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Speaker 1: This is Bloomberg Wall Street Week. What's the state of

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Speaker 1: corporate governance? The deficit is a real issue. To use

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Speaker 1: economy continues to send mixed signals to the financial stories

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Speaker 1: that keep our world fed, action to con concerns over

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Speaker 1: dollar liquidity and encouraging China data the five hundred wealthiest

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Speaker 1: people in the world. Through the eyes of the most

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Speaker 1: influential voices Larry Summers, the former Treasury Secretary, star Ward CEO,

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Speaker 1: Kevin Johnson sec Chairman J Clayton. Bloomberg wool Street Week

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Speaker 1: with David Weston from Bloomberg Radio. Not so fast markets

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Speaker 1: and people even geffective business stumble over a resurgent virus.

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Speaker 1: This is Bloomberg Wall Street Week. I'm David Weston. The

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Speaker 1: addition of the Chinese economy to the global marketplace will

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Speaker 1: result in a more efficient worldwide allocation of resources and

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Speaker 1: Murray's standards of living in China and its trading partners.

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Speaker 1: Should China accept the challenge of international competition embodied in

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Speaker 1: World Trade Organization membership, it will doubtless promote internal economic development,

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Speaker 1: encourage the adoption of modern technologies, and contribute to lifting

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Speaker 1: its citizens out of poverty. That was Chairman Greenspan with

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Speaker 1: President Clinton back in two thousand, arguing that China should

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Speaker 1: be admitted to the w t O flashed forward and

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Speaker 1: it didn't work out quite the way that they planned.

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Speaker 1: Letting China in the w t O did not take

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Speaker 1: care of all of the trade tensions between the United

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Speaker 1: States and China, something that Richard has, the President of

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Speaker 1: the Council and Form Relationship, addresses in his new book

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Speaker 1: The World, A Brief Introduction. I think it's fair to

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Speaker 1: say that the U. S. China relationship is probably the

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Speaker 1: single most important bilateral relationship of this century, or certainly

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Speaker 1: for this era of history, in the same way say

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Speaker 1: that the U. S. Soviet one was for during the

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Speaker 1: Cold War, the same way that the French German English

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Speaker 1: relationship was for the first half of the century. So

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Speaker 1: it's it's that critical. We do not want a Cold war,

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Speaker 1: but takes two countries to avoid it. If you do

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Speaker 1: of a cold war, they're risky and they're expensive, and

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Speaker 1: they're distracting. And ideally, what we'd like to do is

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Speaker 1: figure out a way that even when we disagree with China,

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Speaker 1: we can still do some things together, whether it's mutually

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Speaker 1: advantageous trade, or working on climate change, or reigning in

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Speaker 1: North Korea, and that's the that's the diplomatic goal. I

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Speaker 1: would say that this administration has made a tough situation

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Speaker 1: tougher because they have been strategically incoherent. And what we've

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Speaker 1: seen in the last twenty four hours is yet another

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Speaker 1: example where they're all over the place. On China. They

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Speaker 1: talked tough, they talk sweet, they act off, they then

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Speaker 1: act just the opposite. And I expect there's people in

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Speaker 1: China trying to figure out just what u S policy is.

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Speaker 1: How much of the problem and so far as we

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Speaker 1: have a problem we seem to with China is because

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Speaker 1: of the confusion as you talk about, even with John

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Speaker 1: Bolton's book also which so so confusion in there, and

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Speaker 1: how much is it with the overall approach? Because President

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Speaker 1: Trump has been adamant saying he wants to deal with

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Speaker 1: everybody bilaterally. He doesn't like multilateral That's a bit different,

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Speaker 1: isn't it for the Cold War, where we did have

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Speaker 1: other people on our side there, and we should have

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Speaker 1: other people on our side here. Having allies and partners

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Speaker 1: turns out to be the great structural advantage of American

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Speaker 1: farm policy and to throw away that advantage makes absolutely

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Speaker 1: no sense to me. Just take one example from the

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Speaker 1: recent news day. But you have China and India comforter

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Speaker 1: the blows along their disputed border area. If there was

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Speaker 1: ever a great time to get India to align itself

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Speaker 1: closer to US against China, who would have thought this

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Speaker 1: was it. But instead US Indian relations have been miired

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Speaker 1: and all sorts of bilateral trade disputes. We're hammering the

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Speaker 1: Japanese in the South Koreans over how much they spend

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Speaker 1: on their military and on US forces being based there. Again,

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Speaker 1: they are natural partners. Their natural allies uh to to

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Speaker 1: reign in China the Trans Pacific Partnership. The first big

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Speaker 1: haign policy decision this president made was not to join

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Speaker 1: the Trans Pacific Partnership. Well, that was the best way

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Speaker 1: to associate ourselves with any number of like minded countries,

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Speaker 1: and we to raise the standards that China would have

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Speaker 1: to meet in the way of trade. So again we

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Speaker 1: we talked tough on occasion, but again the policy is

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Speaker 1: somewhere between weak and incoherent. So I think a supporter

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Speaker 1: of President Trump, if he or she were here, would say,

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Speaker 1: what a second the multilateral didn't really work well with China. Mean,

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Speaker 1: take the example of w t OH. We let them

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Speaker 1: in thinking they'd really accommodate their system to the w

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Speaker 1: t O, and if anything in the reverse worked, it

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Speaker 1: didn't happen. So is it fair to say President Trump

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Speaker 1: needed to go a different direction because the multilateral just

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Speaker 1: wasn't working with China? Fair enough? And I think he

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Speaker 1: gets points for having pointed out the problem. But you've

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Speaker 1: got to replace a flood system with something better, and

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Speaker 1: that's where it's falling short. I think a lot of

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Speaker 1: people were unrealistic about what they thought China's membership and

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Speaker 1: the w t O would accomplish. They were never going

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Speaker 1: to be turned into a parliamentary democracy, They're never going

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Speaker 1: to be turned into a free market. So I think

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Speaker 1: it was naive to expect that. The most you could expect,

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Speaker 1: I thought was that China would continue to act in

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Speaker 1: terms of foreign policy in a somewhat restrained way, and

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Speaker 1: by and by and large they did. But once they

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Speaker 1: were in, we should have monitored it closely. And I

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Speaker 1: was trying to got more and more powerful economically, the

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Speaker 1: term should have been tightened and adjusted. They weren't. That's

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Speaker 1: again where TPP came in. That was the way to

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Speaker 1: essentially introduce a new broadly held set of standards, and

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Speaker 1: we didn't do it. And I just say that the

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Speaker 1: administration trashed it, but it could have been so bad

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Speaker 1: because they borrowed from it heavily when they negotiated the

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Speaker 1: U S m c A with Mexico and Canada. Is

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Speaker 1: there a way to really deal with China effectively on

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Speaker 1: these economic issues because their structure so different, as you

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Speaker 1: point out in your book, Actually you talk about the

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Speaker 1: fact that the w t O would have to adjust

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Speaker 1: to a world in which there's so many state subsidies,

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Speaker 1: the state owned enterprises over there, what they've done with

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Speaker 1: technology transfer, things like that. Is there a way multi

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Speaker 1: lettering to handle those fundamental structural differences in an economy

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Speaker 1: not to the w t O, because by definition, you

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Speaker 1: gotta get everybody to agree to it. So I think

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Speaker 1: the w t O is pretty much reduced now to

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Speaker 1: simply being adjudication tribunal where they're disputes. I think you're

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Speaker 1: going to have to negotiate the new rules of trade

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Speaker 1: through bilateral multilateral arrangements. And that's why, again I keep

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Speaker 1: coming back to the Transpacific Partnership. And I think with China,

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Speaker 1: we've got to be realistic. You are never going to

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Speaker 1: go to China to agree to taking the government out

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Speaker 1: of economic policy. They're not going to stop subsidies at all.

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Speaker 1: That So what it means to me then is Okay,

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Speaker 1: if we can't get them to stop, how do we

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Speaker 1: outcompete with them? Why is this administration cutting the amount

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Speaker 1: of basic research? It's it's spending money. It's spending on

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Speaker 1: basic research for the American as economy. We can outcompete China. Uh.

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Speaker 1: And so we don't need to look to trade agreements

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Speaker 1: to to to write the balance between ourselves and China.

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Speaker 1: We can do that ourselves. That was Richard Hawes, President

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Speaker 1: of the Council on Foreign Relations. Coming up, we talk

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Speaker 1: with someone who is trying his best to get his

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Speaker 1: company back up and going again. Jim Farley, the CEO

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Speaker 1: of the Ford Motor Company. That's next on Wall Street

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Speaker 1: Week on Bloomboo. This is Bloomberg Wall Street Week with

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Speaker 1: David Weston from Bloomberg Radio. Ford Motor Company is particularly

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Speaker 1: keen to get back up on running again, not only

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Speaker 1: because the money it loses when it lies idle but

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Speaker 1: also because it is a big relaunch of its F

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Speaker 1: one pick up. It's most popular and one of its

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Speaker 1: most profitable vehicles. I talked with the Ford Motor CEO

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Speaker 1: Jim Farley about this big launch event in the middle

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Speaker 1: of combating the coronavirus. It's been up a challenge like

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Speaker 1: we've never seen, but for it always steps up. Were

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Speaker 1: the first company and start making pp of all the

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Speaker 1: car companies, and look at the F one is the

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Speaker 1: most popular vehicle in the United States. We make more

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Speaker 1: vehicles in the US than any other om by a

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Speaker 1: large part. This is important for our economy as well,

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Speaker 1: because there's a scale of F one fifty and a

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Speaker 1: million units a year is just huge. You know, we

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Speaker 1: planned this product four or five years ago. We're finally

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Speaker 1: getting our plants up to full production. Uh, it's been

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Speaker 1: really challenging. In the second quarter we were completely done,

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Speaker 1: we had no factories open, but we use that time

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Speaker 1: to prepare to bring people back, tens of thousands of

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Speaker 1: people back there now on the factories. How far back

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Speaker 1: are you at this point? What percentage a capacity roughly

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Speaker 1: are you running in We're just under in North America.

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Speaker 1: I think we're we're still having some hiccups with the

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Speaker 1: parts suppliers in Mexico. We're working through Chihuahua and Pueblo.

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Speaker 1: Some of the state to Mexico are still operating thirty

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Speaker 1: or forty percent capacity. We use those parts even in

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Speaker 1: our US produced vehicles. But we're working through it. Air shipment, helicopters,

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Speaker 1: We're doing everything we can to keep the factories going.

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Speaker 1: Our our team has been incredible. You know, we have

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Speaker 1: a factory in the middle of Chicago, downtown Chicago, and

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Speaker 1: the team is working every day. UM. And in fact,

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Speaker 1: the playbook for our our safety now UM, some of

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Speaker 1: our our team may say the safest part of their

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Speaker 1: life is coming to work at Ford. Boy, that's a

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Speaker 1: that's a real tribute. So we're seeing some flare ups

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Speaker 1: now in the virus and some places like Florida, Arizona,

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Speaker 1: it's ex California. Is that affecting your operations at Ford

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Speaker 1: at this point at all? Not yet, but we really

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Speaker 1: are watching this carefully. We we look at the infection

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Speaker 1: data by location with all of our plants and all

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Speaker 1: of our facilities every day, UM. And we're always going

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Speaker 1: to put our our team safety first. So if we

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Speaker 1: have to you know stop operations. We will, we won't

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Speaker 1: hesitate at all. Um. But you know, so far playbook

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Speaker 1: has worked really well and it helped a lot to

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Speaker 1: be in the PPE production business. We've had no issues

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Speaker 1: with PPE availability. You know, we have just tens of

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Speaker 1: thousands of people back to work and so it takes

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Speaker 1: a lot of PPE to keep everyone safe. We're the

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Speaker 1: search of the F one fifty that you're launching here.

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Speaker 1: It is, of course, it's terribly important. I think it's

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Speaker 1: been the most popular vehicle in the United States for

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Speaker 1: forty three years, is what i've read. Actually, Like you

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Speaker 1: also have had some competition recently from Ram, from Chevy.

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Speaker 1: What are you doing in this new Ford F one

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Speaker 1: fifty to really fight that off? Well, this is a

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Speaker 1: big change for us. A lot of our competitors have

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Speaker 1: upgraded their products. It's the first big upgrade for us

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Speaker 1: in five or six years. Uh. Look, we're doing a lot.

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Speaker 1: We have all new power trains. We have a new hybrid,

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Speaker 1: first in the market against seven hundred miles on one tank.

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Speaker 1: We have an onboard generator. A lot of our work

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Speaker 1: teams have to buy these generators. They're very expensive ten

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Speaker 1: dollars plus. You now can get your F one fifty

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Speaker 1: to do that and not have you know, any emissions

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Speaker 1: on the job site and run it from your truck.

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Speaker 1: We have a twelve inch screen, a full flat seat.

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Speaker 1: We have a whole tailgate solution for customers so they

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Speaker 1: can use it for you know, productivity. Uh, there's just

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Speaker 1: we're now adding over the air update. Um, just like

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Speaker 1: your Tesla to improve the product over time, whether it's

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Speaker 1: your voice control or new features like towing features. So, Uh,

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Speaker 1: it's a big change for us, and it comes at

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Speaker 1: the right time. When you talk about things like the generator,

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Speaker 1: like the touch screen and things like that, it points

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Speaker 1: us back to the fact that the Ford F series

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Speaker 1: has really been particularly important to the commercial sector. Uh.

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Speaker 1: If certainly people buy for home use, but a lot

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Speaker 1: of people these are contractors people like that. Is that

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Speaker 1: going to remain your sweet spot that you have to

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Speaker 1: hold and defend? It really is, Bill Ford. Tough is

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Speaker 1: what Ford's all about. We're the most popular vehicle in

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Speaker 1: the US, like you said, and we're only second to

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Speaker 1: iPhone in terms of total revenue. This vehicle is really

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Speaker 1: important for the US economy as well, and our core

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Speaker 1: customer is that work customer. Uh, they buy this as

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Speaker 1: a tool. It has to last a long time and

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Speaker 1: be durable and have all the new features for productivity,

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Speaker 1: including great fuel economy and low cost of ownership. And

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Speaker 1: that's where we except where the number one commercial brand

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Speaker 1: in the US and in Western Europe, not just the

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Speaker 1: F series but also our transit band. Are you seeing

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Speaker 1: a longer term change in demand? For example, you talk

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Speaker 1: about transit van. We have a lot more home delivery

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Speaker 1: of everything these days as we can't go up in places.

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Speaker 1: Is there a shift in demand that you're seeing on

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Speaker 1: the customer side? We are, Uh, we're seeing a move

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Speaker 1: to electric. A lot of our large customers are asking

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Speaker 1: for a full electric In fact, we're gonna be launching

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Speaker 1: in the next twenty four months a fully electric f

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Speaker 1: On fifty and a fully electric transit van UM and

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Speaker 1: that's i think the first full line electric UM you

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Speaker 1: know offer out there. Yes, we're seeing more electric requirements.

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Speaker 1: We're seeing the new technology requirements. Like over their update,

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Speaker 1: people are gonna keep a truck for ten years. They

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Speaker 1: wanted to get better every year. UM and vans are

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Speaker 1: getting more popular for customers. For our customers because of

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Speaker 1: the delivery service, we're seeing demand for transit go through

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Speaker 1: the roof. Frankly, what are your expectations? I think you

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Speaker 1: ships on the d units of the series last year.

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Speaker 1: What are you expectations going forward? And particularly I'm mindful

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Speaker 1: of fact you're selling this new vehicle into an economic

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Speaker 1: recession and a lot of the people have been hit.

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Speaker 1: The hardest are the small businesses who are your commercial customers.

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Speaker 1: It's interesting. We have all of our data connected card

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Speaker 1: data we've been looking at during the pandemic, but we

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Speaker 1: can track the number of trips by location and how

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Speaker 1: it's changing. And we saw dramatic reduction, but frankly, the

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Speaker 1: trips for commercial vehicles really didn't go down that much.

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Speaker 1: A lot of our customers have been working through this pandemic.

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Speaker 1: Their plumbers, electricians, construction workers, they've been busy. Um now,

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Speaker 1: no doubt about it. We're seeing the market down and

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Speaker 1: we're planning our business to be below pre COVID industrial demand.

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Speaker 1: Uh So we see the industry coming down. That's how

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Speaker 1: we're planning our business. We think that's prudent. We'd love

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Speaker 1: it to be fantastic and strong like it was in

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Speaker 1: January and December last year, but that's not what we're

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Speaker 1: planning our business around. If there is the demand there,

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Speaker 1: which you certainly hope for, how do make sure you

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Speaker 1: can fulfill it. You had a little stumble on the Explorer,

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Speaker 1: you know, a lot while ago. How do you make

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Speaker 1: sure you don't have a similar problem with It's a

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Speaker 1: great question. You know, we've done a lot to de

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Speaker 1: risk our launches compared to the Explorer and the Aviator

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Speaker 1: launch in Chicago. Uh. Now we've we're gonna build. We

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Speaker 1: have two plans for flon fifty for example, We're gonna

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Speaker 1: stagger the launch, so we build, we don't convert both

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Speaker 1: plants at the same time. We've learned a lot from

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Speaker 1: what happened and Explorer and now Explorers doing great. Uh.

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Speaker 1: You know production is up to full capacity. Uh. And

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Speaker 1: we've learned a lot and we've done some soul searching.

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Speaker 1: But I'm I'm really excited about how the team has responded,

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Speaker 1: and you know, we're going to take our time with

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Speaker 1: these launches to make sure that we have world class

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Speaker 1: quality when we launch. That was Jim Farley, chief operating

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Speaker 1: officer of the Ford Motor Company, coming up the challenges

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Speaker 1: of reopening on economy when the coronavirus is still with us.

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Speaker 1: We talked with Senator Mike Brown of Indiana. That's next.

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Speaker 1: This is Wall Street Week on Bloomberg. This is Bloomberg

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Speaker 1: Wall Street Week with David Weston from Bloomberg Radio. States

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Speaker 1: may be struggling with a resurgent virus, but Senator Mike

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Speaker 1: Braun of Indiana is adamant that whatever we do, we

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Speaker 1: cannot shut down the entire economy again. Well, if we

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Speaker 1: do it shut down again, someone needs to have their

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Speaker 1: heads examined, because all along that was only necessary in

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Speaker 1: a few places where it just cascaded out of control.

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Speaker 1: Shutting down early, opening up late, and a one size

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Speaker 1: fits all approach that many places took. That's gonna make

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Speaker 1: their recoveries harder. A couple of things make me optimistic

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Speaker 1: about how we're going to recover. Number One, we had

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Speaker 1: the strongest economy that I had ever been a part of,

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Speaker 1: and that was running my own enterprise for thirty seven years.

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Speaker 1: We were in excellent shape going into it. Credit that

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Speaker 1: to the Job and Tax Cut Bill of two thousand seventeen,

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Speaker 1: President Trump leading on it. If we go back to

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Speaker 1: some of the policies and regulations that were in place

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Speaker 1: before that, there'll be a tough recovery. But if we

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Speaker 1: just take everything we've learned about the disease, we know

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Speaker 1: a lot more about it now. It's got peculiarities, and

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Speaker 1: entrepreneurs and business owners are good at multitasking. They shut

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Speaker 1: down the entire downtown in my hometown, my wife's had

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Speaker 1: a business. It'll be forty two years is September. They

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Speaker 1: would have been the ones most capable of distancing wearing masks,

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Speaker 1: and they have, like all business owners, great concern to

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Speaker 1: keep their customers and their employees healthy. Going forward, I

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Speaker 1: think you'll see, and we'll have the data that the

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Speaker 1: places that didn't take that overly prescriptive approach where they

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Speaker 1: were doing two things at once, are gonna have good recoveries,

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Speaker 1: and I think that's gonna benefit the country in its entirety.

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Speaker 1: The places that locked down too long, like a Kentucky

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Speaker 1: or a Michigan where they maybe didn't need to treat

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Speaker 1: Detroit and the rest of the state the same way,

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Speaker 1: or Louisville and Lexington the rest of the state of

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Speaker 1: the Kentucky Indiana had a pretty good balance, and I

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Speaker 1: think we're gonna recover accordingly. Center how much more help

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Speaker 1: do we need from the Congress. It looks like you're

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Speaker 1: gonna have a pretty busy July because a lot of

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Speaker 1: people are talking about a couple of cliffs that maybe

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Speaker 1: coming up in the middle and the end of the month,

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Speaker 1: particular unemployment insurance and some other assistance of the economy.

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Speaker 1: What are you in favor of Congress doing at this point,

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Speaker 1: if anything before? Yeah, I think Leader McConnell's got that right,

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Speaker 1: and we need to see how one to three and

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Speaker 1: three five have been working. Uh, we're not using all

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Speaker 1: of the p p P due to the fact that

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Speaker 1: it's now got some guidance on it that UH is

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Speaker 1: keeping it from going to larger small businesses and trying

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Speaker 1: to get to the places that need it the most.

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Speaker 1: And if this recovery does what I think it's gonna do. Uh,

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Speaker 1: and think President Trump has set the stage for that,

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Speaker 1: and certain governors that were a little more you know,

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Speaker 1: willing to take some risk, maybe we won't need it.

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Speaker 1: And that doesn't mention the fact that we've spent two

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Speaker 1: point eight trillion and we're running trillion dollar structural deficits.

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Speaker 1: So I think we've got to be very careful about

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Speaker 1: what we do going forward, and uh, I think that

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Speaker 1: rather than maybe adding flexibility finding uh what we might

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Speaker 1: have missed on the first go around, I'm hoping that

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Speaker 1: it doesn't take anything significant out of d C. We

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Speaker 1: borrowed every penny that we put towards it. I was

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Speaker 1: okay with it back then because of the uncertainty. Now,

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Speaker 1: let's emphasize on smartly reopening the economy and hopefully that'll

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Speaker 1: do the heavy lifting. You're introducing a bill in Congress

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Speaker 1: to help address some of the concerns about policing efforts

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Speaker 1: that come in the tragic killing of George Floyd. Tell

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Speaker 1: us about that bill, what it does, and why it's

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Speaker 1: the necessary and appropriate reaction. I believe though, for Republicans

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Speaker 1: and Democrats us in this moment, uh that's in front

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Speaker 1: of us, we've got to do maybe something more than

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Speaker 1: the lower hanging fruit that we both agree to, and

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Speaker 1: that comes to this discussion of qualified immunity. And for

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Speaker 1: business owners, people that come from main street like myself,

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Speaker 1: accountability and transparency are a way of life. So I

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Speaker 1: think for law enforcement, they're grappling with something that is

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Speaker 1: stigmatized their business. There all the good things they do

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Speaker 1: because of these horrific incidents that occur far too often.

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Speaker 1: So this bill addresses a law that's been in place

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Speaker 1: since eighteen seventy one, that had nothing touching it until

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Speaker 1: the sixties when they started to judicially qualify immunity, and

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Speaker 1: to where in the eighties it's gotten to the point

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Speaker 1: where you can hardly redress or take to task these

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Speaker 1: incidents that we all no need to be addressed. So

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Speaker 1: this sets some clarification about when you have something that

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Speaker 1: comes to the standard of George Floyd, Raychard Brooks, Brianna Taylor,

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Speaker 1: you've got to have some ability to hold people accountable.

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Speaker 1: It also adds officially the organizations themselves into having that accountability.

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Speaker 1: So far, anybody like me, this is easy because in

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Speaker 1: most places you're fully accountable, you deal with full transparency.

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Speaker 1: And David, I also make it analogous to healthcare. In

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Speaker 1: the year and a half i've been here, I've been

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Speaker 1: probably the most vocal Republican about the industry reforming itself,

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Speaker 1: be transparent, embrace competition, don't have barriers to entry. And

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Speaker 1: that's been a tough struggle too, But I'll keep talking

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Speaker 1: about it because I know it's right. That was Senator

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Speaker 1: Mike Braun of Indiana. Coming up. We wrap up the

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Speaker 1: week with our special contributor l The Summers. This is

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Speaker 1: Wall Street Week on Bloomberg. This is Bloomberg Wall Street

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Speaker 1: Week with David Weston from Bloomberg Radio. We wrap up

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Speaker 1: the week now with our special contributor Larry Summers of Harvard. So, Larry,

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Speaker 1: it's been something a tumultuous week in the equity markets,

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Speaker 1: in particular, as the equity markets come to drips with

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Speaker 1: really increase in coronavirus cases in places like Florida and

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Speaker 1: Texas and California and Arizona. I have to say to

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Speaker 1: give you your due for at least a month or so,

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Speaker 1: you've been warning. If we come back too fast and

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Speaker 1: really haven't putting a stake in the heart of this virus,

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Speaker 1: we've got problems. It turns out you may be right.

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Speaker 1: I think so, David. We we were operating with the

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Speaker 1: contagion factor nationwide of point eight. If we don't do anything,

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Speaker 1: that contagion factor is two and a half. So it

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Speaker 1: doesn't It means you can't move a very large fraction

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Speaker 1: of the way back to normal without getting into traw hole.

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Speaker 1: And we've moved maybe a third of the way back

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Speaker 1: to normal, and that's too much, and we're now in

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Speaker 1: trouble uh in a set of places, and markets are

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Speaker 1: waking up to that. I don't think the biggest problem

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Speaker 1: is the trouble we're in right now. I think Texas

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Speaker 1: and Florida will be forced to backtrack and move towards

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Speaker 1: closing down. I think we will close down more in

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Speaker 1: a certain number of places. I think the discouraging thing

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Speaker 1: which I think the market is starting to come to

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Speaker 1: grips with but still hasn't fully come to grips with,

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Speaker 1: is that until we have a new vaccine or we

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Speaker 1: have a much better therapy, David, we're now looking at

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Speaker 1: the new normal. We're not gonna have probably catastrophic episodes,

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Speaker 1: or at least not very many like what happened in

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Speaker 1: New York, because we'll get on top of them a

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Speaker 1: little faster. But we're not trying to reduce this virus

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Speaker 1: to a negligible level, and so we're gonna live with

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Speaker 1: a chronic, ongoing problem of chronic ongoing cause of death.

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Speaker 1: I don't know whether it will be five people dying

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Speaker 1: a day or a thousand people dying a day. I

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Speaker 1: guess somewhere in between. But that's gonna be the new

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Speaker 1: reality until we have a vaccine. And while that reality

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Speaker 1: is happening, we're not going to be able to have

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Speaker 1: a lot of the things, uh that we're used to.

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Speaker 1: If you look in detail at the plans for the

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Speaker 1: places that are coming back, it's not all the way

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Speaker 1: back in terms of what's going to happen in a

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Speaker 1: junior high school classroom, what's gonna happen on a college campus,

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Speaker 1: what the density is gonna be in a restaurant or

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Speaker 1: a bar. And what we're seeing is that we got

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00:23:59,160 --> 00:24:03,080
Speaker 1: to it too quickly. So I think we're gonna be

432
00:24:03,200 --> 00:24:08,000
Speaker 1: living with what I've called very mediocre whack them all

433
00:24:08,520 --> 00:24:13,240
Speaker 1: as our strategy for well over a year, and I

434
00:24:13,240 --> 00:24:15,080
Speaker 1: don't think it's gonna be great. I'm not sure it's

435
00:24:15,080 --> 00:24:18,119
Speaker 1: gonna be a W with a major double dip, but

436
00:24:18,560 --> 00:24:21,520
Speaker 1: it's sure not gonna be continued growth at the rate

437
00:24:21,560 --> 00:24:24,160
Speaker 1: we've seen so hilarry. At the very end of this week,

438
00:24:24,200 --> 00:24:26,240
Speaker 1: we heard from the Vice president, Mike Patts, who came

439
00:24:26,280 --> 00:24:28,240
Speaker 1: out with his task force, and when he said, is

440
00:24:28,280 --> 00:24:31,560
Speaker 1: these are isolated outbrags, it's county by county, even community

441
00:24:31,560 --> 00:24:33,920
Speaker 1: by community, and the only real response is to listen

442
00:24:33,920 --> 00:24:37,000
Speaker 1: to your local authorities, a different approach than was taken,

443
00:24:37,000 --> 00:24:40,560
Speaker 1: for example, in Europe. Where is he wrong? It's whack

444
00:24:40,600 --> 00:24:42,359
Speaker 1: them all? But he says we can contain this in

445
00:24:42,440 --> 00:24:46,000
Speaker 1: isolated instances. Well, First, he's wrong to say that it's

446
00:24:46,040 --> 00:24:48,920
Speaker 1: isolated instances. It's an odd thing to say, since it's

447
00:24:48,960 --> 00:24:52,840
Speaker 1: most of his electoral coalition, led by Texas and Florida,

448
00:24:53,240 --> 00:24:56,040
Speaker 1: that he's calling isolated. It's the first time I've heard

449
00:24:56,080 --> 00:24:59,920
Speaker 1: a Republican describe them as just a few stray part

450
00:25:00,560 --> 00:25:07,320
Speaker 1: of America. Second, UH, I guess everybody's got their own

451
00:25:07,359 --> 00:25:11,240
Speaker 1: idea of isolated. I don't think of a new killing

452
00:25:11,320 --> 00:25:15,920
Speaker 1: factor that kills more Americans in a year by far

453
00:25:16,600 --> 00:25:21,760
Speaker 1: than UH murder or suicide or opioids all put together.

454
00:25:22,280 --> 00:25:26,240
Speaker 1: I don't call that something that's like a minor factor

455
00:25:26,840 --> 00:25:31,160
Speaker 1: UH in terms of global health. Third, I don't think

456
00:25:31,160 --> 00:25:36,480
Speaker 1: of something that enters into every family in America's life

457
00:25:36,560 --> 00:25:39,080
Speaker 1: planning when they think about whether they're going to go

458
00:25:39,119 --> 00:25:45,080
Speaker 1: out to the store as being isolated UM or minor.

459
00:25:45,800 --> 00:25:49,280
Speaker 1: I don't think of the United States doing UH far

460
00:25:49,440 --> 00:25:54,040
Speaker 1: worse than countries in Africa far worse than most countries

461
00:25:54,560 --> 00:26:00,080
Speaker 1: in America in Europe in protecting its citizens. The essence of,

462
00:26:00,280 --> 00:26:03,600
Speaker 1: after all, national security. I don't think of that as

463
00:26:03,680 --> 00:26:09,679
Speaker 1: being an isolated and small thing. And the reason we

464
00:26:09,880 --> 00:26:14,239
Speaker 1: formed the United States two forty four years ago was

465
00:26:14,359 --> 00:26:19,040
Speaker 1: because we recognized that we were stronger as a union.

466
00:26:19,760 --> 00:26:23,399
Speaker 1: So when we have a contagious disease that doesn't know

467
00:26:23,720 --> 00:26:28,480
Speaker 1: from a state border or a county seat, I can't

468
00:26:28,520 --> 00:26:33,159
Speaker 1: imagine why when it came to issues like UH pulling

469
00:26:33,240 --> 00:26:39,320
Speaker 1: together for vac on vaccines, or when it comes to

470
00:26:39,480 --> 00:26:43,639
Speaker 1: issues like regulating what's a safe health practice, when people

471
00:26:43,680 --> 00:26:48,320
Speaker 1: can just drive across a state border with complete impunity,

472
00:26:48,720 --> 00:26:52,159
Speaker 1: I can't imagine what could be causing these people to

473
00:26:52,320 --> 00:26:56,160
Speaker 1: think that this is something that's best dealt with in

474
00:26:56,400 --> 00:27:02,840
Speaker 1: fifty state units or a thousand local government UH units.

475
00:27:02,880 --> 00:27:06,320
Speaker 1: It seems to me to be a contradiction of the

476
00:27:06,440 --> 00:27:10,000
Speaker 1: very idea of the United States to treat a problem

477
00:27:10,119 --> 00:27:14,600
Speaker 1: um that's fundamentally the most fundamental national security problem in

478
00:27:14,720 --> 00:27:18,200
Speaker 1: terms of the lives and livelihoods of Americans that we've

479
00:27:18,240 --> 00:27:21,439
Speaker 1: had in the last sixty years. To treat that as local,

480
00:27:21,480 --> 00:27:25,480
Speaker 1: I think it's madness. We have, of course, the epidemiological

481
00:27:25,520 --> 00:27:27,800
Speaker 1: problem to deal with. We also have an economy that

482
00:27:27,880 --> 00:27:30,560
Speaker 1: really is struggling quite a bit overall. This week, what

483
00:27:30,760 --> 00:27:33,560
Speaker 1: message to the market sender, for example, the Federal Reserve

484
00:27:33,600 --> 00:27:35,840
Speaker 1: about how long they're gonna have to going with their

485
00:27:35,880 --> 00:27:39,720
Speaker 1: support given where we're headed, It can't be any encouraging

486
00:27:40,119 --> 00:27:45,520
Speaker 1: uh message, Uh, David. But look, uh, I've also been

487
00:27:45,560 --> 00:27:51,000
Speaker 1: saying this from the beginning. If people think they're going

488
00:27:51,040 --> 00:27:55,000
Speaker 1: to get a disease that might kill them or might

489
00:27:55,280 --> 00:27:58,120
Speaker 1: make them contagious in a way that kills their mother,

490
00:27:59,359 --> 00:28:03,159
Speaker 1: they are not going to go shopping and buy a

491
00:28:03,160 --> 00:28:08,000
Speaker 1: new car or a new washing machine. Whatever the interest

492
00:28:08,160 --> 00:28:15,240
Speaker 1: rate uh is, you cannot push on a string. And so, yes,

493
00:28:15,400 --> 00:28:20,960
Speaker 1: the fecit can play some defense against cascading bankruptcy. Yes

494
00:28:21,119 --> 00:28:25,040
Speaker 1: we can give for a time transfer payments that will

495
00:28:25,119 --> 00:28:31,399
Speaker 1: maintain the income of people. Yes, there's some opportunities we

496
00:28:31,400 --> 00:28:34,119
Speaker 1: should take advantage of in this moment of low interest

497
00:28:34,240 --> 00:28:39,920
Speaker 1: rates to invest in our country's future. But fundamentally we

498
00:28:40,080 --> 00:28:44,720
Speaker 1: have to address the pandemic. If our economy is going

499
00:28:44,880 --> 00:28:49,120
Speaker 1: to move forward and the FIG can't know anything about

500
00:28:49,120 --> 00:28:50,760
Speaker 1: where it's going to be a year and a half

501
00:28:50,800 --> 00:28:55,360
Speaker 1: from now, without knowing where the virus is going to

502
00:28:55,440 --> 00:28:59,320
Speaker 1: be it. I think increasingly they should adjust their communications

503
00:28:59,360 --> 00:29:03,920
Speaker 1: strategy to use virus time rather than calendar time. Make

504
00:29:04,000 --> 00:29:07,280
Speaker 1: statements like exactly, we're gonna keep interest rates at zero

505
00:29:07,800 --> 00:29:10,840
Speaker 1: until a year after the virus is fully under control.

506
00:29:11,000 --> 00:29:13,560
Speaker 1: That's the kind of an announcement I think they should

507
00:29:13,600 --> 00:29:16,480
Speaker 1: be thinking in terms of which finally leads to the

508
00:29:16,560 --> 00:29:18,920
Speaker 1: question have we have the markets internalized just how long

509
00:29:18,920 --> 00:29:22,560
Speaker 1: this may take? I think there's more risk of markets

510
00:29:22,560 --> 00:29:26,600
Speaker 1: being too optimistic at this point than there is of

511
00:29:27,200 --> 00:29:33,920
Speaker 1: markets being UH too pessimistic. And I don't think the

512
00:29:33,960 --> 00:29:39,440
Speaker 1: fundamentals of the economy are that terribly good right now.

513
00:29:39,480 --> 00:29:42,960
Speaker 1: I think they're as bad as they've been probably in

514
00:29:43,000 --> 00:29:49,240
Speaker 1: my professional UH lifetime. I think what is true is

515
00:29:49,360 --> 00:29:53,280
Speaker 1: that what markets price is what might be called the

516
00:29:53,440 --> 00:29:57,280
Speaker 1: S and T economy or the corporate economy. And that's

517
00:29:57,320 --> 00:30:02,160
Speaker 1: a very different thing than and UH the real economy.

518
00:30:02,640 --> 00:30:09,160
Speaker 1: You know, UH Apple accounts for five of UH the

519
00:30:09,200 --> 00:30:13,480
Speaker 1: market value of the US stock market. It accounts for

520
00:30:14,120 --> 00:30:19,760
Speaker 1: five one hundreds of one of employment UH in UH

521
00:30:20,000 --> 00:30:22,760
Speaker 1: the United States. And so I think we need policies

522
00:30:23,240 --> 00:30:26,440
Speaker 1: that Yeah, we can't have the financial system collapse, but

523
00:30:26,560 --> 00:30:29,720
Speaker 1: the priority has got to be Main Street at this point.

524
00:30:31,120 --> 00:30:33,640
Speaker 1: There you have the SMP economy supposed to real economy.

525
00:30:33,720 --> 00:30:36,120
Speaker 1: Thank you so much. The Larry Summers always great to

526
00:30:36,120 --> 00:30:37,840
Speaker 1: have him with us. He, of course, is the former

527
00:30:37,920 --> 00:30:40,640
Speaker 1: Secretar of Treasury now at Harvard. Also was the Director

528
00:30:40,960 --> 00:30:44,520
Speaker 1: of the Economic Council at the White House under President

529
00:30:44,560 --> 00:30:51,040
Speaker 1: Barack Obama. Finally, we leave you with one more thought,

530
00:30:51,760 --> 00:30:54,840
Speaker 1: Take me out to the ball game. Never has the

531
00:30:54,880 --> 00:30:57,640
Speaker 1: idea been so appealing as this spring, given what we've

532
00:30:57,680 --> 00:30:59,960
Speaker 1: all been through, and this week it appeared that we

533
00:31:00,040 --> 00:31:03,360
Speaker 1: would get baseball back sort of. The players, well, the

534
00:31:03,360 --> 00:31:05,640
Speaker 1: players will be there, but we, the fans, will not

535
00:31:05,800 --> 00:31:09,280
Speaker 1: be in the stands. Why wait until you can fill

536
00:31:09,280 --> 00:31:12,480
Speaker 1: a stadium before you start to bring the team back,

537
00:31:13,520 --> 00:31:17,040
Speaker 1: And if you can televise it in the meantime, great,

538
00:31:17,800 --> 00:31:20,360
Speaker 1: And because we won't be there in the stands, another

539
00:31:20,480 --> 00:31:23,800
Speaker 1: key element of baseball will be missing this year. Peanuts.

540
00:31:24,280 --> 00:31:27,440
Speaker 1: Peanuts have been essential to the game since the nineties.

541
00:31:27,720 --> 00:31:30,240
Speaker 1: This year there are two point three million pounds of

542
00:31:30,280 --> 00:31:32,880
Speaker 1: peanuts that have been harvested, roasted and are waiting in

543
00:31:32,960 --> 00:31:36,880
Speaker 1: cold storage. But take heart. Some grocery stores may buy

544
00:31:36,880 --> 00:31:38,720
Speaker 1: some of those peanuts, put them in bags, and sell

545
00:31:38,760 --> 00:31:40,240
Speaker 1: them to us so that we can bring them home

546
00:31:40,320 --> 00:31:43,560
Speaker 1: and eat them as we watch baseball on our television sets.

547
00:31:43,560 --> 00:31:46,880
Speaker 1: Not ideal, but better than nothing. So if you need

548
00:31:46,960 --> 00:31:49,600
Speaker 1: another reason to route, not just for the home team,

549
00:31:49,760 --> 00:31:52,600
Speaker 1: but also for a vaccine, think of those peanut vendors

550
00:31:52,680 --> 00:31:55,040
Speaker 1: tossing bags of peanuts to us in the stands of

551
00:31:55,120 --> 00:31:59,520
Speaker 1: baseball games. Well maybe next year. That does it. For

552
00:31:59,560 --> 00:32:02,560
Speaker 1: this episode of Wall Street Week, I'm David Weston. This

553
00:32:02,640 --> 00:32:18,880
Speaker 1: is Bloomberg. See you next week. M