Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
Speaker 1: Jason Kelly. We're right here every day bringing you the
Speaker 1: latest news from the world's of business and finance, plus technology, politics, economics,
Speaker 1: all harnessing the power of Business Week reporters and editors,
Speaker 1: and of course Carol that's part of a team of
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Speaker 1: can also listen to our radio show at two pm
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Speaker 1: about the convention that the Democratic National Convention happened this
Speaker 1: week and look ahead to next week's Republican National Convention.
Speaker 1: But you know, clearly, if you watch it all, you
Speaker 1: saw that we are still in the midst of a
Speaker 1: massive medical and healthcare crisis in this country. It is
Speaker 1: worth remembering, even amid more positive economic news and certainly
Speaker 1: a market that's very enthusiastic. So let's check in on
Speaker 1: the virus. Get the latest, especially from outside our little
Speaker 1: bubble here in the Tri state area. Doctor Harold Pauses
Speaker 1: with us, the CEO of Wexterner Medical Center, Chancellor of
Speaker 1: Health Affairs at Ohio State University. He joins us from
Speaker 1: the Buckeye State. So Dr Pause, really nice to have
Speaker 1: you back with us, so help us understand where we are.
Speaker 1: What's it like on the ground where you are. Thank
Speaker 1: you very much, Jason, I'm delighted to be back. So
Speaker 1: you know, in Ohio we're seeing a leveling off in
Speaker 1: the in the Columbus area of the number of patients
Speaker 1: that are being hospitalized. We were at our peak in
Speaker 1: in mid April, and we've seen those numbers uh slowly
Speaker 1: come down. We still have COVID positive patients in the hospital,
Speaker 1: and we're certainly seeing them in the clinical sites. But
Speaker 1: the good news is we're nowhere near our peak, and
Speaker 1: that's important. And is it also about not only about
Speaker 1: numbers coming down? Certainly in states like yours and other places,
Speaker 1: we've certainly seen it come down dramatically. Dr paulse In
Speaker 1: in New York, But is it also about compared to
Speaker 1: where we were, maybe even just a month ago, we
Speaker 1: are we've started to really figure out ways to treat
Speaker 1: patients who come down with coronavirus so that they may
Speaker 1: get sick, but we can keep them alive. Yeah, and
Speaker 1: and that's another important point. Um. Among the patients that
Speaker 1: are hospitalized, we're seeing fewer patients in the intensive care
Speaker 1: unit setting on ventilators and that's really important. And there
Speaker 1: are a number of things that have been have been
Speaker 1: used over the past several months that we've learned a
Speaker 1: lot around dessevere, which is the anti viral drug that
Speaker 1: we can give intravenously. UM has been added. We're using
Speaker 1: a steroid drug called dex and method zone prone posturing
Speaker 1: so that patients are put on their abdomens as a
Speaker 1: on their backs and given high flow oxygen so they
Speaker 1: don't have to go on mechanical ventilation. And UM. There
Speaker 1: are there have been efforts to use convalescent plasma as well,
Speaker 1: and that I know there continues to be research looking
Speaker 1: at how effective that is. But all these different approaches
Speaker 1: as they come together, mean that we're coming up with
Speaker 1: more and more effective ways to help patients that become
Speaker 1: critically ill with the virus. And and of course all
Speaker 1: the things that we're doing on the ground to prevent
Speaker 1: the spread and that's incredibly important, getting everybody to wear
Speaker 1: a mask two socially distant and to wash their hands
Speaker 1: as as frequently as they can, not touching their eyes, ears, nose,
Speaker 1: or mouth, because you want to stop the spread. That's
Speaker 1: the first step is blocking the spread, which gets the
Speaker 1: overall numbers down. So Dr Paus talked to us about
Speaker 1: rapid testing because I feel like that is something that's
Speaker 1: really comes to the four this week. There's a lot
Speaker 1: of I think in this he has an optimism around
Speaker 1: that that even came up last night in former Vice
Speaker 1: President Joe Biden's speech around what he would do, Uh
Speaker 1: if he were elected? Where are we how effective? What
Speaker 1: should we be thinking about when it comes to rapid testing. Yeah,
Speaker 1: so there's a lot of progress being made and testing
Speaker 1: and we're looking for the results to show how effective
Speaker 1: these new forms of testing are. Let me just give
Speaker 1: you a little bit of background on this. So what
Speaker 1: we were using up until now primarily is what's called
Speaker 1: viral RNA detection. So the genetic code and a virus
Speaker 1: is different than in people and people in the DNA.
Speaker 1: In this particular virus, it's RNA, And what we're looking
Speaker 1: for is the signature RNA for this virus that causes
Speaker 1: COVID nineteen and you do that on the machine called
Speaker 1: a PCR machine Plumerase chain reaction machine, that's the gold standard.
Speaker 1: We set that up at the Ohio State Western Artical
Speaker 1: Center ten machines and we could do up to tests
Speaker 1: the day, but it takes time. It takes it takes
Speaker 1: more than than fifteen minutes. But then again it is
Speaker 1: highly sensitive for the virus and highly specific. We estimate
Speaker 1: that our test at Ohio State wester has over sensitivity
Speaker 1: rate to find the virus. So it's great, but you
Speaker 1: know it results on average take forty eight hours or
Speaker 1: so to get back to the patient, and we've all
Speaker 1: heard these stories of patients going into some places and
Speaker 1: it takes seven days, right, So that's a challenge. So newer,
Speaker 1: newer types of testing UM depend on something else, which
Speaker 1: is called viral anergen detection. So instead of looking for
Speaker 1: the RNA that that the virus codes for, it's looking
Speaker 1: for an anergen on the surface of the virus. And
Speaker 1: this these tests can yield results within thirty minutes and
Speaker 1: without specialized instruments. This clearly, this is this is a
Speaker 1: public health issue, and it's really a matter of uh,
Speaker 1: doing all the things that we need to do with
Speaker 1: any epidemic or pandemic from a public health and a
Speaker 1: a medical standpoint, And it's really about prevention. It's about diagnosis,
Speaker 1: as we were just talking about briefly a few minutes ago,
Speaker 1: and it's about effective treatments and part of that is
Speaker 1: having um the vaccines available to prevent the spread of
Speaker 1: this virus and to make sure that we can develop
Speaker 1: her immunity so that there m there is not going
Speaker 1: to be additional waves of this COVID nineteen virus spreading
Speaker 1: through our communities. So but can I can I just
Speaker 1: follow because I do feel like the virus, though, as
Speaker 1: you know, has become rather political. We certainly saw it
Speaker 1: early on in terms of getting access to equipment for
Speaker 1: there being you know, um uh a message for the
Speaker 1: entire country and it's safe to say you know this
Speaker 1: better than we do that it definitely has, you know,
Speaker 1: made it more difficult for us to get ahead of
Speaker 1: the virus because we were all kind of doing things differently. Yeah,
Speaker 1: So I can tell you that in Ohio, the governor
Speaker 1: of Ohio, Governor Dwine, has taken a very strong leadership
Speaker 1: role in all aspects of dealing with this pandemic, everything
Speaker 1: from being very clear about the need to wear a mask,
Speaker 1: about the programs around social distancing and UH ensuring that
Speaker 1: we can go out and do the things that we
Speaker 1: need to do in terms of testing and and then
Speaker 1: making sure we had things like reagents to run these
Speaker 1: PCR machines I mentioned before, all the way to coordinating
Speaker 1: among the hospitals to deal with patients should there be
Speaker 1: a surge and these hospital facilities get stretched to their limitations.
Speaker 1: So it is exceptionally about about having appropriate leadership in
Speaker 1: place and taking that view at the very top all
Speaker 1: the way through to how we deliver care in our
Speaker 1: little communities. So dr pause before we let you go
Speaker 1: talk to us about reopening Ohio State specifically, but also
Speaker 1: the advice that you're giving even lower down in the
Speaker 1: educational system as we think about K through twelve. Of course, well,
Speaker 1: we're spending a lot of time as you can imagine
Speaker 1: at Ohio State UM as we reopen the university, and
Speaker 1: we want to make sure that we're able to do
Speaker 1: that and to do it safely, and that of course
Speaker 1: means that we want to test our students as they
Speaker 1: come back. We want to make sure that we de
Speaker 1: identify classes, so these large lecture classes that all of
Speaker 1: us know from when we were in college are not
Speaker 1: going to work right now, so that we do over
Speaker 1: distance learning, but smaller classes where we can have appropriate distancing.
Speaker 1: Keep our students six feet apart, make sure they're wearing masks,
Speaker 1: make sure our faculty are wearing masks, particularly in areas
Speaker 1: like the medical school where they have to be physically present,
Speaker 1: or even in is like theater arts where we're in
Speaker 1: dance where they have to be in a class. You
Speaker 1: can't do that over your TV monitor. We want to
Speaker 1: make sure that we can continue to do these things,
Speaker 1: but do them safely. And of course this has had
Speaker 1: an impact on some programs like athletics and result in
Speaker 1: some very difficult decisions that needed to be made to
Speaker 1: keep our students and our staff and our faculty stays.
Speaker 1: But we are all doing this with the notion that
Speaker 1: we're going to get through this thing. And you know,
Speaker 1: i'd like to tell you the precise day, um in
Speaker 1: the next year when this will all be done, but
Speaker 1: it will be done and we'll be on the other
Speaker 1: side of it. And then We're going to get back
Speaker 1: to all the things that we used to do at
Speaker 1: the university to their fullest extent, but in the meantime
Speaker 1: without shutting down entirely. And that's what we want to
Speaker 1: avoid at all costs, is to have to shut down entirely.
Speaker 1: We want to do as much as we possibly can
Speaker 1: that we can do safely. Right all right, Well, uh,
Speaker 1: we've run out of time. We'd love to have you
Speaker 1: back soon, because you are really at the nexus of
Speaker 1: so many things we're interested in when it comes to
Speaker 1: fighting this virus, the future of education, and as you
Speaker 1: alluded to, Buckeye football, Thank goodness, gracious, no big tent football. Yikes.
Speaker 1: Who are listening to Bloomberg Business Week, Well, when you
Speaker 1: think about what's going on in the world, and when
Speaker 1: the name Steve Bannon comes into the headlines like it
Speaker 1: did yesterday with a vengeance, there is one thing you
Speaker 1: want to read, and that's anything that Josh Green writes.
Speaker 1: And we're fortunate to have that as the centerpiece of
Speaker 1: our political conversation today. Joining us Amanda Colson Hurley. She
Speaker 1: is Politics editor for Bloomberg Business Week. She edited this
Speaker 1: piece and Joel Webber, of course, the editor Bloomberg Business Week.
Speaker 1: He joins us from Massachusetts. So Joel, I was so
Speaker 1: happy when this hit the wire because it's what you
Speaker 1: want to know. It is what's going on, and a
Speaker 1: reminder of who Steve Bannon is, that's right, and and uh,
Speaker 1: you know, Josh Green, for the is that don't know him.
Speaker 1: Um wrote a book that is very much about Steve
Speaker 1: Bannon and sort of the power that um, he's been
Speaker 1: able to wield on the right. And so that's called
Speaker 1: The Devil's Bargain. UM. And I had kind of nudged
Speaker 1: Amanda earlier in the day. Josh is obviously a very
Speaker 1: busy man right now with an election around the corner,
Speaker 1: and we've got him on all kinds of stories, and
Speaker 1: I was like, just you know, by the way, just
Speaker 1: make sure that you remember to nudge Josh because we
Speaker 1: saw this this Bannon headline flash that he had been arrested,
Speaker 1: and I was like, oh, boy, of all the people
Speaker 1: in the world, like I desperately want to read right now,
Speaker 1: Josh Green just made himself that number one person. Um.
Speaker 1: And so Amanda, uh, and Josh got it done. Um, Amanda,
Speaker 1: what what what's ultimately Josh's take in the story. Yeah,
Speaker 1: So Josha's take is that Bannon's indictment sort of represents
Speaker 1: the end of this this arc of UM, a political
Speaker 1: project that Bannon a kind of big and when he
Speaker 1: was advising Trump before, you know, when Trump was campaigning
Speaker 1: in twenty sixteen, that it was really Bannon who has
Speaker 1: this vision of combining a sort of UM, anti immigrant
Speaker 1: nationalism with economic populism UM to uh kind of come
Speaker 1: up with this UM what he thought was like a
Speaker 1: winning UM, you know, multi generational kind of winning formula
Speaker 1: for the Republican Party. UM. And I think at the
Speaker 1: time of you know, Republican Party leaders were really not
Speaker 1: sold on that. Uh. They really thought that they had
Speaker 1: to start to pivot to the center a little bit more, UM,
Speaker 1: try to win over more moderate voters, UM, try to
Speaker 1: make more inroads with UM minority groups. UM. But Bannon, Uh,
Speaker 1: Bannon's vision or insight proved to be correct in you know,
Speaker 1: Trump won, UM, but uh, you know Bannon, UM. So
Speaker 1: Bannon kind of thought that, uh, you know, this was
Speaker 1: going to be the beginning of a grand political project
Speaker 1: that would unfold from there. UM. You know what actually
Speaker 1: happened was that UM, he pretty quickly alienated himself, uh,
Speaker 1: you know from other people in the White House. He
Speaker 1: left the White House, he kind of tried to drum
Speaker 1: up a kind of global nationalist political movement. UM that
Speaker 1: has so far, you know, uh not yielded too much,
Speaker 1: at least for him. Um. And Uh, this you know,
Speaker 1: recent indictment kind of shows that he was not able
Speaker 1: to deliver on uh, you know, a key promise of
Speaker 1: that vision that he shaved for Trump, which was the wall. Um.
Speaker 1: You know, this was an effort to privately fund and
Speaker 1: build the border wall. Um. And it collected uh something
Speaker 1: like twenty five million dollars in donations from hundreds of
Speaker 1: thousands of people. Uh. And the allegation is that Bannon
Speaker 1: and and three others um kind of youth a nonprofit
Speaker 1: and I think a shell company to uh to funnel
Speaker 1: some of that money, you know, to themselves personally. Um.
Speaker 1: And so Bannon, you know, this represents arguably, you know
Speaker 1: the end of his political projects. But notably, Trump has
Speaker 1: also not been able to deliver on some of these
Speaker 1: things either. Um. You know, he has uh not built
Speaker 1: a great state, beautiful wall as he promised on a
Speaker 1: campaign trail. Um. You know, it's difficult to argue that
Speaker 1: America is kind of great again. I mean with you know,
Speaker 1: his his tax cuts, uh, you know, benefited arguably the
Speaker 1: rich and not so much the kind of middle class
Speaker 1: uh as a Bannon I think, and Trump you know
Speaker 1: had hoped. Well, Amanda, that's what's really interesting. And I
Speaker 1: love just even the title you know that Josh puts it.
Speaker 1: You guys put on this at the end of you know,
Speaker 1: it may mean the end of Steve Bannon, maybe Trump too.
Speaker 1: And it's interesting because, as you say, they laid out
Speaker 1: this platform, there were critical states of voters who bought
Speaker 1: into that platform and brought Trump to the White House.
Speaker 1: Come and yet now you know, first of all, we
Speaker 1: know Bannon and Trump aren't a pair anymore. And you're
Speaker 1: realizing that that political platform that got Trump to the
Speaker 1: White House, you know, um, isn't there. He didn't he
Speaker 1: didn't follow through. And then you do wonder about, Okay,
Speaker 1: so what impact might that have come come November? Right, Well,
Speaker 1: I think that clearly remains to be seen. Um, there
Speaker 1: are certainly some things that I would guess, you know,
Speaker 1: Trump voters believe that he has delivered on. Um. I'm
Speaker 1: sure there uh, you know, he has put a lot
Speaker 1: of you know, conservative judges. Uh, he has made a
Speaker 1: lot of those appointments, and that was a really big
Speaker 1: you know that that was a really big factor I
Speaker 1: think for a lot of people who voted for him. Um. So,
Speaker 1: I mean there are you know, other variables in this
Speaker 1: um but uh, certainly, um some of those I guess
Speaker 1: the kind of signature you might also almost call them
Speaker 1: bandonian kind of goals Uh from the twenty sixteen campaign.
Speaker 1: Uh do seem you know, do seem to be unfulfilled
Speaker 1: at this point. Yeah. It's a really interesting reminder of
Speaker 1: how important he was, and especially on the eve of
Speaker 1: the Republican National Convention next week, Carol, Uh, a reminder
Speaker 1: of what we saw in and how integral to it
Speaker 1: Steve Bannon was. It's a great must read. Check it
Speaker 1: out online and on the Bloomberg terminal. Josh Green wrote it.
Speaker 1: Amanda Herley edited it. She's the politics editor for Bloomberg
Speaker 1: Business Week. She joined us, as did Joel Weber, the
Speaker 1: editor or of Bloomberg Business Week. This is Bloomberg Business
Speaker 1: Week with Carol Masser and Jason Kelly on Bloomberg Radio.
Speaker 1: Listended Bloomberg Business Week on this Friday. I guess say,
Speaker 1: listening Jason recently one morning, is I like to do
Speaker 1: to surveillance with Tom Keene and the Gang. Danny blanche
Speaker 1: Flower was on. He was talking about walk around economics,
Speaker 1: which I just wanted to hear more about. So in
Speaker 1: today's Business Week Economics. Excited to have with us Professor
Speaker 1: of economics Danny blanch Flower from Dartmouth College, former Bank
Speaker 1: of England Monetary Policy Committee member. He joins us on
Speaker 1: the phone from Hanover, New Hampshire. UM Professor blanch Flower,
Speaker 1: it is so nice to have you on. I love
Speaker 1: it when you're on with Keen in the game. You're
Speaker 1: so much fun. Um so much to talk about when
Speaker 1: it comes to the economy, And first up, I want
Speaker 1: to talk about what's so important to the economy. Education,
Speaker 1: those in school, those who just graduated, you know, they're
Speaker 1: coming into a really tough workplace. Tell me about kind
Speaker 1: of what you're setting up for in the fall. Well
Speaker 1: with with there's a there's a number of things. I mean,
Speaker 1: I think there's there's two bits really to start us
Speaker 1: going the Third World three. The first is what are
Speaker 1: we doing about the kids my Dartmouth kids who graduated
Speaker 1: in June and July of this year and others. How
Speaker 1: are they doing with all the people on the layoff,
Speaker 1: if you like, and the struggles in the job market.
Speaker 1: I just sawt today. Massachusetts has a nonempoint way to
Speaker 1: what So, what's happening to them? Um, particularly what's happening
Speaker 1: to kids who aren't going to college? What's happening to
Speaker 1: those folks? And in fact, it's not perhaps surprising that
Speaker 1: we're seeing unrest in cities. Think about so the kids
Speaker 1: who left school, maybe they were high school dropper, what
Speaker 1: are they doing? What hope will work is there for them?
Speaker 1: And then the third group is obviously the kids who
Speaker 1: are going to college right now, UM and I taught
Speaker 1: class in the spring remote UM Dartmouth. We are supposed
Speaker 1: to have some of our freshmen coming back, although this
Speaker 1: week they put that back again, and old faculty like
Speaker 1: me and we're staying home. So even though the students
Speaker 1: may be coming to the university, the faculty are not
Speaker 1: are not there. I mean, so this is obviously kind
Speaker 1: of chaotic, and I think the big implication we should
Speaker 1: think of Blumberg should be concerned about what's happening in
Speaker 1: the town's what's happening in the places you know, where
Speaker 1: the where the kids are on the street. But also
Speaker 1: if they're not going to print them, they're not going
Speaker 1: to Harvard. I mean, think about Harvard, there's the whole institution,
Speaker 1: all the things around in Cambridge and around the universities
Speaker 1: in that in that great city. This is a really
Speaker 1: downward shock to spending and the good news that you
Speaker 1: were just giving you. Remember, these are lagging indicators. We're
Speaker 1: going to see a downward pressure in the next few
Speaker 1: weeks as the as we approached the elections. But this
Speaker 1: is all very complicated, but none of it's very good news.
Speaker 1: Well indeeded that that gets us right to this whole
Speaker 1: notion of walk around economics that that Carol and I
Speaker 1: talked about, even on the very rare occasions that she
Speaker 1: and I leave our homes and go back to our
Speaker 1: office for for a day or two, the neighborhood around
Speaker 1: Bloomberg in the same way that you're talking about these
Speaker 1: college towns that are suffering, What is the way to
Speaker 1: measure that? How do you approach that in terms of
Speaker 1: really quantifying the net effect here? I mean, let's put
Speaker 1: this in context. I mean, I was on the bank
Speaker 1: of England and well known these days, just saying a
Speaker 1: year ahead of things that, um, the data is looking
Speaker 1: really bad. My economics of walking about, talking to people,
Speaker 1: observing what I see was changing. So obviously some of
Speaker 1: it has to do with surveys that Bloomberg talks about.
Speaker 1: You talk about the p M eyes and you talk
Speaker 1: about all sorts of things like that. But a lot
Speaker 1: of it is I think you walk around the streets
Speaker 1: of New York, you walk up with Hexington and what
Speaker 1: do you think you know the people you know and
Speaker 1: all these people sitting at home working. So I gave
Speaker 1: a story. I remember being in in England early in
Speaker 1: two thousand and eight and I was in a taxi
Speaker 1: cab driving down Oxford Street and the taxi driver said,
Speaker 1: I know who you are. He said, you've been talking
Speaker 1: about the recession here. And he said, I've been driving
Speaker 1: up and down this this most busy street in Europe
Speaker 1: for thirty years around Christmas and he said I've seen something.
Speaker 1: He said, for the very first time, I've seen the
Speaker 1: shoppers are walking around and they don't have shopping bags. Well,
Speaker 1: well there's a great example, right, So we've Then a
Speaker 1: little bit later we suddenly start to see a big
Speaker 1: drop in spending, but the economics are walking about. It
Speaker 1: is essentially what firms do all the time. It's market intelligence.
Speaker 1: It's looking at you walk down your streets. And in
Speaker 1: two thousand seven I was walking down the streets around
Speaker 1: here and businesses were closing. How of the main street
Speaker 1: at Dartmouth is basically half empty, So none of this
Speaker 1: has really picked up. So I think the economics are
Speaker 1: walking about is essentially what bloom Book is so good at.
Speaker 1: It's market intelligence. It's looking at, well, what's happening to people,
Speaker 1: you know, what's happening to the people going through the
Speaker 1: toll booth, how many people are going through the t
Speaker 1: s A checks, what's happening to grub hub, what's happening
Speaker 1: to all these kinds of things. And the evidence from
Speaker 1: those is that it was very early showing slowing, and
Speaker 1: it's really not showing a great pick up in many
Speaker 1: of the states that have seen more COVID. So it's
Speaker 1: about I think, being smart, and especially in the world
Speaker 1: where the normal survey indicators don't pick things up. So
Speaker 1: in the UK, the unemployment rate still hasn't moved from
Speaker 1: street point nine, even though there's ten million people on
Speaker 1: furloughed on benefits. So I think it's this period now
Speaker 1: you really have to switch your brain on and start
Speaker 1: to think what's really going on? And perhaps what I
Speaker 1: see on the street, I mean interesting, what do you
Speaker 1: see on the street around Bloomberg see very quiet street? Well,
Speaker 1: you know what's what's wild to Danny, isn't I had
Speaker 1: to pop into the city for a medical appointment this morning,
Speaker 1: but it was like I flew in driving, which is
Speaker 1: unheard of at like eight in the morning, you know,
Speaker 1: And then even coming home, you know, I don't I'm
Speaker 1: not doing My husband's a little happy, but I'm not
Speaker 1: doing that, you know, normal walk, you know home after work,
Speaker 1: you know, shopping and stopping in stores. I mean, you're
Speaker 1: just you're not. We're not always able to walk around
Speaker 1: so easily. Well, I think that's right, And I think
Speaker 1: to think about what Larry Cudlow has been saying, keep
Speaker 1: saying that there's a V shaped recovery. So what a
Speaker 1: V shaped recovery means is that you went down. I mean, remember,
Speaker 1: we went out really really, really quickly. A V shaped
Speaker 1: recovery means that you're gonna recover just as quickly I mean,
Speaker 1: if what you said is true, which I'm sure it is,
Speaker 1: that throws the whole idea of a V shaped recovery
Speaker 1: on its head because we came down very fast and
Speaker 1: we're recovering very slowly, so a lot a V that
Speaker 1: might be an L. And then if the COVID spreading elsewhere,
Speaker 1: then the thing flattens out. But I think this is
Speaker 1: about what market folks do and what bloom Big is
Speaker 1: so especially good at. It doesn't make sense. The numbers
Speaker 1: often coming out don't make sense. Yes, it's seeing in
Speaker 1: Europe today that retail sales have picked up, and the
Speaker 1: p M I have picked up and so on. So Danny,
Speaker 1: you were talking about a V shape recovery. You said,
Speaker 1: you know, our recovery right now is not very strong.
Speaker 1: It's very slow incoming. I've been reading about folks talking
Speaker 1: about this K shaped recovery. We all keep talking about
Speaker 1: different letters and symbols, but this idea that parts of
Speaker 1: our economy are doing okay, And that's the upper part
Speaker 1: obviously of the K, and you know the lower part
Speaker 1: there are parts that aren't. So what do you what
Speaker 1: do you think? What do what do you what kind
Speaker 1: of visibility do you feel like we have and what
Speaker 1: does it mean fore Well, obviously we have rather different
Speaker 1: experiences going on in some parts of the country, So
Speaker 1: I mean Hampshire, and I go back and forth Virginia,
Speaker 1: Hampshire and Vermont, and it's very there's very few cases there.
Speaker 1: But I think in a sense, the recovery, it's hard
Speaker 1: for people to know. And if people say, I know
Speaker 1: what the what the recovery is, I think the right
Speaker 1: answer is to say that they have no idea. And
Speaker 1: obviously it depends upon a number of things. It depends
Speaker 1: on this virus and a vaccine, It depends upon what
Speaker 1: government do, what they do about masks, and whether they
Speaker 1: close things down, and whether the Treasury puts in money
Speaker 1: and the Congress paths is a deal. But I think
Speaker 1: the biggest thing, in many senses is sort of what
Speaker 1: we've been talking about. What do people do? Do people
Speaker 1: change their spending paths? Yes, if you're in a job
Speaker 1: when you talked about you go to the shoe shop
Speaker 1: which has traditionally been there. Okay, it's open. But the
Speaker 1: issue is how much are they making, how many hours
Speaker 1: a week are they working. But even if people are
Speaker 1: in work, and are they actually making enough money and
Speaker 1: are and going forward, are they going to change their
Speaker 1: behavior um permanently? So the idea, yeah, the subway series
Speaker 1: isn't going to take place, but maybe for the next
Speaker 1: five years. Is it going to be back to normal again?
Speaker 1: People suddenly going to say it's okay to go to
Speaker 1: sports events, to travel on the subway, and go to
Speaker 1: a store and go to restaurants and so on. So
Speaker 1: I think that's hard to know. But certainly some groups
Speaker 1: I assume I'm going to change their behavior, and certainly
Speaker 1: if you're in a place where COVID's spreading UM so,
Speaker 1: I think the answer is it really does depend. But
Speaker 1: the idea trotted out by the government to say that, yeah,
Speaker 1: there's a great there's a V shaped recovery coming, I
Speaker 1: think what you can probably say the one thing we
Speaker 1: know that there isn't one the fat coming because of
Speaker 1: all the things you've talked about, and I think recovery
Speaker 1: will be slow. How do you know whether there's a
Speaker 1: second round or not. How do you know how people
Speaker 1: are going to change their behavior? What? What do we
Speaker 1: know about what the Congress is going to do? Are
Speaker 1: they going to pass up three trillion dollar measure? Who
Speaker 1: is it going to impact? What are people going to do?
Speaker 1: So I think the answer is if anybody says, you know,
Speaker 1: I'm going to forecast LANs, I would say to them,
Speaker 1: all what you should do is say it really depends
Speaker 1: his fre scenarios and under these scenarios is what we do. Uh.
Speaker 1: And anybody who says anything different, I think is just lying.
Speaker 1: So I think we're in a completely unknown world. And
Speaker 1: I think the big worry especially is what's going on
Speaker 1: in the labor market and how fearful of people about
Speaker 1: losing their jobs and what's happened to their incomes? Um, okay,
Speaker 1: I mean you know we yeah, we said create the
Speaker 1: unemployment numbers coming down, people are back to work. Well,
Speaker 1: what if you're back to work and you're make in
Speaker 1: half as many hours as you made before, That's going
Speaker 1: to be very different. So I think, you know, I
Speaker 1: think we have to wait and watch and do the
Speaker 1: economics of walking about because the because the old stuff
Speaker 1: that we looked at is blindingly useless. It doesn't think
Speaker 1: you just you just have to be sensible and try
Speaker 1: and look at things and your k ship recovery. I mean,
Speaker 1: preservably things are pretty different in Maine Vermont, New Hampshire
Speaker 1: than they are in Florida, Texas, Arizona and some of
Speaker 1: them some of the Midwest rural state well and Danny,
Speaker 1: and in six weeks time, who knows, right? Uh? And
Speaker 1: before we let you go, I just have to ask you,
Speaker 1: and this is a big question that I'm fortunally gonna
Speaker 1: have to answer in ninety seconds, but how much do
Speaker 1: you worry about the fact that the K shape also
Speaker 1: indicates that those at higher levels of income and higher
Speaker 1: levels of education are doing okay and those at lower
Speaker 1: levels of income and lower levels of education and are
Speaker 1: not in that gap is only widening. And only got
Speaker 1: about a minute, Danny, Yeah, because I mean, well, obviously
Speaker 1: we've seen that impact in the in the virus in COVID.
Speaker 1: It's impacted groups differentially. When the central bank steps in
Speaker 1: and helps asset holders, that widens inequality. And obviously what
Speaker 1: we've seen at the moment is I mean, the people
Speaker 1: out on the streets, the dissenting about about rising in
Speaker 1: a quality level. So I think going forward we have
Speaker 1: to be mindful of this and mindful of that, you know,
Speaker 1: bring everybody along with you. And in these tough times,
Speaker 1: I mean, we have to be mindful of that. And
Speaker 1: as I said, let's worry particularly about the young. We
Speaker 1: can't leave the young behind. And I think you know,
Speaker 1: those are issues which you have to grapple with um
Speaker 1: and going forward they're probably going to be even bigger issues. Yeah,
Speaker 1: it does feel like that, all right. What a treat
Speaker 1: for us to catch up with you. Thank you so much.
Speaker 1: Danny Blanchflower, professor of economics up at Dartmouth College. That's
Speaker 1: where he joined us from Hanover, New Hampshire. Lovely Hanover,
Speaker 1: New Hampshire. Some great insights in a in a will reminder.
Speaker 1: And I think this is why Carol, you and I
Speaker 1: to some extent, to the point that we can walk
Speaker 1: around that any of us can walk around or drive around.
Speaker 1: We see a world and an economy with our eyes
Speaker 1: that does not reflect what we see on a screen
Speaker 1: every day. No it doesn't exactly. This whole idea of
Speaker 1: walk about is just I think brilliant And you're right, Jason,
Speaker 1: it's again, I think explains so much of the disconnect
Speaker 1: between Main Street and Wall Street. So I gotta say
Speaker 1: I'm just donn a high getting some time to talk
Speaker 1: a lot of economics with Danny Blanche Flower at Dartmouth.
Speaker 1: That was a lot of fun. Journal. Yeah, but you
Speaker 1: let me drive, No, no, no, honey, please, I'll vel
Speaker 1: I want to drive, Just drive the questions and try. Yeah,
Speaker 1: the Drive to the Globe on Bloomberg Radio. All right,
Speaker 1: it's time for the Drive to the clothes. Excited to
Speaker 1: have with us Erica Cloud, Managing director of Technology Equity
Speaker 1: Portfolio Manager Rick Jennison associates so much. We don't know her.
Speaker 1: She's new to the program, Carol, but I like her
Speaker 1: already because A she was a chip analyst and be
Speaker 1: she went to Georgetown University. So God, like, this is
Speaker 1: all this is all going great here. It's gonna start
Speaker 1: emailing on a Friday, and I'm just gonna tell I
Speaker 1: was just gonna say hello to my fellow Joya. I know,
Speaker 1: I love it. I also think we have not to
Speaker 1: get too deep into this. We'll talk about this offline.
Speaker 1: I think you work with a old classmate of mine.
Speaker 1: She'dle mita um from Georgetown. So who is a very
Speaker 1: very good friend of mine from Well, I can't go
Speaker 1: to a public Yeah, exactly, We're gonna go out and
Speaker 1: get a call if I'll be here, Guys, you go ahead,
Speaker 1: So Erica, talk to us about tech right now, because
Speaker 1: we talk about it a lot and it's just been
Speaker 1: an amazing ride. Why I mean, aside from like the
Speaker 1: big cat big cat names, it feels like it's more
Speaker 1: complicated story here. You know, there's a lot to unpack
Speaker 1: here in talking about the transformation to the digital economy. UM.
Speaker 1: What we're seeing is every industry being impacted by the
Speaker 1: use of technology, whether it's telemedicine, whether it's your retailers,
Speaker 1: whether it's your traditional technology companies who are using artificial
Speaker 1: intelligence to advance the development of their own projects. So
Speaker 1: really that every UM company is a technology company these days.
Speaker 1: So when you see you know, it's funny are Dave
Speaker 1: Wilson who does a chart of the day and he consistently,
Speaker 1: you know, looks at the technology sector and how much
Speaker 1: it really moves the market, makes up the market. You know,
Speaker 1: all of us who are in index funds for one
Speaker 1: case where we have a lot of exposure to these
Speaker 1: names as a result, are you comfortable with that or
Speaker 1: do you feel like it's getting a little overdone and
Speaker 1: we need to be a little bit cautious here. Well,
Speaker 1: you know, I think stock selection is always very important,
Speaker 1: but there are some key sub segments that I think
Speaker 1: are still in very very early days. One example would
Speaker 1: be tele medicine. Right now, digital health is about a
Speaker 1: forty billion dollar business that's growing in the mid teams.
Speaker 1: There are many sub segments of that that offer a
Speaker 1: lot of interesting opportunities for growth, whether it's a patient
Speaker 1: who can monitor their glucose on their own, or even
Speaker 1: patients who are for the first time of seeing their
Speaker 1: doctors over the web. Um For example, before the pandemic,
Speaker 1: only one percent of Medicare patients had visited with their
Speaker 1: doctors online. Of Medicare patients have had a visit with
Speaker 1: their doctors since school of it. So when you think
Speaker 1: about this world that we're living in right now, Eric,
Speaker 1: and this goes back to a conversation we had with
Speaker 1: the well known economist up at the Art Myth earlier
Speaker 1: in the show. He was talking about the sort of
Speaker 1: walk about economy and the or the walk about sort
Speaker 1: of economic research that we all do, even if it's
Speaker 1: virtual these days. But you know, one of the things
Speaker 1: that you see in that lack of people walking around
Speaker 1: candidly is everybody's working from home, especially you know, fortunate
Speaker 1: people like us, and I'm guessing you're in the same
Speaker 1: situation able to do your work remotely. It feels like
Speaker 1: this is something that's going to be a fundamental change
Speaker 1: in how business is conducted. How does that play through
Speaker 1: to an investment thesis, Well, I think there's there. There
Speaker 1: are two factors here. First of all, I agree with
Speaker 1: you completely that whether you're working or you're studying, there
Speaker 1: is going to be much more of that that goes
Speaker 1: on in the home. And there are some positive implications
Speaker 1: from that that we're already seeing. UM from workers they
Speaker 1: have more frequent meetings with their colleagues online, they're able
Speaker 1: to keep projects on time by using online software tool UM,
Speaker 1: and they're able to track progress with customers using those
Speaker 1: online tools. For students UM, they're able to check on
Speaker 1: their grades, check on their assignments, collaborate with other students.
Speaker 1: These are all really positive aspects of working or learning online.
Speaker 1: Having said that, I don't think that that is going
Speaker 1: to replace human to human interaction. So right now, I
Speaker 1: think we've seen the pendulums from a little bit um
Speaker 1: far to the left. But I think this certainly is
Speaker 1: going to be a trend here to stay So what
Speaker 1: do you think about the trend? I mean e commerce,
Speaker 1: lant man, we've been all doing it, you know, but
Speaker 1: I do feel like it got kind of a kick
Speaker 1: in the pants because of the pandemic and folks that
Speaker 1: maybe weren't ordering groceries online or weren't doing kicking the
Speaker 1: pants in a good way though, right, kicking pants in
Speaker 1: a kick start? Right, All right? Maybe people don't think
Speaker 1: kicking the pants is great, but I don't know. If
Speaker 1: you do, you know, you get kick in the pants,
Speaker 1: you get people to kind of do something. Even more so,
Speaker 1: I wonder what you think are the lasting impact because
Speaker 1: I do feel like retail, which we've been overstored, overmauled,
Speaker 1: you know, we're seeing that, you know, finally those companies
Speaker 1: go bankrupt. I feel for them, I feel for the people.
Speaker 1: But we knew it was coming, and it certainly was,
Speaker 1: um you know, accelerated as a result of the virus.
Speaker 1: But what do you what do you think how does
Speaker 1: that impact you know, the retail stuff, what stays with us? Well,
Speaker 1: I think retail is one example of a bigger trend
Speaker 1: that I think you're getting at, and that is this
Speaker 1: notion of what this buzzword that we hear all the time.
Speaker 1: Big data, which are these very large UM data sets
Speaker 1: that can be analyzed to find patterns, and big data
Speaker 1: is very important not just for e commerce commerce, but
Speaker 1: for so many applications UM. What big data is able
Speaker 1: to do is able to determine root causes of failures
Speaker 1: UM and then basically detect those issues real time and
Speaker 1: deal with them real time. They can, as you pointed
Speaker 1: out with e commerce, they're able to based on using
Speaker 1: big data, generate coupons at the point of sale based
Speaker 1: on what they're seeing real time in the customers buying habits. UM.
Speaker 1: You can risk analysis analyze UM for insurance companies real
Speaker 1: time in minutes. And then the most important thing I
Speaker 1: would say for so many companies is using big data
Speaker 1: to detect fraudulent behavior before it affects an organization. So
Speaker 1: that trend that ability to not only have the engines
Speaker 1: to process big data, but then also the companies that
Speaker 1: are writing the software to do something with that big data,
Speaker 1: whether it's for e commerce or robotics or automation or security.
Speaker 1: That's really where I would focus my attention to find
Speaker 1: the greatest opportunities in terms of investment. All Right, well,
Speaker 1: we really appreciate the time Erica Cloud, Managing Director of
Speaker 1: Technology Equity Portfolio Manager over at Tennis and Associates Saxa
Speaker 1: say how to sheet for me? Um really good to
Speaker 1: catch up with her and look at the world has
Speaker 1: changed in many ways and technology. It's not just the
Speaker 1: big cap story. I think it is pervasive and it
Speaker 1: is disrupting everything. It's not just you know, be ordering
Speaker 1: a bunch of T shirts, but it kind of I
Speaker 1: got a link for custom made T shirts. Did you
Speaker 1: do it? I'm going to come on. Why wouldn't I?
Speaker 1: I cannot wait. Thanks so much for listening to Bloomberg
Speaker 1: Business Week. Download the podcast on iTunes, Southcloud, Bloomberg dot com,
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