Speaker 1: This is Bloomberg Wall Street Week. We turn our attention
Speaker 1: to the markets this week. U s CPI never's reinforcing
Speaker 1: concerns about inflation. The financial stories that chief are worth
Speaker 1: a really different reaction to Mark. It's more indications of
Speaker 1: just how hot the U. S. Economy really is through
Speaker 1: the eyes of the most influential voices. Larry Summer was
Speaker 1: the former Triptor Secretary Katherine Keating, CEO of v n
Speaker 1: Y Mom, Sam's l Sharmon and founder of Equatic Group Investment.
Speaker 1: In Bloomberg Wall Street Week with David Weston from Bloomberg Radio,
Speaker 1: It's all about time, twenty years since we last saw
Speaker 1: euro dollar parody, six months of a ground war in
Speaker 1: Europe and counting down less than thirty days to the
Speaker 1: next FED decision. This is Bloomberg Wall Street Week. I'm
Speaker 1: David Weston. This week contributers Larry Summers of Harvard on
Speaker 1: his reaction to Chair J. Pale's Jackson Hole remark, look,
Speaker 1: I think he did what he needed to do, and
Speaker 1: former IBM CEO Sam Paulmisano how to make the Chips
Speaker 1: and Science Act live up to its name. You need
Speaker 1: to get the bureaucracy out of the way. This is
Speaker 1: a week to mark anniversaries and look forward to deadlines,
Speaker 1: starting with Dr Anthony Fauci's decision to step away from
Speaker 1: his ni A I D responsibilities after serving seven presidents
Speaker 1: over fifty four years. I tried, as you know, my
Speaker 1: very best to have the facts and the science guide us.
Speaker 1: A very different anniversary came with the euro falling below
Speaker 1: parody with US dollar for the first time in twenty years,
Speaker 1: driven in part by the looming energy crisis and prospects
Speaker 1: for the recession that it may cause something. Ian Shepherdson
Speaker 1: of Pantheon macro Economics thinks he's already here in reception
Speaker 1: now already. I mean, that's that's pretty obvious. Now we
Speaker 1: see that last thing for a while. We also passed
Speaker 1: the six month anniversary of Russia's invasion of Ukraine, as
Speaker 1: Prutent's forces has struck a train station in the eastern
Speaker 1: part of the country. On the thirty first anniversary of
Speaker 1: Ukrainians independence from Russia, a Russia that is trying to
Speaker 1: take it back. That's an irony not lost on Amanda
Speaker 1: Slope of the National Security Council. It's a sobering reminder
Speaker 1: that just as the Ukrainian people had to fight to
Speaker 1: defend themselves and get their independence of thirty one years ago.
Speaker 1: They are unfortunately in a similar position today. But it
Speaker 1: was also a week for celebration, at least for those
Speaker 1: saddled with student loan debt, with President Biden fulfilling his
Speaker 1: promise to give them some relief. I made a commitment
Speaker 1: that we provide student debt relief, and I'm honoring that
Speaker 1: commitment today we will forgive ten thousand dollars in outstanding
Speaker 1: federal student loans. But for Global Wall Street, there was
Speaker 1: really only one story this week, despite all the commemoration,
Speaker 1: and it came from Jackson Hole, and it came from
Speaker 1: Chair J. Powell. As markets eagerly sought answers to their
Speaker 1: questions about US monetary policy coming less than three weeks
Speaker 1: from when the f on MC meets again, and the
Speaker 1: Chair stepped up to the podium and basically said, we'd
Speaker 1: all have to wait. Our decision that September meeting will
Speaker 1: depend on the totality of the incoming data and the
Speaker 1: evolving outlook. But as much as the Fed says it
Speaker 1: will pay attention to the data, the markets, the markets
Speaker 1: got the message that they shouldn't expect any relief from
Speaker 1: tightening anytime soon, as the SMP five hundred who was
Speaker 1: down just over four percent for the week, and over
Speaker 1: three of that came on Friday alone. In response to
Speaker 1: chair Pal, the Nazadac fared even worse, down four point
Speaker 1: four percent, and again almost four of that came on
Speaker 1: Friday alone. The bond market was a bit more complicated,
Speaker 1: with the yield and the tenure up to just over
Speaker 1: three percent, barely up for the week, but the yield
Speaker 1: on the two year reacted much more to the Fed news,
Speaker 1: ending the week at three point four that's up sixteen
Speaker 1: basis points for the week. To help us understand what
Speaker 1: the markets are trying to tell us, we welcome to
Speaker 1: Peter Krauss, he's founder, chairman and CEO of Aperture Investors,
Speaker 1: and liz An Sanders, chief investment strategist for Charles Schwab.
Speaker 1: So listen, give us your take on what happened here.
Speaker 1: The markets were expecting more the same, they, sir, sure
Speaker 1: didn't react that way. Well, I think you know the
Speaker 1: narrative around the basis for the rally that started in
Speaker 1: mid June. Some of it had to do with the
Speaker 1: peak and the tenures around three and a half percent.
Speaker 1: But this narrative that was created around the notion of
Speaker 1: a FED pivot, we never bought into that narrative. I
Speaker 1: think a pause is something we should talk about at
Speaker 1: some point, as did Powell today, but a pivot to
Speaker 1: aggressive rate cuts as early as the beginning of next year,
Speaker 1: that the only reason the FED would have the green
Speaker 1: light to do that would be a significant deterioration the
Speaker 1: labor market from here and or a much more significant
Speaker 1: deterioration in the economy, and for now we haven't seen that.
Speaker 1: So it wasn't a surprise to see him really forcefully
Speaker 1: push back against the the idea of a pivot that
Speaker 1: once they get to whatever the sort of final hike is,
Speaker 1: they're going to stay there for a while. And I
Speaker 1: think the market had troubled digesting that, so, Peter, if
Speaker 1: you look at the markets, they haven't highly given up
Speaker 1: on that cut. Actually they backed off of its some
Speaker 1: after the power marks, but not were you surprised at
Speaker 1: the market reaction? Now? I was, and I was a
Speaker 1: little surprised with August uh Games. I mean, it was
Speaker 1: really sort of a melt up and sort of persistently
Speaker 1: was a risk on type of market, and as Lisianne said,
Speaker 1: it really wasn't any reason to believe that PAL was
Speaker 1: going to somehow give some credence to the idea that
Speaker 1: the FED was about to reduce rates in the next
Speaker 1: six months. So I think the market sort of just
Speaker 1: realized that it was rising in a at a level
Speaker 1: that was not sustainable given where interest rates are likely
Speaker 1: to go, and we haven't really seen enough economic weakness
Speaker 1: to signal that rates are going to modify. So the
Speaker 1: market reacted to that, and I suspect it may follow
Speaker 1: through with more of a reaction until we get into
Speaker 1: September and there's real volume and real players in the marketplace.
Speaker 1: And right now we're still in a very very thinly
Speaker 1: traded market. Peter, if if the FED was trying to
Speaker 1: get out of the business and really affecting the market,
Speaker 1: it's not succeeding very much. I mean, obviously, the central
Speaker 1: banks around the world really got involved a lot starting
Speaker 1: with a great financial crisis, and some people thought they
Speaker 1: were trying to pull out of it, including with the
Speaker 1: balance sheet rundown. But right now, how much of this
Speaker 1: is just driven by the central banks themselves Peter, Well,
Speaker 1: we have not seen a return to fundamental investing. We're
Speaker 1: still in markets that are captivated by headline risks and
Speaker 1: headline commentary. Whether it's the said, whether it's the Russia
Speaker 1: Ukraine War, or whether it's China's COVID policies. We're still
Speaker 1: being driven by headlines and not enough fundamental analysis. I
Speaker 1: suspect that we're going to come to a market where
Speaker 1: fundamental analysis will have much more of an impact on
Speaker 1: what investors actually invest in. But we're gonna have to
Speaker 1: get to some level of the bottom here, and I
Speaker 1: don't think the markets fight there yet, but it's forming about. Okay,
Speaker 1: Listen and Saunders and Peter Kraft will be staying with
Speaker 1: us as we turn to how investors might make some
Speaker 1: sense at this uncertain time. That's going up next on
Speaker 1: Wall Street Week on Bloomberg. This is Bloomberg Wall Street
Speaker 1: Week with David Weston from Bloomberg Radio. Call it the
Speaker 1: next space race. The push for public funding for semiconductors
Speaker 1: starting with President GE's program described by former US Ambassador
Speaker 1: to China Max Baucus, their help in pursuing their China
Speaker 1: two thousand plan, where China will focus on technologies of
Speaker 1: the future to enhance their economy, and followed by Europe's
Speaker 1: own version, described by Margaret Astaire of the European Commission.
Speaker 1: I have been impressed with is that sort of the
Speaker 1: first important project of common European interests that we have
Speaker 1: on semiconductors. Here about two billions of public supports crowded
Speaker 1: in six point five billion of private investment. Now the
Speaker 1: United States has its own version, the Chips and Science Act,
Speaker 1: just signed into law by President Biden. The United States
Speaker 1: must lead the world on the production of these advanced chips.
Speaker 1: This law will do exactly that, and, as in Europe,
Speaker 1: Commerce Secretary Gina Romando predicts, the public funds will prime
Speaker 1: the pump for much more to come from the private sector.
Speaker 1: As big as fifty two billion is, it is a
Speaker 1: drop in the book, get a very big drop in
Speaker 1: the bucket towards what this economy needs. All of which
Speaker 1: leaves us to focus on how fast the money can
Speaker 1: get out the government door, whether it will let loose
Speaker 1: the private sector, and whether it all will be spent wisely.
Speaker 1: Go looking for really talented, experienced people in a wide
Speaker 1: range of ages who understand these technologies and get them
Speaker 1: on board, either as employees or advisors, so to help
Speaker 1: guide the process of making these investments as high potential
Speaker 1: and productive as they can be, and to help us
Speaker 1: understand this world of global competition and technology, and particularly
Speaker 1: the role governments might play. And welcome to somebody who
Speaker 1: spent a good part of his career in the middle
Speaker 1: of that competition. He's Sam Paulisano, the former IBM CEO
Speaker 1: and chairman. Now he's the chairman of the Center for
Speaker 1: Global Enterprise. So welcome back. Great to have you on
Speaker 1: Wall Street week, Sam, as I say, this is not
Speaker 1: the first time we've had governments involved in tech by
Speaker 1: any means. Going back to Media and Japan DARPA, Defense Department,
Speaker 1: what have we learned from that? What should we have
Speaker 1: learned from those experiences? Well, David, I think it's it's
Speaker 1: a great analogy that you drawn. You seem to be
Speaker 1: his starting of our industry. I actually was living in
Speaker 1: Japan during the Memory Wars. I was living in Tokens
Speaker 1: that time, working in IBM Japan. Now today things have changed,
Speaker 1: I mean clearly because it's not Japan who was part
Speaker 1: of the worldwide economic and government systems. It's China and China,
Speaker 1: as you know, is fast growing economy, investing trillions of
Speaker 1: dollars and technology. They want to lead the West. They
Speaker 1: want to be the worldwide leader in semiconductors and microelectronics,
Speaker 1: and the majority of our capacity in this Asia, and
Speaker 1: it's not exactly a stable part of the world, so
Speaker 1: it's quite different. So it's more than just government involvement
Speaker 1: and adding stimulus to get an investment in these key
Speaker 1: critical areas you have. They have the geopolitics at play,
Speaker 1: so it's very complicated, much more so than it was
Speaker 1: in the past. But it doesn't always worked as it
Speaker 1: I mean, I think a lot of people think that
Speaker 1: the media experiment over in Japan actually ultimately was not successful.
Speaker 1: In Japan is not a dominant player in semi conductors today,
Speaker 1: that's correct. I mean, I would argue that the execution
Speaker 1: by government then was very poor. I was. I used
Speaker 1: to meet with media and they were stronger in electronics,
Speaker 1: and they still are stronger manufacturing electronics, but the fill
Speaker 1: in what was required from the industry's perspective. You also
Speaker 1: had to have soltware capability, and they were weak. So
Speaker 1: many times I think the government doesn't understand what's required
Speaker 1: to actually uh, not just in this, but to lead
Speaker 1: and then the discipline that's required to execute these things
Speaker 1: with precision. So same as you suggest and mean, China
Speaker 1: really has changed the game, I think, in technology in
Speaker 1: all sorts of ways, and given its authoritarian aspect, which
Speaker 1: means it can do pretty much whatever it wants to do,
Speaker 1: as well as the massive amounts of money involved doesn't
Speaker 1: make it almost essential. The United States and for that
Speaker 1: matter of Europe also some way step up to the bar.
Speaker 1: I think it's key now. I know many of my
Speaker 1: colleagues and private sector will find that that strange for
Speaker 1: somebody that ran IMBM to say those things. But this
Speaker 1: transition is very, very expensive, and I don't think it's
Speaker 1: you can. You could have a company, regardless of how
Speaker 1: successful they are, Intel, a M D, SML in Europe, etcetera,
Speaker 1: do this on their own. They're taking on a sovereign nation.
Speaker 1: And when you're when you're taking on a sovereign nation,
Speaker 1: it's not like competing in your industry space. So there
Speaker 1: is a role for government. Now the question is what
Speaker 1: is the role for government? And I think we all know,
Speaker 1: we've all learned that government picking winners and looterers, losers.
Speaker 1: Even if you're an authoritarian government like Chanda gone at
Speaker 1: quickly doesn't always work for lots of different reasons. But
Speaker 1: I think you need to have this partnership and not
Speaker 1: have the government pick and choose who the political winners
Speaker 1: or losers happen to be based upon votes per state
Speaker 1: and all the things that they consider beyond just what
Speaker 1: it takes to make this business successful and what it
Speaker 1: takes the lead in technology in the world. Sam, it's
Speaker 1: always a pleasure to have you with us on Walter.
Speaker 1: Thank you so much. As Sam PAULA Summer. He is
Speaker 1: the chairman of the Center for Global Enterprise. Coming up,
Speaker 1: we wrap up the week with our special contributor Larry
Speaker 1: Summers of Harvard. This is Wall Street Week on Bloomberg.
Speaker 1: This is Bloomberg Wall Street Week with David Weston from
Speaker 1: Bloomberg Radio. Call it the Next Space Race. The push
Speaker 1: for public funding for semiconductors, starting with Presidents GE's program
Speaker 1: described by former US Ambassador of China Max Baucus, their
Speaker 1: help and pursuing their China two thousand five plan, where
Speaker 1: China will focus on technologies of the future to enhance
Speaker 1: their economy, and followed by Europe's own version, described by
Speaker 1: Margaret Astair of the European Commission. I have been impressed
Speaker 1: with is that sort of the first important project of
Speaker 1: common European interests that we have on semiconductors. Here about
Speaker 1: two billions of public supports crowded in six point five
Speaker 1: billion of private investments. Now the United States has its
Speaker 1: own version, the Chips and Science Act, just signed into
Speaker 1: law by President Biden. The United States must lead the
Speaker 1: world on the production of these advanced chips. This law
Speaker 1: will do exactly that, and, as in Europe, Commerce Secretary
Speaker 1: Ginia Romando predicts, the public funds will prime the pump
Speaker 1: for much more to come from the private sector. As
Speaker 1: big as fifty two billion is, it is a drop
Speaker 1: from the book, get a very big drop in the
Speaker 1: bucket towards what this economy needs. All of which leaves
Speaker 1: us to focus on how fast the money can get
Speaker 1: out the government door, whether it will let loose the
Speaker 1: private sector, and whether it all will be spent wisely.
Speaker 1: Go looking for really talented, experienced people in a wide
Speaker 1: range of ages who understand these technologies, and get them
Speaker 1: on board either as employees or advisors, so to help
Speaker 1: guide the process of making these investments as high potential
Speaker 1: and productive as they can be, and to help us
Speaker 1: understand this world of global competition and technology, and particularly
Speaker 1: the role governments might plan. And welcome to somebody who
Speaker 1: spent a good part of his career in the middle
Speaker 1: of that competition. He's Sam Paulusana, the former IBM CEO
Speaker 1: and chairman. Now he's a chairman of the Center for
Speaker 1: Global and a Price. So welcome back. Great to have
Speaker 1: you on Wall Street, wink Stamp. As I say, this
Speaker 1: is not the first time we've had governments involved in
Speaker 1: tech by any means. Going back to Media and Japan DARPA,
Speaker 1: Defense Department, What have we learned from that? What should
Speaker 1: we have learned from those experiences? Well, Dave, I think
Speaker 1: it's it's a great analogy that you're drawn. You seem
Speaker 1: to be his starian of our industry. I actually was
Speaker 1: living in Japan during the Memory Wars. I was living
Speaker 1: in tokens of time working in IBM Japan. Now today
Speaker 1: things have changed, I mean clearly because it's not Japan
Speaker 1: who was part of the worldwide economic and government systems.
Speaker 1: It's China, and China, as you know, is fast growing
Speaker 1: economy investing trillions of dollars in technology. They want to
Speaker 1: lead the West. They want to be the worldwide leader
Speaker 1: in semiconductors and microelectronics, and the majority of our capacity
Speaker 1: in this Asia, and it's not exactly a stable part
Speaker 1: of the world, so it's quite different. So it's more
Speaker 1: than just government involvement and adding stimulus to an get
Speaker 1: an investment in these key critical areas you have. They
Speaker 1: have the geopolitics at play, so it's very complicated, much
Speaker 1: more so than it was in the past. But it
Speaker 1: doesn't always work, does it. I mean, I think a
Speaker 1: lot of people think that the media experiment over in
Speaker 1: Japan actually ultimately not successful. Japan is not a dominant
Speaker 1: player in semiconductors today, that's correct. I mean, I would
Speaker 1: argue that the execution by government then was very poor.
Speaker 1: I was. I used to meet with media and they
Speaker 1: were stronger in electronics and they still are stronger manufactured electronics,
Speaker 1: but the fill in what was required from the industry's perspective.
Speaker 1: You also have to have soltware capability, and they were weak.
Speaker 1: So many times, I think the government doesn't understand what's
Speaker 1: required to actually uh not just invest, but to lead
Speaker 1: and then the discipline that's required to execute these things
Speaker 1: with precision. So same as you suggest, I mean, China
Speaker 1: really has changed the game I think in technology in
Speaker 1: all sorts of ways, and given its authoritarian aspect, which
Speaker 1: means they can do pretty much whatever wants to do,
Speaker 1: as well as the massive amounts of money involved doesn't
Speaker 1: make it almost essential. The United States and for that
Speaker 1: matter of Europe also some way step up to the bar.
Speaker 1: I think it's key now. I know many of my
Speaker 1: colleagues and private sector will find that that's strange for
Speaker 1: somebody that ran IMBM to say those things. But this
Speaker 1: transition is very, very expensive, and I don't think it's
Speaker 1: you can. You could have a company, regardless of how
Speaker 1: successful they are, Intel, A M D, s mL in Europe, etcetera,
Speaker 1: do this on their own. They're taking on a sovereign nation.
Speaker 1: And when you're when you're taking on a sovereign nation,
Speaker 1: it's not like competing in your industry space. So there
Speaker 1: is a role for government. Now the question is what
Speaker 1: is the role for government? And I think we all
Speaker 1: know we've all learned that government picking winners and looterers losers,
Speaker 1: Even if you're an authoritarian government like Chinda gone A
Speaker 1: quickly doesn't always work for lots of different reasons. But
Speaker 1: I think you need to have this partnership and not
Speaker 1: have the government pick and choose who the political winners
Speaker 1: your losers happen to be based upon votes per state
Speaker 1: and all the things that they consider beyond just what
Speaker 1: it takes to make this business successful and what it
Speaker 1: takes the lead in technology in the world. Sam, it's
Speaker 1: always a pleasure to have you with us on Walster.
Speaker 1: Thank you so much. As Sam PAULA. Summer. He is
Speaker 1: the chairman of the Center for Global Enterprise. Coming up,
Speaker 1: we wrap up the week with our special contributor Larry
Speaker 1: Summers of Harvard. This is Wall Street Week on Bloomberg.
Speaker 1: This is Bloomberg Wall Street Week with David Weston from
Speaker 1: Bloomberg Radio. This is Wall Street Week. I'm and Western
Speaker 1: were joined once again by our special contributor here in
Speaker 1: Wall Street Week. He is Dr Larry Summers of Harvard. So, Larry,
Speaker 1: we heard from j. Powell. We've heard from the last
Speaker 1: three years in Jackson Hall. You weren't too pleased when
Speaker 1: he had his framework a couple of years ago. We
Speaker 1: weren't too pleased about his transitory talk, did you feel
Speaker 1: a little better this year? Look? I think he did
Speaker 1: what he needed to do. It was clear that inflation
Speaker 1: is the overwhelming priority. It was clear, despite some earlier
Speaker 1: confused talk about neutral, that he was under no illusion
Speaker 1: that monetary policy was in an appropriate place right now.
Speaker 1: It was clear that whatever the academic arguments about demand
Speaker 1: shocks versus supply shocks said, the FED couldn't accept UH
Speaker 1: continuing high inflation and had to act until it was
Speaker 1: clear that that was going away. The remarks were very concise.
Speaker 1: There wasn't a lot of uh more academic UH discussion,
Speaker 1: but there was a statement of being resolute UH. So
Speaker 1: I think that's just right. So I think the Fed
Speaker 1: is positioned UH as well as it can be given
Speaker 1: the credibility losses and mistakes that there have been UH.
Speaker 1: With these remarks to manage things going forward. The chair
Speaker 1: never used the word recession at the same time. You
Speaker 1: did talk about below trend growth for an extended period time,
Speaker 1: also in elevated interest race for a good time to come?
Speaker 1: Is he really pointing to recessions between the lines saying
Speaker 1: get ready for it? I think he also had a
Speaker 1: reference to the fact that there was going to be pain.
Speaker 1: He wasn't predicting recession, and after all, even someone who's
Speaker 1: quite pessimistic about the situation like me, is saying that
Speaker 1: there's a seventy chance of recession in the next two years.
Speaker 1: But he was clearly showing an awareness of the possibility, uh, indeed,
Speaker 1: possibly even the likelihood of recession. And I think that
Speaker 1: was very important because saying you're against inflation when there's
Speaker 1: no price to have to resisting inflation or bringing down
Speaker 1: inflation isn't a consequential statement. Today, he prioritized inflation, making
Speaker 1: clear that he recognized that that prioritization would have short
Speaker 1: term adverse consequences that wouldn't be easy, but that by
Speaker 1: bringing down inflation, ultimately there were going to be more
Speaker 1: jobs with higher real wages for more people, and after all,
Speaker 1: what economic policy is all about. It was a big
Speaker 1: change from the J. Powell of a couple of years ago,
Speaker 1: who was speaking about the importance of maximizing employment without
Speaker 1: an awareness of the issues of sustainability, um and long
Speaker 1: run economic performance. So I was quite pleased with uh
Speaker 1: these remarks. So let let's go over to Europe for
Speaker 1: a moment, because they have their own problems over there.
Speaker 1: The e CP is indicating further titan perhaps at the
Speaker 1: same time, they're in for what looks like a substantial
Speaker 1: energy supply shock, particularly as we get into the winner.
Speaker 1: Are we properly appraising what is going on in Europe
Speaker 1: and how bad it could be. Christine Lagarde's got a
Speaker 1: much harder job right now than UH J. Powell does.
Speaker 1: She's got the dilemmas of inflation, but she's got a
Speaker 1: truly massive supply shock with what's happened there with natural
Speaker 1: gas and electricity prices. She has the set of challenges
Speaker 1: of monetary union, problematic politics in is in Italy, very
Speaker 1: high debts in UH the European UH periphery, so they've
Speaker 1: got a very very difficult set of balances, and they
Speaker 1: also have the challenge of a credible currency as the
Speaker 1: euro moves UH to and through parity with the dollar.
Speaker 1: So I think it's going to be a very difficult
Speaker 1: road for them to UH walk in Europe. My suspicion
Speaker 1: would be that they're gonna have to raise rates more
Speaker 1: than is currently priced in, but that that's gonna come
Speaker 1: at a time when there's very substantial recessionary forces UH
Speaker 1: in Europe, and I'm concerned about what that's gonna mean
Speaker 1: for intra European politics. And I'm also concerned ultimately, and
Speaker 1: what I think it's probably most important is how it
Speaker 1: affects Europe's UH fortitude in this very difficult world we
Speaker 1: have with a ravanchist Russia and an aggressive China. Back
Speaker 1: in the States, one big development this week was President
Speaker 1: Biden announcing his plan for relief, at least partial relief
Speaker 1: from student debt loads. We heard Jason Furman, somebody you
Speaker 1: know well respect I respect him as well. He had
Speaker 1: some tweets that were, I think, among other things, said
Speaker 1: this is pouring gasoline on inflation fire. What did you
Speaker 1: make of that policy changed by the administration. I did
Speaker 1: not support large scale UH student UH debt relief because
Speaker 1: I thought it was using federal resources to make transfers
Speaker 1: hundreds of billions of dollars, and I would have liked
Speaker 1: those resources put to better use helping people who were poorer,
Speaker 1: who were more in need, and who would use the
Speaker 1: money to invest more in the future of the economy.
Speaker 1: I think that it does add to demand, which does
Speaker 1: increase inflationary pressures, but that's something that the FED should
Speaker 1: uh be able to offset UH, but it will mean
Speaker 1: more need uh for the Fed to move UH rates.
Speaker 1: And I think it needs to be recognized that this
Speaker 1: is something that's meaningful relative to all the other things
Speaker 1: uh that are uh that are that are going on.
Speaker 1: It's it's not the policy I would have preferred. But
Speaker 1: if this is our biggest mistake, UH, we will be
Speaker 1: doing uh very well. And you know, this is several
Speaker 1: hundred billion dollars over ten years. What we did in
Speaker 1: one was several trillion dollars over one year. So we
Speaker 1: just need to keep perspective on the scale of thish. Larry,
Speaker 1: you have helped set economic policy both of the Treasury
Speaker 1: and at the White House. Was this the economists talking
Speaker 1: or was it the politicians talking? And some people, as
Speaker 1: you know, are starting to say, UH, serious economis are
Speaker 1: not having enough of us say in this White House. Look,
Speaker 1: I'm somebody who always UH believes that uh you can't
Speaker 1: go wrong UH listening uh more to more to UH economics.
Speaker 1: I think in response to many of the frustrations going
Speaker 1: back to the UH financial crisis, there has been some
Speaker 1: movement away from relying on economy lists advice. I think
Speaker 1: over time that will tend to lead to mistakes. Thank
Speaker 1: you so much, Larry for being with us once again.
Speaker 1: That's our special contributor on Wall Street. That's Larry Summers
Speaker 1: of Harvard. Finally, one more thought, Workers of the world unite.
Speaker 1: That was the rallying cry of Karl Marx and Friedrich
Speaker 1: Engels in their Communist Manifesto of eight and their followers
Speaker 1: took a pretty good run at it. But with the
Speaker 1: Soviet Union and all and at the same time, organized
Speaker 1: labor grew in Europe and in Britain and in the
Speaker 1: United States. Even as late as nineteen seventy nine, the
Speaker 1: noble quest of organized labor was celebrated in an Academy
Speaker 1: award for Sally Field leading a sit down as norma Ray.
Speaker 1: But that was then and now is different, as Cornell's
Speaker 1: Alexander Colvin explains, with labor unions losing a fair amount
Speaker 1: of cloud. In the United States, we had workers representative
Speaker 1: in America by unions. Today it's it's a little leven
Speaker 1: percent and down to round six percent of the private sector,
Speaker 1: so unise a much weaker. The question is whether the
Speaker 1: tide may be turning once again, as job markets have
Speaker 1: tightened and big employers like Amazon are facing new organizing attempts.
Speaker 1: Although CEO is like Andy Jasey, insists unions are not
Speaker 1: the answer. We happen to think they're better off without
Speaker 1: a union for a number of reasons, including the fact
Speaker 1: that you know it's it's much harder when you have
Speaker 1: a union to have a direct relationship with your manager
Speaker 1: and to get things done quickly. With the growing push
Speaker 1: by unions and high inflation and economic uncertainty, it comes
Speaker 1: the prospect of course of strikes. Whether it's in West
Speaker 1: coast ports in the United States is obviously anytime you
Speaker 1: have a negotiations like the ports, whether it's on the
Speaker 1: West and East coast, but in this case on the
Speaker 1: West Coast, we want to keep a close eye because
Speaker 1: we know the impact. Said that if if it doesn't
Speaker 1: go well, what what will happen? Or it's Felix, So,
Speaker 1: Britain's largest port, which went on strike just this week.
Speaker 1: This is a significant moment in the UK summer of strike.
Speaker 1: We're on day two. It's about two thousand workers who
Speaker 1: are disputing their pape. Mirsk has already had two rereute
Speaker 1: three wrestles, but it's one thing for stevadors or warehouse
Speaker 1: workers to stand up to management. You know things are
Speaker 1: getting truly rough when it's the lawyers who decided to strike,
Speaker 1: as British barristers did just this week. Kite is what
Speaker 1: we trained for, it is what we do, unhappy with
Speaker 1: the way their fees are lagging behind runaway inflation, putting
Speaker 1: at risk a classic source of Western entertainment. The sort
Speaker 1: of thing depicted in witness for the prosecution question is
Speaker 1: fro out home? Were you lying then? Are you lying now?
Speaker 1: Are you not in fact a chronic and habitual liar?
Speaker 1: Then again, even as a lawyer, I have to ask myself,
Speaker 1: if all the lawyers decide not to work, is that
Speaker 1: an economic headwind or is the detail wind that does it?
Speaker 1: For this episode of Wall Street Week, I'm good Western,
Speaker 1: See you next week. M