WEBVTT - Surveillance: Reddit Revolt Upends Conventional Trading 0:00:09.880 --> 0:00:13.800 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene. Daily 0:00:13.960 --> 0:00:17.560 we bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.480 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:27.920 Bloomberg dot Com, and of course on the Bloomberg James Paulson. 0:00:27.960 --> 0:00:31.400 Where this Jim Paulson of luth Old Weeding Capital Management, 0:00:31.480 --> 0:00:34.200 as we lay out on a Friday, the path to February, 0:00:34.560 --> 0:00:38.959 and of course the distractions of a short squeeze. Jim Paulson, 0:00:39.080 --> 0:00:43.400 I would respectfully suggest you've seen this before. What is 0:00:43.479 --> 0:00:47.400 different this time with Robin Hood versus the other short 0:00:47.440 --> 0:00:54.480 squeezes you and I have enjoyed well. I Um, I 0:00:54.520 --> 0:00:57.200 think that a couple of things Tom hit me. One. 0:00:57.800 --> 0:01:00.960 One is I think it's another illustration of the impact 0:01:01.040 --> 0:01:05.360 that technology is having, the the power that technology can 0:01:05.440 --> 0:01:08.920 deliver to a small quadre of people. Were certainly seeing 0:01:08.920 --> 0:01:11.800 that in companies like Facebook or Twitter or even people 0:01:12.319 --> 0:01:15.679 on those platforms on the influence they can have, and 0:01:15.760 --> 0:01:19.480 now we're seeing it in the financial markets. UM. I 0:01:19.800 --> 0:01:22.959 think I think that's sort of interesting. The social movement 0:01:23.040 --> 0:01:27.679 aspect is of course unique. Uh, this is less a 0:01:28.400 --> 0:01:31.440 uh short squeeze and there is an angry crowd in 0:01:31.480 --> 0:01:36.119 some regard and UM, I think more to the point, 0:01:36.200 --> 0:01:40.600 it just it seems like it's a destabilizing force, more 0:01:40.720 --> 0:01:44.480 so than in past short squeezes where there's this just 0:01:44.560 --> 0:01:48.080 seems like you you can colude with a with a 0:01:48.440 --> 0:01:52.680 with the redding UH platform UH and and act in 0:01:53.440 --> 0:01:57.360 unison UH to target a specific security and move its 0:01:57.360 --> 0:01:59.560 price wherever you want to with just a little bit 0:01:59.560 --> 0:02:03.560 of leverage. UM. I think that's a destabilizing force. I 0:02:03.600 --> 0:02:08.400 think it's UH to me, sounds a lot like market 0:02:08.440 --> 0:02:13.000 manipulation and probably needs to be regulated. The last point 0:02:13.040 --> 0:02:15.839 I'd say about it is, you know, like the other ones, 0:02:15.880 --> 0:02:21.280 this is going to end badly and probably um eventually 0:02:21.360 --> 0:02:23.760 greed is going to set in, and even among the 0:02:24.280 --> 0:02:28.760 young um robin hood traders, they're going to start to 0:02:28.760 --> 0:02:31.440 take some profits. And when that happens, the thing's gonna 0:02:31.480 --> 0:02:33.839 conravel like they have in the past and probably heard 0:02:33.840 --> 0:02:36.280 a lot of the same investors. We'll let the lawyers 0:02:36.320 --> 0:02:38.240 deal with the legal issues, Jim, I do want to 0:02:38.240 --> 0:02:41.000 get your view on whether we're discussing this the right way. 0:02:41.440 --> 0:02:43.800 We often have this conversation. Everyone is over the last 0:02:43.800 --> 0:02:49.239 week because them versus them, the institutions versus reads out Jim, 0:02:49.280 --> 0:02:51.120 don't you think that's kind of naive to believe that 0:02:51.160 --> 0:02:55.080 there are institutional traders on the Reddit boats doing exactly 0:02:55.080 --> 0:02:59.040 the same thing, squeezing out the big shorts. I totally agree. 0:02:59.080 --> 0:03:02.000 I totally agree that is it's probably happening. More is 0:03:02.480 --> 0:03:05.359 the price of moves. I come back to John that 0:03:05.560 --> 0:03:09.040 whoever is doing it, I think this is market manipulation. 0:03:09.440 --> 0:03:12.760 I think it's a destabilizing force. And you know, think 0:03:12.760 --> 0:03:15.320 about the Federal Reserve. The Federal Reserve in this country 0:03:15.440 --> 0:03:18.280 spent most of last year, a great bulk of the 0:03:18.360 --> 0:03:25.560 year re establishing functionality and liquidity UH and stabilization to 0:03:25.600 --> 0:03:27.840 the financial markets. That was a big part of what 0:03:27.880 --> 0:03:31.640 they did all year long. And now we're we're allowing 0:03:31.800 --> 0:03:35.680 something that's destabilizing the financial markets and setting up the 0:03:35.720 --> 0:03:39.240 situation to harm a number of of of investors, whether 0:03:39.280 --> 0:03:42.680 they're big or small UH down the road. And I 0:03:42.720 --> 0:03:45.680 think it's it's sort of hypocritical to do what we 0:03:45.760 --> 0:03:49.600 did last year to try to stabilize the financial markets 0:03:49.640 --> 0:03:52.680 to save the economy and assistant and allowing this to 0:03:52.720 --> 0:03:55.840 go on unless That's where I'm at. I don't I'm 0:03:55.880 --> 0:03:58.920 still understanding a lot of this do to play Devil's advocate. 0:03:58.960 --> 0:04:03.040 People would say, Federal Reserve perhaps stabilize the market for 0:04:03.080 --> 0:04:06.120 the people in the market, which includes the big Wall 0:04:06.120 --> 0:04:09.680 Street players and the wealthiest individuals. And that seems to 0:04:09.680 --> 0:04:12.040 be the tone that the tone the trope among a 0:04:12.120 --> 0:04:15.120 lot of these Robin Hood investors. I mean, what do 0:04:15.120 --> 0:04:16.800 you say to people who say that Wall Street has 0:04:16.839 --> 0:04:19.760 lost the moral high ground here based on the idea 0:04:19.920 --> 0:04:23.039 that there has been a sort of rejiggering in terms 0:04:23.080 --> 0:04:25.760 of the fundamentals and the price action based on what 0:04:25.839 --> 0:04:30.920 policy has done. Well, I'm not sure Wall Streets ever 0:04:30.960 --> 0:04:34.000 had the high moral ground, you know, if it starts 0:04:34.000 --> 0:04:37.160 the imagination. But I gotta tell you, if if we 0:04:37.600 --> 0:04:40.040 uh you go back to any crisis we've had, and 0:04:40.080 --> 0:04:45.160 if you don't re establish uh functioning Wall Street and stability, 0:04:45.640 --> 0:04:49.440 it's disasters for the economy. And and so you know 0:04:49.600 --> 0:04:51.479 the result of that is if you if you don't 0:04:51.520 --> 0:04:53.320 do that, I think the Federal Reserve would say that 0:04:53.400 --> 0:04:56.280 too at LESA. Then if if you don't re establish 0:04:56.480 --> 0:04:59.760 a functioning Wall Street, it will be disastrous for the economy, 0:04:59.760 --> 0:05:02.440 which means it will be disasters for everyone. So when 0:05:02.480 --> 0:05:05.960 you say Wall Street, you save the economy there, they're 0:05:06.000 --> 0:05:11.080 not a separate deal, and I think that's important to understand. 0:05:11.560 --> 0:05:14.400 I think one great thing that's coming out of the 0:05:14.440 --> 0:05:18.960 Redding situation here, which is a wonderful thing for the future, 0:05:19.360 --> 0:05:23.080 is that we're in enticing more and more young investors 0:05:23.120 --> 0:05:26.120 at a younger age millennials rather than waiting to four 0:05:26.400 --> 0:05:28.400 or fifty to start to learn to invest in the 0:05:28.440 --> 0:05:31.840 markets and getting involved in the marketplace. I think that's 0:05:31.880 --> 0:05:35.760 a huge success. It will be very beneficial down the 0:05:35.800 --> 0:05:39.320 road in terms of general wealth creation, in terms of 0:05:39.360 --> 0:05:44.480 greater liquid markets over time and greater participation by more. 0:05:44.960 --> 0:05:48.359 But I'll tell you what if we damage everybody uh 0:05:48.520 --> 0:05:51.680 while they're just starting to get involved with this, that 0:05:51.720 --> 0:05:54.960 will set that trend back. Jim, it's kind an ups 0:05:55.240 --> 0:05:57.800 Jim Poston. At least wait and always take shot it 0:05:57.800 --> 0:06:04.200 with Jim. Jim, thank you say thanks for having right 0:06:04.240 --> 0:06:06.600 now from the International Monetary Phone. It was my great 0:06:06.600 --> 0:06:10.680 honor to speak to the managing director, Krystelina georg gave 0:06:10.760 --> 0:06:14.320 a few days ago. She stops and she listens to 0:06:14.480 --> 0:06:17.440 Vitr Gaspar He is the I m F Director of 0:06:17.480 --> 0:06:22.000 Fiscal Affairs, always an important position, and evermore so in 0:06:22.040 --> 0:06:26.640 the tumult of this pandemic. Vitor Carmen Reinhardt wrote a 0:06:26.680 --> 0:06:29.520 paper this summer, my paper of the summer with a 0:06:29.560 --> 0:06:34.200 foreign affairs magazine on the pandemic depression. How is your 0:06:34.320 --> 0:06:38.880 fiscal world given the attempt to get through this pandemic 0:06:39.120 --> 0:06:45.520 right now? So a pandemic by nature, uh tom is 0:06:45.800 --> 0:06:49.440 a health crisis at this point in time. The chief 0:06:49.440 --> 0:06:53.360 economist of the I m F as emphasized that we 0:06:53.520 --> 0:06:57.200 face a tremendous amount of uncertainty. That it is a 0:06:57.400 --> 0:07:04.000 race between a mutating virus and the vaccines. The virus 0:07:04.279 --> 0:07:08.640 got a headstart and in the North Atlantic area the 0:07:08.920 --> 0:07:15.840 cases have been very strong in this period of fall winter. 0:07:16.440 --> 0:07:22.040 It is crucial that the rollout of vaccines takes place 0:07:22.200 --> 0:07:26.040 very quickly, and that's a global process. I like to 0:07:26.080 --> 0:07:33.480 say that the virus is not defeated anywhere before it 0:07:33.720 --> 0:07:41.280 is defeated everywhere, and so ensuring global access to vaccines 0:07:41.360 --> 0:07:45.680 at low cost is crucial to be the pandemic. Dr 0:07:45.760 --> 0:07:48.520 Gorey gave us spoke of the new inequality from this 0:07:48.720 --> 0:07:51.520 natural disaster. Tell us what you and your team have 0:07:51.640 --> 0:07:56.560 learned about the new inequality and the distribution of stimulus. 0:07:56.840 --> 0:08:00.600 Are we still are we providing fiscal stimulus to too 0:08:00.640 --> 0:08:03.960 many of the halves and not enough of the have nots. 0:08:05.320 --> 0:08:10.280 There are two very important dimensions of that inequality that 0:08:10.320 --> 0:08:15.240 I would like to stress. One is uh divergencies across 0:08:15.480 --> 0:08:20.680 countries in terms of economic prospects, in terms of supporting 0:08:21.160 --> 0:08:25.120 the economy. At one extreme, you have a country like 0:08:25.280 --> 0:08:30.600 the US that has ample fiscal space that can provide 0:08:30.840 --> 0:08:35.920 relief to the economy, that has been providing relief and 0:08:36.000 --> 0:08:40.120 more is in the pipeline, and looking forward, the United 0:08:40.200 --> 0:08:45.080 States by twenty two will be very close to its 0:08:45.720 --> 0:08:51.640 pre COVID nineteen growth path, in particular if something like 0:08:51.840 --> 0:08:59.480 the Biden relief plan gets through the political process in Congress. 0:08:59.520 --> 0:09:03.480 At the other extreme, we have low income countries that 0:09:03.720 --> 0:09:10.599 basically had to tackle the emergency of COVID nineteen by 0:09:11.960 --> 0:09:16.560 tax by changing the composition of public spending so that 0:09:16.760 --> 0:09:21.360 urgent needs in health could be tackled. Support to business 0:09:21.360 --> 0:09:25.040 and firms could be given, but the financial envelope was 0:09:25.120 --> 0:09:28.680 constrained by the financial capacity of the countries. We have 0:09:28.880 --> 0:09:34.040 also very important aspects of inequality across people, and you 0:09:34.200 --> 0:09:40.280 have divergencies in terms of education. People that have more 0:09:40.520 --> 0:09:44.120 than a college degree have been much less affected than 0:09:44.240 --> 0:09:50.920 people that lacked. This pandemic as affected women and young 0:09:51.240 --> 0:09:55.920 workers UH much more than other segments. I worry very 0:09:56.040 --> 0:10:04.079 much about the children from favored families who are suffering 0:10:04.559 --> 0:10:09.520 in their education prospects given the restrictions imposed by social 0:10:09.520 --> 0:10:12.240 distancing so many people shadows concerns. I just want to 0:10:12.240 --> 0:10:14.440 finish on one brief question, if I may, do you 0:10:14.440 --> 0:10:19.280 think that to GDP right shows is still useful, that 0:10:19.400 --> 0:10:23.839 to GDP ratios are useful. They're an indicator that we 0:10:23.960 --> 0:10:28.040 do look at. It's one of the many indicators that 0:10:28.160 --> 0:10:32.160 one needs to follow, UH in order to assess public 0:10:32.200 --> 0:10:37.520 finance sustainability. It's very important that fiscal policy is able 0:10:37.720 --> 0:10:41.600 to act forcefully in case of need, and we have 0:10:41.760 --> 0:10:45.160 seen how powerful fiscal policy can be in the context 0:10:45.160 --> 0:10:48.680 of COVID nineteen, and in order to have room to 0:10:48.800 --> 0:10:53.400 maneuver to respond so forcefully as has been the case 0:10:53.760 --> 0:10:57.800 in twenty twenty in the face of COVID nineteen, fiscal 0:10:57.920 --> 0:11:02.120 buffers will eventually have to be reconstituted. But at this 0:11:02.280 --> 0:11:07.439 point in time, the priority is to UH spend on vaccines, 0:11:07.720 --> 0:11:13.400 testing and healthcare support resources, to help schools and college 0:11:13.679 --> 0:11:19.640 to reopen safely, helping the poor and most vulnerable families, 0:11:20.000 --> 0:11:26.600 help the unemployment and UH the unemployed, and make sure 0:11:27.240 --> 0:11:32.000 that there are no bottlenecks on crucial services that people 0:11:32.080 --> 0:11:34.679 need in these very un certain times of pandemic. They 0:11:34.720 --> 0:11:37.280 took right to catch up in times valuable. We appreciate it. 0:11:37.320 --> 0:11:39.040 Thank you for spending some of it on this program. 0:11:39.120 --> 0:11:46.320 Video Gasba that of the International Monetary Fund right now, 0:11:46.840 --> 0:11:50.000 not in the vaccine, but the mystery of what to 0:11:50.240 --> 0:11:55.040 do with the vaccine in vaccinations Having Tourism joins us 0:11:55.080 --> 0:12:00.000 from Duke Margolis at Duke University. Having I'm I'm absolute 0:12:00.080 --> 0:12:03.120 lutely stunned, and I went through it myself. I had 0:12:03.120 --> 0:12:07.920 the vaccine of what a manufacturing processes is. You are 0:12:08.200 --> 0:12:12.520 expert at the vaccine the virus. At the state level, 0:12:13.200 --> 0:12:17.880 why did West Virginia, why did the Dakotas succeed and 0:12:17.960 --> 0:12:22.840 others have struggled? Yeah, great to be here with you, 0:12:22.960 --> 0:12:26.040 Tom So, there's a lot of different reasons why you 0:12:26.120 --> 0:12:28.120 see a couple of states at the head of the list, 0:12:28.120 --> 0:12:32.200 and it's not predictable based on any common theme, you know, size, 0:12:33.080 --> 0:12:37.480 you know, um, political attributes, etcetera. So there's a couple 0:12:37.480 --> 0:12:39.720 of things I think that led to the early success 0:12:39.720 --> 0:12:42.120 for some states. And really I will caveat I think 0:12:42.120 --> 0:12:43.480 we're going to see a lot of moving around with 0:12:43.520 --> 0:12:47.080 the figures as things move along. But some states were 0:12:47.120 --> 0:12:50.520 just faster out of the gate. Um. You know, in 0:12:50.559 --> 0:12:55.160 West Virginia, for example, they chose to do their own 0:12:55.240 --> 0:12:57.800 thing with long term care pharmacies. So the long term 0:12:57.840 --> 0:13:00.720 care facilities that you know, most states partner with CBS 0:13:00.720 --> 0:13:04.720 and Walgreens UM, and those pharmacies were responsible for getting 0:13:04.880 --> 0:13:06.920 the vaccine into the arms of you know, residents and 0:13:06.960 --> 0:13:10.680 staff at long term care facilities. In West Virginia, CBS 0:13:10.679 --> 0:13:14.119 and Walgreens does not have a big footprint, so they decided, 0:13:14.240 --> 0:13:16.040 you know, um, we know there's not a lot of 0:13:16.040 --> 0:13:18.920 staff of those pharmacies. Now, given how quickly we need 0:13:19.000 --> 0:13:21.000 to get the vaccines into the arms of people, we're 0:13:21.000 --> 0:13:22.439 going to take control of that and we're going to 0:13:22.480 --> 0:13:25.920 partner with our community pharmacies and community partners and get 0:13:25.960 --> 0:13:29.839 it done. And and they do credit that initial, you know, quick, 0:13:29.920 --> 0:13:33.720 quick speed to that. That's the smartest thing I've heard today, Honey. 0:13:34.000 --> 0:13:37.880 What's so important is Marianna Masacata was on three hours earlier. 0:13:37.920 --> 0:13:40.880 Were there a great new book, and she said exactly 0:13:40.920 --> 0:13:43.920 the same thing. There's a point where government has to 0:13:44.040 --> 0:13:47.880 step in. Is that's what's needed in February is more 0:13:48.200 --> 0:13:52.199 government action. Well, I just also want to say there 0:13:52.200 --> 0:13:54.320 were some states where CBS and Walgreen's had a great 0:13:54.320 --> 0:13:57.839 footprint and they were very effective in getting people vaccinated. Now, 0:13:58.520 --> 0:14:00.720 so there really is this is this is um. You know, 0:14:00.720 --> 0:14:03.000 I've done state work for a long time. There's variations 0:14:03.040 --> 0:14:05.320 across the states, and it matters. You have to look 0:14:05.360 --> 0:14:08.400 at what that state um, how it operates, you know, 0:14:08.480 --> 0:14:11.920 what it's UM staffing looks like, and how you know 0:14:11.960 --> 0:14:13.760 the people are are going to be willing to get 0:14:13.760 --> 0:14:16.679 the back feet Now on federal governments stepping in, I think, 0:14:16.720 --> 0:14:19.400 you know, we do need some national leadership on this, 0:14:19.920 --> 0:14:22.040 and I think states will want national realship on this. 0:14:22.240 --> 0:14:25.080 Funding is going to be really helpful thinking about a 0:14:25.080 --> 0:14:28.600 coordinated plan across the states. But I caveat that to say, 0:14:29.080 --> 0:14:32.760 UM also recognizing and I know the Biden Harris administrations 0:14:33.040 --> 0:14:35.760 is very in tune with this looking at what each 0:14:35.800 --> 0:14:38.560 state needs. Because in one state, you know, you're gonna 0:14:38.600 --> 0:14:41.880 need some National Guard, UM, you know, some federal sites 0:14:41.960 --> 0:14:44.440 to be set up in rural areas and really help 0:14:44.480 --> 0:14:47.560 the state supplement what they're already doing. While other states 0:14:47.600 --> 0:14:50.040 have enough vaccinators and they don't need that, they need 0:14:50.080 --> 0:14:53.640 other kinds of support. So you know, it's really important 0:14:53.640 --> 0:14:55.560 to look at how each state is operating and what 0:14:55.600 --> 0:14:58.840 it really needs. Hey me, you're talking about financing this effort, 0:14:58.880 --> 0:15:01.480 and that's one bipartist an agreement in Washington, d C. 0:15:02.080 --> 0:15:05.520 That financing of the vaccination schedule will be very good 0:15:05.720 --> 0:15:07.760 for the nation. Can you give us a sense just 0:15:07.800 --> 0:15:11.400 to get a greater appreciation of the complication of the 0:15:11.480 --> 0:15:14.720 rollout where the money is most heavily needed going forward 0:15:14.760 --> 0:15:19.960 in order to facilitate this. Yeah, So a number of states, 0:15:20.000 --> 0:15:22.600 in order to start speeding up the process UM have 0:15:22.760 --> 0:15:25.760 started setting up mass vaccination sites, which requires a lot 0:15:25.760 --> 0:15:28.040 of different types of partnership. So that's one area I 0:15:28.080 --> 0:15:31.400 think continued resources will be needed. I also think we 0:15:31.440 --> 0:15:34.560 can't forget about populations that are harder to reach and 0:15:34.600 --> 0:15:37.480 that are in like places like rural areas where mobile 0:15:37.480 --> 0:15:40.600 sites um, you know, or community sites which will be 0:15:40.640 --> 0:15:43.280 smaller but still will need to be set up also 0:15:43.360 --> 0:15:46.080 need also will be needed. I also think, you know, 0:15:46.160 --> 0:15:48.960 this is a this is a complicated effort that's at 0:15:49.000 --> 0:15:51.000 the federal level, the state level, and the local level, 0:15:51.040 --> 0:15:54.440 and the local level really matters, so making sure states 0:15:54.480 --> 0:15:57.560 have funding to then partner with local endies, local government, 0:15:57.600 --> 0:16:01.240 community groups, etcetera. I think it's also important because we 0:16:01.280 --> 0:16:04.480 have to get people to not only trust and believe 0:16:04.520 --> 0:16:06.720 in the vaccine, but also the process by which to 0:16:06.760 --> 0:16:09.760 get access to it. Meanwhile, just today, hey man, I'd 0:16:09.800 --> 0:16:12.480 love to just wrap up with the news of the day, 0:16:12.480 --> 0:16:14.680 which is that J and J came out with the 0:16:14.800 --> 0:16:17.720 data for the single dose vaccine. It was not as 0:16:17.760 --> 0:16:22.280 stunning as some of the other mRNA vaccinations, however, still 0:16:22.600 --> 0:16:26.200 very positive. How much does this accelerate the timeline for 0:16:26.360 --> 0:16:30.640 vaccinating I think, um, we are all hopeful across the 0:16:30.680 --> 0:16:33.400 country that they're going to be more options for vaccines. 0:16:33.440 --> 0:16:36.680 We have to get three million people vaccinated and we 0:16:36.720 --> 0:16:38.880 are not on pace for that, um and the states 0:16:38.880 --> 0:16:41.560 don't have the supply for that. So we absolutely need 0:16:41.640 --> 0:16:44.160 new candidates to come in the door. UM. I do 0:16:44.200 --> 0:16:46.440 think there are concerns UM in the public and it 0:16:46.440 --> 0:16:48.400 will I think will continue be more widespread about the 0:16:48.920 --> 0:16:51.960 strains in the UK and South Africa. I think we've 0:16:51.960 --> 0:16:55.360 seen initial evidence that for the South African strains these 0:16:55.440 --> 0:16:57.760 vaccines are are not quite as effective. I think more 0:16:57.800 --> 0:17:01.600 evidence is needed, UM, but we still need more options 0:17:01.600 --> 0:17:04.360 for people to get vaccinated. Amy, thank you so much, 0:17:04.400 --> 0:17:07.920 greatly appreciated. Hammy Charson with Duke my goals today their 0:17:07.960 --> 0:17:11.119 Center for Health Policy. The state issue here going forward 0:17:11.200 --> 0:17:18.280 is going to be extraordinary. We get lucky. It's okay 0:17:18.320 --> 0:17:21.960 three months out, six months out to book Marianna Masaicado 0:17:22.080 --> 0:17:24.720 to beat up on our new book Mission Economy, but 0:17:24.800 --> 0:17:27.600 it's far more important to speak with u CEL professor 0:17:27.640 --> 0:17:30.480 about the moment in hand as well, because the moment 0:17:30.480 --> 0:17:34.520 in hand is in the Mission Economy. It's about the 0:17:34.560 --> 0:17:38.520 new rules and the myths of capitalism. Professor Mascato, you 0:17:38.520 --> 0:17:40.560 were my book of the Year a couple of years ago. 0:17:40.640 --> 0:17:43.800 I haven't really looked at Mission Economy yet, but thrilled 0:17:43.840 --> 0:17:46.600 you've got a new book out. I want you to 0:17:46.720 --> 0:17:51.000 sit in London wherever you are and comment on how 0:17:51.080 --> 0:17:56.240 you observed game stop comment on this clash of technology 0:17:56.720 --> 0:18:02.320 with a traditional process of capital is um Well, I mean, 0:18:02.400 --> 0:18:05.000 you know, let's broaden the gaze of it. Right. We've 0:18:05.000 --> 0:18:08.200 got tech, we have the digital platforms that we're talking about, 0:18:08.280 --> 0:18:10.480 we have climate change, we have the health pandemic. What 0:18:10.560 --> 0:18:12.959 they all have in common is that we need to 0:18:13.160 --> 0:18:16.560 govern the process in the common interest. And what's you know, 0:18:17.040 --> 0:18:19.240 the common theme in my different books would you always 0:18:19.280 --> 0:18:22.080 get me on for which is wonderful is that unless 0:18:22.119 --> 0:18:25.399 we actually know how to shape markets as opposed to 0:18:25.480 --> 0:18:29.800 constantly just fixed market failures in any of these areas, 0:18:29.800 --> 0:18:31.960 we get it wrong. And I do think the COVID moment, 0:18:32.240 --> 0:18:34.320 where we have the digital divide, where we have the 0:18:34.359 --> 0:18:37.240 health pandemic, where this particular crisis is sitting on top 0:18:37.280 --> 0:18:40.120 of a climate crisis, we just have to go back 0:18:40.160 --> 0:18:42.560 to first principles. And that's really what the book is about. 0:18:42.880 --> 0:18:44.800 What I want to get to that in one moment, 0:18:44.800 --> 0:18:47.560 I want to talk about something in your book, serendipity 0:18:47.600 --> 0:18:52.880 and collaboration. We're seeing serendipity. We're seeing collaboration now by 0:18:53.040 --> 0:18:57.000 smart young people sitting on couches saying to hedge funds 0:18:57.040 --> 0:19:01.000 forget about it. We make the rules. How laborative is 0:19:01.040 --> 0:19:04.800 this new technology, whether it's a crisis like game stop, 0:19:05.160 --> 0:19:07.640 or it's to the broader world economy that you look 0:19:07.680 --> 0:19:11.159 at well, I mean, you know, when I say go 0:19:11.359 --> 0:19:13.520 back to first principles, we should also ask where does 0:19:13.520 --> 0:19:15.760 this technology even come from in the first place. And 0:19:15.800 --> 0:19:18.320 that was kind of two books ago in The Entrepreneurial State, 0:19:18.359 --> 0:19:20.840 where I talked about how everything that makes our iPhone 0:19:20.920 --> 0:19:24.960 smart and not stupid, from the Internet, GPS, touch screen, 0:19:25.119 --> 0:19:28.560 syrian I could go on, was all actually government financed. Right, 0:19:28.960 --> 0:19:32.280 So you know what happens then when this technology and 0:19:32.320 --> 0:19:37.720 the algorithms underlying them are actually increasingly also about extracting 0:19:37.800 --> 0:19:39.800 value and not creating value. But even more so, what 0:19:39.840 --> 0:19:43.560 does it mean to truly have a public private partnership, 0:19:43.640 --> 0:19:47.720 a symbiotic mutualistic partnership and not a parasitic partnership in 0:19:47.760 --> 0:19:50.560 these different spaces? And that's why the moon landing is 0:19:50.560 --> 0:19:53.280 so amazing. There is huge amounts of private sector innovation 0:19:53.280 --> 0:19:57.040 and investment from companies like Honeywell, General Electric, Motor Role 0:19:57.119 --> 0:20:01.119 up course, large state funding from NASA and other public entities, 0:20:01.160 --> 0:20:03.480 but they were going after a common project. So the 0:20:03.520 --> 0:20:07.159 real question is what is the common project underlying you 0:20:07.200 --> 0:20:10.840 know today's news. Yeah, so what is that common project? Mariana? 0:20:10.880 --> 0:20:13.960 I mean, we're fighting climate change where you know everything 0:20:14.000 --> 0:20:16.600 we're doing, right, but what should it be because everything 0:20:16.600 --> 0:20:18.760 we're doing is also under the president, you know, the 0:20:18.760 --> 0:20:22.640 presence of the capitalism that we know. Well, first of all, 0:20:22.760 --> 0:20:25.280 let's not forget there's different ways of doing capitalism. I 0:20:25.320 --> 0:20:28.040 gave a talk this past Monday at the World Economic 0:20:28.080 --> 0:20:31.200 Forum where you and I last year were together physically 0:20:31.200 --> 0:20:33.840 in Switzerland. This year we're all zooming in and you 0:20:33.840 --> 0:20:37.320 know all the talk again it is about stakeholder capitalism. Now, 0:20:37.359 --> 0:20:41.080 if we properly had stakeholder capitalism and not just capitalism 0:20:41.119 --> 0:20:45.640 maximizing shareholder value and kind of gaming the system, then 0:20:45.960 --> 0:20:48.720 that would be a very different conversation, whether we're talking 0:20:48.720 --> 0:20:52.080 about digital platforms, health or climate. So we need to 0:20:52.119 --> 0:20:54.760 remember first of all that there's different experiences in the world. 0:20:54.760 --> 0:20:58.800 Stakeholder capitalism is practice, has been practiced in certain companies 0:20:59.000 --> 0:21:00.480 in certain parts of the world. So we need to 0:21:00.520 --> 0:21:03.399 actually learn from those experiences and walk the talk. And 0:21:03.400 --> 0:21:06.119 there's no better place, I think right now than the 0:21:06.200 --> 0:21:08.840 vaccine to talk about that, because it's not enough to 0:21:08.920 --> 0:21:11.840 have you know, Fiser, the National Institutes of Health, which 0:21:11.880 --> 0:21:16.320 is public money moderna Oxford University, you know, investing in something. 0:21:16.400 --> 0:21:19.600 The question is how do we then govern it for purpose? 0:21:19.680 --> 0:21:21.680 And that's really what the moon Shop book is about, 0:21:21.720 --> 0:21:24.360 which is what is the common purpose with the vaccine? 0:21:24.359 --> 0:21:26.399 It's not just to get a vaccine, it's to make 0:21:26.440 --> 0:21:30.359 sure everyone gets vaccinated. Right, Marianna has okay, But if 0:21:30.359 --> 0:21:32.240 you look at the Commission, they can't even have access 0:21:32.240 --> 0:21:35.280 to the vaccines because you know, they started too late. 0:21:35.359 --> 0:21:38.359 So where do you started actually changing so that you 0:21:38.400 --> 0:21:40.800 create the system that you're seeing, which is you know, 0:21:40.920 --> 0:21:44.480 mission critical, you achieve the goal that you set out right, 0:21:44.880 --> 0:21:47.920 So you know, I think we're bringing in different issues 0:21:47.920 --> 0:21:49.640 here which are all related. So it's a good thing. 0:21:49.720 --> 0:21:52.480 But one issue is also the capacity and the capability 0:21:52.560 --> 0:21:55.399 on the ground organizationally, and whether we're talking about the 0:21:55.440 --> 0:21:58.120 European Commission or the UK government, which is where I'm 0:21:58.119 --> 0:22:02.000 sitting here. In the UK has outsourced its capability and 0:22:02.080 --> 0:22:05.439 its capacity so much to the private sector that a 0:22:05.440 --> 0:22:09.359 couple of weeks ago, a Tory Lord Agnew said that 0:22:09.400 --> 0:22:12.280 the government had become infantilized. It's such an interesting word. 0:22:12.280 --> 0:22:14.800 I started to use that. Uh. You know, by outsourcing 0:22:14.800 --> 0:22:18.199 your brain, you get infantilized. You lose your capability and 0:22:18.200 --> 0:22:22.040 capacity to manage anything, whether it's Brexit or COVID. So 0:22:22.200 --> 0:22:24.399 instead of just kind of taking the status quo, so 0:22:24.600 --> 0:22:27.520 say the European Commission getting in there too late, the 0:22:27.640 --> 0:22:30.679 question is going forwards. How can we actually govern and 0:22:30.760 --> 0:22:33.000 shape and co create markets and such a way to 0:22:33.040 --> 0:22:36.760 achieve the goals we need, which is inclusive growth, sustainable growth. 0:22:37.000 --> 0:22:38.760 And I do think at the center of the COVID 0:22:38.800 --> 0:22:41.359 recovery scheme, and you know we all are talking about 0:22:41.359 --> 0:22:44.200 building back better has to be green growth. And this 0:22:44.240 --> 0:22:46.840 is where the European Commission has gotten it right, more 0:22:46.880 --> 0:22:49.240 so I think than the US, even more so than China. 0:22:49.560 --> 0:22:53.520 Which is the current European recovery scheme, which is close 0:22:53.600 --> 0:22:57.480 to a trillion is conditional. No longer on austerity, which 0:22:57.520 --> 0:23:00.280 is the conditions that we set in the financial crisis 0:23:00.320 --> 0:23:03.600 for the recovery scheme, but on investment, investment around digital 0:23:03.800 --> 0:23:07.160 and climate. And then there's a separate pot for help. Marianna, 0:23:07.280 --> 0:23:11.200 you have a phrase that is absolutely spectacular in folks 0:23:11.280 --> 0:23:13.280 if I was sitting in a happy valley right now 0:23:13.320 --> 0:23:15.800 on the deck with friends seeing this would be my 0:23:15.920 --> 0:23:19.919 title for this year's Davos. It is a shaping, not 0:23:20.160 --> 0:23:26.120 fixing Davos. Marianna. That is absolutely brilliant. This describes so 0:23:26.240 --> 0:23:28.840 much of what I and you know, Marianna hate the 0:23:28.840 --> 0:23:32.000 phrase thought leaders and all that other malarkey. This is 0:23:32.040 --> 0:23:36.280 so so so true. They're trying to shape the message 0:23:36.359 --> 0:23:40.520 and not fix it. Discuss that well in some ways, 0:23:40.720 --> 0:23:42.720 I guess, I'm so. I'm not sure what you've just said, 0:23:42.720 --> 0:23:44.520 but what I usually say is that we should stop 0:23:44.560 --> 0:23:47.399 just fixing market failures, you know, actually waiting for the 0:23:47.400 --> 0:23:51.200 martin the market to mess up before policy comes in. 0:23:51.520 --> 0:23:53.479 We need a different type of policy, and we need 0:23:53.520 --> 0:23:56.840 a different type of public private partnership that co creates 0:23:56.920 --> 0:24:01.000 and shapes markets to deliver the outcomes we actually need. 0:24:01.400 --> 0:24:05.280 And that requires fundamentally different partnership. Literally a new contract, 0:24:05.640 --> 0:24:07.040 and I do you know, I'm not a big fan 0:24:07.080 --> 0:24:09.400 of getting lawyers involved, but I really want to starting 0:24:09.400 --> 0:24:12.720