WEBVTT - Is Trump on a Collision Course With California Over Emissions? 0:00:05.800 --> 0:00:08.720 Welcome to the Bloomberg P and L Podcast. I'm Pim Fox. 0:00:08.760 --> 0:00:11.520 Along with my co host Lisa Bramowitz. Each day we 0:00:11.640 --> 0:00:15.120 bring you the most important, noteworthy, and useful interviews for 0:00:15.200 --> 0:00:17.840 you and your money, whether you're at the grocery store 0:00:17.960 --> 0:00:20.720 or the trading floor. Find the Bloomberg P M L 0:00:20.840 --> 0:00:30.840 Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot Com. We 0:00:30.960 --> 0:00:33.479 hear a lot about increasing tensions between some of the 0:00:33.479 --> 0:00:38.000 biggest states with respect to air pollution controls and Washington, 0:00:38.159 --> 0:00:41.120 d C, where President Trump has taken a more lax 0:00:41.360 --> 0:00:44.479 stance with respect to pollution controls. I want to bring 0:00:44.560 --> 0:00:47.680 in Mary Nichols, chair of the California Air Resources Board, 0:00:47.920 --> 0:00:49.760 which is based in Los Angeles, but she joins us 0:00:49.760 --> 0:00:52.640 here in our Bloomberg leven three studios UH and UH. 0:00:52.680 --> 0:00:57.920 Mary was crucial in revealing the Volkswagen's diesel cheating scandal. 0:00:58.520 --> 0:01:02.080 She has talked in Germany about this. She also has 0:01:02.160 --> 0:01:07.240 taken really a hard line with respect to tightening our standards. 0:01:07.280 --> 0:01:10.640 And I'm so glad that you're here. I'm wondering it's 0:01:10.680 --> 0:01:14.520 California headed on a collision course with Washington, d C. 0:01:14.680 --> 0:01:17.760 And sort of how ugly could this get well, I 0:01:17.800 --> 0:01:21.640 hope not. We're trying not to be on a collision course. 0:01:21.680 --> 0:01:25.880 We're trying to continue along a path that began really 0:01:25.920 --> 0:01:33.160 many years ago, where California generally identifies a pollution problem 0:01:33.280 --> 0:01:39.040 and helps to identify the technologies that could could solve 0:01:39.120 --> 0:01:41.840 that problem and do it in a way that's also 0:01:41.880 --> 0:01:45.440 good for the economy, and then usually within a period 0:01:45.480 --> 0:01:48.240 of a few years, the federal government steps up and 0:01:48.280 --> 0:01:51.680 adopts the same standards. That's what happened at the beginning 0:01:51.760 --> 0:01:56.080 of the Obama administration when we locked in a national 0:01:56.200 --> 0:02:01.120 program that combined fuel economy standards a end greenhouse gas 0:02:01.120 --> 0:02:04.480 emission standards at the federal and the state level. So 0:02:04.760 --> 0:02:08.920 we've been on a path working collaboratively with the federal 0:02:08.960 --> 0:02:13.720 government UM for quite a few years now. When President 0:02:13.720 --> 0:02:17.680 Obama came in, he immediately indicated that he wanted to 0:02:18.520 --> 0:02:22.320 put a halt and re examine that program. And so 0:02:22.360 --> 0:02:25.240 we're in the midst of that process right now. It's 0:02:25.320 --> 0:02:30.320 not a foregone conclusion that the standards will change, and actually, UM, 0:02:30.360 --> 0:02:33.760 the auto industry as a whole has indicated that they 0:02:33.760 --> 0:02:37.000 don't want to throw out this whole program. What they're 0:02:37.040 --> 0:02:40.880 hoping to do, in their terms, would be tweak the 0:02:40.960 --> 0:02:44.560 standards and the enforcement provisions a little bit, but not 0:02:44.680 --> 0:02:49.280 really halted. Now. I think part of the rationale there 0:02:49.400 --> 0:02:52.920 is that they know that getting better fuel economy is 0:02:53.000 --> 0:02:55.880 popular with the American public. It may not be the 0:02:55.960 --> 0:02:58.679 most important thing that people look at when they are 0:02:58.720 --> 0:03:01.840 making a purchase decay vision for a car or a 0:03:01.919 --> 0:03:05.760 light truck, but people really like it that the vehicles 0:03:05.800 --> 0:03:08.800 that are out there today are so much more efficient 0:03:08.800 --> 0:03:11.040 than they used to be. But we're going to have 0:03:11.120 --> 0:03:14.480 to see what this administration decides they want to do. 0:03:15.280 --> 0:03:21.919 Mary explain to people perhaps the differences between emissions rules 0:03:21.960 --> 0:03:26.600 and regulations in California and in other states, although there 0:03:26.600 --> 0:03:29.239 are some states that have similar emissions and I'm wondering 0:03:29.560 --> 0:03:32.560 if there is a push to offer a more consistent 0:03:32.680 --> 0:03:35.800 national emissions program because each state has its own. You know, 0:03:35.840 --> 0:03:38.200 you want to register a car, let's say, in California, 0:03:38.480 --> 0:03:40.720 if it's older than I believe, was it sixty five 0:03:40.800 --> 0:03:42.840 or seventy five, you don't have to go through an 0:03:42.840 --> 0:03:46.480 emissions test. So you know, there's so many different differences 0:03:46.520 --> 0:03:51.120 between states. What characterizes California, Well, actually there are only 0:03:51.200 --> 0:03:57.440 two emissions standards federal and there's federal and California. Other 0:03:57.520 --> 0:04:00.280 states can if they want to opt in to the 0:04:00.360 --> 0:04:04.720 California program, and there are thirteen states that have done that. 0:04:05.200 --> 0:04:09.080 So it's basically the northeastern states and the Pacific coast 0:04:09.120 --> 0:04:13.320 states Oregon and Washington with California and then the rest 0:04:13.320 --> 0:04:18.039 of the country having the federal standards. But the good 0:04:18.040 --> 0:04:20.960 news at the moment is that although there are differences 0:04:21.040 --> 0:04:24.400 in some of the features like inspection and maintenance requirements 0:04:24.440 --> 0:04:27.000 and when you have to reregister and all that kind 0:04:27.000 --> 0:04:29.719 of thing, when it comes to the cars that are 0:04:29.839 --> 0:04:35.640 built by the auto manufacturers, UM, they really now build 0:04:35.680 --> 0:04:39.839 them all to one standard. Because we and the federal 0:04:39.880 --> 0:04:44.599 government agreed on the greenhouse gas emission standards UH and 0:04:44.680 --> 0:04:49.920 have been pursuing a common pattern since we thought we 0:04:49.960 --> 0:04:55.640 had locked this in until but now, because of the 0:04:55.760 --> 0:05:01.440 Trump administration's desire to redo the so called mid term 0:05:01.560 --> 0:05:04.520 review that was a part of that program, we're in 0:05:04.560 --> 0:05:07.839 a holding pattern at the moment while they decide what 0:05:07.880 --> 0:05:10.279 they want to do. Another front of this is that 0:05:10.360 --> 0:05:15.440 California has been requiring a higher proportion of electric vehicle 0:05:15.960 --> 0:05:20.400 UH cars sales does anyone want to buy them? Oh yes, Um, 0:05:20.480 --> 0:05:24.120 so we now have three hundred and twenty thousand and 0:05:24.279 --> 0:05:28.800 change electric cars on the roads in California. They're beginning 0:05:28.839 --> 0:05:31.680 to pop up in places, and not just in San 0:05:31.720 --> 0:05:35.559 Francisco or l A where they're very visible. Uh, And 0:05:35.760 --> 0:05:39.880 because of that we are seeing a real increase. It 0:05:40.080 --> 0:05:43.560 still is one of those technologies that many people think 0:05:43.680 --> 0:05:46.839 is somehow pie in the sky. They're not really aware 0:05:47.000 --> 0:05:50.919 of how many different models of electric vehicles are available. 0:05:51.320 --> 0:05:55.359 But this summer we saw proliferation at county fairs of 0:05:55.600 --> 0:05:59.880 ride and drive opportunities where hundreds of thousands of people 0:06:00.040 --> 0:06:03.520 in total came out just to try out some of 0:06:03.520 --> 0:06:08.040 the new electric vehicles. I wonder how much power it 0:06:08.080 --> 0:06:13.560 gives California from a negotiating perspective that China and other 0:06:13.640 --> 0:06:17.440 countries are so aggressively trying to promote electric vehicles, so 0:06:17.720 --> 0:06:20.719 to be able to say, the automakers look from a 0:06:20.760 --> 0:06:25.160 competitive advantage, you need you need to go for this. Well, 0:06:25.560 --> 0:06:28.520 we like to think that our stance as having been 0:06:28.600 --> 0:06:33.400 pioneers with promoting electric vehicles helped to get the companies 0:06:33.440 --> 0:06:36.920 to the point where they made the decisions to build these. 0:06:37.120 --> 0:06:41.440 Now very attractive models that are out there offered for sale. 0:06:41.839 --> 0:06:46.200 But China is on its own course, and obviously a 0:06:46.240 --> 0:06:50.440 mandate from China is going to have an enormous leveraging 0:06:50.480 --> 0:06:54.039 effect because they're such a huge potential market out there, 0:06:54.440 --> 0:06:57.080 and they're saying they're not going to allow any internal 0:06:57.080 --> 0:07:01.400 combustion engines at all after twenty dirty so just a period, 0:07:01.480 --> 0:07:05.080 don't even try that. That certainly gets the car company's 0:07:05.120 --> 0:07:09.120 attention in a way that even California can't do. Mary, 0:07:09.200 --> 0:07:12.000 do you and other members of the California Air Resources 0:07:12.080 --> 0:07:15.120 Board and vision at time when we will have self 0:07:15.240 --> 0:07:18.760 driving trucks and that truck drivers will be more like 0:07:18.960 --> 0:07:24.320 airplane pilots with autopilot features rather than the way they 0:07:24.360 --> 0:07:28.680 operate now. I actually think that trucks could be in 0:07:28.760 --> 0:07:33.240 some ways the ideal place for some of the autonomous 0:07:33.320 --> 0:07:38.200 driving features to be introduced early, because they have so 0:07:38.280 --> 0:07:45.040 many safety features associated with them. Um, I myself least 0:07:44.880 --> 0:07:49.560 a new car just two years ago. I hadn't bought 0:07:49.600 --> 0:07:52.600 a new car in years. I won't bother to justify that, 0:07:52.680 --> 0:07:57.200 but just say I'm cheap. But the fact is that 0:07:57.480 --> 0:08:02.600 cars nowadays, you know, anything above the least expensive car 0:08:02.920 --> 0:08:05.760 already comes with certain features that I had never heard 0:08:05.800 --> 0:08:08.680 of before, like something that beeps at you when you 0:08:08.760 --> 0:08:11.480 cross over the white line, and you know, a light 0:08:11.560 --> 0:08:13.960 that flashes in their rear view mirror that tells you 0:08:14.000 --> 0:08:16.640 when there's somebody coming too close to you. These are 0:08:16.680 --> 0:08:20.600 things that are tremendous safety features, but if you put 0:08:20.640 --> 0:08:22.840 them into a truck, it's going to make a huge 0:08:22.880 --> 0:08:25.880 difference because the trucks do so much more damage. Thank 0:08:25.920 --> 0:08:29.000 you very much. Mary Nichols, chair of the California Air 0:08:29.080 --> 0:08:32.320 Resources Board, speaking to us here at our Bloomberg eleven 0:08:32.360 --> 0:08:46.560 three oh Studios. This is Bloomberg. I want to turn 0:08:46.559 --> 0:08:49.360 our attention now to the world of equal pay for 0:08:49.480 --> 0:08:52.360 equal work. And Bob Morrits is the chairman of Price 0:08:52.440 --> 0:08:56.880 Waterhouse Cooper's International and the Price Waterhouse Cooper's has just 0:08:56.920 --> 0:09:00.839 put together the Heat for She Impact Sport and here 0:09:00.880 --> 0:09:03.400 to tell us more about what it revealed. Bob more, 0:09:03.440 --> 0:09:05.920 it's Bob. Thanks for being with us. Maybe you could 0:09:05.960 --> 0:09:08.720 just give us some of the highlights for the results 0:09:08.720 --> 0:09:12.960 of the annual report. Sure, I love to um first. 0:09:12.960 --> 0:09:15.079 The Heat First SHE initiative is something that the u 0:09:15.280 --> 0:09:18.640 N sponsors, which is a effort to get more men 0:09:19.760 --> 0:09:22.480 uh in the business of supporting women, both at a 0:09:22.559 --> 0:09:25.439 corporate level, at a country level, and at an educational level. 0:09:25.960 --> 0:09:29.040 And we had ten Impact Champions from university, ten country 0:09:29.120 --> 0:09:32.840 leaders as well as ten corporate leaders exemplifying what we're 0:09:32.840 --> 0:09:37.480 looking for individual organizations and individuals themselves to do. So 0:09:37.520 --> 0:09:41.520 what the report focuses on is what progress have women made. 0:09:42.360 --> 0:09:46.440 It provides some insights and hopefully some inspiration for the 0:09:46.480 --> 0:09:49.360 thirty organizations to ten by ten by ten in terms 0:09:49.440 --> 0:09:54.280 of what they've done in their own organizations, countries or institutions, 0:09:54.360 --> 0:09:57.839 and exemplifies the benefit that can come from it. So, 0:09:57.920 --> 0:10:00.199 for example, we heard from the pres is it in 0:10:00.240 --> 0:10:04.559 a Malawi who changed laws to allow for and eliminate 0:10:05.320 --> 0:10:08.240 child marriages, um that put more women in the education 0:10:08.280 --> 0:10:11.400 system that allow for them to have job opportunities. Thereafter, 0:10:11.480 --> 0:10:14.920 we heard from university presidents in terms of what they 0:10:14.920 --> 0:10:18.440 were doing to deal with sexual assault and discrimination. And 0:10:18.440 --> 0:10:20.640 we heard from the corporates both in terms of what 0:10:20.679 --> 0:10:23.360 they're doing to increase the number of women both in 0:10:23.480 --> 0:10:28.080 leadership roles as well as to move forward with pay equity, 0:10:28.160 --> 0:10:30.200 as well as what corporates are doing to help in 0:10:30.240 --> 0:10:34.240 the education system to enable women to bigger opportunities, particularly 0:10:34.240 --> 0:10:37.000 in the STEM research areas that are important to the 0:10:37.040 --> 0:10:40.120 future of work in various countries around the world. Bob 0:10:40.440 --> 0:10:45.680 in the US, what is the major obstacle to women 0:10:45.920 --> 0:10:50.640 having more prominent roles and organizations? From our perspective, what 0:10:50.679 --> 0:10:55.280 we see is it's a combination of the unconscious preferences 0:10:55.400 --> 0:10:59.160 or biases that come out of organizations. UM. If you 0:10:59.240 --> 0:11:03.040 think about roles, for example, UM, there's very few women 0:11:03.040 --> 0:11:05.320 on boards today and those boards are responsible or picking 0:11:05.320 --> 0:11:08.320 the new CEOs UM, So it's not surprising that there's 0:11:08.360 --> 0:11:12.280 a biased um that might come from that. But nonetheless, 0:11:12.320 --> 0:11:14.120 we've got to do more to get more women, um 0:11:14.200 --> 0:11:16.080 at the top of the house in these board rooms. 0:11:16.120 --> 0:11:19.440 So there's a different perspective. And when you have women 0:11:19.440 --> 0:11:22.319 on the boards, our own study has found actually diversity 0:11:23.000 --> 0:11:26.079 becomes an important factor in thinking about leadership succession as 0:11:26.080 --> 0:11:27.959 the men are in the room that it's not the one, 0:11:28.000 --> 0:11:30.560 two or three issue that's top of mind for them. UM. 0:11:30.760 --> 0:11:32.600 The second thing I would say is that we've got 0:11:32.600 --> 0:11:34.880 to make sure that organizations do a much better job 0:11:34.920 --> 0:11:38.640 with their talent management, succession planning and making sure that 0:11:38.679 --> 0:11:42.400 the women have the opportunities because the women are equally 0:11:42.440 --> 0:11:44.440 qualified to do these roles. It's a cruel matter of 0:11:44.480 --> 0:11:47.800 creating the opportunity for success being business unit leaders and 0:11:47.880 --> 0:11:50.800 driving that. And this is where data becomes important. What 0:11:50.840 --> 0:11:53.600 we have found is there's tremendous amount of data now 0:11:53.840 --> 0:11:57.240 demonstrating where policies need to change, where perhaps leaders might 0:11:57.280 --> 0:12:00.520 have those unconscious or conscious preferences or biases. And the 0:12:00.600 --> 0:12:03.880 data can allow for organizations to pinpoint what changes you 0:12:03.920 --> 0:12:06.160 need to make it kind an organization and where the 0:12:06.160 --> 0:12:09.160 efforts should be pinpointed for hopefully turning the actions into 0:12:09.200 --> 0:12:12.080 better results than better outcomes. You know, maybe I'm just 0:12:12.160 --> 0:12:15.880 revealing my bias here, but in my experience, a lot 0:12:15.880 --> 0:12:18.280 of it does come down to childcare and if the 0:12:18.320 --> 0:12:22.480 woman is the primary caretaker, which usually that is the assumption, 0:12:22.960 --> 0:12:26.440 she is going to prefer to have a lighter schedule 0:12:26.440 --> 0:12:29.000 and a less prominent rule in order to take care 0:12:29.040 --> 0:12:31.000 of her family. Sometimes it's not even a preference, it's 0:12:31.000 --> 0:12:33.679 a it's a mandatory kind of reality of life. So, 0:12:33.800 --> 0:12:35.679 I mean, what what what what What did you say 0:12:35.679 --> 0:12:38.960 to that? Yeah, it's it's definitely one of a few 0:12:39.000 --> 0:12:41.360 issues that actually have to be dealt with at the 0:12:41.400 --> 0:12:44.000 corporate level UM. And here's what we see organization is doing. So, 0:12:44.080 --> 0:12:47.240 for example, with us at PwC, we put in a 0:12:47.280 --> 0:12:50.240 number of different policy changes. So give you another stat 0:12:50.280 --> 0:12:53.640 which is when women leave from alternity to leave out 0:12:53.640 --> 0:12:55.120 of side and of mind more than one year and 0:12:55.160 --> 0:12:57.960 they come back into the system because they're out of 0:12:57.960 --> 0:13:01.560 side of the mind, there's automatically a decrease in their 0:13:01.600 --> 0:13:05.559 reading and assessment of their performance. Why is that. It's 0:13:05.559 --> 0:13:07.320 probably because they were out of sight, out of mind 0:13:07.360 --> 0:13:09.000 for a period of time, or there might be some 0:13:09.400 --> 0:13:12.079 unconscious behavior for it. So we as a P two 0:13:12.080 --> 0:13:15.559 BC organization change the way in which we do evaluations 0:13:15.679 --> 0:13:19.200 for women that have left on alternatively UM and giving 0:13:19.240 --> 0:13:21.440 them a two year period where we're saying, hey, listen, 0:13:21.480 --> 0:13:24.160 if they come back into doing good work, their assessments 0:13:24.160 --> 0:13:27.080 should not change. The second thing we've done is provide 0:13:27.120 --> 0:13:31.160 more opportunity for flexibility. We've got more women that are 0:13:31.160 --> 0:13:33.960 being promoted at a senior level that have flexible schedules 0:13:33.960 --> 0:13:35.560 and we need to role model them and put them 0:13:35.559 --> 0:13:38.520 in places more accepting. And third, we're actually putting in 0:13:38.559 --> 0:13:41.480 more support care UM to make sure that there's an 0:13:41.520 --> 0:13:46.080 opportunity for them to leverage tools UM and other methodologies 0:13:46.120 --> 0:13:48.160 as well as other support groups to deal with the 0:13:48.240 --> 0:13:50.440 child care issues. So there's a big opportunity, but it 0:13:50.520 --> 0:13:53.440 causes the management teams to look at that data and 0:13:53.480 --> 0:13:56.520 then take the appropriate actions necessary to address that data. 0:13:57.040 --> 0:13:59.160 What you do with women is much different than what 0:13:59.200 --> 0:14:01.680 you need to do to overcome some of the challenges 0:14:01.679 --> 0:14:05.040 with minorities, for example, men or women. UM, So, I 0:14:05.080 --> 0:14:07.240 think that's where people have got to be very tailored. 0:14:07.240 --> 0:14:10.360 There's no one silver bullet or one size. SIT's all well, well, Bob, 0:14:10.360 --> 0:14:13.800 I mean I understand all these initiatives, programs and you know, 0:14:14.040 --> 0:14:17.839 management training efforts, but why don't you just pay people 0:14:17.880 --> 0:14:20.720 more money? I mean, why do this? What's the incentive? 0:14:20.760 --> 0:14:23.320 I mean it may sound great and it sounds fair, 0:14:23.720 --> 0:14:26.080 but if you're a manager who isn't going to get 0:14:26.080 --> 0:14:31.000 any financial bonus or any financial incentive to, let's say, 0:14:31.120 --> 0:14:34.040 hire women or make women more prominent in the organization, 0:14:35.040 --> 0:14:38.600 why wouldn't you just use the incentive of pay people 0:14:38.640 --> 0:14:40.960 more for doing whatever it is you want them to do. 0:14:42.120 --> 0:14:45.120 So we'll take your your point in sort of flip 0:14:45.160 --> 0:14:47.880 it a little bit um. There's organizations now that are 0:14:47.960 --> 0:14:50.480 much better, and we made a change about three years ago. 0:14:50.600 --> 0:14:53.080 Was one of our commitments to He for She, which 0:14:53.160 --> 0:14:55.920 was to put a diversity index in place. That caused 0:14:55.960 --> 0:14:58.400 us to get very specific with our leadership teams around 0:14:58.400 --> 0:15:03.000 expectations were now there's risk and reward to their compensation model. 0:15:03.120 --> 0:15:05.640 To your point, right, how do they actually lead? By example, 0:15:06.040 --> 0:15:07.960 let'son sent them. But now we can pinpoint with the 0:15:08.040 --> 0:15:10.680 right data where people are not doing what's needed and 0:15:10.720 --> 0:15:13.520 therefore there is a negative or a negative implication of 0:15:13.560 --> 0:15:16.600 their compensation. So you do have the data to say 0:15:16.600 --> 0:15:19.960 who's doing things quantitatively as well as get a sense qualitative. 0:15:20.000 --> 0:15:24.600 With some feedback processes, you can adjust accordingly um compensation 0:15:24.640 --> 0:15:27.760 for your leadership team if you're very specific on accountability 0:15:27.800 --> 0:15:31.120 and you hold them accountable very specifically in terms of 0:15:31.160 --> 0:15:33.240 your assessment on their performance as well as in the 0:15:33.280 --> 0:15:36.600 compensation that they received. Bob Maritz, thank you so much 0:15:36.600 --> 0:15:40.560 for joining us. He's chairman of Price Waterhouse Cooper's International Limited, 0:15:40.920 --> 0:15:44.000 which is based in New York, and they just put 0:15:44.000 --> 0:15:47.920 out this Heat for Sheet Impact Report, a lengthy look 0:15:48.080 --> 0:15:52.160 at what the obstacles are to getting more women and 0:15:52.480 --> 0:15:56.560 UH and a broader diversity of employees into positions of 0:15:56.600 --> 0:16:12.200 power and earning more well. There has been an escalating 0:16:12.400 --> 0:16:16.040 war of words and threats between North Korea and the 0:16:16.120 --> 0:16:19.120 United States. The latest is in North Korea is threatening 0:16:19.120 --> 0:16:22.080 to test a powerful nuclear weapon over the Pacific Ocean 0:16:22.080 --> 0:16:27.359 in response to President Donald Trump's threats and increased sanctions 0:16:27.480 --> 0:16:30.360 on the country. To give us a sense of what's 0:16:30.400 --> 0:16:34.440 at stake here, how much more this exacerbates the tensions here. 0:16:34.480 --> 0:16:37.040 I want to bring in Scott Seeman uh. He is 0:16:37.120 --> 0:16:40.880 the director for Asia at Eurasia Group, which is based 0:16:40.880 --> 0:16:42.760 in Washington, d C. Scott, thank you so much for 0:16:42.840 --> 0:16:46.560 joining us. So this seems alarming. I'm wondering at what 0:16:46.640 --> 0:16:52.200 point does this escalation of words bleed over into escalation 0:16:52.240 --> 0:16:58.200 and actual physical combat. So we still attach a pretty 0:16:58.200 --> 0:17:03.480 low probability to the risk of an actual military conflict UM. 0:17:03.560 --> 0:17:07.040 And that's talking about a wide range of scenarios, everything 0:17:07.160 --> 0:17:12.680 from uh, someone starting intentionally an attack to an accident 0:17:12.720 --> 0:17:16.719 or miscalculation kind of getting out of control and pushing 0:17:16.720 --> 0:17:19.760 in a direction of a larger conflict UM. So we're 0:17:19.760 --> 0:17:23.240 not you know, we're not overly concerned at this point 0:17:23.480 --> 0:17:28.000 that this rhetoric that we're seeing is really escalating the 0:17:28.119 --> 0:17:34.040 chances of something going awry. But certainly the threat to 0:17:34.359 --> 0:17:38.399 send a missile someplace over the Pacific and detonate it UH, 0:17:38.440 --> 0:17:40.920 that adds a new element that the US and other 0:17:40.920 --> 0:17:44.000 countries are going to have to take into consideration. Scott. 0:17:44.440 --> 0:17:47.480 In the past month, North Koreans have launched two missiles 0:17:47.520 --> 0:17:51.480 over Japan. They tested a sixth and powerful nuclear device. 0:17:51.560 --> 0:17:55.120 They described it as a hydrogen bomb, and that follows 0:17:55.240 --> 0:18:00.399 two successful test launches of intercontinental ballistic missiles in July. 0:18:01.000 --> 0:18:04.280 If they try to put both of those technologies together. 0:18:04.840 --> 0:18:07.840 What could the United States or its allies in Asia 0:18:07.960 --> 0:18:11.080 do if indeed they tried to launch and test a 0:18:11.200 --> 0:18:16.440 hydrogen weapon in the atmosphere over the Pacific Ocean. So 0:18:16.560 --> 0:18:19.520 the range of options everything from some sort of a 0:18:19.520 --> 0:18:23.359 surgical strike UH to try to eliminate some of the 0:18:23.359 --> 0:18:29.359 capabilities that preemptively. I don't think preemptively is you know, 0:18:29.440 --> 0:18:33.600 unless there was intelligence that said that the North Koreans 0:18:33.600 --> 0:18:36.200 were fueling up a rocket that was going to threaten 0:18:36.960 --> 0:18:39.639 the United States or an ally with an actual UH 0:18:40.080 --> 0:18:43.119 nuclear weapon. No, I don't think a preemptive strike is 0:18:43.160 --> 0:18:47.239 probably in the cards, but we'll we'll have to be 0:18:47.280 --> 0:18:51.640 watching to see what kind of preparations the satellites give 0:18:51.720 --> 0:18:54.680 us an indication that the North Koreans are doing, and 0:18:54.920 --> 0:18:58.399 certainly there will be a whole range of options that 0:18:58.480 --> 0:19:01.720 military leaders here in the US and elsewhere we'll have 0:19:01.760 --> 0:19:04.359 to sit down and start thinking about. Now. You know, 0:19:04.600 --> 0:19:08.080 I have to wonder what the reaction is within North 0:19:08.160 --> 0:19:12.960 Korea among the common folk, because these increased sanctions are 0:19:13.000 --> 0:19:17.320 only going to exacerbate food shortages that have been brought 0:19:17.359 --> 0:19:19.440 about by the worst drought since two thousand and one 0:19:19.560 --> 0:19:24.000 in the country. Is there any chance of rising political 0:19:24.000 --> 0:19:27.920 tensions within North Korea? I doubt it. I think we've 0:19:27.920 --> 0:19:32.960 been hoping for that for decades and and it hasn't happened. 0:19:33.520 --> 0:19:37.200 I think the normal people, the people who are outside 0:19:37.200 --> 0:19:41.000 of Kongyang, who are not part of the government elite. Uh, 0:19:41.040 --> 0:19:45.359 they're simply trying to get through uh, you know, every day. UM. 0:19:45.400 --> 0:19:47.679 I don't think that the economy is in a state 0:19:47.800 --> 0:19:51.840 right now that we're looking at starvation famine on the 0:19:51.880 --> 0:19:55.680 scale that we saw under Kim Jong UN's father, for example. 0:19:55.720 --> 0:19:58.680 The economy seems to be performing relatively well, so they've 0:19:58.680 --> 0:20:01.159 got quite a bit of a cushion. Uh. So I 0:20:01.200 --> 0:20:03.159 think the chances of some sort of a you know, 0:20:03.200 --> 0:20:07.920 a political crisis or or an uprising, uh would you know, 0:20:08.000 --> 0:20:10.720 it's extremely remote. And again we've been hoping for that 0:20:10.960 --> 0:20:14.240 for decades and it just hasn't materialized, you know, Scott. 0:20:14.560 --> 0:20:19.359 Despite some people's lamenting the increasing war of words between 0:20:19.440 --> 0:20:22.639 Kim Jong un and President Trump, some others say that 0:20:22.760 --> 0:20:24.960 actually this is just highlighting a problem that has been 0:20:24.960 --> 0:20:28.359 going on for a long time, that the situation is 0:20:28.359 --> 0:20:31.399 coming to a head, not because of the words, but 0:20:31.480 --> 0:20:34.080 because of what's been behind it and what's been sort 0:20:34.119 --> 0:20:37.520 of left for future presidents to deal with. Do you 0:20:37.560 --> 0:20:40.000 agree with that or do you think that that there 0:20:40.040 --> 0:20:42.840 has been some kind of material escalation since the beginning 0:20:42.880 --> 0:20:47.359 of the year. So I hate to go into assessing 0:20:47.400 --> 0:20:51.679 whether previous governments in the US or elsewhere could have 0:20:51.720 --> 0:20:54.760 done more, should have done more. Um, I think you 0:20:54.800 --> 0:20:59.040 can always say that probably more effort in time could 0:20:59.040 --> 0:21:02.119 have been put into ensuring that we don't get to 0:21:02.160 --> 0:21:05.200 the point that we're at right now. But that's where 0:21:05.200 --> 0:21:10.640 we are, and certainly the pace of development around these 0:21:10.680 --> 0:21:14.840 weapons that we've been seeing has greatly accelerated. People are 0:21:14.840 --> 0:21:19.320 talking about this being a breakout, meaning that they have 0:21:19.600 --> 0:21:25.080 really moved quickly towards eventually getting the technology that they 0:21:25.119 --> 0:21:29.359 require for a viable I CBM. So, uh, this is 0:21:29.480 --> 0:21:32.720 moving all in the wrong direction. Um. The flip side 0:21:32.720 --> 0:21:34.639 of that, of course, is that one part of the 0:21:34.720 --> 0:21:37.679 strategy to deal with North Korea is to ensure that 0:21:37.800 --> 0:21:40.720 this becomes a bigger crisis for China, hoping that that 0:21:40.760 --> 0:21:43.399 will motivate Beijing to do more as well. Well, we 0:21:43.440 --> 0:21:45.679 know that the Chinese have just forbidden their banks to 0:21:45.720 --> 0:21:49.359 do business transact business with companies in the North Korea. 0:21:49.400 --> 0:21:52.080 That was announced earlier today. But just quickly, Scott, what 0:21:52.080 --> 0:21:55.040 do you think about the the sort of fear that 0:21:55.080 --> 0:21:58.840 people are not expressing. I'm looking at the Korean stock index. 0:21:59.080 --> 0:22:01.080 It is of more than seven in team percent year 0:22:01.119 --> 0:22:03.520 to date, and it doesn't seem as if investors care. 0:22:03.680 --> 0:22:07.520 Give you about seconds, Yeah, no, we we've seen the 0:22:07.560 --> 0:22:10.680 markets really kind of shrug off a lot of this. 0:22:11.160 --> 0:22:14.040 Part of it is probably because this is so this 0:22:14.119 --> 0:22:17.439 is such a common occurrence, But I think the market 0:22:17.480 --> 0:22:20.960 is probably needing to spend a little more time looking 0:22:21.000 --> 0:22:24.440 at this issue. Well, I guess that's a diplomatic way 0:22:24.600 --> 0:22:27.160 saying no one's afraid, but it might not be bad 0:22:27.200 --> 0:22:29.239 to look over your shoulder at least a little bit. 0:22:29.280 --> 0:22:31.440 Thanks very much, Scott Seaman, he is the director of 0:22:31.480 --> 0:22:34.199 Asia for the Eurasia Group, giving us his thoughts on 0:22:34.960 --> 0:22:38.440 the turmoil that exists on the Korean peninsula. As I said, 0:22:38.520 --> 0:22:41.440 the South Korean stock index, the costpy up more than 0:22:41.480 --> 0:22:55.439 seven and a half percent so far. It is a 0:22:55.480 --> 0:22:57.520 bad day for grub hub today. It is a very 0:22:57.520 --> 0:23:00.600 bad day because Amazon is looking at their business model 0:23:00.640 --> 0:23:03.119 and saying we can do that too. To tell us 0:23:03.160 --> 0:23:06.520 more is Craig Giamana. He's consumer reporter for Bloomberg News, 0:23:06.720 --> 0:23:10.240 and he joins us now Amazon dot Com is about 0:23:10.359 --> 0:23:13.879 to get into the or deeper into the food delivery business. 0:23:13.960 --> 0:23:16.000 What's going on here, like give us a label? End? Yeah, 0:23:16.000 --> 0:23:18.560 So they have, um, they've had Amazon restaurants for a while. 0:23:18.600 --> 0:23:21.400 I think they started that in Seattle. You know, it's 0:23:21.440 --> 0:23:23.600 it's still pretty small, and I don't think it's quite 0:23:23.600 --> 0:23:26.280 crossed over into you know, mainstream peel and they haven't 0:23:26.280 --> 0:23:29.080 really attracted many national chains. Is the big thing. So 0:23:29.520 --> 0:23:31.200 the news today is that they're partnering with a company 0:23:31.240 --> 0:23:34.560 called Olo, which provides digital order and pay solutions for 0:23:34.600 --> 0:23:38.000 about two restaurant brands that have forty tho locations, and 0:23:38.040 --> 0:23:40.280 they're going to basically make it easy for all of 0:23:40.320 --> 0:23:42.480 their customers to work with Amazon. So, yes, this is 0:23:42.520 --> 0:23:46.040 Amazon making a big push into the restaurant delivery space, 0:23:46.040 --> 0:23:47.760 which has gotten more and more popular it seems like 0:23:47.800 --> 0:23:50.080 every year. Hey Craig, does this mean that Amazon gets 0:23:50.080 --> 0:23:53.719 an exclusive with those customers, No, it doesn't. What it 0:23:53.760 --> 0:23:56.040 means basically is that if you are an OLO customer, 0:23:56.359 --> 0:23:59.359 you can easily tap into Amazon restaurants. So the feeling 0:23:59.440 --> 0:24:02.600 is that places like shake Shack, Chipotle's catering business that 0:24:03.119 --> 0:24:05.199 sort of they'll flip the switch and turn this on. 0:24:05.280 --> 0:24:07.040 But also what it does this is a little bit 0:24:07.080 --> 0:24:09.720