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
Speaker 1: twenty seven hundred journalists and analysts and more than a
Speaker 1: hundred and twenty countries and Jason. You can download Bloomberg
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Speaker 1: can also listen to our radio show at two pm
Speaker 1: Eastern on Bloomberg Radio every weekday, or watch us on
Speaker 1: YouTube by searching Bloomberg Global News. The virus clearly, UH
Speaker 1: continues to be front of mine, and yet I feel
Speaker 1: like we're looking at it, maybe in a more complicated
Speaker 1: way and a more complex way, not in a bad way.
Speaker 1: Candid League, Carol, and this next guest has always kept
Speaker 1: us on us when we've talked to him about some
Speaker 1: of the demographic, the socio economic elements of this that
Speaker 1: we cannot forget right and I feel like it's been exacerbated.
Speaker 1: Are reminded even more because of the last couple of weeks, Um,
Speaker 1: the black community right again impacted disproportionately. Um, when it
Speaker 1: comes to certainly the virus, we saw that, and then
Speaker 1: equality and justice. So perfect voice for us on this Monday.
Speaker 1: Welcome back Dr Sandro Gillia. He's dean and professor at
Speaker 1: Boston University School of Public Health and his author pained
Speaker 1: uncomfortable conversations about the public's health. Conversations though that need
Speaker 1: to be had, he joins us once again on the
Speaker 1: phone from Boston. Dr Gilia, Nice to have you back
Speaker 1: with us. UM. I do wonder, both Jason and I
Speaker 1: do wonder how you're thinking has continued to evolve because
Speaker 1: of what's happened, not only in the past thirteen weeks,
Speaker 1: because of the virus. We've talked to you about that,
Speaker 1: but then what's happened in the past two weeks, what
Speaker 1: we've seen out of Minneapolis. You know, first of all,
Speaker 1: thank you for having me always. I think what we're
Speaker 1: seeing coming out of Minneapolis is an expression of justifiable,
Speaker 1: entirely understandable anger and frustration with decades and centuries long injustices,
Speaker 1: and that I think is reflected in the protest we
Speaker 1: have seen around police around policing and around systemic racism. Now,
Speaker 1: when you think about that one question, you might ask, well,
Speaker 1: what does it have to do with COVID, What does
Speaker 1: it at the moment we've been living through. But I
Speaker 1: would argue that these underlying structural forces that divide us,
Speaker 1: that divide us on racial ethnic lines, that divide us
Speaker 1: on social class lines, also are the story of COVID.
Speaker 1: COVID was a virus that early on said world virus
Speaker 1: effect everybody. Sure it does, but it doesn't affect everybody equally.
Speaker 1: We know now that the greater burden of COVID infections
Speaker 1: disproportionately falls on minorities, on people of color. We know
Speaker 1: that among those who are infected, the greater proportion of death,
Speaker 1: a great egshbit of death falls on people of color
Speaker 1: and people who are socio economically marginalized. And that reflects
Speaker 1: this underlying division that shape and colors our society. And
Speaker 1: those are really the same forces that we are now
Speaker 1: seeing flare up in uh in this anger that emerged
Speaker 1: obviously from the George Floyd killing and the other killings
Speaker 1: around it. So we do have here commonalities. We have
Speaker 1: essentially a pandemic unemployment, civil unrest, all of which is
Speaker 1: reflecting underlying deep racial and socio economic device and so
Speaker 1: Dr Ghalia, how do we go about solving this structurally
Speaker 1: from a health perspective? Because all of these things, and
Speaker 1: I think you've pointed this out to us before rightly,
Speaker 1: are all intertwined. Whether it's health, education, transportation, housing, all
Speaker 1: of it is tied together. But just taking health and
Speaker 1: your specialty and public health specifically, what are the ways
Speaker 1: that that maybe we can be thinking about, uh, to
Speaker 1: start to change the structure of this. Yeah, I think, uh,
Speaker 1: it thinks a great question, and I think it's a
Speaker 1: it's a natural question, and I sup pose I would
Speaker 1: invert the question because I don't. I do not think
Speaker 1: you can treat this just as a health problem. Interesting,
Speaker 1: I think that health is ineluctably linked with housing, with fair,
Speaker 1: fair wages, with gender equity, with clean air, drinkable water,
Speaker 1: with the way we structure our society overall. And this
Speaker 1: is why health and social justice are so inextricably intertwined,
Speaker 1: because there is no solution that focuses only on health.
Speaker 1: If we focus only on health, what ends up happening
Speaker 1: is we end up borrowing and borrowing more, ever more,
Speaker 1: deeply in spending money on healthcare, and of course, spending
Speaker 1: money on healthcare as as you know, as the listeners know,
Speaker 1: is fleeting disease after people are already sick. But of
Speaker 1: course people are getting sick to begin with because of
Speaker 1: these underlying issues. And let's take let's take one complete example.
Speaker 1: Let's take the economic collapse that has happened after a
Speaker 1: COVID we all, we all notice you talk about it
Speaker 1: quite a bit in your show. But of course the
Speaker 1: economic collapse has been uneven t thirty six million jobs
Speaker 1: have been lost so far in where health of the
Speaker 1: jobs lost were helped by people who are already had
Speaker 1: an animal alsehold income of below the unemployment rate among
Speaker 1: white's fourteen percent, among black seventeen percent among Latin X populations.
Speaker 1: So what we're seeing here is even in something like this,
Speaker 1: which is an economic collapse which is widespread, which you
Speaker 1: report correctly has been widespread, is furthering these divides. And
Speaker 1: these are the social divides that are going to become
Speaker 1: health divide. So let's take for a second, let's let's
Speaker 1: assume let's agree that unemployment results in bad health. That's
Speaker 1: that's not a controversial. That's not a comrevercial statement, right,
Speaker 1: So I'm telling unemployment results in bad health. I'm also
Speaker 1: telling you that unemployment is this proportion and among people
Speaker 1: who are already poorer than people who are richer. So
Speaker 1: it doesn't take a sort of too many logical steps
Speaker 1: to realize that that means that people who are poorer
Speaker 1: are going to get sicker, people who are richer are
Speaker 1: going to get healthier. Now, if we focused on that
Speaker 1: as a strictly health problem, we are going to be
Speaker 1: throwing money at healthcare to help fix people who have
Speaker 1: gotten sick. Well, the problem, the reason they got six
Speaker 1: to begin with is because they were already economically marginalized
Speaker 1: and because they became unemployed in a time of COVID.
Speaker 1: So when you see it that way, the two are inextricable.
Speaker 1: And I think a health agenda has to include an
Speaker 1: economic agenda. I totally agree. God, we were talking about
Speaker 1: this a lot over the weekend, about what it is
Speaker 1: to those that are more vulnerable and economically disadvantaged. What
Speaker 1: do we need to do to really make a difference
Speaker 1: with Our guest at this hour is Dr Sandro Galia. Galia.
Speaker 1: He is dean and professor at Boston University School of
Speaker 1: Public Health author pained uncomfortable conversations about the public's health.
Speaker 1: Dr Galia, One thing I want to ask you, since
Speaker 1: we you know, we know so much is interconnected in
Speaker 1: terms of, you know, really determining what kind of life
Speaker 1: an individual in America has. So, what do you think
Speaker 1: is the most important difficult conversation that we have to
Speaker 1: have at this point? Is it over housing? Is it transportation?
Speaker 1: Is it wages? Is it taxation? Is it health? What
Speaker 1: the one that we need to have to kind of
Speaker 1: make a difference to the less fortunate populations, and specifically
Speaker 1: since we've talked about it a lot over the last
Speaker 1: couple of weeks and certainly the last thirteen weeks, the
Speaker 1: black population. Yeah, I think that's a that's a terrific
Speaker 1: question and one I must all the time. And is
Speaker 1: it a conversation about making sure everybody has access to
Speaker 1: quality early childhood education, is a conversation about fair wages
Speaker 1: and increasing knowledge? Is it the convertation about affordable housing
Speaker 1: ensuring that everybody there's this food about narrowing wealth gaps
Speaker 1: or redating violence of infginalized groups SPD groups. And the
Speaker 1: answer is I don't know any of these important and others.
Speaker 1: I have to think the hardest conversation is the one
Speaker 1: we're having now. We just to say that all of
Speaker 1: these conversations are important. You know, which of the conversations
Speaker 1: become policy solutions depends as much on the connotation as
Speaker 1: it does on the pragmatics of the moment as to
Speaker 1: on what is possible in what jurisdiction. So as not
Speaker 1: un concerned. If there is one thing that we should do,
Speaker 1: it's to change the conversation and to say that all
Speaker 1: of these are forces that we should discuss in the
Speaker 1: same breath as we discuss health. And when you think
Speaker 1: about COVID and ask myself, you know, what should we
Speaker 1: look back on COVID in ten years time, what's the
Speaker 1: conversation that we should remember. What I'd like us to
Speaker 1: remember is that COVID taught us if you cannot help
Speaker 1: have a healthy country without better education, transportation, wages, housing, food,
Speaker 1: narrowing wealthcaps, reducing violence, better integration of marginalized groups. Because
Speaker 1: all of those forces we have seen play out in
Speaker 1: creating the COVID pandemic that we've lived through. So if
Speaker 1: we learn from that, if we learn from that, we
Speaker 1: will tackle them and tackle them now. And you know,
Speaker 1: I do wonder, Dr Galia. Part of this is educating
Speaker 1: maybe the next generation, whether it's the next generation of
Speaker 1: doctors or just the next generation writ large, sort of
Speaker 1: a different way or to think in a different way,
Speaker 1: and that seems to be coming up repeatedly. And I
Speaker 1: think many of us are buoyed by the fact that
Speaker 1: a lot of the people protesting peacefully are of many
Speaker 1: different races and colors and backgrounds. Um. I do wonder
Speaker 1: what the conversations are that you're having with your students
Speaker 1: and how they might be different from a previous generation. Yeah,
Speaker 1: I I like you by by thinking about the next generation.
Speaker 1: One of the privileges of being a dean of the
Speaker 1: school that I'm surrounded by the next generation. I all
Speaker 1: of these conversations are happening with our students, but perhaps
Speaker 1: most importantly, our students are leading the appreciations because I
Speaker 1: actually think that the generation that is up and coming
Speaker 1: that will be in charge of the world in next
Speaker 1: into years as some interesting ideas. And I don't think
Speaker 1: all of the ideous work I think somebody with somebody
Speaker 1: disagree with, but I think it's UM It's a tremendously
Speaker 1: important moment in time to allow ideast by space as
Speaker 1: we can which sift forward, which once we can adopt
Speaker 1: m to use. I think something Carol said before the break,
Speaker 1: how we can make sure we actually implement the transformations
Speaker 1: to implement without and making sure that people are not
Speaker 1: hurt in the process and that and that of course
Speaker 1: is critical. So I've been I've been enjoying listening and
Speaker 1: learning from all the ideas emerging from the next generation.
Speaker 1: And of course it's immensely hopeful to think that some
Speaker 1: of these concepts that the three of us are discussing
Speaker 1: their sort of second nature to the generation, and that
Speaker 1: will make the world a better place. I was thinking about,
Speaker 1: I know, Jason, you do this at your home with
Speaker 1: your teenagers and my teenager. To like the way they
Speaker 1: talk about this and approach it gives me hope, I
Speaker 1: have to say, in terms of totally you know the
Speaker 1: possibility of making a difference and looking at it in
Speaker 1: a different way. UM, thank you so much. Dr Sandrow
Speaker 1: Galileo galia He is dean and professor at Boston University
Speaker 1: School of Public Health. Author pained uncomfortable conversations about the
Speaker 1: public's health. And he's so patient because every time I
Speaker 1: say his name, I seem to just mess it up.
Speaker 1: I mean, he's just such a jam, new and different.
Speaker 1: I know, I feel so terrible because I he's one
Speaker 1: of my favorite voices to talk to, because I feel
Speaker 1: like he looks at the world. It's not just healthcare,
Speaker 1: but it's taking everything into account and how do you
Speaker 1: make a difference. Maybe in all of our show calls,
Speaker 1: will just say, all right, let's say it again. Sandro Gallea,
Speaker 1: Sandra Gallea, I think it's Sandro Sandro Gallea. You're listening
Speaker 1: to Bloomberg Business Week with Carol Masser and Jason Kelly
Speaker 1: on Bloomberg Radio. One of the issues that we have
Speaker 1: been looking at so closely, Carol is what happens next
Speaker 1: and how we got here? And this true from the
Speaker 1: magazine last week, I think is a really important and
Speaker 1: I'm really glad Joel Webber and I were talking about
Speaker 1: this earlier that we're getting a chance to talk about it.
Speaker 1: Clearance Souneth wrote it, uh and the story has a
Speaker 1: very simple headline, America's safety net is failing. It's workers.
Speaker 1: Claire Jones is on the phone from Brooklyn. Joel Webber
Speaker 1: is also with us, the aforementioned Joel Webber. He is
Speaker 1: the editor, of course, of Bloomberg Business Week. So Joel
Speaker 1: help us under dand how this fits into what was
Speaker 1: clearly a broader theme in the magazine and the most
Speaker 1: recent issue of the magazine. So Claire actually started working
Speaker 1: on this story basically right at the very beginning of
Speaker 1: the pandemic. And I think she really, uh, she's just
Speaker 1: like one of the most gifted storytellers I think we have.
Speaker 1: And really, I think she was like a laser on
Speaker 1: putting um the you know, the spotlight on on workers,
Speaker 1: and one after the next that she talked to, she
Speaker 1: was just getting amazing stuff about them, basically realizing how
Speaker 1: there was no more safety net in this country because
Speaker 1: it's basically just been eroded over time. So when something
Speaker 1: like the pandemic hits, everything is overwhelmed and as a result,
Speaker 1: the labor market just goes upside down. And frankly, even
Speaker 1: despite Friday being what those numbers were, it still feels
Speaker 1: like we still don't understand entirely what's going on. And
Speaker 1: I think clear reporting to me, of everything I've read
Speaker 1: so far, was the one That just made me really
Speaker 1: understand it on a more human level. Clear what did
Speaker 1: you how did you find these people and what did
Speaker 1: you hear from them? Um, that is a great question.
Speaker 1: I found him a number of ways. Um. I mean
Speaker 1: part of this is this whole story, given the pandemic
Speaker 1: had to be reported remotely. UM. So normally I tried
Speaker 1: to go out and talk to people, but here I
Speaker 1: basically utilized the Internet. I put out a column pretty
Speaker 1: much all social media that I could, and then I
Speaker 1: also just reached out to random small business owners. UM.
Speaker 1: I read something small in the paper about cheesecake factory
Speaker 1: employees being furloughed and that they had formed a Spacebook group.
Speaker 1: So I talked my way into the Facebook group and
Speaker 1: ended up talking to all these cheesecake factory employees. So
Speaker 1: there's an anecdote about them and there. Um. And it
Speaker 1: was just a lot of I would refer to it
Speaker 1: as on the ground reporting, except it's more like on
Speaker 1: the internet reporting. Um. Yeah. And I tried to talk
Speaker 1: to people all over the country. So there are people
Speaker 1: from you know, Virginia to Chicago, to California, to Montana,
Speaker 1: to New Mexico to Texas in the story. Um, to
Speaker 1: paint a pretty wide picture of what it looks like
Speaker 1: across America as a whole, and everybody I learned, so
Speaker 1: I did. I started reporting this before the Cares Act passed. UM.
Speaker 1: So the thing that struck me first as people were
Speaker 1: getting laid off during the shutdown the initial couple of
Speaker 1: first weeks in March was that, UM, given the past
Speaker 1: work that I have done on stuff similar to this,
Speaker 1: I just knew that there wasn't anything available for a
Speaker 1: lot of people. And many people have extreme debt um
Speaker 1: or their health care is tied to their jobs, or
Speaker 1: they don't have health care at all, and so I
Speaker 1: wanted to see what this looks like when you suddenly
Speaker 1: are laid off of work UM, with no opportunity really
Speaker 1: to get another job. I think what was different with
Speaker 1: this pandemic is if you're laid off in a recession,
Speaker 1: its docks and it's terrible, but you can look for
Speaker 1: other jobs. But if you're if you're a restaurant worker
Speaker 1: in your restaurant closes, you can't go to another restaurant,
Speaker 1: so you had to sit tight UM. And so I
Speaker 1: watched as these people went from having UM no safety
Speaker 1: net whatsoever, the very first people in this story happened
Speaker 1: to be working. They were freelance workers, and they happened
Speaker 1: to be working the first sporting event in the US
Speaker 1: that was shut down on March eight, and they had nothing.
Speaker 1: They had, Um, they paid for their own health insurance,
Speaker 1: they didn't have you know, any unemployment. They didn't qualify
Speaker 1: the CARES actual later changed that, but it took them
Speaker 1: a month plus to actually get up, you know, through
Speaker 1: the unemployment system, which is you know, it has its
Speaker 1: own issues. And so I started talking to them before
Speaker 1: they could even apply for unemployment and thought they had
Speaker 1: to do this all on their own. And then this
Speaker 1: act gets passed and then they feel better, and then
Speaker 1: it turns out that they have to wait for their
Speaker 1: unemployment and then it's not what they thought it was
Speaker 1: going to be. You know, one of them didn't even
Speaker 1: get anything until just a couple of weeks ago. Um,
Speaker 1: and they have been laid off since March. So that's
Speaker 1: basically the story of why we didn't have the set
Speaker 1: up in the first place. And then, um, what a
Speaker 1: cluster mess it is to try to build a safety
Speaker 1: net in the middle of a pandemic. Right Well, you
Speaker 1: know what's first of all. I love that you tell
Speaker 1: the personal stories because I feel like sometimes we talked
Speaker 1: from that big perspective, the big broad numbers, But when
Speaker 1: you really hear about, you know, the struggles that so
Speaker 1: many Americans are going through as a result of this,
Speaker 1: it's really very telling. The thing is, what's interesting, Claire
Speaker 1: too about your story is the destruction of the middle class. Right.
Speaker 1: You know, we see people pointing like, you've got to
Speaker 1: have a safety neft net, But how can you have
Speaker 1: a safety net when we really destroyed I feel like
Speaker 1: that opportunity for so many Americans. Yeah, you know, I
Speaker 1: talked to people in all different levels of UM what
Speaker 1: I would I guess refer to as you know, economic
Speaker 1: and financial security and UM. You know, there's a woman
Speaker 1: in the story who was a senior marketing manager at Airbnb. Like,
Speaker 1: she made good money, she worked for a big company. UM,
Speaker 1: she's getting severance through UM July. UM. But the thing
Speaker 1: is that she lives in the Bay Area and she had,
Speaker 1: you know, had I think it was about forty five
Speaker 1: thousand dollars in personal debt, and she can't afford to
Speaker 1: stay in the Bay Area if she can't find another job,
Speaker 1: and she's not sure that she's going to be able
Speaker 1: to do that before her severance ends, um, which is
Speaker 1: you know, she's like maybe a month to go before,
Speaker 1: you know, and she doesn't have a job, and so
Speaker 1: her option is essentially she's forty years old and she's
Speaker 1: originally from New Jersey, and so she said, I'm just
Speaker 1: going to move home to New Jersey and live with
Speaker 1: my mom. Um. And this is a woman who's you know,
Speaker 1: well advanced in her career, is doing well in all
Speaker 1: other respects. But um, just the nature of life and
Speaker 1: how expensive it is the middle class. I talked to
Speaker 1: several economists to study this and study wealth disparity, and
Speaker 1: one of the things, um um, Edward Wolfe at m
Speaker 1: Y you mentioned that he's been setting this for so long.
Speaker 1: In the nineteen eighties, your average middle class family had
Speaker 1: enough financial reserves and savings to get through two to
Speaker 1: three months of just sort of normal consumption. If they
Speaker 1: hold tight, they lose their jobs. And now it's a
Speaker 1: little bit over a week nothing. Yeah, that's really remarkable. Well, uh,
Speaker 1: it is. They must read for sure. It was one
Speaker 1: of the most rehead when it published last week, and
Speaker 1: certainly this full issue of the magazine is one to
Speaker 1: really sit with and kind of take it in because
Speaker 1: I think we all need that gut check and that
Speaker 1: reality check about what the statistics, the data and the
Speaker 1: personal stories. And you pointed that out, Carroll, really show.
Speaker 1: But I also think of the conversation we have with
Speaker 1: Dr galayap right about all of this so interconnected, and
Speaker 1: we've got to if we're going to solve some of
Speaker 1: these problems, folks, we have to look at all of it, education, housing, wages,
Speaker 1: so much so our thanks to Claire Saideth check out
Speaker 1: that story in the magazine. Of course, I think so always.
Speaker 1: To Bloomberg Business Week editor Joe Webber, you're listening to
Speaker 1: Bloomberg Business Week with Carol Masser and Jason Kelly on
Speaker 1: Bloomberg Radio. All right, you are listening to Bloomberg Business Week.
Speaker 1: It is Monday. I'm Carol Masser along with my co
Speaker 1: host Jason Kelly. So, Jason, it is so true. My
Speaker 1: family is another description of it too at her at home,
Speaker 1: but we'll talk about that later. Um, Jason, let's not forget.
Speaker 1: We've got a FED meeting this Wednesday, so it's gonna
Speaker 1: be very interesting. If you think about Friday's jobs report,
Speaker 1: I'm so curious what the Fed has to say in
Speaker 1: today's Business Week economics. UM. So delighted to have back
Speaker 1: with us Stephen Skanky. He's chief economic advisor at keel Point.
Speaker 1: Former US Treasury uh UM US former sorry, former U
Speaker 1: S Treasury and White House National Security Council staff member.
Speaker 1: It's terrible when I can't even read my own notes.
Speaker 1: Based in Washington, d C. He's on the phone in
Speaker 1: the nation's capital. Um, Steven, so great to have you
Speaker 1: back with us. UM. So much going on as well,
Speaker 1: and I do wonder, first of all, how is your world? Well, thanks, Carol.
Speaker 1: Always great to be with you and Jason. Our our
Speaker 1: world is increasingly complicated, just because there's so much going
Speaker 1: on all the time. But I'd say generally, well, we
Speaker 1: feel good about what we're seeing and about how markets
Speaker 1: are responding. Some of it is is a little bit
Speaker 1: hard to fathom when markets are up on days that
Speaker 1: we have negative news, but clearly they've they've learned to
Speaker 1: look forward to what's coming and not what's in the
Speaker 1: rear view mirror. Yeah, I mean, it is sort of
Speaker 1: remarkable to to see this and to continue to try
Speaker 1: and synthesize sort of well street main street data, market
Speaker 1: sentiment and all that. So, Stephen, if you're sitting at
Speaker 1: the FED, you know, sitting around that virgin at that
Speaker 1: zoom meeting with which I assume is how they're doing everything,
Speaker 1: like we all are um with j Pollack, what's the
Speaker 1: tone of the meeting? What are you looking at more
Speaker 1: acutely or more specifically, and and how does the conversation go.
Speaker 1: They certainly have to be happy with how things are
Speaker 1: developing and how what they've done already, which was proactive, preemptive,
Speaker 1: uh and done very effectively. They've got to be very
Speaker 1: satisfied with that, notwithstanding the other things that are going
Speaker 1: on in the economy and public health. But they've really
Speaker 1: done their part, and they've done it well. Uh So,
Speaker 1: so as they see where they've they've made sure that
Speaker 1: there's enough liquidity, they've backstopped critical credit markets, they've done
Speaker 1: what they can on easy monetary policy and buying longer
Speaker 1: term asset, and so now let's to figure out where
Speaker 1: the fine tuning has to happen. You know, so far
Speaker 1: off there are eleven emergency credit facilities, they've only implemented
Speaker 1: three of them. It looks like they're getting ready to
Speaker 1: roll out main street lending, UH, which can have a
Speaker 1: huge impact. It's it's potential is up to billion, and
Speaker 1: that will be significant when that gets rolling. So so
Speaker 1: they're they're looking at what needs to be done next
Speaker 1: and what fine tuning needs to be done with what
Speaker 1: they've done already. So fine tuning what I'm curious And
Speaker 1: you understand, um, Steve, how it all works right? Having
Speaker 1: you know, worked at the treasure, you understand, um, the
Speaker 1: workings of all of this. How does something like the
Speaker 1: last two weeks fit into potentially a FED discussion. I
Speaker 1: bring it up because Alan Greenspan used to talk a
Speaker 1: lot about the broader society and inequalities and so on
Speaker 1: and so forth, and just kind of looking at things.
Speaker 1: So I just do wonder does the FED think about
Speaker 1: policy and how it either helps or hurts kind of
Speaker 1: some of the gaps that are in our society. They
Speaker 1: think about it a lot and pay good attention to it.
Speaker 1: That is the one that generates income and wealth disparity
Speaker 1: numbers to make sure that it's well distributed publicly and
Speaker 1: that policymakers are aware of it, and they and they
Speaker 1: do it in a very a politic call UH. Almost
Speaker 1: academic way. So the data is trustworthy, it's transparent, it's
Speaker 1: widely circulated, and they talk about it. Uh. Nothing is
Speaker 1: uh nothing is sort of kept in the background because
Speaker 1: it comes from the FED. It's it's right there with
Speaker 1: the highest level of credibility. J. Powell has also been
Speaker 1: very proactive, as you've probably heard him say, being out
Speaker 1: in town meetings and meeting with minority communities and those
Speaker 1: parts of our society that have have not done as
Speaker 1: well over time as some of the others. And they
Speaker 1: were very pleased to see historic progress made in in
Speaker 1: income levels with some of the historically less privileged minority areas.
Speaker 1: And of course one of the one of the tragedies
Speaker 1: among many within the minority communities right now is a
Speaker 1: lot of that is rolling back because of course, uh,
Speaker 1: that's where many of the joblessness numbers have come from. First.
Speaker 1: So Stephen, before we let you go, I just gotta
Speaker 1: ask you, because we are thinking so much about reopening, uh,
Speaker 1: even cautiously here in the Tri state area in New
Speaker 1: York City specifically, what's the most important data to look
Speaker 1: at when it comes to reopening. It's even from a
Speaker 1: national or or a regional perspective. In your estimation, probably
Speaker 1: the most important data to keep an eye on is
Speaker 1: the is the public health data, because at the end
Speaker 1: of the day, UH, people will individuals will only be
Speaker 1: comfortable going back to work and being fully productive and
Speaker 1: being out as active consumers again if they feel safe,
Speaker 1: if they believe that that the government, society, workplace, our
Speaker 1: state and local governments in particular, are are paying attention
Speaker 1: to the environment in which they work in shop, that
Speaker 1: personal protective equipment is available, that testing and contract contact
Speaker 1: tracing is being done efficiently. Uh. And of course everyone
Speaker 1: is paying attention to the latest news on the vaccines
Speaker 1: and therapeutics and and that been a big market driver
Speaker 1: over the last month. So we are paying attention to
Speaker 1: what's happening in the public health area and believe that
Speaker 1: that will be the principal driver ultimately for how quickly
Speaker 1: the recovery happens. Right, the ultimate oversight right in our
Speaker 1: expectations about it and what we kind of expect our
Speaker 1: leaders in society to take care of us. I'm Steven,
Speaker 1: always thoughtful and really appreciate your time. Steve Skanky, Chief
Speaker 1: Economic Advisory kill Point, former U S. Treasury and White
Speaker 1: House National Security Council staff member joining us. Jason once
Speaker 1: again on the phone from Washington, d C. You're listening
Speaker 1: to Bloomberg Business Week with Carol Masser and Jason Kelly
Speaker 1: on Bloomberg Radio. Well, now, as we try to do
Speaker 1: most weeks, sometimes multiple times a week because we just
Speaker 1: need his insights that much, let's turn to Andy Brown,
Speaker 1: Bloomberg New Economy Editorial Director. Uh, he's got a provocative column.
Speaker 1: Maybe not so provocative these days, given everything and how
Speaker 1: everything is up. I doubt another lost decade is coming in.
Speaker 1: Dejoins on the phone from New Hampshire. Alright, break it
Speaker 1: down for us. A B. What are you seeing? Yeah,
Speaker 1: so we've you know, the the the epicenter of the
Speaker 1: coronavirus is now shifted to Latin America, and so the
Speaker 1: New economy we're really focused now on what is going
Speaker 1: to be the fallout on the world developing countries. And
Speaker 1: you know, what we're seeing is the good news. If
Speaker 1: you can talk about good news and an epidemic, maybe
Speaker 1: it's best to say that the less bad news is
Speaker 1: that the most dire predictions are the economists and epidemiologists
Speaker 1: um about the impact that this was going to have
Speaker 1: on the developing world just hasn't actually come to pass UM.
Speaker 1: And that's particularly true in Africa, where the United Nations
Speaker 1: just a few weeks ago I was talking about potentially
Speaker 1: more than a billion infections and three more than three
Speaker 1: million deaths and multiple famines of biblical proportions and and
Speaker 1: really sort of um creating these and of the world scenarios.
Speaker 1: And that hasn't that hasn't happened. UM. It's also I mean,
Speaker 1: right now Africa, you know, according to John's Hopkins University,
Speaker 1: which is wasn't you know, some of the most reliable
Speaker 1: data that we have that there's only been a hundred
Speaker 1: and fifty thousand infections in the whole of Africa. Of course,
Speaker 1: that's lowballing the the total because Africa hasn't had widespread testing. UM.
Speaker 1: The The other sort of piece of good news, I
Speaker 1: guess is that you know, it's it's actually emerging economies
Speaker 1: that are leading the global uh economic recovery UM. And
Speaker 1: and the countries that are performing best are the ones
Speaker 1: that have been most competent at dealing with COVID nineteen.
Speaker 1: And that's been you know, by and large countries in
Speaker 1: East Asia, led by China, South Korea UM and tai one,
Speaker 1: which was of course and an exemplar. So that's kind
Speaker 1: of on the on the positive side in a sense
Speaker 1: of of the balance. UM. You know, the that the
Speaker 1: bad news is that this this this epidemic is going
Speaker 1: to dramatically widen global inequality. You know, the rich countries
Speaker 1: of the world have been able to you know, spend
Speaker 1: literally trillions of dollars on on stimulus, plugging income gaps
Speaker 1: but workers, plugging revenue shortfalls for companies, and you know,
Speaker 1: countries in Latin American Africa simply haven't been able to
Speaker 1: do that. And to the extent that they can UM
Speaker 1: borrow now to UM you know, to support their economies,
Speaker 1: they're having to do it at higher interest rates. So
Speaker 1: now they have this additional burden of debt UM you know,
Speaker 1: on top of plunging currencies, on top of failing trade UM.
Speaker 1: And that's not before we even get into sort of
Speaker 1: these other issues around long term issues of of climate change.
Speaker 1: So you know, they net net outcome UM is that
Speaker 1: you're going to have a much deeper uh divide in
Speaker 1: in in the global economy between the haves and the
Speaker 1: have nots, and then even between emerging economies between those
Speaker 1: in Africa, Latin America and then the economies of East
Speaker 1: Asia of course, which which you're going to going to
Speaker 1: be come out of this pretty well. So you know,
Speaker 1: you are really knocking back development in large parts of
Speaker 1: the world by many, many years. Well, this is you know, Andy,
Speaker 1: what I love about your story. It's like if you
Speaker 1: were scientists and you were going looking at a cell
Speaker 1: and you keep going through, you know, smaller and smaller layers,
Speaker 1: and I feel like that's what you do in terms
Speaker 1: of the viruses impact on the world. Right, differences among
Speaker 1: developed nations, then you have developers, is developing, and then
Speaker 1: the more you break it down, there's differences even in
Speaker 1: the developing markets. You though, go as far to say
Speaker 1: another lost decade is coming for emerging market How how
Speaker 1: do you anticipate that that might play out? Then well,
Speaker 1: if you if you look, you know, we had a
Speaker 1: Bloomberg story UM today by our Bloomberg's economics team. They're
Speaker 1: talking about the Brazilian economy shrinking by six percent is
Speaker 1: um you know other some of the other major economies
Speaker 1: in Latin America, Peru, Mexico are predicted to shrink by
Speaker 1: similar amounts. So you could say, actually, right off the bat,
Speaker 1: we've got a decade of of of lost growth there um.
Speaker 1: But for many of these countries, you know, they now
Speaker 1: they don't have the resources to invest in social infrastructure,
Speaker 1: in in education, in healthcare. Everybody's talking about, you know,
Speaker 1: the the the the necessity of investing in the digital
Speaker 1: economy coming out of this. That this is going to
Speaker 1: be um you know, and and an area where all
Speaker 1: countries are going to have to uh, you know, pour
Speaker 1: their resources as well. You know, Latin America, Africa just
Speaker 1: doesn't have the don't in the countries, they don't have
Speaker 1: the capacity to do that. So hence this you know
Speaker 1: there there are something like don Besa Moyo. She was
Speaker 1: on our newer Car to Me a Conversation series the
Speaker 1: other day. She says, what we need for Africa is
Speaker 1: a martiall plan and not going to be able to
Speaker 1: dig their way out of this on their own. They
Speaker 1: need they need massive infusions of capital, um, you know,
Speaker 1: from from the United States, from Europe, just as just
Speaker 1: as you had this US effort to rebuild Europe after
Speaker 1: the World War Two. It's another thoughtful piece and you
Speaker 1: also do wonder about you know where we need China
Speaker 1: may be and all of this, they have spent so
Speaker 1: much money on the emerging areas um before interne of
Speaker 1: tapping resources but then also providing money for those areas.
Speaker 1: So you do wonder um where they should what their
Speaker 1: role should be going forward. Another provocative piece and thoughtful
Speaker 1: piece by Andy Brown, editorial director. Andy thank you Bloomberg
Speaker 1: New Economy on the phone from New Hampshire. All Right,
Speaker 1: you're listening to Bloomberg Business Week cal Master along with
Speaker 1: Jason Kelly, and we're just about twelve minutes away from
Speaker 1: the closing bell on this Monday, and we continue to see,
Speaker 1: as you just heard from Charlie Pellett, that rally continuing.
Speaker 1: In fact, we're just covering pretty much off our highs
Speaker 1: of the session, but nonetheless stocks continuing to grind Highermzing
Speaker 1: it is time, I know, I don't I mean, I
Speaker 1: still I don't know. Well, I feel like disconnect between
Speaker 1: broader world and the markets, but I also feel like
Speaker 1: it's indicative of who is in the financial markets, who's investing,
Speaker 1: versus kind of the rest of the world and some
Speaker 1: of what ails us in certainly a large part of
Speaker 1: our society Jason absolutely. All right, Well, let's get to
Speaker 1: the Drive to the Close today with Mike Chalker. He
Speaker 1: is portfolio manager senior analyst at LM Capital Group, looking
Speaker 1: after about four billion dollars journing us on the phone
Speaker 1: from San Diego. All right, So Mike, we're scratching our
Speaker 1: heads as as we continue to at this market that
Speaker 1: grinds higher. You just heard Charlie Pett break down the
Speaker 1: numbers and Carol referenced them as well. What do you
Speaker 1: make of this market? What do you see in the market,
Speaker 1: and how do you account for what we see in
Speaker 1: quote unquote the real world and the real economy. Very
Speaker 1: good afternoon, guys, Thanks for having me. Yeah, you know,
Speaker 1: it really is been of a and under for some UM.
Speaker 1: For other example, the answer is fairly simple, and that
Speaker 1: would be the Federal Reserve. You know, it is really
Speaker 1: the market maker ever since it announced the accident, wanted
Speaker 1: to take back in March, and our feeling and the
Speaker 1: firm is that and the fixed thing comes side at least,
Speaker 1: and and it's been echoing over to the equity side.
Speaker 1: You're having a lot of market participants try to front
Speaker 1: run UM the FEDS participation, and so if you feel
Speaker 1: like you can get in the securities and the risk
Speaker 1: that you're comfortable taking, and then maybe later selves at
Speaker 1: a higher price. When the FED steps into the market,
Speaker 1: which you know it's only just beginning to do so
Speaker 1: with its primary and secondary credit facilities, then that's a
Speaker 1: great big uh. You know, then we'll continue to maybe
Speaker 1: step take a step back after that point and really
Speaker 1: see if the economy can now mimic the v recovery
Speaker 1: that the market to that. Yeah, that's interesting and I
Speaker 1: do feel like, um a million questions here. First of all,
Speaker 1: let me ask you, since it is a FED week,
Speaker 1: we have a FED meeting, do you expect the FED
Speaker 1: to continue to be really supportive or do you think,
Speaker 1: based on that Friday's jobs report last Friday, that they're
Speaker 1: going to maybe start to say, well, you know, we
Speaker 1: can start to back off. I mean, we've seen the
Speaker 1: back off in terms of asset purchases, but I do
Speaker 1: wonder if you think they will say more on that front.
Speaker 1: I don't think they will. Um, it was interesting to
Speaker 1: see them back off the asset purchases. I was a
Speaker 1: little bit premature, I'm gon our view from them. I
Speaker 1: thought they would be a little bit more supportive. The
Speaker 1: job's number on Friday, of course, was a rocket number.
Speaker 1: I'm surprised almost everyone on the street, including us, But
Speaker 1: it does make a little bit of sense. As we're
Speaker 1: beginning to reopen the economy. All these restaurants, all these
Speaker 1: small businesses that did have to lay off workers, well
Speaker 1: now they're in a rush right there, in a rush
Speaker 1: to bring back as much employees as they need to
Speaker 1: sufficiently stay open. Now the question is did they get
Speaker 1: them all once? I'll swoop did they just quickly bring
Speaker 1: everybody back? And this is you know, maybe thirty or
Speaker 1: of their employee rates that they had they mentioned that
Speaker 1: they had before we went to COVID. And then the
Speaker 1: question remains for the rest of the economics recovery, Well,
Speaker 1: how many jobs are going to be permanently lost, because
Speaker 1: there will be a significant number there will be four
Speaker 1: or five, six, seven million, who knows number of jobs
Speaker 1: that will not return. So how do you put money
Speaker 1: to work at a time like this? And there are
Speaker 1: certain sectors that feel a little bit better as you
Speaker 1: synthesize all of that, and presumably, uh, it might gives
Speaker 1: you look at a a reopening economy. We're obviously laser
Speaker 1: focused on it here on the East Coast and especially
Speaker 1: being in and around New York City and sort of
Speaker 1: what that looks like and how much that will influence
Speaker 1: not just investor sentiment, but ultimately earnings and economic behavior. Right,
Speaker 1: So we've done a couple of things. Um, obviously, you know,
Speaker 1: there's been an incredible rotation on an incredible spread compression
Speaker 1: on the credit side. And if for a minute, we
Speaker 1: can just step back and talk about where rates are
Speaker 1: right now, right, so the belly and the early part
Speaker 1: of the curve, or excuse me, the front part of
Speaker 1: the curve two and three year paper being a you know,
Speaker 1: low to mid twenty basis points doesn't really entice anybody
Speaker 1: on the treasury side. You're not gonna have anybody continue
Speaker 1: to think, oh, let's go ahead and buy treasuries because
Speaker 1: we can pick up twenty six basis points. Um. The
Speaker 1: risk there, the risk reward didn't didn't worked it. So
Speaker 1: a lot of what we've been doing is taking some
Speaker 1: of that allegation moving into a credit name that we
Speaker 1: like in particularly as you've seen in the last week
Speaker 1: or last two weeks, the incredible steepening that's gone on
Speaker 1: in the treasury curve. I think that's exactly the momentum
Speaker 1: in the move that the FED wants to see, whether
Speaker 1: they'll say it or admit it or not. I believe
Speaker 1: there is some type of yield curve control that is
Speaker 1: happening um, probably inadvertently, but it's working out to their favor.
Speaker 1: They want rates low, but they want a steeper curve um.
Speaker 1: And so for us, a great place to be is
Speaker 1: in the financial banking sector, which we've been overweight for
Speaker 1: a good part of a year, if not more. I mean,
Speaker 1: we're continuing to add to those names some people that
Speaker 1: have been chasing the beaten down names like energies and
Speaker 1: cruises and the airlines. We think that will end up
Speaker 1: rotating out and just further the trade moving into finance.
Speaker 1: And thanks as well, Hey Mike, before we go. I
Speaker 1: am curious though, when you look at some of the
Speaker 1: current events that are going on in our world, whether
Speaker 1: it's the virus, whether it's the last couple of weeks
Speaker 1: from Minneapolis, and you know, once again we're talking about
Speaker 1: the gaps in our society and the people who are
Speaker 1: being left behind once again, and I do wonder how
Speaker 1: you look at it with an investment I and I
Speaker 1: do wonder if you think about maybe some of the
Speaker 1: changes that need to come about, um and and and
Speaker 1: how investors specifically can really vote with where they put
Speaker 1: their investment dollars. Well, it's really tough. I mean, that's
Speaker 1: a really tough question. It's a really tough topic. Um.
Speaker 1: You know, I was watching a segment today about how
Speaker 1: E s G has really become part of the forefront
Speaker 1: and a lot of investor is mind and particularly what's
Speaker 1: what's happened in the past couple of days. Um, you know,
Speaker 1: I'd really like to see that sort of explained, right.
Speaker 1: And then not just environmental, social, and governance, but you know,
Speaker 1: particularly into the social aspect. You get a lot of
Speaker 1: people that are really concerned about their environmental exposure and
Speaker 1: you know, not being in the coal producers and such.
Speaker 1: But you know, I think what's going on in the
Speaker 1: past week or so, it really brings up to the
Speaker 1: forefront more of the social and the social injustices. And
Speaker 1: as a money manager, it's really tough to see what
Speaker 1: we think of you know, the top tier percent of
Speaker 1: the people to make up our economy continue to succeeded,
Speaker 1: Asset prices rise, knowing that there is a large group
Speaker 1: of people that aren't able to participate in this because
Speaker 1: of their socioeconomic factors and they're kind of left behind.
Speaker 1: Um So I think really that further further the divide
Speaker 1: in our country. And and like I said, as a manager,
Speaker 1: it is sort of a tough thing to watch. But
Speaker 1: of course, you know, our our our duty is to
Speaker 1: make our clients money. But um I really, I really
Speaker 1: do feel that there is some some more that needs
Speaker 1: to be done on the E s G side and
Speaker 1: frankly on the policy side. But yeah, that's a that's
Speaker 1: the topic that we we don't hand that we only
Speaker 1: kind of try to keep watching. All right, Well, good
Speaker 1: to catch up with you. Thanks for the insights. Mike
Speaker 1: Tarker is portfolio manager and senior analysts for LM Capital
Speaker 1: Group on the phone from San Diego. Thanks so much
Speaker 1: for listening to Bloomberg Business Week. Download the podcast on iTunes,
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