: time we got one of these reports, from four point

450
00:24:12,400 --> 00:24:15,239
Speaker 1: nine percent to four point six percent, steeper drop than

451
00:24:15,280 --> 00:24:17,600
Speaker 1: than many would have expected. In light of that, do

452
00:24:17,640 --> 00:24:20,120
Speaker 1: you expect the rate to stay the same, to tick

453
00:24:20,200 --> 00:24:21,879
Speaker 1: up a little bit? What are you looking for in

454
00:24:21,880 --> 00:24:24,280
Speaker 1: today's numbers? You know what may take up? It's slight bit.

455
00:24:24,320 --> 00:24:26,520
Speaker 1: But usually when these things happen and the uneplumber rate

456
00:24:26,520 --> 00:24:29,520
Speaker 1: takes a big step down, uh, you tend to stay

457
00:24:29,560 --> 00:24:31,960
Speaker 1: there for a little while as things catch up to it.

458
00:24:32,080 --> 00:24:35,560
Speaker 1: So often the aberration that you see in the unemplumber

459
00:24:35,640 --> 00:24:38,680
Speaker 1: rate isn't volatility that gets reversed. It really just kind

460
00:24:38,680 --> 00:24:40,280
Speaker 1: of is a step down. And then we kind of

461
00:24:40,280 --> 00:24:43,919
Speaker 1: hovered there for a while. But you know, uh, I

462
00:24:43,920 --> 00:24:46,560
Speaker 1: think we're kind of in the zone where we should

463
00:24:46,560 --> 00:24:49,439
Speaker 1: be for the measured unemployed. There still is a pool

464
00:24:49,480 --> 00:24:53,400
Speaker 1: of people who are not captured in this unemployment rate.

465
00:24:53,760 --> 00:24:55,679
Speaker 1: They will be coming in and I expect that that

466
00:24:55,720 --> 00:24:58,800
Speaker 1: will probably slow the decline and unemployment. We probably will

467
00:24:58,800 --> 00:25:01,000
Speaker 1: have it here for a while. Useful the numbers that

468
00:25:01,080 --> 00:25:03,320
Speaker 1: we got yesterday, the weekly numbers, the a DP numbers.

469
00:25:03,320 --> 00:25:06,720
Speaker 1: I was struck by who's hiring? You're seeing big companies

470
00:25:07,240 --> 00:25:10,639
Speaker 1: doing more than hiring than than smaller companies right now. Yeah,

471
00:25:10,760 --> 00:25:12,600
Speaker 1: that does make sense. It's kind of hard to know

472
00:25:12,640 --> 00:25:14,199
Speaker 1: where we are right now because there's a lot up

473
00:25:14,200 --> 00:25:16,880
Speaker 1: in the air with the outlook for this coming year.

474
00:25:17,080 --> 00:25:21,520
Speaker 1: If we get new push from Washington, Uh, it may

475
00:25:21,640 --> 00:25:23,040
Speaker 1: sort of rive things up a little bit more. But

476
00:25:23,080 --> 00:25:26,600
Speaker 1: I think we were probably heading towards something more moderate

477
00:25:26,680 --> 00:25:29,600
Speaker 1: growth and job growth because frankly, most people we look

478
00:25:29,600 --> 00:25:32,720
Speaker 1: at the unemployment measures, we're sort of getting there. We've

479
00:25:32,720 --> 00:25:36,320
Speaker 1: got maybe two million young people still out they will

480
00:25:36,359 --> 00:25:38,800
Speaker 1: be coming back in, and we've got a couple we

481
00:25:38,840 --> 00:25:40,800
Speaker 1: still have about a million people more than normal who

482
00:25:40,840 --> 00:25:45,119
Speaker 1: are working part time in a wonderful time job. But honestly, uh,

483
00:25:45,320 --> 00:25:49,600
Speaker 1: I think it's not surprising that that we're seeing the

484
00:25:49,680 --> 00:25:52,399
Speaker 1: steady job grow. When the economy starts doing better, the

485
00:25:52,480 --> 00:25:56,000
Speaker 1: large companies probably offer more stability for people, and so

486
00:25:56,320 --> 00:25:58,000
Speaker 1: you know, if they're hiring, then they tend to draw

487
00:25:58,080 --> 00:26:02,240
Speaker 1: people more than say small businesses, but a lot will

488
00:26:02,240 --> 00:26:04,200
Speaker 1: depend on and what they do on the policy side.

489
00:26:04,240 --> 00:26:07,639
Speaker 1: If they helped small business community, that may change the

490
00:26:07,640 --> 00:26:11,520
Speaker 1: story a bit. Jim, what are you learning about the

491
00:26:11,640 --> 00:26:14,719
Speaker 1: ute of America? You were front and center during the

492
00:26:14,760 --> 00:26:19,280
Speaker 1: crisis on what the different age partitions, if you will,

493
00:26:19,640 --> 00:26:22,720
Speaker 1: we're doing in America. What is your latest research on

494
00:26:22,800 --> 00:26:26,280
Speaker 1: our kids? Are they going back to work? Slowly coming back?

495
00:26:26,680 --> 00:26:28,359
Speaker 1: The last couple of months was kind of a step

496
00:26:28,359 --> 00:26:30,720
Speaker 1: back on this, but it looked like all of two

497
00:26:30,760 --> 00:26:34,119
Speaker 1: thousands sixteen we were seeing this steady pull back. And

498
00:26:34,119 --> 00:26:36,880
Speaker 1: you've talked to people a higher education they would say

499
00:26:37,080 --> 00:26:39,399
Speaker 1: that they would tell you that enrollments are coming down,

500
00:26:40,080 --> 00:26:42,600
Speaker 1: and they expected that because when the economy does better,

501
00:26:42,960 --> 00:26:45,400
Speaker 1: in romans go down. So I think personally, I think

502
00:26:45,600 --> 00:26:47,399
Speaker 1: you look at the twenty and thirty year olds as

503
00:26:47,400 --> 00:26:51,680
Speaker 1: a group, they're about two millions still who have not

504
00:26:51,840 --> 00:26:55,159
Speaker 1: come back in maybe they're still doing the schooling. I

505
00:26:55,200 --> 00:26:59,320
Speaker 1: think this generation got more help then maybe you and

506
00:26:59,359 --> 00:27:02,560
Speaker 1: I did, Tom, because parents are available to help if

507
00:27:02,760 --> 00:27:05,359
Speaker 1: you know, you can go back to school, and so

508
00:27:05,400 --> 00:27:07,600
Speaker 1: a lot of kids did that, and they were smart

509
00:27:07,640 --> 00:27:10,639
Speaker 1: to do it because the nature of the jobs and

510
00:27:10,720 --> 00:27:12,920
Speaker 1: more demanding, and there are good jobs out there if

511
00:27:12,920 --> 00:27:16,320
Speaker 1: you can get better trained. So I think I think

512
00:27:16,320 --> 00:27:18,879
Speaker 1: we're seeing a reversal of this thing that's been going on.

513
00:27:18,960 --> 00:27:21,280
Speaker 1: We had about three million people who dropped out originally.

514
00:27:21,520 --> 00:27:23,600
Speaker 1: Now it's down to about two millions, So that tells

515
00:27:23,640 --> 00:27:26,320
Speaker 1: me we are starting to see improvement. Look at the

516
00:27:26,320 --> 00:27:29,920
Speaker 1: participation rate of various ages, you see some improvement. There

517
00:27:30,680 --> 00:27:33,919
Speaker 1: is our pay raise for two thousand and seventeen going

518
00:27:33,960 --> 00:27:36,840
Speaker 1: to be a benefit pay raise or will we actually

519
00:27:36,880 --> 00:27:39,520
Speaker 1: see something in our check? I hope we see it

520
00:27:39,600 --> 00:27:42,800
Speaker 1: in our check. It's hard to tell from these monthly

521
00:27:42,880 --> 00:27:45,800
Speaker 1: numbers because they're all over the map. The average early

522
00:27:45,880 --> 00:27:48,679
Speaker 1: yearnings on a year on year basis, which should be smooth,

523
00:27:48,800 --> 00:27:51,160
Speaker 1: is sort of vast, lating between two and a half

524
00:27:51,200 --> 00:27:53,880
Speaker 1: and three and a half percent. So I bet as

525
00:27:53,880 --> 00:27:56,600
Speaker 1: the year progresses, we're going to see more real money

526
00:27:56,640 --> 00:27:59,320
Speaker 1: showing up in the paycheck. You'll see it. I'm struck

527
00:27:59,400 --> 00:28:02,679
Speaker 1: by the transition that we've seen under way here away

528
00:28:02,680 --> 00:28:05,720
Speaker 1: from blue collar jobs, away from manufacturing, jumps into service

529
00:28:06,359 --> 00:28:10,760
Speaker 1: into retail. Uh, the growth of pink collar jobs. I've

530
00:28:10,760 --> 00:28:13,560
Speaker 1: seen them called before. How seismic a change is this?

531
00:28:13,600 --> 00:28:15,280
Speaker 1: As you see it? You know it's been going on

532
00:28:15,320 --> 00:28:17,680
Speaker 1: for a while, right, because I mean, this is really

533
00:28:17,800 --> 00:28:20,200
Speaker 1: one of the disruptions going on in the industrial economy.

534
00:28:20,240 --> 00:28:23,520
Speaker 1: Is we used to have twenty million people working in manufacturing.

535
00:28:23,560 --> 00:28:26,320
Speaker 1: Now that's down to twelve millions, so eight million jobs

536
00:28:26,320 --> 00:28:29,680
Speaker 1: and manufacturing have disappeared. And this is a secular turn

537
00:28:29,760 --> 00:28:32,879
Speaker 1: that's been going on as a result of innovation. So

538
00:28:33,000 --> 00:28:35,560
Speaker 1: I don't know that it's a step change, but it is.

539
00:28:35,640 --> 00:28:37,840
Speaker 1: You know, it's something that you expect in a modern economy.

540
00:28:38,040 --> 00:28:40,239
Speaker 1: Let's go to two thousand and seventeen. Update folks, if

541
00:28:40,240 --> 00:28:43,320
Speaker 1: you're just joining us, Jim Blastman. JP Morgan with is

542
00:28:43,440 --> 00:28:45,920
Speaker 1: generous of him almost every month unless he's on the

543
00:28:46,000 --> 00:28:50,800
Speaker 1: road with this preview Jobs Day, Jim Glassman, give us

544
00:28:50,800 --> 00:28:54,480
Speaker 1: an update on the nostalgia that we saw from your

545
00:28:54,520 --> 00:28:59,480
Speaker 1: professor Robert Gordon of Northwestern last year. Has Mr Trump

546
00:28:59,520 --> 00:29:03,400
Speaker 1: pulled us away from a nostalgia look back? Are we

547
00:29:03,480 --> 00:29:07,120
Speaker 1: beginning to look forward? You know, the market seems to

548
00:29:07,160 --> 00:29:11,840
Speaker 1: be acting that way right you had the election, and

549
00:29:11,880 --> 00:29:15,280
Speaker 1: the market is anticipating we're going to get a new

550
00:29:15,320 --> 00:29:18,360
Speaker 1: effort to try to push the economy more. The equity

551
00:29:18,360 --> 00:29:20,880
Speaker 1: market tends to monetize hopes, and so in a way

552
00:29:21,000 --> 00:29:24,680
Speaker 1: we're bringing that forward. Um, I think maybe so. I think,

553
00:29:24,800 --> 00:29:29,280
Speaker 1: you know, taking a time out looking at regulations, trying

554
00:29:29,280 --> 00:29:31,160
Speaker 1: to fix the healthcare thing. I wish it. It's not

555
00:29:31,320 --> 00:29:33,320
Speaker 1: really a partisan issue. We really need to fix the

556
00:29:33,320 --> 00:29:36,840
Speaker 1: healthcare reasue because that's our number one imbalance, that's that's

557
00:29:37,000 --> 00:29:41,760
Speaker 1: plaguing the economy. But I think the hope of tax reform,

558
00:29:42,160 --> 00:29:47,480
Speaker 1: tax reduction, some rethinking of the regulations is bringing back

559
00:29:47,560 --> 00:29:52,080
Speaker 1: that enthusiasm and animal spirits. Frankly, I think that's part

560
00:29:52,080 --> 00:29:54,400
Speaker 1: of what's driving the equity market well. But an animal

561
00:29:54,440 --> 00:29:57,800
Speaker 1: spirits is a nominal GDP. If we do get trum inflation,

562
00:29:58,360 --> 00:30:00,440
Speaker 1: is it a good pick up a nominal g d P?

563
00:30:00,560 --> 00:30:02,640
Speaker 1: Will there be a real growth pick up that's will

564
00:30:02,880 --> 00:30:05,280
Speaker 1: all be with an inflation? That's the question. A lot

565
00:30:05,320 --> 00:30:07,800
Speaker 1: of people think, Look, the economy is close to full employment,

566
00:30:07,800 --> 00:30:10,880
Speaker 1: our demographics is slowed. How much can we really get

567
00:30:10,920 --> 00:30:13,200
Speaker 1: out of really economic activity if we try to step

568
00:30:13,200 --> 00:30:15,400
Speaker 1: on the gas. Personally, I think what we're going to

569
00:30:15,480 --> 00:30:18,400
Speaker 1: find out? I'm not so skeptical. I think we've got

570
00:30:18,480 --> 00:30:21,080
Speaker 1: a lot of capacity out there. The businesses have a

571
00:30:21,120 --> 00:30:24,880
Speaker 1: lot of capacity to do more and boost productivity. We

572
00:30:24,960 --> 00:30:27,080
Speaker 1: just haven't seen that in our numbers. And the reason

573
00:30:27,120 --> 00:30:29,160
Speaker 1: I say that is because when you look everywhere, innovations

574
00:30:29,240 --> 00:30:32,200
Speaker 1: everywhere and companies are driving really hard to be more

575
00:30:32,240 --> 00:30:34,920
Speaker 1: efficient cut costs. So I think that we're going to

576
00:30:35,000 --> 00:30:37,560
Speaker 1: find out that we have the capacity to do better,

577
00:30:37,640 --> 00:30:41,120
Speaker 1: to grow more, and it will translate into more real benefits,

578
00:30:41,200 --> 00:30:43,720
Speaker 1: not so much inflation. We got a conversation earlier in

579
00:30:43,720 --> 00:30:47,440
Speaker 1: the week about the squishiness of the term productivity. What

580
00:30:47,480 --> 00:30:48,880
Speaker 1: does it mean? What does it mean to you when

581
00:30:48,920 --> 00:30:51,600
Speaker 1: we talk about an improvement in productivity? What exactly does

582
00:30:51,640 --> 00:30:56,880
Speaker 1: that look like? You know, Uh, it's really it requires

583
00:30:56,920 --> 00:30:59,440
Speaker 1: intuition to think about this. You don't see it in numbers.

584
00:30:59,440 --> 00:31:01,520
Speaker 1: Are very who are trying to capture this thing because

585
00:31:01,520 --> 00:31:05,360
Speaker 1: it sometimes it takes a decade to see a trend developing. Um,

586
00:31:05,400 --> 00:31:07,880
Speaker 1: it means that we're more efficient in doing things. We've

587
00:31:07,920 --> 00:31:10,440
Speaker 1: got less downtime in our work day. I mean I

588
00:31:10,480 --> 00:31:12,160
Speaker 1: look at look a look at your own personal life.

589
00:31:12,560 --> 00:31:14,960
Speaker 1: I have less wasted time in my life because of

590
00:31:15,000 --> 00:31:20,160
Speaker 1: the you know, online shopping, because what I can do seamless, uh,

591
00:31:20,320 --> 00:31:23,000
Speaker 1: you know, remote connecting. And I think that's going on

592
00:31:23,040 --> 00:31:25,160
Speaker 1: all over the place, not only in our business community

593
00:31:25,200 --> 00:31:27,520
Speaker 1: but in our private life. So to me, it's really

594
00:31:27,560 --> 00:31:30,200
Speaker 1: more of a feeling are we getting more? Are we

595
00:31:30,280 --> 00:31:33,760
Speaker 1: able to do more with the same resources. I think

596
00:31:33,760 --> 00:31:35,640
Speaker 1: a lot of what's going on in our economy is

597
00:31:35,640 --> 00:31:38,720
Speaker 1: helping us to do that, including the sharing economy. James

598
00:31:38,760 --> 00:31:40,760
Speaker 1: Glassman here with us in the studio, head economist a

599
00:31:40,840 --> 00:31:43,040
Speaker 1: Chase Commercial Bank. Great to have you here, as we

600
00:31:43,080 --> 00:31:44,920
Speaker 1: can need to press onto eight thirty when the jobs

601
00:31:44,960 --> 00:31:48,280
Speaker 1: data come out. There's been so much conversation about what

602
00:31:48,320 --> 00:31:51,000
Speaker 1: the president elect may or may not do in concert

603
00:31:51,040 --> 00:31:53,440
Speaker 1: with Republicans on on Capitol Hill. A bit component of

604
00:31:53,440 --> 00:31:57,000
Speaker 1: that is the prospect for infrastructure spending. I would as

605
00:31:57,000 --> 00:31:59,400
Speaker 1: you look at that, as you think about that, what

606
00:31:59,480 --> 00:32:02,760
Speaker 1: would make a stimulus package the most efficacious? In other words,

607
00:32:02,760 --> 00:32:04,760
Speaker 1: what are lawmakers wrestling with? How do they make this

608
00:32:04,840 --> 00:32:06,600
Speaker 1: thing something that actually does make a difference if in

609
00:32:06,680 --> 00:32:09,560
Speaker 1: fact they go down that path. I personally think you

610
00:32:09,920 --> 00:32:14,120
Speaker 1: what really does make a difference is tax reform UH

611
00:32:14,160 --> 00:32:17,000
Speaker 1: and action on the tax side, because that I think

612
00:32:17,000 --> 00:32:20,760
Speaker 1: that's that that changes the attitude the confidence level of

613
00:32:20,760 --> 00:32:22,840
Speaker 1: the business community. If it starts to spending, there are

614
00:32:22,880 --> 00:32:25,080
Speaker 1: limits on how much you can do because it takes

615
00:32:25,080 --> 00:32:27,520
Speaker 1: time to get all the permitting done. Is President Obama

616
00:32:27,800 --> 00:32:30,920
Speaker 1: showed uh these shovel ready projects they have to go

617
00:32:30,960 --> 00:32:32,920
Speaker 1: through a long process before they get put in place,

618
00:32:32,960 --> 00:32:35,080
Speaker 1: and I think Congress is probably gonna be trying to

619
00:32:35,120 --> 00:32:36,920
Speaker 1: figure out how to pay for this because we do

620
00:32:37,000 --> 00:32:40,560
Speaker 1: have a long term fiscal challenge. So to me, the

621
00:32:40,080 --> 00:32:43,520
Speaker 1: the greater potential here is what we might get on

622
00:32:43,600 --> 00:32:47,280
Speaker 1: the tax reform side, particularly in the corporate area. In

623
00:32:47,320 --> 00:32:50,760
Speaker 1: the corporate area, that's been talking of a repatriation holiday.

624
00:32:51,440 --> 00:32:53,880
Speaker 1: Some concerned about what corporations might do with that money

625
00:32:53,880 --> 00:32:55,840
Speaker 1: if they were able to bring it back at a

626
00:32:55,840 --> 00:32:59,440
Speaker 1: at a lower rate. On the subject of efficaciousness here,

627
00:32:59,680 --> 00:33:02,800
Speaker 1: you know, are you optimistic that would be spent? Well, well,

628
00:33:02,800 --> 00:33:05,440
Speaker 1: you know, I don't think that's really what drives business

629
00:33:05,520 --> 00:33:07,920
Speaker 1: investment decisions. If you've got a good market here, you're

630
00:33:07,920 --> 00:33:10,360
Speaker 1: going to be investing here regardless of where the money

631
00:33:10,480 --> 00:33:13,240
Speaker 1: is parked. So I think the thing that makes the

632
00:33:13,480 --> 00:33:18,040
Speaker 1: tax reform most efficacious is if the repatriation part is

633
00:33:18,040 --> 00:33:20,480
Speaker 1: put together with a broader tax reform, bringing the corporate

634
00:33:20,520 --> 00:33:24,880
Speaker 1: tax rates down, expensing those kinds of things limit, you know,

635
00:33:25,040 --> 00:33:27,920
Speaker 1: cap the burden for small businesses. That's really a big

636
00:33:27,960 --> 00:33:30,760
Speaker 1: that's a big deal. Um. I think that's the kind

637
00:33:30,760 --> 00:33:33,520
Speaker 1: of thing that really gets to generates the animal spirits

638
00:33:33,560 --> 00:33:35,680
Speaker 1: which I think has been the market has been hinting at.

639
00:33:35,880 --> 00:33:37,800
Speaker 1: I want to rip up the script here, Jim Glass,

640
00:33:37,800 --> 00:33:40,000
Speaker 1: and we just had the great honor speaking with Alicia

641
00:33:40,080 --> 00:33:43,960
Speaker 1: Monnell of Boston College, truly one of America's giants of

642
00:33:44,080 --> 00:33:48,240
Speaker 1: thinking on our failed retirement systems. Just looking at her

643
00:33:48,400 --> 00:33:52,240
Speaker 1: update on four oh one case nationwide, it's just stunning

644
00:33:52,280 --> 00:33:55,680
Speaker 1: the failure of the system for so many Americans. How

645
00:33:55,760 --> 00:34:01,120
Speaker 1: linked is our retirement success to buoyant DP growth? To me,

646
00:34:01,640 --> 00:34:04,840
Speaker 1: it almost has to be the key linkage, isn't it. Yeah,

647
00:34:04,880 --> 00:34:07,480
Speaker 1: that's that's one linkage and the other is the whole

648
00:34:07,480 --> 00:34:11,200
Speaker 1: health care area. I mean, uh, part part of the

649
00:34:11,239 --> 00:34:14,080
Speaker 1: issue with the retirement system where the public side, is

650
00:34:14,160 --> 00:34:18,080
Speaker 1: that we don't have our retirement age linked up to

651
00:34:18,200 --> 00:34:21,440
Speaker 1: our life expectancy. So the programs always getting out of

652
00:34:21,480 --> 00:34:25,800
Speaker 1: balance because thank god, we all tend to live longer

653
00:34:25,880 --> 00:34:28,759
Speaker 1: over time. But I think it's important. You know, you

654
00:34:28,760 --> 00:34:31,120
Speaker 1: could argue, well, look, Americans don't seem to be really

655
00:34:31,160 --> 00:34:33,359
Speaker 1: hung up about this because our saving is very low.

656
00:34:33,400 --> 00:34:37,040
Speaker 1: And look compare us with Japan. Japan Japanese saved very

657
00:34:37,120 --> 00:34:40,520
Speaker 1: high rates because they don't really have that safety system,

658
00:34:40,560 --> 00:34:43,000
Speaker 1: so I think it would help though. I think I

659
00:34:43,000 --> 00:34:46,400
Speaker 1: think the more secure people feel about the future, the

660
00:34:46,440 --> 00:34:50,120
Speaker 1: more confidence you have about what you're doing. So it's

661
00:34:50,160 --> 00:34:54,720
Speaker 1: it's it's an important part of the public sector income

662
00:34:54,760 --> 00:34:58,400
Speaker 1: support programs. On the subject of healthcare, a lot of

663
00:34:58,440 --> 00:35:01,399
Speaker 1: conversation on Capital Hill about what happens next to Obamacare

664
00:35:01,480 --> 00:35:06,279
Speaker 1: if Obamacare remains around. I imagined that that law has

665
00:35:06,280 --> 00:35:09,719
Speaker 1: had implications, huge implications on on the labor market here,

666
00:35:09,760 --> 00:35:12,480
Speaker 1: and the prospect of repealing it could really throw things

667
00:35:12,480 --> 00:35:15,359
Speaker 1: in a different direction. Well, yeah, the problem is that

668
00:35:15,440 --> 00:35:18,560
Speaker 1: insurance premiums rising. Small businesses face a real big burden

669
00:35:18,640 --> 00:35:21,640
Speaker 1: here that this system wasn't. We've got all the we've

670
00:35:21,640 --> 00:35:24,640
Speaker 1: got people into the system over the last eight years

671
00:35:24,680 --> 00:35:27,960
Speaker 1: that are relatively unhealthy, but all the young healthy folks

672
00:35:27,960 --> 00:35:30,920
Speaker 1: didn't want to don't come in, so it's creating stresses

673
00:35:30,920 --> 00:35:33,440
Speaker 1: in the system. I really think the bigger issue is

674
00:35:34,080 --> 00:35:38,520
Speaker 1: not so much coverage, but getting people more engaged in

675
00:35:38,560 --> 00:35:42,680
Speaker 1: the process of choosing our own healthcare, making people think

676
00:35:42,680 --> 00:35:45,680
Speaker 1: about things, making people understand what the costs are, and

677
00:35:45,760 --> 00:35:48,160
Speaker 1: helping doctors figure that out. Getting a little more competition,

678
00:35:48,800 --> 00:35:51,960
Speaker 1: what what's really what's really missing in our healthcare system

679
00:35:52,000 --> 00:35:54,040
Speaker 1: is we're not managing resources very well. And if you

680
00:35:54,080 --> 00:35:57,319
Speaker 1: believe the Congressional Budget Office projections, what they're telling us

681
00:35:57,400 --> 00:35:59,480
Speaker 1: is if we don't do anything, healthcare is going to

682
00:35:59,520 --> 00:36:01,880
Speaker 1: be gobbling up an awful lot of resources in the future.

683
00:36:02,280 --> 00:36:05,040
Speaker 1: Partly because the demograph this is shifting, but partly because

684
00:36:05,760 --> 00:36:09,279
Speaker 1: we don't really get people engaged in the process of

685
00:36:09,719 --> 00:36:12,919
Speaker 1: figuring out better ways to do things. I wonder about

686
00:36:12,960 --> 00:36:14,600
Speaker 1: the kind of jobs being created versus the kind of

687
00:36:14,680 --> 00:36:16,600
Speaker 1: jobs that are are disappearing. Is it is it even

688
00:36:16,640 --> 00:36:18,200
Speaker 1: Are the jobs that are going away being replaced with

689
00:36:18,280 --> 00:36:21,759
Speaker 1: jobs of the same kind. Well, if you look at

690
00:36:21,760 --> 00:36:24,520
Speaker 1: the longer trend, the jobs that are disappearing are a

691
00:36:24,560 --> 00:36:28,120
Speaker 1: lot of manufacturing jobs. They were paying above average, So

692
00:36:28,160 --> 00:36:30,400
Speaker 1: that's really part of the problem. People are finding jobs,

693
00:36:30,440 --> 00:36:32,000
Speaker 1: but the pay is not the same but they were

694
00:36:32,040 --> 00:36:34,560
Speaker 1: getting before. And I think that's why there's such a device,

695
00:36:34,680 --> 00:36:38,000
Speaker 1: why there's so much unhappiness in in the industrial economy.

696
00:36:38,480 --> 00:36:40,640
Speaker 1: But you know, the truth is new jobs. If you

697
00:36:40,640 --> 00:36:43,520
Speaker 1: think about it, when a company hires somebody, that first

698
00:36:43,600 --> 00:36:45,840
Speaker 1: job you get is not your best paying job in

699
00:36:45,880 --> 00:37:00,080
Speaker 1: your career. You hope, So with us James Glass and

700
00:37:00,120 --> 00:37:02,360
Speaker 1: head economists at Chase Commercial break Bank coming up in

701
00:37:02,360 --> 00:37:05,560
Speaker 1: a few moments, Bill Gross of Jenna's capital, we'll join us. Jim,

702
00:37:05,600 --> 00:37:08,040
Speaker 1: let me get your reaction here to the headline. Never

703
00:37:08,120 --> 00:37:10,240
Speaker 1: we talked about the fact that it might go up slightly.

704
00:37:10,280 --> 00:37:12,080
Speaker 1: The survey was for four point seven percent. Indeed, that

705
00:37:12,160 --> 00:37:14,120
Speaker 1: is what we got here, and then the change in

706
00:37:14,120 --> 00:37:17,600
Speaker 1: payrolls here down your reaction if you would, Yeah, I

707
00:37:17,600 --> 00:37:19,560
Speaker 1: think this is good news. Actually, it tells you we're

708
00:37:19,560 --> 00:37:22,000
Speaker 1: we're start of hovering in the zone close to full

709
00:37:22,120 --> 00:37:25,280
Speaker 1: full employment, not really there yet, and yet we're starting

710
00:37:25,280 --> 00:37:27,319
Speaker 1: to see now more and more signs that that is

711
00:37:27,360 --> 00:37:30,920
Speaker 1: actually helping workers, because we're seeing average hotly earnings jumped

712
00:37:31,160 --> 00:37:33,240
Speaker 1: two point nine percent on a year on your basis,

713
00:37:33,320 --> 00:37:37,040
Speaker 1: So we've been volatile here, the average houtlely earnings wage

714
00:37:37,040 --> 00:37:38,520
Speaker 1: gains running from two and a half to three and

715
00:37:38,560 --> 00:37:41,160
Speaker 1: a half percent. We're sort of in that three zone now,

716
00:37:41,200 --> 00:37:43,560
Speaker 1: which is pretty good news because that means we've kind

717
00:37:43,600 --> 00:37:46,600
Speaker 1: of broken out of that rut that we were in

718
00:37:46,719 --> 00:37:49,399
Speaker 1: for much of this recovery. So I would say this

719
00:37:49,440 --> 00:37:51,879
Speaker 1: is kind of the story we're going to see more

720
00:37:51,880 --> 00:37:54,640
Speaker 1: and more in the coming year the economies, you know,

721
00:37:55,239 --> 00:37:58,839
Speaker 1: job growth gonna be slowing down gradually and wages start

722
00:37:58,920 --> 00:38:02,279
Speaker 1: to do better, and hopefully unemployment stays in this zone

723
00:38:02,320 --> 00:38:04,200
Speaker 1: as we bring the rest of the folks who are

724
00:38:04,840 --> 00:38:08,239
Speaker 1: missing back into the job market. So I'd say good news.

725
00:38:08,080 --> 00:38:10,560
Speaker 1: Let me ask you here just about the way that

726
00:38:10,560 --> 00:38:12,920
Speaker 1: the Fed wire policy makers are gonna going to read

727
00:38:12,920 --> 00:38:15,160
Speaker 1: these data. I wonder if you had a threshold, a

728
00:38:15,239 --> 00:38:17,239
Speaker 1: number over which this would have to come in for

729
00:38:17,280 --> 00:38:19,160
Speaker 1: them to be satisfied to move, I had to move

730
00:38:19,200 --> 00:38:21,080
Speaker 1: a pace with the with the rate timetable, the rate

731
00:38:21,160 --> 00:38:23,560
Speaker 1: rate raised timetable that they set out at the last meeting,

732
00:38:23,600 --> 00:38:25,840
Speaker 1: that the expectation here at three rate increases in the

733
00:38:25,880 --> 00:38:28,759
Speaker 1: year two thousand seventeen. Uh, they can be satisfied with

734
00:38:28,760 --> 00:38:30,200
Speaker 1: with what they see today. I think this is the

735
00:38:30,239 --> 00:38:32,560
Speaker 1: exactly the kind of news that makes them comfortable getting

736
00:38:32,640 --> 00:38:34,880
Speaker 1: rate slowly back to something more normal. There would be

737
00:38:34,880 --> 00:38:37,719
Speaker 1: no issue if the Fed funds rate were not so low.

738
00:38:37,760 --> 00:38:40,279
Speaker 1: But they think at a normal Fed funds rate is

739
00:38:40,280 --> 00:38:42,440
Speaker 1: closer to about three percent, and they want to they

740
00:38:42,440 --> 00:38:44,440
Speaker 1: want to get there in an orderly way. So they're

741
00:38:44,480 --> 00:38:46,719
Speaker 1: starting to see more and more signs that the US

742
00:38:46,760 --> 00:38:50,000
Speaker 1: economy is doing well. We got our job market getting

743
00:38:50,040 --> 00:38:52,360
Speaker 1: back to full employment. Not quite there yet, it probably

744
00:38:52,400 --> 00:38:54,480
Speaker 1: over the next couple of years will be So I

745
00:38:54,520 --> 00:38:56,400
Speaker 1: think this is the exactly the kind of report that

746
00:38:56,440 --> 00:39:00,720
Speaker 1: plays into their expectation, makes the case first slowly moving

747
00:39:00,760 --> 00:39:03,520
Speaker 1: the Fed funds rate back to something more normal very quickly.

748
00:39:03,480 --> 00:39:05,600
Speaker 1: Here Jim Glass amouth thirty seconds left. I'm looking at

749
00:39:05,600 --> 00:39:08,000
Speaker 1: the underemployment right that is at nine point two percent

750
00:39:08,080 --> 00:39:11,800
Speaker 1: now was at nine point three percent, ticking down slightly.

751
00:39:12,000 --> 00:39:14,080
Speaker 1: How being a concern is underemployment to you? Here? Still

752
00:39:14,080 --> 00:39:16,279
Speaker 1: when you look at US letter market, it's not it's

753
00:39:16,400 --> 00:39:19,160
Speaker 1: it's a concern, but it's it's it's been improving, And

754
00:39:19,200 --> 00:39:21,040
Speaker 1: I think, what is it? And it's it's another way

755
00:39:21,080 --> 00:39:23,239
Speaker 1: of saying, we're not quite there yet. We still have

756
00:39:23,719 --> 00:39:26,880
Speaker 1: hidden populations of unemployment. Uh and and I think it's

757
00:39:26,920 --> 00:39:28,759
Speaker 1: a job market stays here and does well, we're going

758
00:39:28,800 --> 00:39:31,080
Speaker 1: to see more and more that come down. So my

759
00:39:31,160 --> 00:39:33,600
Speaker 1: expectation is we'll see a lot of the damage that

760
00:39:33,719 --> 00:39:36,520
Speaker 1: was doing during the recession. Unemployment that's not captured in

761
00:39:36,560 --> 00:39:39,520
Speaker 1: the unemployment rate will slowly creep its way back, and

762
00:39:39,520 --> 00:39:41,600
Speaker 1: I think it's that aspect that's going to be the

763
00:39:41,680 --> 00:39:44,040
Speaker 1: most interesting in these job reports to follow Jim Glass

764
00:39:44,080 --> 00:39:46,040
Speaker 1: there had economist at Chase Commercial Bank, Thank you very

765
00:39:46,080 --> 00:39:48,080
Speaker 1: much for your time. Again the unemployment and never see

766
00:39:48,120 --> 00:39:52,040
Speaker 1: it one thousand when you look at private payrolls. Well.

767
00:39:52,160 --> 00:39:54,800
Speaker 1: Our listeners are viewers around the world on Bloomberg Television,

768
00:39:54,880 --> 00:39:57,239
Speaker 1: David Gura and Tom Keene here now joined by Bill

769
00:39:57,280 --> 00:39:59,480
Speaker 1: Gross of Janet's Capital. Bill, great to speak with you,

770
00:39:59,560 --> 00:40:02,880
Speaker 1: as always, and let's start by taking stock here President Obama.

771
00:40:02,920 --> 00:40:05,279
Speaker 1: In the last two weeks of his second term as

772
00:40:05,320 --> 00:40:08,120
Speaker 1: President of the United States, he has been touting his

773
00:40:08,160 --> 00:40:10,799
Speaker 1: achievements with regard to the labor market here in a

774
00:40:10,840 --> 00:40:13,880
Speaker 1: memo yesterday, in speeches over the last a few weeks,

775
00:40:14,320 --> 00:40:16,640
Speaker 1: give us your assessment of how the labor market looks today,

776
00:40:16,680 --> 00:40:19,240
Speaker 1: how the labor market post crisis looks under the tenure

777
00:40:19,280 --> 00:40:22,680
Speaker 1: of President Obama. Well, you know, he's done a fine

778
00:40:22,800 --> 00:40:25,600
Speaker 1: job from where he started right eight years ago and

779
00:40:25,640 --> 00:40:29,160
Speaker 1: down at four point seven percent unemployment from as I

780
00:40:29,200 --> 00:40:33,120
Speaker 1: remember something above nine and close to ten. So um,

781
00:40:33,200 --> 00:40:36,160
Speaker 1: you know, the economy is improving, the labor markets improving,

782
00:40:36,280 --> 00:40:40,040
Speaker 1: I still think, in contrast to what Jim Glassman just said,

783
00:40:40,080 --> 00:40:44,520
Speaker 1: that the USE six the underemployment rate is as relatively

784
00:40:44,600 --> 00:40:46,919
Speaker 1: high and needs to come down by one or two

785
00:40:46,920 --> 00:40:49,840
Speaker 1: percent because there we're talking about the labor force that

786
00:40:49,960 --> 00:40:53,480
Speaker 1: wants to work as opposed to the U three number.

787
00:40:53,560 --> 00:40:56,200
Speaker 1: But it's a it's a decent number, and it suggests

788
00:40:56,239 --> 00:40:59,600
Speaker 1: that GDP perhaps is moving along at two percent or

789
00:40:59,640 --> 00:41:03,960
Speaker 1: two an percent. I think that in order to um,

790
00:41:04,000 --> 00:41:08,160
Speaker 1: you know, to get a very healthy economy at Trump uh,

791
00:41:08,200 --> 00:41:12,680
Speaker 1: you know, suggested strong economy that you need three percent

792
00:41:12,800 --> 00:41:15,279
Speaker 1: real growth and you need five percent nominal growth, and

793
00:41:15,320 --> 00:41:20,120
Speaker 1: we're about a point under for both of those. Well,

794
00:41:20,160 --> 00:41:22,480
Speaker 1: but Bill, this is absolutely crucial if you are to

795
00:41:22,520 --> 00:41:25,960
Speaker 1: see a lift in the animal spirits, certainly something the

796
00:41:26,000 --> 00:41:29,279
Speaker 1: president elect wants. Do you tilt towards it will be

797
00:41:29,320 --> 00:41:33,960
Speaker 1: an inflation lift illusory to Americans of little value, or

798
00:41:34,000 --> 00:41:37,600
Speaker 1: will we actually see real economic growth over the next

799
00:41:37,719 --> 00:41:41,320
Speaker 1: year or two years? Yeah? I think some of both.

800
00:41:41,400 --> 00:41:43,520
Speaker 1: Thom it's hard to know. We we don't really know

801
00:41:43,560 --> 00:41:47,120
Speaker 1: what the program will be. Trump is suggesting a trillion

802
00:41:47,120 --> 00:41:50,600
Speaker 1: dollar program over ten years. That's a hundred billion a year.

803
00:41:50,640 --> 00:41:53,400
Speaker 1: That's a half a percent in terms of fiscal spending,

804
00:41:53,440 --> 00:41:56,480
Speaker 1: that might boost real growth by a half a percent

805
00:41:56,560 --> 00:41:59,080
Speaker 1: or so. We've seen inflation, but with these numbers and

806
00:41:59,120 --> 00:42:01,880
Speaker 1: wages go up by you know, close to three percent,

807
00:42:02,040 --> 00:42:05,000
Speaker 1: So I think some of both. I think what's critical, however,

808
00:42:05,120 --> 00:42:08,440
Speaker 1: is is the productivity number, and not just productivity but

809
00:42:08,520 --> 00:42:12,279
Speaker 1: total factor. Productivity gets a little complicated, and you know,

810
00:42:12,360 --> 00:42:15,200
Speaker 1: economists speak, but what that means is that you can't

811
00:42:15,239 --> 00:42:19,480
Speaker 1: just throw resources at the economy like Trump may do

812
00:42:19,560 --> 00:42:22,440
Speaker 1: and the Republican administration may do in terms of fiscal spending,

813
00:42:22,480 --> 00:42:26,080
Speaker 1: but you need to um throw productivity at the economy.

814
00:42:26,120 --> 00:42:30,120
Speaker 1: In other words, resources that produce uh growing productivity, and

815
00:42:30,560 --> 00:42:33,520
Speaker 1: they're just more resources. And so we're gonna have to

816
00:42:33,560 --> 00:42:36,839
Speaker 1: see about that that. I think it's the crucial number. Bill.

817
00:42:36,960 --> 00:42:40,600
Speaker 1: It is such an interesting time, and it's a time

818
00:42:40,640 --> 00:42:42,719
Speaker 1: where we could do a six hour interview with you.

819
00:42:42,800 --> 00:42:45,120
Speaker 1: Maybe we'll do that if my people talk to your people.

820
00:42:45,520 --> 00:42:48,760
Speaker 1: But the basic idea here, Bill is, there's three vectors

821
00:42:48,800 --> 00:42:52,239
Speaker 1: to interest rates. There's a Trump reflation, there's a jump

822
00:42:52,320 --> 00:42:55,640
Speaker 1: condition that we've had since November eight, and its stability,

823
00:42:56,080 --> 00:42:58,280
Speaker 1: and then there's a lot of people talking about Okay,

824
00:42:58,320 --> 00:43:00,880
Speaker 1: this is great, but we're gonna roll over to a

825
00:43:00,960 --> 00:43:04,799
Speaker 1: note on a new lower rate regime, some of that

826
00:43:04,840 --> 00:43:09,160
Speaker 1: because of international fairs. What does the Janus unconstrained fun

827
00:43:09,320 --> 00:43:13,480
Speaker 1: betting on higher rates sustained rates or do we roll

828
00:43:13,600 --> 00:43:17,959
Speaker 1: back to a pre Trump level well slightly higher rates.

829
00:43:17,960 --> 00:43:21,480
Speaker 1: And and here I'll introduce a new factor that I

830
00:43:21,560 --> 00:43:24,799
Speaker 1: know you're interested in because you're a technician to to

831
00:43:24,960 --> 00:43:28,399
Speaker 1: a considerable extent. But there's been a thirty year thirty

832
00:43:28,480 --> 00:43:32,560
Speaker 1: five year trend line since the nineteen four eighty three

833
00:43:32,719 --> 00:43:35,760
Speaker 1: on the tenure. Take the ten year treasury for instance,

834
00:43:36,160 --> 00:43:39,160
Speaker 1: um moving down perhaps by thirty basis points a year,

835
00:43:39,200 --> 00:43:43,520
Speaker 1: but the downward trend line being hit by six, seven, eight,

836
00:43:43,640 --> 00:43:46,239
Speaker 1: nine times in a cyclical type of fashion, a very

837
00:43:46,280 --> 00:43:49,000
Speaker 1: strong trend line. You know at the moment that trend

838
00:43:49,040 --> 00:43:53,040
Speaker 1: line is around two point six percent. And so I

839
00:43:53,080 --> 00:43:55,279
Speaker 1: would I would say this. You know, it's hard to

840
00:43:55,320 --> 00:43:58,040
Speaker 1: know what fiscal spending will do in terms of real

841
00:43:58,080 --> 00:44:00,239
Speaker 1: growth and in terms of inflation. It's hard to know

842
00:44:00,440 --> 00:44:03,319
Speaker 1: what other countries and central banks will do in terms

843
00:44:03,360 --> 00:44:06,640
Speaker 1: of their quantitative easy and etcetera, etcetera. But we will

844
00:44:06,680 --> 00:44:09,320
Speaker 1: see it. We will know it. You know, if the

845
00:44:09,680 --> 00:44:12,840
Speaker 1: tenure breaks two point six percent on a weekly or

846
00:44:12,880 --> 00:44:15,879
Speaker 1: on a monthly basis, because it's so strong and so

847
00:44:16,400 --> 00:44:20,319
Speaker 1: important in terms of technical analysis that if and when

848
00:44:20,360 --> 00:44:23,080
Speaker 1: it's broken on the upside, it's a bear market. And

849
00:44:23,120 --> 00:44:25,200
Speaker 1: if it's not broken on the upside, we just sort

850
00:44:25,239 --> 00:44:27,879
Speaker 1: of stay where we are. And and David David Garrow,

851
00:44:28,000 --> 00:44:30,759
Speaker 1: this is really really important, this idea of trying to

852
00:44:30,800 --> 00:44:34,720
Speaker 1: find a point estimate of where things change. Mr Gross

853
00:44:34,719 --> 00:44:37,040
Speaker 1: says two point six percent. There's a lot of other

854
00:44:37,080 --> 00:44:39,520
Speaker 1: opinions on that, but it's nice at least to her

855
00:44:39,640 --> 00:44:42,279
Speaker 1: point estimate we can get our hands around. Absolutely. Bill,

856
00:44:42,360 --> 00:44:43,799
Speaker 1: let me ask you if we're starting to see a

857
00:44:43,800 --> 00:44:46,719
Speaker 1: recalibration of expectations when it comes to Washington's ability to

858
00:44:46,760 --> 00:44:49,440
Speaker 1: effect policy. We have the excitement, the exuberance in the

859
00:44:49,480 --> 00:44:51,520
Speaker 1: markets at the end of last year. Here we are

860
00:44:51,560 --> 00:44:54,760
Speaker 1: in two thousand seventeen. We see a Republican lawmakers, especially

861
00:44:54,840 --> 00:44:57,960
Speaker 1: laying out their agenda items. Are there. Is there going

862
00:44:58,000 --> 00:45:00,040
Speaker 1: to be a healthy dose of realism here over the

863
00:45:00,160 --> 00:45:03,440
Speaker 1: next few weeks, Well, you know, I think there should be.

864
00:45:03,719 --> 00:45:06,120
Speaker 1: We don't know what the fiscal package will be, and

865
00:45:06,120 --> 00:45:08,960
Speaker 1: it will be having its effect a year or two

866
00:45:09,040 --> 00:45:11,040
Speaker 1: years from now. We don't know what the health care

867
00:45:11,800 --> 00:45:15,960
Speaker 1: reconfiguration will be. We're not sure exactly where the money

868
00:45:15,960 --> 00:45:18,759
Speaker 1: goes and where it comes from. So I think there's

869
00:45:18,800 --> 00:45:21,359
Speaker 1: a touch of realism again. What I what I think

870
00:45:21,560 --> 00:45:24,759
Speaker 1: investors want to see is a is a standard three

871
00:45:24,760 --> 00:45:28,320
Speaker 1: percent real growth rate which will induce you know, profit

872
00:45:28,440 --> 00:45:31,480
Speaker 1: growth with with wages moving up at three percent. It's

873
00:45:31,480 --> 00:45:34,200
Speaker 1: important that real growth moves up by three percent so

874
00:45:34,280 --> 00:45:39,759
Speaker 1: that the corporate profits can participate in that uh particular run. So, um,

875
00:45:39,880 --> 00:45:41,880
Speaker 1: we're gonna need those types of numbers at the moment.

876
00:45:41,920 --> 00:45:44,680
Speaker 1: What do we have? One point nine percent for the

877
00:45:44,760 --> 00:45:48,080
Speaker 1: last twelve months, about two percent for the last five years?

878
00:45:48,800 --> 00:45:52,120
Speaker 1: Can Trump do it? Can he produced a three percent number? Uh?

879
00:45:52,239 --> 00:45:55,399
Speaker 1: And and give some to profits and some two wages. Um,

880
00:45:55,440 --> 00:45:58,160
Speaker 1: we're just gonna have to see. I tend to be skeptical.

881
00:45:58,320 --> 00:46:02,279
Speaker 1: I tend to be of the you know, secular stagnation

882
00:46:02,920 --> 00:46:07,760
Speaker 1: Robert Gordon low hanging fruit productivity, uh new normal type

883
00:46:07,760 --> 00:46:11,799
Speaker 1: of persuasion. But we'll see if fiscal spending can get

884
00:46:11,880 --> 00:46:15,240
Speaker 1: us up there. We continue our conversation with William Gross.

885
00:46:15,239 --> 00:46:18,680
Speaker 1: Bill Gross, everyone wants to know what you feel about

886
00:46:18,719 --> 00:46:22,760
Speaker 1: Trump economics, Trump theory, but particularly that through the prism

887
00:46:22,760 --> 00:46:25,640
Speaker 1: that we heard earlier this week from Lawrence Summer, the

888
00:46:25,680 --> 00:46:30,440
Speaker 1: former Secretary of Treasury. Larry Summers was fiery about speaking

889
00:46:30,560 --> 00:46:34,759
Speaker 1: about the voodoo economics of a selected group of Trump advisors,

890
00:46:34,960 --> 00:46:40,200
Speaker 1: even calling it economic creationism. Is Trump economics on solid

891
00:46:40,320 --> 00:46:45,440
Speaker 1: theoretical ground, well, on a short term basis, perhaps, But

892
00:46:45,480 --> 00:46:48,800
Speaker 1: I think that's what Larry Summers is talking about creationism

893
00:46:48,800 --> 00:46:51,480
Speaker 1: a little sensitive, I guess, But voodoo economics we know

894
00:46:51,560 --> 00:46:54,600
Speaker 1: about that. Well, what do you suggesting basically is that

895
00:46:54,920 --> 00:46:58,920
Speaker 1: some of the policy initiatives, the tax cuts for instance,

896
00:46:59,000 --> 00:47:02,560
Speaker 1: that will generate more revenue. We've we've heard this before,

897
00:47:02,640 --> 00:47:04,680
Speaker 1: We've seen it with the Lapper curve, and so he's

898
00:47:05,120 --> 00:47:09,359
Speaker 1: criticizing that. He's also talking about repatriation of money, you know,

899
00:47:09,680 --> 00:47:13,080
Speaker 1: one trillion, two trillion coming back to the economy and

900
00:47:13,160 --> 00:47:17,920
Speaker 1: regenerating investment. Typically and historically back in the early part

901
00:47:17,960 --> 00:47:21,360
Speaker 1: of the center, but fifteen years ago with Bush, it

902
00:47:21,480 --> 00:47:23,880
Speaker 1: did come back. They did reduce the rate, but it

903
00:47:23,960 --> 00:47:26,720
Speaker 1: came back, and it was used for stock by backs

904
00:47:26,719 --> 00:47:30,040
Speaker 1: and for mergers and acquisitions, not for investment. And so Yeah,

905
00:47:30,040 --> 00:47:32,719
Speaker 1: I think there's a lot of voodoo there in terms

906
00:47:32,760 --> 00:47:36,000
Speaker 1: of the tax policies, at least not necessarily in terms

907
00:47:36,000 --> 00:47:39,880
Speaker 1: of the fiscal spending bill. This is an important question.

908
00:47:39,920 --> 00:47:42,160
Speaker 1: I believe you worked at a small start up shop

909
00:47:42,200 --> 00:47:46,040
Speaker 1: in Newport Beach a few years ago. You had enormous

910
00:47:46,520 --> 00:47:50,919
Speaker 1: influence with other nations debt. You knew about Mexico debt,

911
00:47:50,960 --> 00:47:53,600
Speaker 1: you knew about Poland debt, you knew about the debt

912
00:47:53,680 --> 00:47:56,400
Speaker 1: of Asia and the modest amount of debt in Asia.

913
00:47:56,600 --> 00:47:59,880
Speaker 1: Are you concerned that Trump economics will lead to a

914
00:48:00,080 --> 00:48:07,040
Speaker 1: zero sum world that will destabilize the international financial system. Yeah,

915
00:48:07,080 --> 00:48:10,120
Speaker 1: I think that's a possibility. Let's not put odds on

916
00:48:10,160 --> 00:48:14,040
Speaker 1: it and go to an extreme, but yeah, it's a possibility.

917
00:48:14,080 --> 00:48:16,880
Speaker 1: Because the world in total, and we're talking about emerging

918
00:48:16,880 --> 00:48:19,759
Speaker 1: and we're talking about developed with Japan and so on,

919
00:48:19,960 --> 00:48:24,239
Speaker 1: is that of debt to GDP the highest it's ever been?

920
00:48:24,600 --> 00:48:26,840
Speaker 1: What does that mean? Why is that such a negative

921
00:48:26,880 --> 00:48:30,640
Speaker 1: well in certain countries terms in terms of Mexico and

922
00:48:30,920 --> 00:48:33,600
Speaker 1: in some of the emerging market countries to the extent

923
00:48:33,640 --> 00:48:35,840
Speaker 1: that that they have a high amount and a growing

924
00:48:35,880 --> 00:48:39,319
Speaker 1: amount of dollar denominated debt and the dollar strengthens, which

925
00:48:39,400 --> 00:48:41,560
Speaker 1: it has except for the last few days. As you know,

926
00:48:42,080 --> 00:48:45,239
Speaker 1: then the ability to pay back that dollar denominated debt

927
00:48:45,320 --> 00:48:48,239
Speaker 1: down the road becomes more and more difficult and could

928
00:48:48,360 --> 00:48:53,359
Speaker 1: potentially create a situation where certain countries have to be

929
00:48:53,400 --> 00:48:55,640
Speaker 1: bailed out by the I, M F and so. And

930
00:48:55,680 --> 00:48:59,439
Speaker 1: I'm not suggesting that from Mexico. I like Mexico, but yes,

931
00:48:59,560 --> 00:49:02,359
Speaker 1: it's a it's a definite problem. Whenever you get imbalances

932
00:49:02,400 --> 00:49:05,680
Speaker 1: in terms of debt, m look for debt to GDP

933
00:49:05,880 --> 00:49:09,560
Speaker 1: and therein lies the problem. China is a good example

934
00:49:09,680 --> 00:49:11,880
Speaker 1: going forward, though. There are plenty of people here who

935
00:49:11,920 --> 00:49:13,960
Speaker 1: would like to see you on Twitter, and this may

936
00:49:14,000 --> 00:49:16,200
Speaker 1: be the President elect who gets you to do it.

937
00:49:16,239 --> 00:49:18,000
Speaker 1: I'm sure you've been following what the President elect has

938
00:49:18,040 --> 00:49:20,000
Speaker 1: been tweeting this week. He's been talking about companies and

939
00:49:20,040 --> 00:49:23,359
Speaker 1: specific and talking about the relationship with Mexico as well

940
00:49:23,400 --> 00:49:26,360
Speaker 1: as we sort of try to navigate all of this uncertainty.

941
00:49:26,360 --> 00:49:28,640
Speaker 1: Are we getting the contours here of a trade policy

942
00:49:28,680 --> 00:49:31,200
Speaker 1: from what we've seen from Donald Trump this week? Well,

943
00:49:31,200 --> 00:49:36,720
Speaker 1: we're we're about to get perhaps or we're getting what

944
00:49:36,719 --> 00:49:39,200
Speaker 1: what we're seeing in terms of tweets. I I think

945
00:49:39,239 --> 00:49:42,080
Speaker 1: It's interesting David that, um, you know, some of these

946
00:49:42,200 --> 00:49:47,319
Speaker 1: uh pre term policies, he's not an office yet where

947
00:49:47,360 --> 00:49:50,880
Speaker 1: he's basically cajoling if that's a nice word. Uh, you know,

948
00:49:50,920 --> 00:49:54,640
Speaker 1: companies to move production back in the United States. I

949
00:49:54,680 --> 00:49:57,840
Speaker 1: think that's fine. But it reminds me of some extent,

950
00:49:58,160 --> 00:50:03,120
Speaker 1: does it not of Paul Season uh Italy long ago, uh,

951
00:50:03,440 --> 00:50:07,120
Speaker 1: you know, associated with Mussolini and the government control of

952
00:50:07,440 --> 00:50:10,520
Speaker 1: corporate interests, and so you know, I don't want it

953
00:50:10,560 --> 00:50:14,120
Speaker 1: to go too far. Let's uh yeah, let's okay, But Phil,

954
00:50:14,200 --> 00:50:18,120
Speaker 1: come on, Bill, Bill I built Mr Gross, Mr Gross,

955
00:50:18,160 --> 00:50:20,480
Speaker 1: I have to interrupt there. This is too important. Are

956
00:50:20,520 --> 00:50:24,239
Speaker 1: you suggesting that we are seeing a fascism light or

957
00:50:24,320 --> 00:50:27,680
Speaker 1: some form of new neo fascism with the policies of

958
00:50:27,719 --> 00:50:32,120
Speaker 1: our president elect. Well, I'm not gonna go that for

959
00:50:32,280 --> 00:50:33,680
Speaker 1: that to your term, I was going to put out

960
00:50:33,719 --> 00:50:36,400
Speaker 1: it toe and say none dare call it fascism. And

961
00:50:36,480 --> 00:50:39,320
Speaker 1: so I don't dare call it fascism. But to the

962
00:50:39,400 --> 00:50:43,360
Speaker 1: extent that he pinpoints certain corporations in certain industries and

963
00:50:43,520 --> 00:50:47,520
Speaker 1: makes them change their policies based upon statements and threats,

964
00:50:47,840 --> 00:50:51,640
Speaker 1: you know, it reminds me, yes of of policies long ago, which,

965
00:50:51,719 --> 00:50:54,440
Speaker 1: by the way, we're supposed to make the trains run

966
00:50:54,560 --> 00:50:57,799
Speaker 1: on time, and did for a few years, but ultimately

967
00:50:58,280 --> 00:51:00,799
Speaker 1: the trains weren't running. But let me ask you here

968
00:51:00,800 --> 00:51:03,080
Speaker 1: about the role of the FED reserve here in the

969
00:51:03,120 --> 00:51:05,799
Speaker 1: new term with with Donald Trump as president. I wonder

970
00:51:05,800 --> 00:51:07,760
Speaker 1: if we're seeing a third mandate here. We've got employment,

971
00:51:07,800 --> 00:51:09,520
Speaker 1: we've got inflation, and we've got the Fed's job to

972
00:51:09,600 --> 00:51:12,560
Speaker 1: be a political punching bag. We have the prospects here

973
00:51:12,560 --> 00:51:15,479
Speaker 1: for a radical transformation of the FED. Five new people

974
00:51:15,520 --> 00:51:17,880
Speaker 1: could be joining the FED, including a chairperson here in

975
00:51:17,880 --> 00:51:20,759
Speaker 1: the next eighteen months. Who would you like to see

976
00:51:20,840 --> 00:51:22,719
Speaker 1: running What kind of person would you like to see

977
00:51:22,960 --> 00:51:24,640
Speaker 1: running the FED? How do you see the FED changing

978
00:51:24,680 --> 00:51:29,520
Speaker 1: here under a president Donald Trump? Well, as you probably know,

979
00:51:29,640 --> 00:51:32,239
Speaker 1: and I know Tom knows for sure over the past

980
00:51:32,360 --> 00:51:35,759
Speaker 1: year to h you know, my favorite policy in terms

981
00:51:35,840 --> 00:51:38,680
Speaker 1: of the FED the Central Bank is to move interest

982
00:51:38,800 --> 00:51:42,400
Speaker 1: rates back as close to normal as possible without threatening

983
00:51:42,880 --> 00:51:45,360
Speaker 1: uh the economy. In terms of high real rates. The

984
00:51:45,480 --> 00:51:49,120
Speaker 1: critical question, of course, is what's the appropriate real neutral

985
00:51:49,239 --> 00:51:52,279
Speaker 1: rate or nominal neutral rate that will make the economy

986
00:51:52,600 --> 00:51:56,000
Speaker 1: chugg along at two to three percent. I would like

987
00:51:56,160 --> 00:51:59,240
Speaker 1: to see a FED that is more interested in raising

988
00:51:59,440 --> 00:52:03,160
Speaker 1: rates and and producing a neutral interest rate, because I

989
00:52:03,239 --> 00:52:06,440
Speaker 1: think ultimately the last several years has been destructive in

990
00:52:06,600 --> 00:52:08,960
Speaker 1: terms of where they've been at negative interest rates, and

991
00:52:09,160 --> 00:52:11,760
Speaker 1: not in the United States, but negative interest rates around

992
00:52:11,760 --> 00:52:14,400
Speaker 1: the world, you know, basically have been robbing savers of

993
00:52:14,480 --> 00:52:18,160
Speaker 1: their ability to save um, which has robbed investment of

994
00:52:19,280 --> 00:52:23,040
Speaker 1: an ability to grow in terms of uh economic terms.

995
00:52:23,120 --> 00:52:26,680
Speaker 1: So I would I would want to use the FED

996
00:52:26,840 --> 00:52:29,439
Speaker 1: and the US as a leader to raise interest rates

997
00:52:29,480 --> 00:52:32,719
Speaker 1: back to more normal levels in order to regenerate savings.

998
00:52:34,040 --> 00:52:36,280
Speaker 1: We have so much more to talk about this morning,

999
00:52:36,320 --> 00:52:38,880
Speaker 1: and time is just short, short, short. Help me here

1000
00:52:38,920 --> 00:52:41,080
Speaker 1: with the theme that we've had this week, the butterfly

1001
00:52:41,239 --> 00:52:44,520
Speaker 1: effect of e M currencies, which have a certain curve

1002
00:52:44,920 --> 00:52:48,759
Speaker 1: and an acceleration to their weakness. How do you position

1003
00:52:49,280 --> 00:52:54,120
Speaker 1: and how do you think about profoundly weak Malaysian, profoundly

1004
00:52:54,200 --> 00:52:58,160
Speaker 1: weak Turkish, the Mexican pay so breaching into record weakness

1005
00:52:58,200 --> 00:53:04,560
Speaker 1: as well. What should that signal to the new administration? Well,

1006
00:53:04,640 --> 00:53:07,800
Speaker 1: those are all the different situations, right. Turkey is a

1007
00:53:07,920 --> 00:53:11,120
Speaker 1: great basket case from a number of angles. But let's

1008
00:53:11,120 --> 00:53:14,040
Speaker 1: pick on Mexico for a second. And yes, every time

1009
00:53:14,120 --> 00:53:19,080
Speaker 1: Trump tweets about a car company H and moving production back,

1010
00:53:19,440 --> 00:53:22,080
Speaker 1: you know the pace so weekends, I would look at

1011
00:53:22,120 --> 00:53:26,000
Speaker 1: a longer term trend line in terms of in terms

1012
00:53:26,040 --> 00:53:30,759
Speaker 1: of the real UH, the real paso UH inflation adjusted

1013
00:53:30,880 --> 00:53:34,600
Speaker 1: and point out that it's perhaps forty five to fift

1014
00:53:35,239 --> 00:53:37,680
Speaker 1: lower than it was five or six years ago. What

1015
00:53:37,719 --> 00:53:40,080
Speaker 1: does that mean? It means the pace is very competitive.

1016
00:53:40,320 --> 00:53:43,080
Speaker 1: It means that, yes, even if you know some of

1017
00:53:43,160 --> 00:53:46,400
Speaker 1: that production doesn't flow to Mexico on a political basis,

1018
00:53:46,480 --> 00:53:50,360
Speaker 1: that it's very, very, very cheap relative to other countries.

1019
00:53:50,400 --> 00:53:53,360
Speaker 1: And so that's my way of saying that the PACEO

1020
00:53:54,040 --> 00:53:57,120
Speaker 1: H is very cheap, and it's politically oriented, and the

1021
00:53:57,200 --> 00:54:00,920
Speaker 1: trick for an investor is basically that try and time

1022
00:54:01,239 --> 00:54:05,480
Speaker 1: that political influence and to buy a very cheap currency

1023
00:54:05,640 --> 00:54:08,920
Speaker 1: at a very attractive level. Are you prepared to to

1024
00:54:08,960 --> 00:54:12,160
Speaker 1: start writing the obituary for globalization Bill? We've heard people

1025
00:54:12,200 --> 00:54:14,120
Speaker 1: saying that we're seeing the end of it. Are you

1026
00:54:14,239 --> 00:54:18,040
Speaker 1: in that camp? Yeah? I think so. When I wrote

1027
00:54:18,080 --> 00:54:22,480
Speaker 1: the obituary in mild terms with the new normal back

1028
00:54:22,520 --> 00:54:24,960
Speaker 1: into thousand and eight into thousand and nine, I mean

1029
00:54:25,280 --> 00:54:29,440
Speaker 1: We've had several longer term secular trends. We've had Breton

1030
00:54:29,560 --> 00:54:33,080
Speaker 1: Woods uh in nineteen seventy one. We've moved into another

1031
00:54:33,400 --> 00:54:39,040
Speaker 1: globalization type of trend, which induced a monetary consideration, and

1032
00:54:39,160 --> 00:54:42,640
Speaker 1: now we're moving in the other direction, if only from

1033
00:54:42,719 --> 00:54:46,160
Speaker 1: monetary terms, that we've gone so low that negative interest

1034
00:54:46,239 --> 00:54:49,279
Speaker 1: rates have to have to move higher, and of course

1035
00:54:49,360 --> 00:54:53,760
Speaker 1: with trade policies and all of that reflecting a deglobalization

1036
00:54:53,840 --> 00:54:56,080
Speaker 1: as opposed to a globalization. So yeah, I think we're

1037
00:54:56,120 --> 00:54:58,200
Speaker 1: in a new era, and I think some of the

1038
00:54:58,239 --> 00:55:01,240
Speaker 1: effects are going to be negative. I want David Gura

1039
00:55:01,320 --> 00:55:03,400
Speaker 1: to take us out here. But Bill Gross, I got

1040
00:55:03,480 --> 00:55:06,080
Speaker 1: one more question. Should we build a wall around the

1041
00:55:06,120 --> 00:55:09,279
Speaker 1: San Francisco forty Niners to keep them removed from the

1042
00:55:09,360 --> 00:55:13,480
Speaker 1: rest of the NFL? Well, maybe the Browns give the

1043
00:55:13,600 --> 00:55:16,759
Speaker 1: Niners a chance. That got the second draft choice. Oh no,

1044
00:55:17,000 --> 00:55:21,440
Speaker 1: oh god, let's go with that. Very good Bill Gross.

1045
00:55:21,480 --> 00:55:24,000
Speaker 1: There of Jannis Capital, joining us as he often does

1046
00:55:24,040 --> 00:55:33,440
Speaker 1: here on Job Sick, grateful for his time. Thanks for

1047
00:55:33,560 --> 00:55:37,960
Speaker 1: listening to the Bloomberg Surveillance podcast. Subscribe and listen to

1048
00:55:38,160 --> 00:55:43,240
Speaker 1: interviews on iTunes, SoundCloud, or whichever podcast platform you prefer

1049
00:55:44,000 --> 00:55:46,840
Speaker 1: I'm out on Twitter at Tom Keene. David Gura is

1050
00:55:47,000 --> 00:55:50,759
Speaker 1: at David Gura. Before the podcast, you can always catch

1051
00:55:50,840 --> 00:56:05,840
Speaker 1: US World One. I'm Bloomberg Radio. Yeah. Brought to you

1052
00:56:05,920 --> 00:56:08,360
Speaker 1: by Bank of America. Merrill Lynch Dedicated to bringing our

1053
00:56:08,440 --> 00:56:10,880
Speaker 1: clients insights and solutions to meet the challenges of a

1054
00:56:10,920 --> 00:56:14,200
Speaker 1: transforming world. That's the power of global connections. Merrill Lynch,

1055
00:56:14,280 --> 00:56:16,919
Speaker 1: Pierced Fenner and Smith Incorporated, Member s I PC