1 00:00:05,800 --> 00:00:08,720 Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm pim Fox. 2 00:00:08,760 --> 00:00:11,440 Speaker 1: Along with my co host Lisa A. Bramowitz. Each day 3 00:00:11,480 --> 00:00:15,000 Speaker 1: we bring you the most important, noteworthy, and useful interviews 4 00:00:15,040 --> 00:00:17,520 Speaker 1: for you and your money, whether you're at the grocery 5 00:00:17,560 --> 00:00:20,560 Speaker 1: store or the trading floor. Find the Bloomberg p m 6 00:00:20,680 --> 00:00:32,400 Speaker 1: L Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. 7 00:00:32,440 --> 00:00:36,240 Speaker 1: We've talked a lot about Mark Zuckerberg in his presentations 8 00:00:36,280 --> 00:00:39,640 Speaker 1: in front of Congress. One thing we've heard less about 9 00:00:40,000 --> 00:00:42,479 Speaker 1: is what's been going on in the minds of big 10 00:00:42,520 --> 00:00:46,280 Speaker 1: advertisers and how they're going to be using Facebook going forward. 11 00:00:46,280 --> 00:00:47,680 Speaker 1: Here to talk a little bit about it from that 12 00:00:47,720 --> 00:00:52,040 Speaker 1: angle is Mark Douglas, chief executive officer of Steelhouse, which 13 00:00:52,240 --> 00:00:56,000 Speaker 1: works with advertisers of all sizes and tries to give 14 00:00:56,040 --> 00:00:58,280 Speaker 1: them some context from a data perspective of how to 15 00:00:58,320 --> 00:01:01,000 Speaker 1: go about doing so, and his bay in Los Angeles. Mark, 16 00:01:01,040 --> 00:01:03,639 Speaker 1: thank you so much for being with us. UM, So 17 00:01:04,000 --> 00:01:07,680 Speaker 1: just let's start with how much advertisers have actually pulled 18 00:01:07,760 --> 00:01:12,080 Speaker 1: back in the wake of the Facebook reach, if at all. UM, 19 00:01:12,120 --> 00:01:15,280 Speaker 1: we haven't seen any advertisers pulled back, and we have 20 00:01:15,760 --> 00:01:20,280 Speaker 1: UM close to a thousand pretty sizable advertisers that use 21 00:01:20,319 --> 00:01:23,600 Speaker 1: our software. Um, what we've seen is actually a lot 22 00:01:23,640 --> 00:01:27,360 Speaker 1: more concern about GDPR, which is a whole another topic. 23 00:01:27,480 --> 00:01:31,920 Speaker 1: Basically there being yet global basically is a global UM 24 00:01:32,040 --> 00:01:35,520 Speaker 1: protect a privacy protection law that's coming out of the EU, 25 00:01:35,840 --> 00:01:38,039 Speaker 1: and so I think there's and that has that has 26 00:01:38,080 --> 00:01:40,760 Speaker 1: some stiff penalties. If you violate it, you can be 27 00:01:40,760 --> 00:01:43,839 Speaker 1: penalized four percent of your revenue. What's the concern on 28 00:01:44,000 --> 00:01:48,080 Speaker 1: behalf of advertisers. Well, because the virtually every company in 29 00:01:48,080 --> 00:01:51,520 Speaker 1: Europe has to conform with it, and it's brand new, 30 00:01:51,600 --> 00:01:56,160 Speaker 1: it goes in effect on MA and UM. Europe has 31 00:01:56,200 --> 00:01:59,640 Speaker 1: more consumers than actually the US does. So in other words, 32 00:01:59,640 --> 00:02:02,680 Speaker 1: the idea here is advertisers wouldn't be able to access 33 00:02:03,040 --> 00:02:07,080 Speaker 1: the information of European users. Therefore they couldn't target the 34 00:02:07,080 --> 00:02:09,480 Speaker 1: odds as well as the idea they have to dislose. 35 00:02:09,600 --> 00:02:13,280 Speaker 1: But what the information that they're collecting is being used for. 36 00:02:13,360 --> 00:02:17,760 Speaker 1: So Apple actually this past weekend released OS updates for 37 00:02:17,919 --> 00:02:23,160 Speaker 1: every every Apple OS, iOS, Apple TV, Mac os and 38 00:02:23,280 --> 00:02:25,880 Speaker 1: now when you open their operating systems or any of 39 00:02:25,880 --> 00:02:28,840 Speaker 1: the apps, they just slose to you that they value 40 00:02:28,840 --> 00:02:32,320 Speaker 1: your privacy. They dislose what data are collecting, how long 41 00:02:32,320 --> 00:02:35,240 Speaker 1: they're retaining it for. That's going to happen in Europe 42 00:02:35,680 --> 00:02:39,680 Speaker 1: for essentially every company in Europe and every app in Europe. 43 00:02:39,880 --> 00:02:41,920 Speaker 1: And Apple did it worldwide. I don't know if they 44 00:02:41,960 --> 00:02:44,200 Speaker 1: did in China, but they did it certainly in the 45 00:02:44,320 --> 00:02:47,880 Speaker 1: US and Europe. And that that happened for Apple this weekend. 46 00:02:47,919 --> 00:02:51,519 Speaker 1: It has to happen for all companies that operate in Europe. 47 00:02:51,520 --> 00:02:54,280 Speaker 1: So if someone, if you're a US company, soone gets 48 00:02:54,280 --> 00:02:57,120 Speaker 1: on an airplane, when they get off the airplane and 49 00:02:57,160 --> 00:03:00,680 Speaker 1: they read and they use your app, you now subject 50 00:03:00,760 --> 00:03:05,120 Speaker 1: to that law as a company. And that's coming on. Mark. 51 00:03:05,360 --> 00:03:07,280 Speaker 1: I want to give you about the thirty seconds or 52 00:03:07,360 --> 00:03:10,639 Speaker 1: maybe even forty five seconds, give us the short version 53 00:03:10,680 --> 00:03:13,280 Speaker 1: of of Mark Douglas. Because you're born in the Bronx 54 00:03:13,320 --> 00:03:18,839 Speaker 1: Aviation High School, you learned to code in Seattle Oracle 55 00:03:19,200 --> 00:03:21,520 Speaker 1: Center of you E Harmony. These are all part of 56 00:03:21,520 --> 00:03:25,560 Speaker 1: your biography. Yeah, so um, yeah, I'm a Bronx kid 57 00:03:25,840 --> 00:03:29,760 Speaker 1: and UM dropped out of college about one semester and 58 00:03:29,800 --> 00:03:33,239 Speaker 1: then UM taught myself to program, bought a book and 59 00:03:33,360 --> 00:03:36,320 Speaker 1: borrow a computer, taught myself to program and then UM 60 00:03:36,560 --> 00:03:40,120 Speaker 1: just kind of found kept connecting with the right technologies. 61 00:03:40,400 --> 00:03:42,400 Speaker 1: I learned how to program on Windows, which is now 62 00:03:42,440 --> 00:03:45,600 Speaker 1: way back from the developers at Microsoft that wrote it, 63 00:03:46,200 --> 00:03:49,360 Speaker 1: and then eventually met Larry Ellison and then that you know, 64 00:03:49,480 --> 00:03:52,560 Speaker 1: was in Silicon Valley, and now um, I'm in Los 65 00:03:52,600 --> 00:03:55,200 Speaker 1: Angeles kind of enjoying the l A lifestyle, but I 66 00:03:55,240 --> 00:03:58,120 Speaker 1: think working harder than most people. And you know, I 67 00:03:58,160 --> 00:04:00,600 Speaker 1: bring some New York five to l A, so working 68 00:04:00,600 --> 00:04:03,560 Speaker 1: a little harder than most people in l A. The 69 00:04:03,800 --> 00:04:06,880 Speaker 1: reason I wanted to introduce your background here is because 70 00:04:06,880 --> 00:04:09,120 Speaker 1: I want to get to this idea of how you 71 00:04:09,160 --> 00:04:13,600 Speaker 1: reinvent yourself and specifically the reinvention of video and video 72 00:04:13,640 --> 00:04:16,200 Speaker 1: on demand. Tell us what's going on with things like 73 00:04:16,320 --> 00:04:22,360 Speaker 1: video advertising, Direct TV now, Hulu Live, Fox Now, and 74 00:04:22,720 --> 00:04:26,440 Speaker 1: the way that marketing and advertising is going to be 75 00:04:26,560 --> 00:04:30,760 Speaker 1: working with video in the future. So, you know, one 76 00:04:30,800 --> 00:04:34,040 Speaker 1: thing that's really interesting. If you ask UM, if anyone 77 00:04:34,160 --> 00:04:37,800 Speaker 1: in the industry, what's whether to where the biggest um 78 00:04:37,920 --> 00:04:40,560 Speaker 1: at tech companies, the first name they'll say is Google 79 00:04:41,040 --> 00:04:44,719 Speaker 1: and the second name they'll say is Facebook. Well, actually 80 00:04:44,760 --> 00:04:48,640 Speaker 1: that's not right. Fox is actually bigger than Facebook. And 81 00:04:48,680 --> 00:04:51,360 Speaker 1: if Fox and Disney combined, they might be bigger than Google. 82 00:04:52,400 --> 00:04:56,599 Speaker 1: So and that's all television ad revenue. All that ad 83 00:04:56,600 --> 00:05:00,520 Speaker 1: revenue is going online and so connected to TV. More 84 00:05:00,520 --> 00:05:03,960 Speaker 1: than six percent of Americans now watch a majority of 85 00:05:04,000 --> 00:05:08,560 Speaker 1: their television on demands, so use it. It's started with Netflix, 86 00:05:08,960 --> 00:05:12,279 Speaker 1: but now it's basically every channel. And so when you 87 00:05:12,320 --> 00:05:15,359 Speaker 1: watch television is broadcasts we might I say broadcast, I 88 00:05:15,400 --> 00:05:19,200 Speaker 1: mean just cable. Um, those ads are just broadcast based 89 00:05:19,240 --> 00:05:22,400 Speaker 1: on time slots. Like the people watch the show have 90 00:05:22,520 --> 00:05:25,000 Speaker 1: these qualities and we want to, you know, kind of 91 00:05:25,000 --> 00:05:27,080 Speaker 1: put our message in front of them. But you watch 92 00:05:27,160 --> 00:05:31,280 Speaker 1: the same exact show on connected TV, um, you can 93 00:05:31,480 --> 00:05:35,000 Speaker 1: you Basically the targeting on those ads is now much 94 00:05:35,040 --> 00:05:38,400 Speaker 1: more personalized in the way that Mark Zuckerberg talked about 95 00:05:38,960 --> 00:05:42,880 Speaker 1: basically gave a tutorial on Internet advertising this week and 96 00:05:43,080 --> 00:05:46,520 Speaker 1: for a lot of centators even just the Internet, and um, 97 00:05:46,520 --> 00:05:48,839 Speaker 1: so you get kind of the same kind of targeting 98 00:05:48,880 --> 00:05:52,520 Speaker 1: now for television. It's a huge transition. Okay, So given 99 00:05:52,560 --> 00:05:56,240 Speaker 1: that that is a huge transition, are you seeing that 100 00:05:56,400 --> 00:06:00,200 Speaker 1: Facebook and frankly Google are losing some of the lure 101 00:06:00,279 --> 00:06:04,719 Speaker 1: that they once had because these targeted ads are perhaps 102 00:06:04,720 --> 00:06:07,640 Speaker 1: even more effective given the fact that they are more 103 00:06:07,680 --> 00:06:10,559 Speaker 1: notable as the only advertisement and they're on a specific show, 104 00:06:10,960 --> 00:06:14,840 Speaker 1: and they're also not skippable. The ad completion rates broadcast 105 00:06:14,880 --> 00:06:19,520 Speaker 1: television or fourteen percent, so because most people DV are 106 00:06:19,520 --> 00:06:22,800 Speaker 1: the ads. The ad completion rates for connected television on 107 00:06:22,839 --> 00:06:26,880 Speaker 1: demand television are nine percent because they're completely unskippable. And 108 00:06:26,920 --> 00:06:30,480 Speaker 1: you're right the the earl. We can now measure this 109 00:06:30,839 --> 00:06:33,880 Speaker 1: at sealhouse. We can now measure this. And the TV 110 00:06:34,040 --> 00:06:36,320 Speaker 1: is a powerful medium and it's showing up on connected 111 00:06:36,360 --> 00:06:40,920 Speaker 1: TV also, so we're seeing already some budgets. That's where 112 00:06:40,920 --> 00:06:44,880 Speaker 1: we're seeing some budgets move where the early adopters have 113 00:06:44,960 --> 00:06:47,760 Speaker 1: connected to the advertisers who are early adopters are starting 114 00:06:47,800 --> 00:06:52,440 Speaker 1: to move some budget from UM social media, from other 115 00:06:52,520 --> 00:06:58,640 Speaker 1: digital channels like mobile advertising, display advertising to television and UM. 116 00:06:58,880 --> 00:07:02,360 Speaker 1: We're seeing response rates for the consumer that are just, 117 00:07:02,600 --> 00:07:05,239 Speaker 1: you know, kind of really really strong. Approaching paid search 118 00:07:05,279 --> 00:07:08,360 Speaker 1: in terms of effectiveness. If you're in the marketing or 119 00:07:08,440 --> 00:07:13,480 Speaker 1: advertising world and you're listening to Mark Douglas, what are 120 00:07:13,560 --> 00:07:15,520 Speaker 1: some of them I'm going to use the term buzz words, 121 00:07:15,560 --> 00:07:18,080 Speaker 1: but what are those key things that you want to 122 00:07:18,120 --> 00:07:20,960 Speaker 1: be spending your weekend learning about so that when you 123 00:07:21,000 --> 00:07:24,000 Speaker 1: go into the office on Monday, you can have a 124 00:07:24,080 --> 00:07:27,760 Speaker 1: constructive conversation about how your business is going to operate 125 00:07:27,760 --> 00:07:34,160 Speaker 1: in the future. The that's an interesting question. I think, um, 126 00:07:35,320 --> 00:07:37,560 Speaker 1: you know, the topics we touched on are really the 127 00:07:37,600 --> 00:07:41,440 Speaker 1: ones I'm putting most of my energy into, and it's there. 128 00:07:41,560 --> 00:07:44,360 Speaker 1: There's basically another way to think about it is that 129 00:07:44,560 --> 00:07:49,640 Speaker 1: traditional media is making a comeback. It's kind of been predicted, 130 00:07:49,720 --> 00:07:53,800 Speaker 1: you know, like Google dominates and Facebook dominates, and Display dominates, 131 00:07:54,160 --> 00:07:57,400 Speaker 1: and essentially traditional media because it's not just connected television, 132 00:07:57,480 --> 00:08:01,760 Speaker 1: digital radio is like with and or with Spotify, who 133 00:08:01,800 --> 00:08:03,560 Speaker 1: I think just went public or is about to go 134 00:08:03,640 --> 00:08:06,280 Speaker 1: put don't know they went public, got it, and so 135 00:08:06,360 --> 00:08:09,600 Speaker 1: that is making a big comeback, and I think that's 136 00:08:09,680 --> 00:08:12,040 Speaker 1: where we're putting a lot of attention. I think any 137 00:08:12,080 --> 00:08:17,559 Speaker 1: advertiser should, especially traditional media advertiser, should be thinking, how 138 00:08:17,600 --> 00:08:19,600 Speaker 1: can you know? How do I how do I now 139 00:08:19,680 --> 00:08:23,200 Speaker 1: target traditional media? Thanks very much for being here, Mark Douglas, 140 00:08:23,240 --> 00:08:41,960 Speaker 1: Chief executive Steelhouse. You're listening to Bloomberg. It's been one 141 00:08:41,960 --> 00:08:44,760 Speaker 1: of the biggest secrets in the global oil business for 142 00:08:45,000 --> 00:08:49,440 Speaker 1: more than forty years. These are the financials of Saudi Aramco. 143 00:08:49,600 --> 00:08:53,160 Speaker 1: Well secret no longer here to tell us more. Will Kennedy, 144 00:08:53,280 --> 00:08:57,800 Speaker 1: Managing editor for Europe, Middle East and Africa, Energy and 145 00:08:57,880 --> 00:09:01,600 Speaker 1: Commodities for Bloomberkey, joins us for London. Well Kennedy, thank 146 00:09:01,640 --> 00:09:03,760 Speaker 1: you very much for being with us. Just to give 147 00:09:03,760 --> 00:09:06,440 Speaker 1: people a little bit of a sort of description as 148 00:09:06,480 --> 00:09:09,679 Speaker 1: to why this is so relevant and interesting, not only 149 00:09:09,720 --> 00:09:11,559 Speaker 1: if you're an investor, but just if you want to 150 00:09:11,640 --> 00:09:15,839 Speaker 1: understand how the oil business works. There were two things 151 00:09:16,160 --> 00:09:20,360 Speaker 1: to say I think him One, Saudi Arabia has suggested 152 00:09:20,400 --> 00:09:22,160 Speaker 1: that it might like to I p O this company, 153 00:09:22,160 --> 00:09:24,880 Speaker 1: and it would, given its scale, be the probably the 154 00:09:24,960 --> 00:09:28,400 Speaker 1: largest sequity deal ever. So that's made it hugely interesting 155 00:09:28,480 --> 00:09:32,079 Speaker 1: to investors and everyone around the world. And secondly, this 156 00:09:33,160 --> 00:09:36,679 Speaker 1: soil at Aramco pumps underpins the whole Saudi economy. This 157 00:09:36,720 --> 00:09:39,560 Speaker 1: is the income stream that pays for social spending in 158 00:09:39,559 --> 00:09:44,480 Speaker 1: the kingdom. It's increasingly assertive military and uh the royal family. 159 00:09:45,679 --> 00:09:48,160 Speaker 1: So I want to just get your sense. Do you 160 00:09:48,200 --> 00:09:51,839 Speaker 1: think the potential investors looking at the numbers reviewed by 161 00:09:51,840 --> 00:09:55,800 Speaker 1: Bloomberg would feel more positively towards the company considering the 162 00:09:55,840 --> 00:09:59,400 Speaker 1: fact that it's the world's most profitable one, or take 163 00:09:59,480 --> 00:10:01,480 Speaker 1: a take a little bit more of a placious stance. 164 00:10:02,400 --> 00:10:05,640 Speaker 1: There were there's a mixture of things here in Lisa. 165 00:10:05,720 --> 00:10:09,280 Speaker 1: I mean there were some extremely good positives. Clearly, even 166 00:10:09,360 --> 00:10:12,120 Speaker 1: last year when our prices were below where they are now, 167 00:10:12,360 --> 00:10:14,640 Speaker 1: this was a company that was making considerably more than 168 00:10:14,920 --> 00:10:17,199 Speaker 1: any other company in the world. Um, and it will 169 00:10:17,240 --> 00:10:19,120 Speaker 1: be making even more money this year as all that 170 00:10:19,240 --> 00:10:23,360 Speaker 1: vallees to seventy dollars and beyond. Do you see a 171 00:10:23,400 --> 00:10:26,480 Speaker 1: balance sheet that's pretty much pristine, no debt at all. 172 00:10:26,760 --> 00:10:31,240 Speaker 1: You see oil production costs which by our estimates perhaps 173 00:10:31,280 --> 00:10:33,600 Speaker 1: a quarter of ex On and Shell, the two biggest 174 00:10:33,600 --> 00:10:37,000 Speaker 1: publicly traded companies oil companies in the world. But there 175 00:10:37,040 --> 00:10:40,680 Speaker 1: are probably negatives for investors, and the one that probably 176 00:10:40,679 --> 00:10:43,439 Speaker 1: needs highlighting more than any other is is the tax regime. 177 00:10:44,000 --> 00:10:46,600 Speaker 1: What we discovered is that saudio Abia has imposed a 178 00:10:46,640 --> 00:10:50,040 Speaker 1: new tax regime, a royalty regime, which takes a share 179 00:10:50,080 --> 00:10:54,199 Speaker 1: of every single dollar the company owns earns sorry um, 180 00:10:54,240 --> 00:10:57,800 Speaker 1: and that that take rises of oil prices. So it 181 00:10:57,920 --> 00:10:59,880 Speaker 1: goes up once I'll get to seventy, it goes up 182 00:10:59,880 --> 00:11:03,240 Speaker 1: a and to once ago to a hundred to investors 183 00:11:03,240 --> 00:11:05,680 Speaker 1: may feel that really limits for them the upside of 184 00:11:05,679 --> 00:11:08,320 Speaker 1: any rallying oil prices if they were to invest in 185 00:11:08,320 --> 00:11:10,920 Speaker 1: a company like this when it went public. Now, what 186 00:11:10,960 --> 00:11:13,520 Speaker 1: are we talking about in terms of actual profits? I 187 00:11:13,559 --> 00:11:16,360 Speaker 1: believe what do they say about the almost thirty four 188 00:11:16,400 --> 00:11:19,520 Speaker 1: billion dollars in income for the first six months. That's 189 00:11:19,559 --> 00:11:23,120 Speaker 1: according to what Blimberg News has seen. Yeah, that's right, 190 00:11:23,160 --> 00:11:26,439 Speaker 1: and that was in seventeen when prices were a lot lower. 191 00:11:26,440 --> 00:11:28,960 Speaker 1: And to put that in perspective, I mean they produced 192 00:11:28,960 --> 00:11:32,880 Speaker 1: ten million miles a day. Excellent Shell between them probably 193 00:11:32,880 --> 00:11:36,680 Speaker 1: produced somewhere about seven million miles a day, but those 194 00:11:36,720 --> 00:11:40,440 Speaker 1: two companies made just seven point four billion each. So 195 00:11:40,559 --> 00:11:43,360 Speaker 1: you can really see that the low costs that Aramco 196 00:11:43,480 --> 00:11:46,160 Speaker 1: have to pump their ta million miles a day from 197 00:11:46,200 --> 00:11:49,480 Speaker 1: these giant fields under the Society desert mean that it's 198 00:11:49,559 --> 00:11:52,760 Speaker 1: far more profitable than its nearest piers in among the 199 00:11:52,760 --> 00:11:56,760 Speaker 1: western all major's. Excellent Shell. Now, the Saudi crown Prince 200 00:11:56,840 --> 00:12:00,760 Speaker 1: Mohammed been a salmon who has justly been visiting the 201 00:12:00,880 --> 00:12:03,240 Speaker 1: United States in the last couple of weeks. What is 202 00:12:03,280 --> 00:12:09,920 Speaker 1: he said about about Saudi ARAMCA I mean, he he 203 00:12:10,040 --> 00:12:14,400 Speaker 1: has while he was in America all along his our 204 00:12:14,400 --> 00:12:17,440 Speaker 1: start again him and forgive me he made He made 205 00:12:17,480 --> 00:12:21,120 Speaker 1: selling Saudi Aramco doing an I p O a centerpiece 206 00:12:21,240 --> 00:12:24,040 Speaker 1: of his reform for the kingdom, and he said that 207 00:12:24,080 --> 00:12:26,280 Speaker 1: it might be worth as much as two trillion dollars 208 00:12:26,320 --> 00:12:29,880 Speaker 1: and it would be key to key to change in 209 00:12:29,920 --> 00:12:31,520 Speaker 1: the economy of the kingdom of preparing it for the 210 00:12:31,520 --> 00:12:33,520 Speaker 1: oil age. I mean, he's still stuck by that. What 211 00:12:33,640 --> 00:12:35,439 Speaker 1: has changed that he says they'll only sell it when 212 00:12:35,440 --> 00:12:39,400 Speaker 1: the time is right, when oil prices right. One thing 213 00:12:39,400 --> 00:12:42,800 Speaker 1: that I'm struck by is how much flexibility does the 214 00:12:42,920 --> 00:12:46,920 Speaker 1: Saudi Arabian government have to love the additional taxes or 215 00:12:47,000 --> 00:12:51,000 Speaker 1: take additional profits from the company. It has all the 216 00:12:51,000 --> 00:12:52,800 Speaker 1: scope that it wants. I mean, it can change the 217 00:12:52,880 --> 00:12:55,360 Speaker 1: tax regime whenever it wants. And I think you're rightly 218 00:12:55,400 --> 00:12:58,400 Speaker 1: st highlight that that's probably going to be a key 219 00:12:58,480 --> 00:13:01,240 Speaker 1: concern for investors if they look at this company. Clearly, 220 00:13:01,520 --> 00:13:04,120 Speaker 1: the primary role of Saudi Aramco is to support the 221 00:13:04,120 --> 00:13:08,520 Speaker 1: fiscal uh power of Saudi Arabia, and if they need to, 222 00:13:09,160 --> 00:13:14,040 Speaker 1: that's going to take presidents over looking after minority investors, 223 00:13:14,040 --> 00:13:16,680 Speaker 1: and that you know that maybe we'll be enough money 224 00:13:16,720 --> 00:13:19,360 Speaker 1: for everyone, but that's going to be something for investors 225 00:13:19,400 --> 00:13:22,480 Speaker 1: to think about as they assessed the risk of this investment. Well, Kennedy, 226 00:13:22,559 --> 00:13:25,480 Speaker 1: thank you so much for joining us, and congratulations, really 227 00:13:25,559 --> 00:13:29,400 Speaker 1: really fascinating story at William Kennedy, Managing editor for the 228 00:13:29,400 --> 00:13:33,000 Speaker 1: E M e A Energy and Commodities Team, UH for Bloomberg. 229 00:13:49,000 --> 00:13:52,400 Speaker 1: We are joined now by Bob mulroy, chief executive officer 230 00:13:52,480 --> 00:13:56,080 Speaker 1: of Partner Therapeutics, also former founder and chief executive of 231 00:13:56,320 --> 00:14:00,920 Speaker 1: Merrimac based in Boston. Bob, thank you so much for 232 00:14:01,000 --> 00:14:04,280 Speaker 1: being with us in congratulations. Your first drug, lu Keen, 233 00:14:04,440 --> 00:14:06,720 Speaker 1: I hope I'm pronouncing that correctly, was just approved by 234 00:14:06,760 --> 00:14:10,800 Speaker 1: the FDA to treat acute radiation sickness. I am a 235 00:14:10,800 --> 00:14:13,640 Speaker 1: little concerned, however, about the sort of fact that this 236 00:14:13,720 --> 00:14:15,680 Speaker 1: drug exists and the fact that the U. S. Department 237 00:14:15,679 --> 00:14:20,000 Speaker 1: of Health and Human Services office actually began stockpiling this 238 00:14:20,240 --> 00:14:24,160 Speaker 1: drug in case of a nuclear attack. Is that the 239 00:14:24,200 --> 00:14:27,800 Speaker 1: main purpose of this drug, so lucine isn't actually an 240 00:14:27,840 --> 00:14:31,360 Speaker 1: older drug, and its purposes really to help restore your 241 00:14:31,480 --> 00:14:34,840 Speaker 1: entire immune system and so in diseases where you might 242 00:14:34,840 --> 00:14:37,440 Speaker 1: have in affections, it's very important. Um. And in the 243 00:14:37,440 --> 00:14:40,200 Speaker 1: case of a radiation sickness, which you could occur from 244 00:14:40,440 --> 00:14:42,480 Speaker 1: a nuclear accident, but that could be a leak at 245 00:14:42,480 --> 00:14:45,120 Speaker 1: a power plant, it could be from a radioactive mind 246 00:14:45,200 --> 00:14:47,160 Speaker 1: that's deep in the ground. So there are many different 247 00:14:47,200 --> 00:14:51,480 Speaker 1: possible sources of radiation sickness. But but the US government 248 00:14:51,480 --> 00:14:54,480 Speaker 1: did after nine eleven make a decision to stockpile drugs 249 00:14:54,480 --> 00:14:57,040 Speaker 1: that could help in a public emergency, and lucine is 250 00:14:57,080 --> 00:14:59,120 Speaker 1: one of those drugs. So how many people do they 251 00:14:59,160 --> 00:15:03,040 Speaker 1: have doses for? So I'm not sure that that's public information. 252 00:15:03,120 --> 00:15:06,200 Speaker 1: I know that they are targeting, uh, you know, covering 253 00:15:06,240 --> 00:15:08,680 Speaker 1: hundreds of thousands of patients with the stockpile over time, 254 00:15:08,680 --> 00:15:10,680 Speaker 1: and what they've done today, I'm not sure that's public. 255 00:15:10,720 --> 00:15:13,720 Speaker 1: But um, you know, we're excited that this new approval 256 00:15:14,000 --> 00:15:15,800 Speaker 1: and the new data that's been shown with luke. I'm 257 00:15:15,800 --> 00:15:18,440 Speaker 1: where it's the first drug to be shown effective at 258 00:15:18,440 --> 00:15:20,760 Speaker 1: treating patients who have been exposed to radiation forty eight 259 00:15:20,800 --> 00:15:24,960 Speaker 1: hours after an incident. Is really important because in an emergency, 260 00:15:25,000 --> 00:15:27,200 Speaker 1: you can necessarily dose everybody right away. You've got to 261 00:15:27,200 --> 00:15:29,680 Speaker 1: get the drug and the medical treatment to the potential 262 00:15:29,720 --> 00:15:32,960 Speaker 1: patients who have been exposed. Um so luka I really 263 00:15:33,040 --> 00:15:36,320 Speaker 1: is a is a breakthrough in that area. Just tell 264 00:15:36,360 --> 00:15:38,960 Speaker 1: people a little bit about your background, because you're the 265 00:15:39,000 --> 00:15:43,800 Speaker 1: former chief executive of Merrimack that ran into some issues 266 00:15:43,920 --> 00:15:46,280 Speaker 1: that caused you to leave and you had to cut 267 00:15:46,280 --> 00:15:49,280 Speaker 1: the workforce there. Tell us about why you decided to 268 00:15:49,360 --> 00:15:54,840 Speaker 1: put together Partner Therapeutics and the strategy behind Partner. Well, 269 00:15:55,320 --> 00:15:57,280 Speaker 1: I've been in the industry for twenty five years and 270 00:15:57,560 --> 00:16:01,680 Speaker 1: I love drug development. And after leaving Merrimack, I partnered 271 00:16:01,720 --> 00:16:04,960 Speaker 1: with a gentleman named Debashi's Road Chattery who ran oncology 272 00:16:04,960 --> 00:16:08,920 Speaker 1: at exactly at Sergeon, Well he was chief medical officer there, 273 00:16:08,920 --> 00:16:11,280 Speaker 1: but he ran oncology at Sinofie and Glaxo and and 274 00:16:11,440 --> 00:16:14,000 Speaker 1: we've been good friends for years. And what we saw 275 00:16:14,120 --> 00:16:17,000 Speaker 1: was a trend in the industry where um, the larger 276 00:16:17,000 --> 00:16:19,880 Speaker 1: companies were focusing on fewer and fewer targets, particularly in 277 00:16:19,920 --> 00:16:22,560 Speaker 1: the immunotherapy space. But there weren't a lot of companies 278 00:16:22,600 --> 00:16:25,560 Speaker 1: thinking about what would you need to make those immunotherapies work. 279 00:16:26,160 --> 00:16:27,920 Speaker 1: And so we said, well, let's try and work on 280 00:16:27,960 --> 00:16:30,920 Speaker 1: the elements of the components you need to get immunotherapy work, 281 00:16:31,120 --> 00:16:33,640 Speaker 1: and so one of the key components is stimulating the 282 00:16:33,680 --> 00:16:37,360 Speaker 1: immune cells that immune therapies can trigger. And Luken we 283 00:16:37,400 --> 00:16:39,680 Speaker 1: saw it was a key ingredient to that. And if 284 00:16:39,680 --> 00:16:42,000 Speaker 1: you think about luke on, it's only one of two 285 00:16:42,120 --> 00:16:44,400 Speaker 1: drugs and combinations with immunotherapy that have been shown to 286 00:16:44,480 --> 00:16:47,600 Speaker 1: work in cancer. Now, if you happen to be a 287 00:16:47,640 --> 00:16:53,400 Speaker 1: patient who is undergoing or undergone chemotherapy or bone marrow transplant, 288 00:16:53,760 --> 00:16:59,080 Speaker 1: how would Lukin figure into your life. So today Lukens 289 00:16:59,120 --> 00:17:01,520 Speaker 1: approved to treat patients with with a m al acute 290 00:17:01,520 --> 00:17:06,080 Speaker 1: Milo leukemia or under a bone mile transplortation transplantation. And 291 00:17:06,440 --> 00:17:09,000 Speaker 1: what happens in those cases is you need to uh 292 00:17:09,240 --> 00:17:11,639 Speaker 1: in amail for instance, the cancer is against the immune 293 00:17:11,640 --> 00:17:16,159 Speaker 1: system and destroying immune cells. So UH Luken can help 294 00:17:16,240 --> 00:17:20,000 Speaker 1: reconstitute and rebuild your immune system. UH when you're getting 295 00:17:20,080 --> 00:17:22,720 Speaker 1: chemotherapy for treatment, so you don't have an infection, so 296 00:17:22,760 --> 00:17:25,280 Speaker 1: effectively replace the cells that are cancers that are geting 297 00:17:25,320 --> 00:17:27,560 Speaker 1: killed by the chemotherapy. The same is true with bone 298 00:17:27,560 --> 00:17:30,439 Speaker 1: mile transplantation, where you have to regrow or restimulate or 299 00:17:30,440 --> 00:17:33,199 Speaker 1: replace that immune system. Because many of those patients they 300 00:17:33,200 --> 00:17:35,560 Speaker 1: don't die of the cancer, they'll die of infections as 301 00:17:35,560 --> 00:17:39,199 Speaker 1: a result of the cancer reducing their immune systems effectiveness. 302 00:17:39,359 --> 00:17:41,959 Speaker 1: Lukin restores the immune systems so that they don't they 303 00:17:42,000 --> 00:17:44,080 Speaker 1: don't suffer those effects. I want to talk about the 304 00:17:44,080 --> 00:17:46,800 Speaker 1: process of getting the drug approved by the FDA, because 305 00:17:46,800 --> 00:17:49,199 Speaker 1: there's been talk that the FDA is trying to expedite 306 00:17:49,359 --> 00:17:53,960 Speaker 1: approvals in response to the to the cries for cheaper medications. 307 00:17:54,119 --> 00:17:56,280 Speaker 1: Did you find that it was a faster process than 308 00:17:56,320 --> 00:17:59,480 Speaker 1: you've heard and experience than in the past. It was 309 00:17:59,480 --> 00:18:01,840 Speaker 1: a very fat process for us, but but not one 310 00:18:01,880 --> 00:18:04,719 Speaker 1: that's a typical today. We applied for something called priority review, 311 00:18:04,960 --> 00:18:07,560 Speaker 1: which is available to any drug that is deemed to 312 00:18:07,560 --> 00:18:10,760 Speaker 1: be important to the public health, to a particular treatment 313 00:18:10,760 --> 00:18:14,000 Speaker 1: of a condition where you really have a breakthrough therapy opportunity, 314 00:18:14,160 --> 00:18:16,520 Speaker 1: and so we applied for a priority review in the 315 00:18:16,560 --> 00:18:19,960 Speaker 1: f d A granted that priority review and review the 316 00:18:20,000 --> 00:18:22,719 Speaker 1: drug in essentially a six month time frame as opposed 317 00:18:22,760 --> 00:18:25,639 Speaker 1: to uh, you know, typical twelve or fourteen months. What 318 00:18:25,680 --> 00:18:28,280 Speaker 1: are you working on now? What's in the pipeline? Well, 319 00:18:28,320 --> 00:18:30,760 Speaker 1: for luke On what's exciting about it is that uh 320 00:18:31,320 --> 00:18:35,040 Speaker 1: uh emunotherapy, which is the latest wave in cancer is 321 00:18:35,040 --> 00:18:37,520 Speaker 1: is a really important growing area and lucan is in 322 00:18:37,600 --> 00:18:39,800 Speaker 1: a whole number of trials, including a big Phase three 323 00:18:39,800 --> 00:18:42,919 Speaker 1: in frontline melanoma today as well as in trials with 324 00:18:42,920 --> 00:18:46,520 Speaker 1: cancer vaccines. And in the second area, uh, lucan has 325 00:18:46,520 --> 00:18:49,080 Speaker 1: plays in a very important role in the immune system, 326 00:18:49,080 --> 00:18:51,439 Speaker 1: where we're finding out that our diseases like Alzheimer's and 327 00:18:51,440 --> 00:18:54,600 Speaker 1: Parkinson's that have a big immune system component and potentially 328 00:18:54,600 --> 00:18:56,639 Speaker 1: in those indications that there have been early dated in 329 00:18:56,640 --> 00:18:59,080 Speaker 1: Phase two showing if you can restore the immune system 330 00:18:59,119 --> 00:19:02,120 Speaker 1: you can benefit those diseases as well. Just real quick, 331 00:19:02,200 --> 00:19:05,119 Speaker 1: any any wish for an initial public offering anytime in 332 00:19:05,119 --> 00:19:07,200 Speaker 1: the near future. Well, right now, we're going to focus 333 00:19:07,200 --> 00:19:09,840 Speaker 1: on on on growing lukine of the business and working 334 00:19:09,880 --> 00:19:13,960 Speaker 1: on building our pipeline of other drugs um but uh, 335 00:19:14,000 --> 00:19:18,000 Speaker 1: we'll see how things go. And just to offer the opportunity, 336 00:19:18,040 --> 00:19:20,679 Speaker 1: you did pick up a manufacturing plan from Santa Few, right, 337 00:19:20,880 --> 00:19:24,560 Speaker 1: That's right, that's right. So we did acquire a biological 338 00:19:24,600 --> 00:19:28,200 Speaker 1: manufacturing facility outside of Seattle, Washington, which helps make lucine. 339 00:19:28,440 --> 00:19:30,320 Speaker 1: But we're hopeful other products that we're bringing into the 340 00:19:30,359 --> 00:19:33,080 Speaker 1: pipeline they can make for us as well, and so 341 00:19:33,160 --> 00:19:36,000 Speaker 1: we'll have. An important capacity in today's world is the 342 00:19:36,040 --> 00:19:39,639 Speaker 1: ability to supply product reliably to patients and too physicians. 343 00:19:40,080 --> 00:19:43,200 Speaker 1: Uh and and that's a critical thing as as capacity 344 00:19:43,200 --> 00:19:46,199 Speaker 1: industry gets constrained with all the development. Thanks very much 345 00:19:46,240 --> 00:19:48,480 Speaker 1: for being with us. Bob mulroy is the chief executive 346 00:19:48,640 --> 00:19:51,639 Speaker 1: partner Therapeutics. They are based in Boston, home to a 347 00:19:51,680 --> 00:19:54,679 Speaker 1: Bloomberg one of six one Boston New Report int thirty 348 00:19:54,720 --> 00:20:11,400 Speaker 1: in MetroWest and the South Shore. There seems to be 349 00:20:11,720 --> 00:20:16,200 Speaker 1: escalating fissure between the left and the right in the 350 00:20:16,280 --> 00:20:20,240 Speaker 1: United States? Is it the same among chief executive officers 351 00:20:20,400 --> 00:20:22,760 Speaker 1: of American companies? Here to talk about that and the 352 00:20:22,800 --> 00:20:27,280 Speaker 1: consequences of these fissures is Joe Minerrek, Senior vice president 353 00:20:27,280 --> 00:20:30,760 Speaker 1: and director of Research at the Committee for Economic Development, 354 00:20:31,080 --> 00:20:34,000 Speaker 1: also a former chief Economists at the Office of Management 355 00:20:34,040 --> 00:20:38,680 Speaker 1: and Budget during all eight years of the Clinton administration. Joe, 356 00:20:38,680 --> 00:20:41,359 Speaker 1: thank you so much for being with us. You co 357 00:20:41,520 --> 00:20:45,600 Speaker 1: authored a book last year, Sustaining Capitalism, Bipartisan Solutions to 358 00:20:45,640 --> 00:20:51,639 Speaker 1: Restore Trust and Prosperity. In your conversations with executives, do 359 00:20:51,680 --> 00:20:54,280 Speaker 1: you get the sense that they are trying to foster 360 00:20:54,520 --> 00:20:58,440 Speaker 1: more bipart partisanship, or if you've seen the partisanship sort 361 00:20:58,440 --> 00:21:03,639 Speaker 1: of spread to the c suite. We have something of 362 00:21:03,680 --> 00:21:06,920 Speaker 1: a self selected audience. I don't want to overstate this, 363 00:21:07,160 --> 00:21:10,919 Speaker 1: but uh, the folks who engage with us at the 364 00:21:10,960 --> 00:21:16,119 Speaker 1: Committee for Economic Development believe in bipartisan solutions to the 365 00:21:16,240 --> 00:21:19,080 Speaker 1: nation's problems. I think that that. However, I think I 366 00:21:19,080 --> 00:21:22,840 Speaker 1: can assert that that is fairly representative of the business community. 367 00:21:23,440 --> 00:21:27,399 Speaker 1: When you have problems in business, Uh, they're not republican 368 00:21:27,520 --> 00:21:31,600 Speaker 1: or democratic problems. There are not republican or democratic facts. 369 00:21:32,080 --> 00:21:36,080 Speaker 1: They are not republican or democratic solutions. Business leaders tend 370 00:21:36,160 --> 00:21:41,960 Speaker 1: to be focused at solving problems, facing facts, and uh, 371 00:21:42,040 --> 00:21:46,480 Speaker 1: coming out at the end with success and our perception, 372 00:21:46,640 --> 00:21:50,320 Speaker 1: my perception is that the folks I talked to are 373 00:21:50,440 --> 00:21:54,400 Speaker 1: trying to find a way to solve the nation's problems. Well, 374 00:21:54,480 --> 00:21:58,919 Speaker 1: Joe interact, I beg your pardon is is there a 375 00:21:58,960 --> 00:22:03,120 Speaker 1: development of a parallel economy or a parallel government? Because 376 00:22:03,119 --> 00:22:06,800 Speaker 1: in your book you talk about how that that lawmaking 377 00:22:07,200 --> 00:22:12,240 Speaker 1: is polluted by special interest lobbying, re election fundraising demands, 378 00:22:12,240 --> 00:22:17,080 Speaker 1: and revolving door job appointments. That seems to be pretty 379 00:22:17,080 --> 00:22:22,800 Speaker 1: contradictory to what you're describing when you talk about business leaders. Well, 380 00:22:22,840 --> 00:22:26,159 Speaker 1: I'm talking to business leaders who want to try to 381 00:22:26,240 --> 00:22:30,800 Speaker 1: find solutions. And I find that many business leaders, even 382 00:22:30,800 --> 00:22:34,520 Speaker 1: those who don't engage with us directly, do have a 383 00:22:34,600 --> 00:22:37,720 Speaker 1: sense of the need to face facts when they are 384 00:22:37,800 --> 00:22:41,480 Speaker 1: dealing with issues with respect to their own businesses. So 385 00:22:41,680 --> 00:22:46,600 Speaker 1: we do have, I believe, an opportunity to work with business, 386 00:22:46,640 --> 00:22:51,040 Speaker 1: to have business cooperate with government to try to find 387 00:22:51,119 --> 00:22:54,840 Speaker 1: ways to solve the problems that we face today. I 388 00:22:54,920 --> 00:22:58,280 Speaker 1: know there will be differences with respect to particular issues. 389 00:22:58,960 --> 00:23:03,080 Speaker 1: It of course gets very tricky when you have business 390 00:23:03,200 --> 00:23:08,040 Speaker 1: leaders from different parts of a particular industry where there 391 00:23:08,080 --> 00:23:15,439 Speaker 1: are issues of regulation or issues of alternative technologies, where 392 00:23:16,119 --> 00:23:18,359 Speaker 1: you have the potential to have one side win and 393 00:23:18,400 --> 00:23:23,200 Speaker 1: the other side lose. But the business community, by and large, 394 00:23:23,240 --> 00:23:27,240 Speaker 1: in my experience and the people with my work, try 395 00:23:27,280 --> 00:23:30,960 Speaker 1: to find a way to solve problems. And right now 396 00:23:31,000 --> 00:23:33,600 Speaker 1: we have some very big issues that we need to address, 397 00:23:33,640 --> 00:23:36,040 Speaker 1: and folks I talked to are willing to do that. 398 00:23:36,320 --> 00:23:38,239 Speaker 1: So let's talk about some of the big issues and 399 00:23:38,280 --> 00:23:40,880 Speaker 1: just wearing your hat as the head of the committee 400 00:23:40,880 --> 00:23:43,280 Speaker 1: for Economic Development, but also as the as the senior 401 00:23:43,359 --> 00:23:46,879 Speaker 1: vice president of the agency, but also with your former 402 00:23:47,000 --> 00:23:50,000 Speaker 1: role at the o MB. How concerned are you about 403 00:23:50,119 --> 00:23:54,959 Speaker 1: the deepening deficit in the US. We have been on 404 00:23:55,000 --> 00:23:59,560 Speaker 1: a path where our debt has been growing faster than 405 00:23:59,600 --> 00:24:04,840 Speaker 1: our elective income. The debt to GDP ratio, which is 406 00:24:04,880 --> 00:24:09,480 Speaker 1: economist jargon, has been rising, and that has been going 407 00:24:09,560 --> 00:24:14,600 Speaker 1: on for uh, just about two decades now. That is 408 00:24:14,680 --> 00:24:19,919 Speaker 1: not sustainable. We can't continue along that path. And the 409 00:24:20,040 --> 00:24:24,119 Speaker 1: longer we wait, the bigger build up of debt we 410 00:24:24,240 --> 00:24:28,080 Speaker 1: will have. And that to me is a matter of 411 00:24:28,280 --> 00:24:32,800 Speaker 1: enormous concern. Uh. It's a matter of concern for me personally. 412 00:24:33,000 --> 00:24:37,280 Speaker 1: I have two daughters and three grandchildren, and I have 413 00:24:37,320 --> 00:24:39,720 Speaker 1: a hard time looking at them in the eye sometimes. 414 00:24:40,080 --> 00:24:43,639 Speaker 1: You know, I can imagine my grandchildren saying, ten twenty 415 00:24:43,720 --> 00:24:46,400 Speaker 1: years from now, you know, why didn't pop a deal 416 00:24:46,480 --> 00:24:49,520 Speaker 1: with that? I thought it was supposed to be something 417 00:24:49,560 --> 00:24:53,639 Speaker 1: he worked on. Uh. And that's that should be worrisome 418 00:24:53,760 --> 00:24:57,320 Speaker 1: for everybody. The head of a corporation wants to leave 419 00:24:57,359 --> 00:25:02,719 Speaker 1: a corporation behind. UH. That is sound. And I've spoken 420 00:25:02,720 --> 00:25:06,280 Speaker 1: of business leaders telling me that they consider the nation's 421 00:25:06,320 --> 00:25:08,879 Speaker 1: fiscal and balanced to be the greatest threat to the 422 00:25:08,880 --> 00:25:12,639 Speaker 1: future of their businesses. Really, that's that's really, you know. 423 00:25:12,720 --> 00:25:15,400 Speaker 1: It's It's interesting though, because if you hear some economists 424 00:25:15,440 --> 00:25:18,200 Speaker 1: and some members of the current administration, they'll say, if 425 00:25:18,200 --> 00:25:20,639 Speaker 1: you look at the deficit with respect to the GDP 426 00:25:20,760 --> 00:25:23,119 Speaker 1: of the nation, UH, it's not so big of it. 427 00:25:23,119 --> 00:25:24,560 Speaker 1: It's not so big of a deal. What do you 428 00:25:24,560 --> 00:25:29,720 Speaker 1: say to that, Uh, If you want to measure that 429 00:25:30,000 --> 00:25:33,600 Speaker 1: by recent history, you have to understand that you have 430 00:25:33,720 --> 00:25:36,960 Speaker 1: not just lowered the bar, you buried the bar. For 431 00:25:37,040 --> 00:25:41,439 Speaker 1: the last twenty years, our budget UH position has not 432 00:25:41,600 --> 00:25:44,520 Speaker 1: been sustainable. And you want to say, well, it's not 433 00:25:44,680 --> 00:25:47,000 Speaker 1: so bad, it's better than it was in the depths 434 00:25:47,000 --> 00:25:51,520 Speaker 1: of the UH the financial crisis. That's true. In the 435 00:25:51,560 --> 00:25:55,200 Speaker 1: depths of the financial crisis, we were setting records for 436 00:25:55,320 --> 00:25:59,359 Speaker 1: the size of our deficits, you know, trillion dollar deficits 437 00:25:59,400 --> 00:26:02,080 Speaker 1: for the first time in our history. And now we're 438 00:26:02,119 --> 00:26:04,679 Speaker 1: in a position where if you start from where we 439 00:26:04,760 --> 00:26:08,160 Speaker 1: are and you draw a straight line with a UH 440 00:26:08,359 --> 00:26:11,400 Speaker 1: with a ruler in the direction in which we want 441 00:26:11,440 --> 00:26:14,480 Speaker 1: to go, in which we are now going, UH, you 442 00:26:14,560 --> 00:26:18,720 Speaker 1: will find that in we're going to have uh deficits 443 00:26:18,760 --> 00:26:21,800 Speaker 1: that are back in the trillion dollar range again. Uh. 444 00:26:21,880 --> 00:26:26,600 Speaker 1: Ten years from now, in the nation's debt will be 445 00:26:26,680 --> 00:26:30,159 Speaker 1: greater than it's gross domestic product. The debt to GDP 446 00:26:30,400 --> 00:26:34,720 Speaker 1: ratio will be over for the first time since the 447 00:26:34,840 --> 00:26:37,960 Speaker 1: end of World War Two. Uh. And now we're talking 448 00:26:38,000 --> 00:26:42,320 Speaker 1: about setting that standard in a peacetime economy, when the 449 00:26:42,320 --> 00:26:47,000 Speaker 1: economy is growing relative to of course, the the the 450 00:26:47,600 --> 00:26:51,080 Speaker 1: enormous emergency in World War Two when we we would 451 00:26:51,160 --> 00:26:54,600 Speaker 1: borrow all we needed to to finance our freedom. Uh. 452 00:26:54,720 --> 00:26:57,680 Speaker 1: We have no excuses today for that kind of behavior. 453 00:26:58,119 --> 00:27:00,199 Speaker 1: All right, So what so what do you said us 454 00:27:00,240 --> 00:27:04,040 Speaker 1: that people who are listening to you do? Earlier today, 455 00:27:04,080 --> 00:27:06,080 Speaker 1: I got the chance to speak the Congressman Dave Bratt, 456 00:27:06,119 --> 00:27:11,600 Speaker 1: Republican the Virginia seventh District, asked him about teacher pay 457 00:27:11,720 --> 00:27:14,520 Speaker 1: at the time when you're running one and a half 458 00:27:14,560 --> 00:27:18,800 Speaker 1: trillion dollar deficits according to the OMB, and there was 459 00:27:18,840 --> 00:27:21,359 Speaker 1: a disconnect in terms of trying to make any kind 460 00:27:21,400 --> 00:27:23,840 Speaker 1: of inroads into Well, you know, maybe the money should 461 00:27:23,840 --> 00:27:28,680 Speaker 1: have been spent on education. What do you do? Well, 462 00:27:29,240 --> 00:27:33,520 Speaker 1: I'm talking here and the members of our organization are 463 00:27:33,560 --> 00:27:38,879 Speaker 1: talking about bipartisan solutions. I think the first thing that 464 00:27:38,920 --> 00:27:42,959 Speaker 1: we have to recognize is that our budget problem is 465 00:27:43,040 --> 00:27:47,200 Speaker 1: so large that the only way that we are going 466 00:27:47,240 --> 00:27:50,720 Speaker 1: to solve it is if we have everyone at the 467 00:27:50,760 --> 00:27:56,200 Speaker 1: table and everything on the table. We need our nation's 468 00:27:56,320 --> 00:28:00,280 Speaker 1: leaders in the Congress and in the executive branch to 469 00:28:00,400 --> 00:28:05,160 Speaker 1: recognize that there is no way to solve this problem 470 00:28:05,160 --> 00:28:08,840 Speaker 1: where one side gets everything at once and does not 471 00:28:09,040 --> 00:28:11,600 Speaker 1: have to pitch in. Alright, everybody is going to have 472 00:28:11,680 --> 00:28:14,159 Speaker 1: to be involved. Well, thank you for being involved, and 473 00:28:14,440 --> 00:28:17,639 Speaker 1: thank you for Sustaining Capitalism, the book that you co 474 00:28:17,800 --> 00:28:21,440 Speaker 1: authored last year. Joe Minrick is the director of Research 475 00:28:21,520 --> 00:28:24,200 Speaker 1: at the Committee for Economic Development. He's all our former 476 00:28:24,520 --> 00:28:31,080 Speaker 1: chief economist at the Office of Management and Budget. Thanks 477 00:28:31,080 --> 00:28:33,719 Speaker 1: for listening to the Bloomberg P and L podcast. You 478 00:28:33,720 --> 00:28:37,520 Speaker 1: can subscribe and listen to interviews at Apple Podcasts, SoundCloud, 479 00:28:37,640 --> 00:28:41,080 Speaker 1: or whatever podcast platform you prefer. I'm Pim Fox. I'm 480 00:28:41,120 --> 00:28:45,120 Speaker 1: on Twitter at pim Fox. I'm on Twitter at Lisa Abramo. 481 00:28:45,240 --> 00:28:47,840 Speaker 1: It's one before the podcast. You can always catch us 482 00:28:47,880 --> 00:28:49,480 Speaker 1: worldwide on Bloomberg Radio.