WEBVTT - Rivian’s IPO Is Ultimate Validation of Tesla 0:00:01.800 --> 0:00:04.440 This is Bloomberg Business Week. I'm Carole Masser and I'm 0:00:04.480 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanovk. We're here every day bringing 0:00:07.320 --> 0:00:09.840 you the latest news from the world to business and finance, 0:00:09.840 --> 0:00:13.640 plus technology, politics, economics, all purtnising the power of Business 0:00:13.680 --> 0:00:17.119 Week reporters and editors, not to mention our journalists and 0:00:17.120 --> 0:00:20.000 analysts in more than one twenty countries. You can download 0:00:20.000 --> 0:00:23.239 Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot Com. 0:00:23.400 --> 0:00:25.200 You can also listen to our radio show at two 0:00:25.200 --> 0:00:27.760 pm Eastern Time on the Bloomberg Radio or watch us 0:00:27.760 --> 0:00:31.680 on YouTube search Bloomberg clovel News. Alright, let's get back 0:00:31.720 --> 0:00:33.520 to uh, some of what we're seeing in the world 0:00:33.520 --> 0:00:36.560 of COVID and vaccines. The Biden administration we mentioned offering 0:00:36.600 --> 0:00:40.159 drug manufacturers. We're talking about fives or Maderna UH funding 0:00:40.159 --> 0:00:44.880 to expand annual production domestic production, specifically of Messenger RNA 0:00:45.000 --> 0:00:48.600 vaccines by a billion at the b a billion doses 0:00:48.600 --> 0:00:50.800 by the second half of next year. That's significant. That's 0:00:50.800 --> 0:00:53.560 government support, right, very significant. I mean you look to 0:00:53.760 --> 0:00:56.160 doses is what we're supposed to get, at least for 0:00:55.880 --> 0:00:58.680 our first set of doses. But if you think about 0:00:58.680 --> 0:01:02.600 each American needing three, uh, then that covers each American 0:01:02.680 --> 0:01:05.520 and ongoing perhaps. Yeah, well that's the question, right, how 0:01:05.520 --> 0:01:07.240 many boosters are we going to need? Yeah? And meantime, 0:01:07.240 --> 0:01:09.360 we've got new infections in Germany rising to a record 0:01:09.440 --> 0:01:12.119 and death. Let's just get to it though our deli 0:01:12.200 --> 0:01:14.840 check on COVID. Let's bring a pediatrician. Dr Peter Antal. 0:01:15.160 --> 0:01:18.160 He's chief medical officer at the Behavioral Health Solution Company. 0:01:18.160 --> 0:01:21.720 It's specifically geared for kids, teens, their families. He joins 0:01:21.760 --> 0:01:24.080 us on the phone in South Lake Tahoe. Dr Antal, 0:01:24.280 --> 0:01:27.520 Nice to have you here with us. How are you, thanks, Carol. 0:01:27.959 --> 0:01:32.360 It's it's great to be here, and I'm doing great well, great, sure, 0:01:32.480 --> 0:01:34.560 thanks for bringing me on. Well, it's great to have 0:01:34.600 --> 0:01:36.880 you here. Not doing so great though, are certain areas 0:01:36.920 --> 0:01:38.919 of the world when it comes to COVID. We're still, 0:01:38.920 --> 0:01:40.800 you know, keeping an eye on kids. We're seeing it 0:01:40.920 --> 0:01:45.280 rollout for certain kids here in New York City and elsewhere. Um, 0:01:45.319 --> 0:01:47.559 how do you see what's going on with COVID, especially 0:01:47.600 --> 0:01:53.000 with the population you deal with, which is a younger population. Yeah, yeah, absolutely, 0:01:53.200 --> 0:01:55.720 you know, we we we we don't tend to focus 0:01:55.720 --> 0:01:59.240 on children when we're talking about COVID because they don't 0:01:59.280 --> 0:02:02.480 tend to get usually as sick as as older adults 0:02:02.520 --> 0:02:05.240 do unless they have a chronic condition. Um. But but 0:02:05.360 --> 0:02:09.680 you know, children are spreaders of disease, and uh, children 0:02:09.720 --> 0:02:12.800 still do get COVID, they still do get hospitalized. And 0:02:12.840 --> 0:02:16.079 I think the last number I saw, they've been sediatric 0:02:16.160 --> 0:02:20.040 deaths due to COVID since the pandemic began. So it's 0:02:20.040 --> 0:02:22.640 still a serious issue. I think that you know, we're 0:02:22.680 --> 0:02:26.320 we're excited that the vaccines are now being tested and 0:02:26.360 --> 0:02:28.840 proven to be effective and safe down to at least 0:02:28.880 --> 0:02:31.000 for the Fiser vaccine, now down to age five, so 0:02:31.320 --> 0:02:34.280 it gives us an opportunity to try to better protect 0:02:34.280 --> 0:02:36.480 the children. It is a serious issue. It's also can 0:02:36.520 --> 0:02:39.400 be very disruptive to people's lives. And I'm speaking as 0:02:39.440 --> 0:02:41.480 a parent of a nearly three year old who's home 0:02:41.520 --> 0:02:44.640 from nursery school right now because school is canceled until 0:02:44.639 --> 0:02:47.000 at least Friday, because one of the parents of one 0:02:47.040 --> 0:02:49.880 of the kids in my son's class has a breakthrough case. 0:02:50.360 --> 0:02:53.360 And I wonder, we don't know if anyone else has COVID, 0:02:53.360 --> 0:02:56.400 and likely they don't, fortunately, and everybody's healthy, but it 0:02:56.680 --> 0:02:58.800 certainly is disruptive to a lot of families out there 0:02:58.880 --> 0:03:01.600 right now. I'm I'm wondering, dr antal when we can 0:03:01.639 --> 0:03:05.399 expect to have vaccines available for the youngest in our population, 0:03:05.440 --> 0:03:08.440 those under the age of five. You know, it's a 0:03:08.480 --> 0:03:10.639 good question, and it's it's hard to put a timeline 0:03:10.680 --> 0:03:13.120 on that, you know, I think both are all of 0:03:13.160 --> 0:03:16.320 the vaccine manufacturers, of course, started with with adults and 0:03:16.360 --> 0:03:20.560 then are marching down in in age groups and testing serially. 0:03:20.800 --> 0:03:24.919 Um so, the testing, uh is ongoing. I think we 0:03:24.960 --> 0:03:29.679 should expect vaccine availability down to at least age six 0:03:29.720 --> 0:03:31.920 months sometime and I would hope and then in the 0:03:31.960 --> 0:03:35.760 next year or so. Okay, well that's not bad. Well, 0:03:35.840 --> 0:03:37.600 and I'm gonna let you play with this tim because 0:03:37.600 --> 0:03:39.560 I feel like you've got a younger one. I've got 0:03:39.600 --> 0:03:42.240 an older one. She's vaccinated, she can get her boosters 0:03:42.280 --> 0:03:45.080 and things like that. Um well, since around top of 0:03:45.120 --> 0:03:47.800 mind for you especially, it's it's it's basically like, this 0:03:47.880 --> 0:03:49.920 is our life right now, and we're choosing again not 0:03:50.000 --> 0:03:52.680 to fly with our son to see family, and for 0:03:52.720 --> 0:03:54.680 the second year in a row, we haven't been back 0:03:54.720 --> 0:03:56.760 to visit my parents in California. We have been able 0:03:56.800 --> 0:03:58.560 to see them, but you know, he hasn't been there 0:03:58.560 --> 0:04:03.920 since gosh twenty Yeah, and I just wonder if this 0:04:03.960 --> 0:04:05.320 is I turned to my wife the other day and said, 0:04:05.360 --> 0:04:07.600 this is our life, for the for the for this 0:04:07.680 --> 0:04:09.200 is like how we're thinking about things now. I mean, 0:04:09.200 --> 0:04:10.520 this is kind of the new normal right now, and 0:04:10.520 --> 0:04:13.040 I'm wondering, uh dr ante if it goes back to 0:04:13.080 --> 0:04:18.560 what we had before, not being concerned about this. Yeah, well, 0:04:18.600 --> 0:04:21.240 you know, I think what we don't know right now 0:04:21.400 --> 0:04:23.440 is what what what's the future going to look like? 0:04:23.640 --> 0:04:26.800 You know, is is COVID gonna eventually be conquered and 0:04:26.839 --> 0:04:28.520 go away or are we just gonna have to learn 0:04:28.520 --> 0:04:30.800 to live with it and have to get you know, 0:04:30.880 --> 0:04:34.640 periodic vaccines maybe every few years, uh, something analogous to 0:04:34.680 --> 0:04:37.200 what we do with influenza those, although those are recommended 0:04:37.200 --> 0:04:40.000 of course yearly. Um, we just don't know, and it's 0:04:40.040 --> 0:04:42.359 that that uncertain is just so challenging. You know. It 0:04:42.400 --> 0:04:46.040 feels as though we've we've made progress. We're back out 0:04:46.160 --> 0:04:49.080 and going to restaurants and things like this, many of us, 0:04:49.160 --> 0:04:51.919 but we're still not quite there, and I think, you know, 0:04:51.960 --> 0:04:54.800 I want to turn it to the impact on children. 0:04:55.160 --> 0:04:57.440 You know, imagine, if you're an eight year old, a 0:04:57.520 --> 0:05:00.799 quarter of your life has been in the age of COVID. Yeah, um, 0:05:00.920 --> 0:05:04.279 the impact on their development, the impact on their mental health, 0:05:04.760 --> 0:05:09.960 um is really substantial. Well because a survey a Lurry 0:05:10.040 --> 0:05:14.960 Children's it said, uh of parents are worried about their 0:05:15.000 --> 0:05:18.880 child's mental mental health right now. Yeah. A colleague of mine, 0:05:18.880 --> 0:05:21.000 I remember a few months ago and I'm like, how 0:05:21.080 --> 0:05:23.320 you doing? And hes a young child, and he's like, 0:05:23.360 --> 0:05:25.080 I've got a young child. I think, you know, it's 0:05:25.080 --> 0:05:27.719 probably depressed because I can't play with friends, can't go outside, 0:05:27.720 --> 0:05:30.839 can't do anything, and how do you You know, you 0:05:30.920 --> 0:05:32.960 definitely have to see get some help because this is 0:05:33.000 --> 0:05:35.000 just a really tough on kids. You do. But at 0:05:35.000 --> 0:05:36.840 the same time, we do have vaccines available for those 0:05:36.880 --> 0:05:39.120 kids ages five and up. And I've seen just a 0:05:39.160 --> 0:05:41.480 sea change with my friends with kids those ages who 0:05:41.520 --> 0:05:43.320 have been able to get their kids vaccinated. They are 0:05:43.360 --> 0:05:45.359 so grateful. Right, it's a comfort level. It's just like 0:05:45.360 --> 0:05:47.640 the rest of us. There's some stress that's taken off 0:05:47.680 --> 0:05:49.400 that you can be out in the world. Um. Dr 0:05:49.440 --> 0:05:52.280 Peter Antal, Thank you so much, pediatrician, chief medical officer 0:05:52.279 --> 0:05:55.560 at bright Line. On the phone from South Wake, Tahoe, California. 0:05:56.000 --> 0:06:00.000 This is Bloomberg Business Week with Carol Messer and Bloomberg 0:06:00.080 --> 0:06:04.200 Quick Takes Tim Stinovich from Bloomberg Radio. So perhaps a 0:06:04.279 --> 0:06:06.440 sign of Tesla's success. We're going to get into that 0:06:06.560 --> 0:06:08.200 in just a moment of validation of the e V 0:06:08.360 --> 0:06:11.560 world in a company though with no sales worth a 0:06:11.640 --> 0:06:14.400 hundred and fifty billion dollars, that is really an automotive 0:06:14.400 --> 0:06:16.360 which shout out of the ip O gate just last 0:06:16.400 --> 0:06:19.040 week doubled in value before dipping back. Just to hair, 0:06:19.320 --> 0:06:23.599 It's still up, Tim, since becoming a publicly held company 0:06:23.839 --> 0:06:25.919 billion dollars in market cap, fewer than one hundred of 0:06:25.960 --> 0:06:31.880 these vehicles sold so far, Joel, would Van be the 0:06:32.000 --> 0:06:36.600 company that it is today without that investment from Amazon, However, 0:06:36.760 --> 0:06:39.360 Editor Bloomberg Business Week, along with Matt Winkler, who is 0:06:39.400 --> 0:06:42.840 of course editor in chief Amritus here at Bloomberg News. Uh, 0:06:42.920 --> 0:06:46.480 the answer to that is a definite no. Um. There 0:06:46.560 --> 0:06:49.279 was one company that basically has has laid an appetite 0:06:49.279 --> 0:06:52.800 for electric vehicles, not only in the US, but globally, 0:06:52.839 --> 0:06:57.520 and that company is Tesla, right, Matt, correct? So can 0:06:57.520 --> 0:07:01.839 you talk about the assignment was let's talk about Rivian 0:07:01.960 --> 0:07:05.120 Ribvians going public. This other company ten years ago went public. 0:07:05.240 --> 0:07:08.080 How did they compare when they went public? Man, So, Joel, 0:07:08.200 --> 0:07:10.840 you are actually the person to answer your own question, 0:07:10.920 --> 0:07:13.840 but I'll do it for you because you said, you know, 0:07:14.080 --> 0:07:17.720 I think this piece really belongs in the technology section 0:07:18.240 --> 0:07:21.400 of Bloomberg Business Week, And I think by that you 0:07:21.480 --> 0:07:24.440 meant really what this is about more than anything else, 0:07:24.480 --> 0:07:27.480 It's less about cars per se and more about technology. 0:07:27.520 --> 0:07:31.240 And what Tesla is about is that back in two 0:07:31.280 --> 0:07:35.760 thousand ten when it went public, uh, it was promising 0:07:36.040 --> 0:07:41.440 something that was completely absent from the automotive industry, and 0:07:41.520 --> 0:07:44.760 that is the zero mission vehicle. And this is at 0:07:44.760 --> 0:07:47.560 a time when not a lot of people yet have 0:07:47.840 --> 0:07:53.000 truly appreciated the existential threat of climate change. The thing 0:07:53.080 --> 0:07:55.640 that happened was that Tesla turned out to be a 0:07:55.720 --> 0:07:59.040 great product from the get go, and that people who 0:07:59.080 --> 0:08:03.360 bought the Model US for example, yours truly included a 0:08:03.400 --> 0:08:07.280 long time ago two thousand fourteen, realized it was every 0:08:07.320 --> 0:08:11.400 bit as competitive, if you like, and comfortable and efficient 0:08:11.520 --> 0:08:14.360 in fact, some ways much more so than an internal 0:08:14.360 --> 0:08:20.200 combustion engine. And Tesla to answer Joel's question with a fact, 0:08:20.840 --> 0:08:26.320 Teslas sold four hundred times four hundred times the average 0:08:27.120 --> 0:08:31.840 annual growth of the automotive industry in a ten year period. 0:08:31.840 --> 0:08:34.080 Think about that four hundred times now when you think 0:08:34.080 --> 0:08:37.360 that's like eyeballs. Okay, we all get excited about eyeballs 0:08:37.400 --> 0:08:41.600 these days. In technology, Tesla was able to create something 0:08:41.679 --> 0:08:44.880 and that of course paved the way for Ribbyan and 0:08:44.920 --> 0:08:47.959 these other companies. And that's why Ribban has the valuation 0:08:47.960 --> 0:08:50.840 that it has. Okay, but this is no easy feet 0:08:50.880 --> 0:08:54.120 and it's something that Elon Musk tweeted about. He tweeted, 0:08:54.120 --> 0:08:57.160 when Ribbian when public, I hope they're able to achieve 0:08:57.240 --> 0:08:59.920 high production and break even cash flow. There have been 0:09:00.040 --> 0:09:03.040 hundreds of automotive startups, both electric and combustion, but Tesla 0:09:03.120 --> 0:09:05.079 is the only American car maker to reach high volume 0:09:05.120 --> 0:09:08.120 production and positive cash flow in the past one years. 0:09:08.160 --> 0:09:12.319 How does Rivian do this? Well, there's someone called Jeff 0:09:12.360 --> 0:09:16.640 Bezos for one thing, and Amazon, and uh, that's a 0:09:16.679 --> 0:09:21.480 pretty formidable Uh if you like backer big shareholder, biggest shareholder, 0:09:22.000 --> 0:09:25.960 and that is something that makes Ribban very different from 0:09:26.000 --> 0:09:29.400 Tesla when it started. You're absolutely right, or he's absolutely 0:09:29.520 --> 0:09:33.319 right that Musk turns out to be a relative miser 0:09:33.760 --> 0:09:39.040 by comparison to ribbyan um in the spending of money. Uh. 0:09:39.080 --> 0:09:42.520 Certainly in the two years before it went public, Ribban 0:09:42.559 --> 0:09:46.680 has spent far more money, uh Tesla spent of what 0:09:47.160 --> 0:09:51.559 Rivian spent. Having said that, though the world's changed, and 0:09:51.640 --> 0:09:54.920 so the betting is that because the world's changed, and 0:09:55.040 --> 0:10:00.760 because Amazon has already ordered a hundred thousand van, and 0:10:00.960 --> 0:10:04.840 there's some thinking here that vans are really an important 0:10:04.880 --> 0:10:08.040 part of the market that people haven't thought about until 0:10:08.120 --> 0:10:11.520 Rivan came along. And Rivan is going to benefit from 0:10:11.559 --> 0:10:16.840 all kinds of commercial logistics operators. It's not just Amazon 0:10:16.960 --> 0:10:20.720 are going to embrace the electric van, uh, and they 0:10:20.880 --> 0:10:23.120 first move her advantage in that right, they could be 0:10:23.679 --> 0:10:25.760 for sure. I mean, you know, that's where they are 0:10:25.840 --> 0:10:28.880 right now, and that partly explains why they're where they are. 0:10:29.000 --> 0:10:31.760 But coming back to Musk's point, if you're an investor 0:10:32.200 --> 0:10:35.280 and you're a shareholder, you have to take seriously what 0:10:35.320 --> 0:10:38.760 he's saying, because it's true in a hundred years, whether 0:10:38.800 --> 0:10:42.720 you're looking at internal combustion engines or electric Uh. No 0:10:42.760 --> 0:10:45.360 one has been able to get the kind of break 0:10:45.440 --> 0:10:50.680 even cash flow performance that Tesla has, and that makes Tesla, 0:10:51.440 --> 0:10:53.760 you know, stand out for sure. One thing I wanted 0:10:53.760 --> 0:10:56.600 to ask you what's missing Cathy Wood? And I know 0:10:56.640 --> 0:10:58.200 you've covered her a lot. You've talked to her a lot. 0:10:58.240 --> 0:10:59.640 I've talked to her a lot. We've talked to her 0:10:59.640 --> 0:11:05.280 a lot. Um she didn't invest in Rivan, did she know? Right? 0:11:05.520 --> 0:11:09.120 And we did catch up with her um somewhat belatedly 0:11:09.280 --> 0:11:12.360 right after the ribby and I p O. And what 0:11:12.400 --> 0:11:14.680 we really wanted to know was has she changed her 0:11:15.160 --> 0:11:17.800 view in any way? Uh? In her view, of course, 0:11:17.880 --> 0:11:23.280 is she's an unabashed UH supporter of Tesla, remains so 0:11:23.760 --> 0:11:29.040 and believes that Tesla, for example, has billions of miles 0:11:29.160 --> 0:11:32.400 if you like, of memory that is incorporated in the 0:11:32.440 --> 0:11:36.840 Tesla ecosystem that no other EV maker has and that 0:11:37.040 --> 0:11:39.160 is a huge advantage when we get to things like 0:11:39.200 --> 0:11:44.560 automotive uh self driving vehicles, that Tesla has a huge 0:11:44.559 --> 0:11:47.760 advantage over everyone. And she hasn't changed her view there, 0:11:48.400 --> 0:11:50.200 you know, Matt, As long as we're we've got our 0:11:50.280 --> 0:11:53.520 investor hat on here. The one that that the question 0:11:53.559 --> 0:11:57.320 I was wanted to ask you is And this was 0:11:57.320 --> 0:11:59.560 surprising because I think people forget about it when Tesla 0:11:59.559 --> 0:12:03.320 went pub lick did it have products? Because Rivian's gone 0:12:03.320 --> 0:12:06.280 in public and really doesn't have much of anything to 0:12:06.320 --> 0:12:09.839 show yet. Yeah, Tesla actually in two thousand and ten 0:12:09.960 --> 0:12:14.079 had the roadster, and the roadster had been around for 0:12:14.280 --> 0:12:19.959 many years actually and was written up by the Arbiters 0:12:20.000 --> 0:12:25.120 of Automotive Excellence as an excellent vehicle even though it 0:12:25.200 --> 0:12:28.680 was a roadster. So there was a lot of evidence 0:12:28.760 --> 0:12:32.720 to suggest that this electric vehicle that Tesla had created 0:12:33.400 --> 0:12:37.680 was a standout, and of course that paved the way 0:12:37.679 --> 0:12:42.840 for the models in two thousand UM twelve. So take 0:12:42.880 --> 0:12:46.680 away from Rivian and it's blockbuster, IPA, Tesla, You're for real? 0:12:47.160 --> 0:12:49.440 Is that kind of the takeaway? Year? Uh? If you 0:12:49.480 --> 0:12:52.800 asked Cathy would she would say? Yes, everything, um that 0:12:52.920 --> 0:12:57.040 you see from Tesla is definitely real, and only more 0:12:57.080 --> 0:12:59.800 so than it's only gonna it's only going to increase 0:13:00.000 --> 0:13:01.600 in just twenty seconds or thursdays. What does it mean 0:13:01.600 --> 0:13:05.000 for Rivian then, well, you know at this point it's 0:13:05.040 --> 0:13:09.440 almost rising tide lifts soul boats, um We're not just 0:13:09.480 --> 0:13:13.040 talking about Ribby. And there's Lucid, which is another highly brod. Look, 0:13:13.360 --> 0:13:17.120 here's the thing, here's the takeaway. More than two thirds 0:13:17.240 --> 0:13:20.040 of the top automakers in the world top ten, are 0:13:20.080 --> 0:13:25.679 now electric. Think about that. That was improbable, if not impossible, 0:13:25.880 --> 0:13:28.840 a year ago to say that's a short time That's 0:13:28.840 --> 0:13:31.080 a short time frame for such a big difference. The 0:13:31.160 --> 0:13:34.720 message investors are setting sending is evs are here to 0:13:34.720 --> 0:13:36.079 stay in there the future, and what are we talking 0:13:36.080 --> 0:13:39.240 about every day? Grifvian Tesla, Matt, thank you so much, 0:13:39.240 --> 0:13:41.680 really appreciate Matt Winkler. He's editor in chief Emeritus at 0:13:41.720 --> 0:13:44.319 Bloomberg News. Check him out at Bloomberg dot com. Joel Webber, 0:13:44.360 --> 0:13:46.360 thank you so much. This story in the upcoming issue 0:13:46.400 --> 0:13:48.760 of Bloomberg Business Week magazine. Joe, of course, editor of 0:13:48.800 --> 0:13:52.240 Bloomberg Business Week. That new issue out tomorrow newsstands online 0:13:52.240 --> 0:13:55.040 and oways on the Bloomberg terminal. You are listening to 0:13:55.080 --> 0:14:05.040 Bloomberg Radio. This is Bloomberg Business Week with Carol Messer 0:14:05.280 --> 0:14:10.240 and Bloomberg Quick Takes Tim Stinovik on Bloomberg Radio. So 0:14:10.440 --> 0:14:12.480 looking forward to this next guest. He and I email 0:14:12.520 --> 0:14:16.120 back and forth. Helas sends me thought thoughtful notes. Uh. 0:14:16.160 --> 0:14:17.719 And when it comes to the economy and some of 0:14:17.760 --> 0:14:19.880 the big trends that are going on, he's got a 0:14:19.960 --> 0:14:23.200 research note doubt and it's entitled It's not the economy Stupid, 0:14:23.240 --> 0:14:26.200 it is vulnerability. Not my words, they are the words 0:14:26.200 --> 0:14:28.960 of Peter Atwater. He's adjunct professor of economics. That William 0:14:29.000 --> 0:14:32.840 and Mary. He's back with us on the phone in Pennsylvania. Peter, 0:14:32.880 --> 0:14:35.720 how are you. I'm doing great. Thanks for having me back. 0:14:35.840 --> 0:14:38.080 So listen. It's great to have you back because Peter, 0:14:38.160 --> 0:14:40.320 you know you listen to us. As I said, you 0:14:40.360 --> 0:14:43.080 send notes and thoughts and observations. We are all talking 0:14:43.160 --> 0:14:45.840 a lot about inflation and supply shortages. The Bloomberg New 0:14:45.880 --> 0:14:49.360 Economy Forum is underway in Singapore. That is certainly top 0:14:49.400 --> 0:14:52.320 of mine on a global level. Um, whether it's tight 0:14:52.360 --> 0:14:55.360 labor markets, we see strong demand. There's like this really 0:14:55.400 --> 0:14:58.640 weird though disconnect because we keep talking about consumer sentiment. 0:14:58.720 --> 0:15:02.120 Everybody is so downtrodden. Um, what is your take on 0:15:02.160 --> 0:15:05.280 all of this? What's really important? So I think what's 0:15:05.280 --> 0:15:09.120 happened is that in the last year we've awakened to 0:15:09.280 --> 0:15:14.160 vulnerability and vulnerability A lot of people talk about it, 0:15:14.200 --> 0:15:17.120 you know, burn a Brown and folks think about it 0:15:17.160 --> 0:15:19.200 in a different way than I do. And I think 0:15:19.200 --> 0:15:23.560 of it in terms of vulnerability is the opposite of confidence, 0:15:23.720 --> 0:15:27.080 that when we don't have certainty, when we don't have 0:15:27.160 --> 0:15:31.840 control in our lives, we somehow feel threatened. Nowhere was 0:15:31.880 --> 0:15:36.320 that clear than with the pandemic last spring. But what 0:15:36.400 --> 0:15:39.600 we've seen since then has been this ebbing and flowing 0:15:39.680 --> 0:15:43.960 of vulnerability. And you know, you mentioned inflation and supply 0:15:44.080 --> 0:15:47.560 chain shortages, and that's that's scarcity. You know that, that's 0:15:47.600 --> 0:15:51.520 how we interpret both of them psychologically. And so I 0:15:51.560 --> 0:15:55.920 think that below the surface of these record markets is 0:15:56.200 --> 0:15:59.400 really growing anxiety that things are not as certain as 0:15:59.440 --> 0:16:01.800 we like them to be, and we're not quite sure 0:16:01.840 --> 0:16:05.120 what to do. So what is the connection between that 0:16:05.200 --> 0:16:09.680 vulnerability that you write about, lack of childcare, the ongoing pandemic. 0:16:09.960 --> 0:16:13.960 How does that manifest in a lack of spending or 0:16:13.960 --> 0:16:17.800 in consumer activity? What's the connection there? So I think 0:16:17.880 --> 0:16:21.120 that you have to look at it by economic strata, 0:16:21.200 --> 0:16:23.360 because you know, when I when I wrote about the 0:16:23.400 --> 0:16:26.720 k shaped recovery last year, it was about this divide 0:16:26.760 --> 0:16:31.360 in in confidence and ability, and so what you're seeing 0:16:31.440 --> 0:16:35.320 for those who do feel confident that there is, you know, 0:16:35.400 --> 0:16:38.400 almost this sense of unlimitedness in terms of what they 0:16:38.400 --> 0:16:40.400 can afford and what they can spend and what they 0:16:40.400 --> 0:16:45.360 are spending and spending on. But as you deep dig 0:16:45.440 --> 0:16:49.680 down deeper into the into different parts of the economy, 0:16:49.880 --> 0:16:53.480 you begin to realize that wage growth isn't keeping up 0:16:54.040 --> 0:16:56.920 and that people are now being forced to make real 0:16:57.000 --> 0:17:00.800 choices between what they can afford. You know, what do 0:17:00.840 --> 0:17:03.360 they need versus what do they want? So wait, Peter, 0:17:03.440 --> 0:17:05.720 So somebody at comes say wait a minute, Peter Atwater. 0:17:06.119 --> 0:17:08.280 You know, everybody keeps talking about we're paying workers more 0:17:08.320 --> 0:17:10.600 and more they're doing okay. We've also done the stories 0:17:10.640 --> 0:17:13.560 that it's not keeping up with inflation. So I mean, 0:17:13.600 --> 0:17:16.040 what is your what is your pushback against that that? 0:17:16.119 --> 0:17:18.080 You know, we do the stories on Wall Street about 0:17:18.080 --> 0:17:21.920 bonuses going up and you know, people jumping firms, Um, 0:17:22.040 --> 0:17:24.680 how do we make sense of that? So I think 0:17:24.760 --> 0:17:28.240 firms have to be really careful in trying to address 0:17:28.359 --> 0:17:32.960 what they think the problem is through money, because what's 0:17:33.040 --> 0:17:37.520 becoming very clear as I talked to businesses and business 0:17:37.520 --> 0:17:42.600 owners as you dig deeper. What they're finding is that 0:17:42.760 --> 0:17:48.240 the thing's employees need go beyond just more you know, 0:17:49.080 --> 0:17:51.960 higher wages. I mean, if you if you look at 0:17:52.000 --> 0:17:55.760 the strikes that are going on. Yes, wages are a 0:17:55.800 --> 0:17:58.679 part of it, but there's a much greater sense of 0:17:58.720 --> 0:18:02.000 working conditions. And you know, what do we do about 0:18:02.080 --> 0:18:07.080 child care? And you know, firms that didn't respond to 0:18:07.160 --> 0:18:11.280 the vulnerability that employees were feeling last year are really 0:18:11.359 --> 0:18:15.119 taking it in the shorts now are there? Is this 0:18:15.160 --> 0:18:18.280 a firm level approach though? Does it? Does it? Is 0:18:18.280 --> 0:18:20.119 that the most effective way to tackle it? Because you 0:18:20.160 --> 0:18:23.920 have Democrats in Washington saying this is the type of 0:18:24.480 --> 0:18:28.160 stuff we need to write into legislation. Yeah. I I'm 0:18:28.200 --> 0:18:33.160 a believer that when it comes to vulnerability, proximity matters. 0:18:33.280 --> 0:18:37.840 You know, every crisis is local, and so policy makers 0:18:38.240 --> 0:18:42.520 want to solve these problems with broad brushes. But whether 0:18:42.640 --> 0:18:46.440 you're Republican or Democrat, the issue is much more localized. 0:18:46.960 --> 0:18:50.119 And so I would much rather see you know, whether 0:18:50.160 --> 0:18:54.639 it's local communities or or businesses themselves, be given the 0:18:54.680 --> 0:18:57.199 tools to deal with this versus some sort of a 0:18:57.280 --> 0:19:00.520 top down approach. The top town takes too long, it 0:19:00.600 --> 0:19:04.359 tends to be too broad in its approach, and honestly, 0:19:04.440 --> 0:19:08.960 when we feel vulnerable, Washington feels very abstract to us. 0:19:10.119 --> 0:19:14.680 It's hard to gain a sense of control when when 0:19:14.720 --> 0:19:17.320 power is far away from you. Peter, you write, the 0:19:17.320 --> 0:19:20.000 great reassessment is not only a reflection, well, let me 0:19:20.040 --> 0:19:23.560 go back. Traumatic events also foster reconsideration for what matters 0:19:23.560 --> 0:19:25.200 and how with whom we wish to spend what we 0:19:25.280 --> 0:19:29.000 view as increasingly precious time. Been there, that's my own 0:19:29.000 --> 0:19:32.000 personal assessment. You go on to say, the great reassessment 0:19:32.080 --> 0:19:33.840 is not only a reflection of that, but a reflection 0:19:33.880 --> 0:19:35.800 of the fact that we never go back to before 0:19:35.960 --> 0:19:38.919 after trauma. Our actions are framed our experience, and we 0:19:38.960 --> 0:19:41.879 move forward looking to eliminate the vulnerability we've experienced. We 0:19:41.960 --> 0:19:45.400 must create new norms, routines, and habits. Will you say, then, 0:19:45.760 --> 0:19:48.480 go as far as as as a society and certainly 0:19:48.560 --> 0:19:51.720 as a professional corporate society. We're not facing up to 0:19:51.760 --> 0:19:54.640 that yet. We I feel like we see it with 0:19:54.880 --> 0:19:58.720 the tug between hybrid not hybrid, going back to the 0:19:58.840 --> 0:20:02.360 office not going back, you know, corporate executives saying, oh yeah, 0:20:02.440 --> 0:20:04.760 we're cool, We're all in on you know, flexibility, and 0:20:04.880 --> 0:20:09.240 yet behind the scenes they're not UM. Yeah. So so 0:20:09.520 --> 0:20:12.280 I really believe that when we don't go back to 0:20:12.320 --> 0:20:15.120 what was, And so I think business leaders who are 0:20:15.119 --> 0:20:20.640 expecting employees to go back are are missing a very 0:20:20.680 --> 0:20:24.679 significant part of this, which is one, you know, the 0:20:24.720 --> 0:20:27.680 longer people are out, the fewer employees will actually come back. 0:20:28.280 --> 0:20:31.520 Just statistically, you know, at this point you're lucky if 0:20:31.600 --> 0:20:35.959 se your folks come back just based on turnover. But 0:20:35.960 --> 0:20:40.040 but I think that the bigger concern here is that 0:20:40.359 --> 0:20:45.920 companies are not hearing the vulnerabilities that people that employees 0:20:45.960 --> 0:20:49.920 have experienced in the last year, and so they need 0:20:49.960 --> 0:20:52.959 to be listening for where do employees feel like they 0:20:52.960 --> 0:20:56.800 don't have control today, whether it's in their workplace or 0:20:56.840 --> 0:21:00.800 at home, and what do they still think is uncertain 0:21:01.359 --> 0:21:04.800 as far as the work environment. With us is Peter Atwater, 0:21:04.880 --> 0:21:07.840 Adjunct Professor of Economics, Everet William and Mary still with 0:21:07.920 --> 0:21:10.560 us on the phone in Pennsylvania. So, Peter, you're talking 0:21:10.600 --> 0:21:16.879 about UM recognizing how the vulnerability that's out there and 0:21:16.920 --> 0:21:21.040 what that is doing to individuals people's confidence. And I 0:21:21.080 --> 0:21:26.399 do wonder what's the significance of the world of companies 0:21:26.440 --> 0:21:29.320 not facing up to that we're not going to go 0:21:29.400 --> 0:21:33.880 back to life as it was before our trauma, which 0:21:33.920 --> 0:21:35.520 was the pandemic. And I guess what I'm getting to 0:21:35.600 --> 0:21:37.320 And my producers know this really well. Like when we're 0:21:37.359 --> 0:21:39.600 booking a guest or somebody says something, it's like, tell 0:21:39.640 --> 0:21:42.800 me why I care? Tell me why as a human 0:21:42.880 --> 0:21:45.000 I care? Why is an investor I care about this? 0:21:46.000 --> 0:21:49.919 You care about this because vulnerability is as much a 0:21:49.960 --> 0:21:55.800 cognitive condition as it is anything else. So your employees 0:21:56.000 --> 0:22:01.280 are preoccupied. They're worried about something that happening in their life, 0:22:01.359 --> 0:22:05.680 not what is driving your business. Um And I think 0:22:05.720 --> 0:22:09.639 for employers, they need to recognize that that has a 0:22:09.680 --> 0:22:13.040 real impact on your on their bottom line. That and 0:22:13.400 --> 0:22:17.560 I know from experience, you know, working with managers who 0:22:17.560 --> 0:22:20.840 have found that, you know, it's it's the car trouble 0:22:21.480 --> 0:22:25.680 that that an employee faces that is what is making 0:22:25.720 --> 0:22:28.040 it difficult for them to show up on work and 0:22:28.119 --> 0:22:30.800 to pay attention at work because they're worried about that 0:22:31.280 --> 0:22:35.199 or the child care or these these things that seemingly 0:22:35.720 --> 0:22:40.760 feel minor to many corporate leaders. Is what is preoccupying 0:22:41.280 --> 0:22:44.560