WEBVTT - Little Boxes All The Same 0:00:03.800 --> 0:00:07.080 Welcome to Bloomberg Opinion. I'm Vonnie Quinn this week. It's 0:00:07.200 --> 0:00:09.560 terrible to move ahead with something that looks like a 0:00:09.640 --> 0:00:13.000 partisan prosecution, but it's also terrible to let a president 0:00:13.039 --> 0:00:15.600 get away with crimes. Jonathan Bernstein on the progress of 0:00:15.600 --> 0:00:18.160 the House January six Committee, and later a look at 0:00:18.200 --> 0:00:22.120 China's economic woes with Julie Ren and Tim Coulban. First, 0:00:22.560 --> 0:00:25.079 people might be coming back to big cities post pandemic. 0:00:25.360 --> 0:00:27.440 One thing that never went away though, and is in 0:00:27.480 --> 0:00:31.840 fact proliferating even more post pandemic big box apartment buildings. 0:00:32.040 --> 0:00:35.000 I spoke to Justin Fox about housing renting and all 0:00:35.000 --> 0:00:38.880 the problems associated with So justin mortgage rates finally topped 0:00:38.920 --> 0:00:40.720 six percent, So I imagine there's going to be a 0:00:40.720 --> 0:00:43.159 lot more renters out there. Is that a question of 0:00:43.159 --> 0:00:46.200 supply and demand as to how prices go. I mean, 0:00:46.440 --> 0:00:50.800 clearly we've been switching to more people renting versus owning 0:00:51.120 --> 0:00:54.360 over the past ten or fifteen years, and I think 0:00:54.480 --> 0:00:57.440 right now, yeah, if somebody who was looking to buy 0:00:57.440 --> 0:00:59.880 a house with a mortgage is suddenly going to be 0:00:59.920 --> 0:01:02.680 a much different situations, so they'll probably be more demand 0:01:02.720 --> 0:01:05.800 to rent both houses and apartments. The thing is in 0:01:05.840 --> 0:01:08.640 New York City and I imagine other large cities, pandemic 0:01:08.640 --> 0:01:11.640 rents meant that it was possible for artists and people 0:01:11.640 --> 0:01:13.120 who didn't make a whole lot of money to move 0:01:13.160 --> 0:01:15.720 into the city. Are they all now being pushed out 0:01:15.760 --> 0:01:18.720 of the city, the ones that had the courage to move. Yeah. 0:01:18.760 --> 0:01:20.559 And I don't know that there were all that many 0:01:20.600 --> 0:01:22.720 people who did that or thought that the lower rents 0:01:22.760 --> 0:01:26.360 would stick forever, but definitely rents went up in all 0:01:26.360 --> 0:01:30.120 of these suburban areas and in cities like Boise, and 0:01:30.160 --> 0:01:32.479 those have settled down some, but cities where they fell 0:01:32.520 --> 0:01:35.760 a lot, especially in New York, they've come careening back up. 0:01:35.920 --> 0:01:40.320 We're hearing stories about the median price increasing third base 0:01:40.319 --> 0:01:43.880 effects involved. These are obviously above pre pandemic rerants, but 0:01:43.920 --> 0:01:46.600 it's a different city as well. Yeah, I mean there's 0:01:46.600 --> 0:01:49.480 a lot of demand to rent apartments. I guess there 0:01:49.480 --> 0:01:51.600 were some people who thought, in the depths of the 0:01:51.640 --> 0:01:54.200 pandemic in two thousand twenty that no one would ever 0:01:54.240 --> 0:01:56.000 want to live in a city again, But that's not 0:01:56.080 --> 0:01:58.400 what's happened. Which brings me to one of your recent 0:01:58.440 --> 0:02:01.840 columns about Big Boxy apart buildings, which really I guess 0:02:01.880 --> 0:02:04.040 went out of style during the pandemic because you were 0:02:04.040 --> 0:02:05.760 beating in everybody else's air. There was a lot of 0:02:05.760 --> 0:02:07.440 people walking in out of the buildings and so on. 0:02:07.520 --> 0:02:08.840 I mean, I don't know, I don't think they ever 0:02:08.880 --> 0:02:11.080 went out of style, but definitely you would have thought 0:02:11.160 --> 0:02:14.000 they would have. Given all the rhetoric against cities and 0:02:14.040 --> 0:02:16.200 apartment buildings and all, and you know, for a couple 0:02:16.200 --> 0:02:19.799 of months there as someone who lives in an apartment building, 0:02:19.800 --> 0:02:21.520 and you know it would have been nice not to 0:02:21.919 --> 0:02:24.000 have to share the air with everyone else. Well, you 0:02:24.040 --> 0:02:26.760 looked into the data, and apparently they're actually getting more 0:02:26.800 --> 0:02:30.560 and more plentiful. In fact, yeah, there's this great annual 0:02:30.639 --> 0:02:33.400 data release from the Census Bureau that is sort of 0:02:33.440 --> 0:02:35.359 my favorite data release, and I've seen it be the 0:02:35.400 --> 0:02:39.000 only person favorite data release who who looks out for it, 0:02:39.000 --> 0:02:41.880 because it's all these great things like how many fireplaces 0:02:41.880 --> 0:02:46.040 there are in new houses and how many bedrooms and bathrooms. 0:02:46.360 --> 0:02:47.960 One of the things they keep track of is just 0:02:48.120 --> 0:02:52.800 housing units completed by the size of the building in 0:02:53.040 --> 0:02:56.679 multifamily apartment buildings. And something kind of remarkable happened last 0:02:56.720 --> 0:03:01.200 year that more apartments were built in Buildings of fifty 0:03:01.320 --> 0:03:06.120 units are more than ever before in US history. Two 0:03:06.360 --> 0:03:09.359 D are we talking about across the United States? Across 0:03:09.400 --> 0:03:13.160 the US where mostly the South is overall where most 0:03:13.320 --> 0:03:17.280 construction is happening. So just about half we're in the South, 0:03:17.720 --> 0:03:19.560 and then a lot in the West and less in 0:03:19.600 --> 0:03:21.760 the Midwest and a bunch of the Northeast. What's the 0:03:21.800 --> 0:03:24.919 impetus for these big buildings. Part of it is that 0:03:25.040 --> 0:03:28.239 there's been an increase in demand for apartments, partly because 0:03:28.280 --> 0:03:31.959 of this slight switch away from ownership since the financial 0:03:32.000 --> 0:03:34.519 crisis that will now get sort of renewed boost with 0:03:34.600 --> 0:03:38.360 high mortgage rates. Also, it's that in big metropolitan areas 0:03:38.400 --> 0:03:42.120 there's limited space on which to build. It's often close 0:03:42.280 --> 0:03:46.080 to commercial districts because you're less likely to have NIMBI 0:03:46.120 --> 0:03:49.800 homeowners saying don't build an apartment building there. And increasingly 0:03:49.920 --> 0:03:53.520 the development of apartment buildings is sort of driven by 0:03:53.560 --> 0:03:57.640 these big institutional actors, and you know, for them, it's 0:03:57.640 --> 0:03:59.880 not worth it to build a couple of duplexes. They 0:04:00.160 --> 0:04:03.200 to build big projects. So what you get is these 0:04:03.280 --> 0:04:07.680 larger buildings. And I mean another aspect is this change 0:04:07.720 --> 0:04:11.720 in building codes and adaptation by builders to it has 0:04:11.760 --> 0:04:15.000 resulted in this specific kind of building, mostly called the 0:04:15.040 --> 0:04:19.520 five over one, which is five usually five stories of 0:04:19.760 --> 0:04:24.480 wood framed building over the bottom floor of concrete, and 0:04:24.520 --> 0:04:27.360 it can be sometimes it's six over two. Their variants. 0:04:27.640 --> 0:04:30.240 They're not allowed in New York City, but in other 0:04:30.360 --> 0:04:33.560 cities and suburbs all across the country. That's the form 0:04:33.600 --> 0:04:35.800 that most of these buildings are taking. Knew, that's what 0:04:35.839 --> 0:04:37.680 they were called five over one or six over two. 0:04:37.720 --> 0:04:39.880 I presume that I prefer to call them stump ees, 0:04:39.960 --> 0:04:43.159 but that hasn't really fought on. Rents for these buildings 0:04:43.160 --> 0:04:45.359 are not exactly cheap, and when we're talking about media 0:04:45.400 --> 0:04:48.080 and rents plus for many of these buildings, they're considered 0:04:48.080 --> 0:04:51.880 almost luxury buildings. They're often marketed as luxury buildings. I 0:04:51.880 --> 0:04:56.440 mean mostly that just means stainless steel appliances. They're not 0:04:56.560 --> 0:04:59.840 it's like they're not that luxurious. It's just that's how 0:04:59.839 --> 0:05:03.800 you market these things. Very often they're at higher rents 0:05:03.839 --> 0:05:07.040 than some surrounding buildings. But I think over all the evidences, 0:05:07.360 --> 0:05:10.000 you build more stuff like this, and it it puts 0:05:10.000 --> 0:05:13.080 some downward pressure on prices. Now, how do the pandemic 0:05:13.200 --> 0:05:17.120 affect builders that we're building these apartments, because I guess 0:05:17.120 --> 0:05:19.080 building was one of the things that didn't really shut down. 0:05:19.120 --> 0:05:21.000 It kept going out. Yeah, I mean it's shut down 0:05:21.000 --> 0:05:23.040 for a couple of months in some places, and in 0:05:23.080 --> 0:05:25.560 some places it didn't at all. I mean, one thing 0:05:25.600 --> 0:05:27.680 about this is it takes a while to get a 0:05:27.760 --> 0:05:30.440 large apartment building built. So all these buildings that were 0:05:30.440 --> 0:05:32.960 being completed in two thousand twenty one, I think the 0:05:33.000 --> 0:05:35.839 majority of them were actually they got the permits and 0:05:35.960 --> 0:05:38.520 it was in the works before the pandemic, and there 0:05:38.560 --> 0:05:41.560 actually was a dip in permits for the first six 0:05:41.600 --> 0:05:44.600 months or so of the pandemic, but then since late 0:05:45.640 --> 0:05:48.760 permits of skyrocket, and it looks like if you go 0:05:48.880 --> 0:05:51.160 by the it takes like nineteen months or so to 0:05:51.200 --> 0:05:53.440 get one of these buildings built. They're going to set 0:05:53.480 --> 0:05:56.240 another record in two thousand twenty three, and there are 0:05:56.240 --> 0:05:58.680 people to live in all of these I guess. So, 0:05:58.800 --> 0:06:00.560 I mean part of it is, you know that with 0:06:00.680 --> 0:06:03.480 the lead time, they may be opening all these new 0:06:03.520 --> 0:06:06.599 buildings into a weak market if there's a recession, but 0:06:06.680 --> 0:06:08.760 maybe not. I mean, it does seem like for the 0:06:08.800 --> 0:06:10.599 most part, they're able to fill them all up. You 0:06:10.640 --> 0:06:13.839 have a great chart here housing apartments issued for Austin 0:06:13.960 --> 0:06:17.960 round Rock in more than twenty five and a half thousand. 0:06:18.440 --> 0:06:20.080 But I guess we are seeing a lot of companies 0:06:20.080 --> 0:06:23.440 build new headquarters in other cities. I mean, Austin's booming, 0:06:23.560 --> 0:06:27.159 Nashville's booming, Salt Lake cities booming. What's just interesting is 0:06:27.200 --> 0:06:30.000 that traditionally these booming cities, and this is still true 0:06:30.000 --> 0:06:34.320 of like Atlanta, Dallas, Houston, the vast majority of that 0:06:34.560 --> 0:06:39.039 new housing is single family. But increasingly what's happening in 0:06:39.200 --> 0:06:42.039 even inland metro areas is what's happened a while on 0:06:42.080 --> 0:06:45.040 the coast, is that almost all the constructions that's happening 0:06:45.080 --> 0:06:48.480 as apartment buildings because there's either just too much opposition 0:06:48.600 --> 0:06:52.280 or these places just can't sprawl any farther out. Justin Fox. 0:06:52.520 --> 0:06:55.600 The House January six committee is several public hearings into 0:06:55.680 --> 0:06:58.880 its investigation of the attack on the capitol. Seventeen months ago, 0:06:59.120 --> 0:07:02.000 I spoke with Jonathan Bernstein about what we've discovered so far. 0:07:02.480 --> 0:07:05.040 We just literally heard that we might actually be getting 0:07:05.240 --> 0:07:08.120 more hearings than we originally thought because there are new 0:07:08.160 --> 0:07:12.240 pieces of evidence available to the committee. What's the outlook, Jonathan, 0:07:12.320 --> 0:07:15.840 what happens after recess? Well, apparently after recess they're going 0:07:15.880 --> 0:07:18.720 to have at least two more, but they may schedule 0:07:18.760 --> 0:07:21.040 more after that. And you know, I hate to do 0:07:21.200 --> 0:07:24.280 and I told you so, but I've been screaming for 0:07:24.360 --> 0:07:26.520 months that one of the reasons to get to the 0:07:26.560 --> 0:07:30.240 hearings is because hearings themselves may produce additional evidence. And 0:07:30.280 --> 0:07:34.760 apparently that's what happened. We spoke about that on this program. 0:07:34.800 --> 0:07:37.160 At this point, they're really starting to hit a hard 0:07:37.200 --> 0:07:39.920 deadline because they have to write the report, which is 0:07:39.960 --> 0:07:42.360 somewhat important, but all they have is the end of 0:07:42.400 --> 0:07:45.160 this Congress to do it, and we're going into election season. 0:07:45.680 --> 0:07:49.000 As we get closer to the mid terms, it becomes 0:07:49.000 --> 0:07:52.560 increasingly difficult for them to put these hearings on without 0:07:52.600 --> 0:07:56.160 acting as if they are electioneering. And part of the 0:07:56.200 --> 0:07:59.720 importance of this is to try to appeal to people 0:07:59.800 --> 0:08:02.480 who will be turned off by electioneering. So there is 0:08:02.520 --> 0:08:04.920 some suggestion out there, Jonathan, that if there were to 0:08:04.960 --> 0:08:08.120 be delaying tactics we might reach into the next Congress 0:08:08.160 --> 0:08:11.040 that would be a different speaker that might change things. 0:08:11.200 --> 0:08:14.280 I mean is that a possibility. Well, if we assume 0:08:14.360 --> 0:08:17.160 that Republicans will take over the majority in the next Congress, 0:08:17.600 --> 0:08:22.440 which certainly seems very likely, it's impossible to imagine basically 0:08:22.840 --> 0:08:28.400 a Republican majority Congress continuing anything of this stuff. So realistically, 0:08:28.840 --> 0:08:31.280 they've got till the end of the year, and I 0:08:31.320 --> 0:08:33.880 think it's unlikely that they'll come back in September and 0:08:33.920 --> 0:08:38.080 do further public hearings. So really they just have the 0:08:38.200 --> 0:08:40.640 end of July until the August recess unless there's something 0:08:40.720 --> 0:08:42.880 so spectacular that they feel they have to do it. 0:08:42.920 --> 0:08:44.480 They do have the option of coming back in a 0:08:44.559 --> 0:08:47.360 lame duck session after the election, but again, they have 0:08:47.440 --> 0:08:49.680 to write a report. So I think that they're really 0:08:49.920 --> 0:08:52.440 in a time crunch and the impetus will be to 0:08:52.520 --> 0:08:55.320 get this done. Well, we have had four public hearings, 0:08:55.559 --> 0:08:58.680 will have x amount more. We have heard from people 0:08:58.679 --> 0:09:01.320 that were completely anonymous before the hearings. Has the committee 0:09:01.320 --> 0:09:03.840 done a good job so far? I think given the 0:09:03.840 --> 0:09:07.000 parameters they set for themselves of having a small number 0:09:07.000 --> 0:09:09.480 of fearing starting this late, I think that they've done 0:09:09.480 --> 0:09:12.360 an excellent job. A couple of things, in particular, the 0:09:12.440 --> 0:09:15.320 restraint the members have shown you know, they're having just 0:09:15.600 --> 0:09:19.840 the chair and Representative Chaney the vice chair speak in 0:09:19.880 --> 0:09:23.400 each hearing, but outside of that, just one member is 0:09:23.440 --> 0:09:26.640 designated to interview entire panels, and in fact, around the 0:09:27.080 --> 0:09:31.840 Tuesday edition, we had you know, Adam Shift interviewing both panels. 0:09:32.320 --> 0:09:36.040 Every other member sits there like a stone, doesn't say anything. 0:09:36.559 --> 0:09:39.439 That's a really hard thing to get members of Congress 0:09:39.480 --> 0:09:42.080 to agree to do on something which is a major 0:09:42.280 --> 0:09:46.679 publicity opportunity. The other thing they've done extremely well is 0:09:47.040 --> 0:09:52.000 using video, using physical evidence, tweets and documents and all that, 0:09:52.520 --> 0:09:56.000 and coordinating that with questioning in a way that makes 0:09:56.120 --> 0:10:01.240 the presentations very compelling television. What were the most salient 0:10:01.360 --> 0:10:06.160 facts uncovered? You know, I think that while there have 0:10:06.280 --> 0:10:09.360 been some specific facts that have been uncovered, for example, 0:10:09.400 --> 0:10:13.120 they really emphasized the extent to which people told Donald 0:10:13.160 --> 0:10:15.319 Trump that he lost the election. So there's been some 0:10:15.440 --> 0:10:18.400 progress on digging out specifics, but I think what's most 0:10:18.400 --> 0:10:21.800 important is the overview and telling things, some of which 0:10:21.840 --> 0:10:25.680 we learned as early as before January six, you know, 0:10:25.800 --> 0:10:31.240 his call pressuring Georgia officials and other state legislative officials, 0:10:31.559 --> 0:10:35.200 but putting it all in one piece explaining how all 0:10:35.240 --> 0:10:38.080 of the different pieces of what Trump and his allies 0:10:38.120 --> 0:10:41.160 were doing added up to an attempt to, put it bluntly, 0:10:41.440 --> 0:10:44.520 overthrow the government, which doesn't mean that it's actually going 0:10:44.559 --> 0:10:47.280 to impact anything in the future when it comes to 0:10:47.440 --> 0:10:50.040 the former president running again or even having an impact 0:10:50.080 --> 0:10:52.280 on the primary so far as certainly doesn't seem like 0:10:52.320 --> 0:10:55.120 there's been any negative influence on the primaries, you know. 0:10:55.280 --> 0:10:58.400 I mean, Trump has not had a particularly good primary 0:10:58.400 --> 0:11:01.360 season during these midterm primary but I wouldn't credit the 0:11:01.480 --> 0:11:05.280 January six investigation particularly. I think it is possible that 0:11:05.320 --> 0:11:07.880 the events of January six in the first place may 0:11:07.880 --> 0:11:10.600 have turned some people off from Trump. But I think 0:11:10.679 --> 0:11:13.319 that what the hearings can do in terms of the 0:11:13.400 --> 0:11:17.559 audiences that they have some Republicans who may have been 0:11:17.559 --> 0:11:21.200 willing to go along with Trump but weren't real comfortable 0:11:21.200 --> 0:11:24.920 with that may be affected. That won't necessarily affect primary 0:11:24.960 --> 0:11:27.920 elections this year, but long term that may have some 0:11:28.040 --> 0:11:31.600 consequences for his influence within the party. Um. I think 0:11:31.640 --> 0:11:35.240 also to the extent that it changes press coverage going forward. 0:11:35.520 --> 0:11:38.880 The one attentive group is the media itself and people 0:11:38.920 --> 0:11:41.880 in the media who think of themselves as neutral, pounding 0:11:41.880 --> 0:11:45.280 it into them that being neutral about these things includes 0:11:45.520 --> 0:11:49.200 accepting the truth of what Trump actually tried to do. Well. 0:11:49.200 --> 0:11:52.240 The other thing is, we still don't have firm evidence 0:11:52.400 --> 0:11:57.840 tying Trump exactly to violence or groups that were violenced 0:11:57.880 --> 0:12:01.000 that day. Do the details really matter? We still don't 0:12:01.200 --> 0:12:06.319 have firm evidence tying Trump to violence or groups that 0:12:06.360 --> 0:12:10.040 were violenced that day. Do the details really matter? They 0:12:10.080 --> 0:12:13.120 may matter for prosecution and what exactly he can be 0:12:13.160 --> 0:12:16.720 prosecuted for. One of the audiences here is the Justice Department. 0:12:17.080 --> 0:12:20.960 And the thing about violence is it's complicated. Right by 0:12:21.000 --> 0:12:24.520 the time that we get to January six, it's clear 0:12:24.600 --> 0:12:28.040 that the way Trump talks about things has consequences in 0:12:28.160 --> 0:12:30.640 terms of violence and threats of violence. And I think 0:12:30.720 --> 0:12:34.040 it's pretty clear that Trump knew or should have known 0:12:34.080 --> 0:12:36.400 by this point that his words and the words of 0:12:36.480 --> 0:12:42.160 his allies had these consequences. Now, for legal purposes, that 0:12:42.200 --> 0:12:44.560 may not be good enough, but there is something different 0:12:44.600 --> 0:12:47.320 between that and if there may have been more direct 0:12:47.400 --> 0:12:50.839 contact between Trump and some of these organized groups. We know, 0:12:51.080 --> 0:12:53.560 you know that Trump said to one of the organized 0:12:53.600 --> 0:12:55.679 groups in the national debate, you can't get a more 0:12:55.679 --> 0:12:59.120 public thing than a presidential debate that they should stand by, 0:12:59.240 --> 0:13:01.800 you know, when you has to condemn them, so you know, 0:13:01.880 --> 0:13:05.160 you can draw lines here, but how deeply the lines 0:13:05.200 --> 0:13:08.800 should be shaded. We still don't know if there's more 0:13:08.880 --> 0:13:11.560 to come well, and Bennie Thompson has said that there 0:13:11.720 --> 0:13:14.520 is footage from a documentary and Alex Holder who had 0:13:14.559 --> 0:13:17.960 access to the Trump family before and after January six, 0:13:17.960 --> 0:13:19.880 So we don't know what's going to come out of that. 0:13:20.600 --> 0:13:24.120 What would the Justice Department need more of in order 0:13:24.160 --> 0:13:28.439 to prosecute Donald Trump? Well, two things. One is do 0:13:28.480 --> 0:13:31.680 they feel like there's public pressure to move ahead on 0:13:31.720 --> 0:13:35.720 this without seeming partisan? And again I think that the 0:13:35.720 --> 0:13:39.120 Attorney General is very hesitant to move forward with anything 0:13:39.160 --> 0:13:43.000 they could look like a partisan prosecution of a former 0:13:43.040 --> 0:13:46.040 president and current presidential candidate, and rightly so, he should 0:13:46.040 --> 0:13:49.360 be very hesitant. It's an impossible conundrum for the Justice 0:13:49.360 --> 0:13:52.480 Department because it's terrible to move ahead with something that 0:13:52.559 --> 0:13:56.200 looks like a partisan prosecution, but it's also terrible to 0:13:56.400 --> 0:14:02.400 let the president get away with crimes. Um. That's yeah. 0:14:02.600 --> 0:14:05.839 Then there's the legal side of things, which is how 0:14:06.080 --> 0:14:07.920 open and shut a case do they have on some 0:14:08.000 --> 0:14:12.600 of these charges, and there's discussion within sort of Upella law, 0:14:12.640 --> 0:14:17.520 Twitter and bloggers and and columnists about what matters in 0:14:17.640 --> 0:14:20.160 terms of Trump's state of mind for some of these 0:14:20.240 --> 0:14:24.640 charges and what exactly is needed to make good these persecutions, 0:14:24.680 --> 0:14:27.760 because option one of convicting him, an option two of 0:14:28.040 --> 0:14:31.560 not charging him or bad but options three of bringing 0:14:31.640 --> 0:14:35.520 him to trial and having him declared not guilty, that's worse. 0:14:35.920 --> 0:14:39.480 Jonathan Bernstein. They're turning east now and specifically to China, 0:14:39.560 --> 0:14:42.720 where President she Jin things this week criticized the impact 0:14:42.760 --> 0:14:47.080 of sanctions for causing global economic pain. Also this week, 0:14:47.240 --> 0:14:50.440 President she warned of hunger and he ordered more pro 0:14:50.560 --> 0:14:54.240 growth policies to boost China's COVID mattered economy SHOOTI ran 0:14:54.360 --> 0:14:57.600 joins Now for some perspective on the Chinese consumer SHOOTI 0:14:57.680 --> 0:15:01.120 President she sounds concerned about his people. How badly is 0:15:01.120 --> 0:15:04.600 the Chinese consumer suffering right now? I mean, if you 0:15:04.760 --> 0:15:08.080 just look at the use unemployment rate at the Periodic 0:15:08.160 --> 0:15:11.520 Consumer Sentiment survey, it's done though it's on record. Use 0:15:11.600 --> 0:15:16.400 unemployment has already had eighteen percent. Yes, it's going to 0:15:16.520 --> 0:15:20.000 kick higher because college graduates are going to graduate in 0:15:20.040 --> 0:15:23.800 the month. Also, Yes, so we're going to see basically 0:15:23.880 --> 0:15:27.440 one thing, four or five young people aged between sixteen 0:15:27.440 --> 0:15:30.640 and twenty four unemployed. How do you think that happened, Julie. 0:15:30.760 --> 0:15:32.880 We know that inflation hasn't been a problem, but how 0:15:33.040 --> 0:15:36.400 is unemployment such a problem in China? Well, a lot 0:15:36.440 --> 0:15:38.760 of it was the big tech at the real estate 0:15:38.800 --> 0:15:41.920 developer crackdown. I mean, the tech sector employed a lot 0:15:41.960 --> 0:15:44.840 of people, especially young people, right So that's a big chunk. 0:15:45.080 --> 0:15:47.920 And also because of the COVID lockdowns, I mean, the 0:15:47.960 --> 0:15:51.040 big tech companies also hired a lot of gig economy workers, 0:15:51.040 --> 0:15:54.440 food delivery workers, drivers, And these people don't have any 0:15:54.520 --> 0:15:57.560 jobs right now. Do they have social security benefits or 0:15:57.640 --> 0:16:00.720 any kind of income coming in? So very little to 0:16:00.800 --> 0:16:03.680 be honest, And that's something very interesting about China. Even 0:16:03.720 --> 0:16:06.120 though it claims to be a communist country, there is 0:16:06.320 --> 0:16:09.920 very little social security net. And the president, Shimking is 0:16:09.920 --> 0:16:13.960 definitely not into this notion called the welfare state. He 0:16:14.000 --> 0:16:19.240 basically hears this ideology called production first and then living next. 0:16:19.560 --> 0:16:22.160 So what China has done is that they are giving 0:16:22.200 --> 0:16:25.240 subsidies to factories and say, oh, you know, like if 0:16:25.240 --> 0:16:27.920 you just keep those workers, we're going to give you 0:16:28.080 --> 0:16:31.280 some tax rebates, and they're not very many, to be honest. 0:16:31.520 --> 0:16:34.480 So there's no talk of stimulus check, and there's very 0:16:34.480 --> 0:16:37.440 little unemployment check, to be honest. I think in twenty 0:16:37.600 --> 0:16:40.880 twenty about sixty million people lost their jobs, only two 0:16:40.920 --> 0:16:44.880 million managed to claim unemployment. Wow, that is a serious, 0:16:44.960 --> 0:16:49.320 serious black mark on the Chinese economy. Now, President season thing, 0:16:49.520 --> 0:16:52.520 he has an ego, he wants to hold himself upright 0:16:52.560 --> 0:16:55.080 in the world. How does he allow this unemployment rate 0:16:55.160 --> 0:16:58.560 continue to be the case? If it's for use, what 0:16:58.720 --> 0:17:02.080 is it overall? Well, we all urban unemployment is a 0:17:02.120 --> 0:17:04.560 little bit shy of seventh perment. A lot of it 0:17:04.640 --> 0:17:07.240 is because if you're like forty fifty year old, chances 0:17:07.240 --> 0:17:09.720 are your work force their own enterprises and they don't 0:17:09.800 --> 0:17:12.399 lay off workers, right, So a lot of the tension 0:17:12.560 --> 0:17:16.080 is into generational young people are struggling, whereas you're forty 0:17:16.119 --> 0:17:18.160 fifty year old that you're doing a little bit better, 0:17:18.400 --> 0:17:20.960 but still you will have children for young right, So 0:17:21.480 --> 0:17:24.600 use unemployment is the biggest problem right now. Presidency has 0:17:24.640 --> 0:17:27.280 been talking about going easier on the tax sector and 0:17:27.359 --> 0:17:31.160 also fintech reforms and reforms in other areas, and that 0:17:31.280 --> 0:17:34.800 the economy is almost ready to incorporate those reforms and 0:17:34.840 --> 0:17:37.640 allow these companies operate again. Would that be a bright 0:17:37.680 --> 0:17:41.240 sign for employment. Yes, that would be that's the early 0:17:41.560 --> 0:17:47.000 stage of perhaps unemployment recovery. We don't have the complete statistics, 0:17:47.040 --> 0:17:50.800 but just according to surveys, the tutoring sector it used 0:17:50.800 --> 0:17:54.480 to hire about seventeen percent of fresh college graduates and 0:17:54.640 --> 0:17:58.120 that actor was completely wiped out because of the tax crackeder. Right, 0:17:58.359 --> 0:18:01.000 so the government is trying, but it's not going to 0:18:01.040 --> 0:18:03.879 be like what it used to be. No. You point 0:18:03.880 --> 0:18:07.320 out that a record ten point eight million college graduates 0:18:07.359 --> 0:18:10.400 will be fresh out this summer and there are no 0:18:10.520 --> 0:18:12.760 jobs for them right now. I mean that will lead 0:18:12.800 --> 0:18:16.080 to social unrest if it continues. Correct. I think that 0:18:16.200 --> 0:18:18.879 the government is truly very worried. The thing is the 0:18:18.920 --> 0:18:23.000 way China sees unemployment. For micro workers, they always feel like, okay, 0:18:23.040 --> 0:18:25.040 you can always go back to your country side, then 0:18:25.119 --> 0:18:28.639 go far. They would never be worried about micro workers unemployment. 0:18:28.720 --> 0:18:32.040 They feel like, you know, the land is their employment ultimately. 0:18:32.280 --> 0:18:35.320 But for young fresh college graduate it's a problem because 0:18:35.320 --> 0:18:38.640 they're quite educated and they're frustrated, and we have seen 0:18:38.680 --> 0:18:41.439 what happened in the Middle East and other parts of 0:18:41.440 --> 0:18:44.520 the world. China is very worried right now. And China 0:18:44.600 --> 0:18:47.240 has a great reputation in the tech sector in semi 0:18:47.240 --> 0:18:50.040 conductors in all sorts of areas, and you would have 0:18:50.080 --> 0:18:52.200 imagined that China would be able to put them to work. 0:18:52.359 --> 0:18:55.400 Tell us about what you call gold, silver, and copper babies. 0:18:56.040 --> 0:18:58.439 So Chinese schools can be very harsh. I mean I 0:18:58.480 --> 0:19:01.520 went through the Chinese from the earlier the Rancors by 0:19:01.560 --> 0:19:05.080 our great and then divide into gold, silver and copper. 0:19:05.240 --> 0:19:07.199 So the gold babies they are the ones who can 0:19:07.240 --> 0:19:09.920 go to Chincha and Baking University and they're the next 0:19:09.960 --> 0:19:14.399 generation engineers that can design China's world class chips or 0:19:14.480 --> 0:19:17.520 e D autopaths. And then the copper babies they tend 0:19:17.560 --> 0:19:20.280 to be micro workers children, so they will do more 0:19:20.359 --> 0:19:25.200 gig economy work and perhaps lower manufacturing construction work. The 0:19:25.240 --> 0:19:28.879 big chunk basically we're talking about two thirds now because 0:19:28.960 --> 0:19:32.200 China's middle class is getting bigger. Are they so called 0:19:32.200 --> 0:19:36.960 sumer babies? They're okay, students, not stella. But now most 0:19:37.000 --> 0:19:40.320 of those super babies they are getting college education as well. 0:19:40.560 --> 0:19:44.320 China's college attendance rate is close to sixty in the US. 0:19:44.359 --> 0:19:47.960 It's only and these tuber babies, yeah, they don't want 0:19:48.000 --> 0:19:51.800 to go working factories anymore their parents did. And then 0:19:51.840 --> 0:19:54.800 they are not good enough to design the next generation 0:19:54.880 --> 0:19:57.680 the chips, so China didn't know what to do with them. 0:19:57.760 --> 0:19:59.720 And the all these super babies, they want to go 0:19:59.800 --> 0:20:02.760 work for their own enterprises or work for the government, 0:20:02.920 --> 0:20:06.080 but the government is purring back its own employment as well. 0:20:06.240 --> 0:20:09.720 The government knows it's so easy uploaded to bloaded. Everyone's 0:20:09.760 --> 0:20:12.679 just sitting around doing nothing. Way, and then the sewer babies. 0:20:12.720 --> 0:20:14.720 They used to go to the tech sector a lot, 0:20:14.960 --> 0:20:17.600 and now the tech sector is not hiring because of 0:20:17.600 --> 0:20:20.680 the crecktown. These are the big problem. Julie ran there 0:20:20.920 --> 0:20:22.679 By the way you do get in touch, comments and 0:20:22.720 --> 0:20:25.680 opinions always welcome. I'm at Vonney Quinn on Twitter or 0:20:25.720 --> 0:20:29.640 email v Quinn at Bloomberg dot net. China's COVID zero 0:20:29.720 --> 0:20:33.960 approach has been controversial. Communist Party slogans of oak maximum 0:20:33.960 --> 0:20:37.080 results achieved with minimum cost, but some of that cost 0:20:37.160 --> 0:20:39.320 is in the form of economic growth. Economists and a 0:20:39.320 --> 0:20:42.199 Bloomberg Survey forecast GDP will expand at a four and 0:20:42.200 --> 0:20:45.040 a half percent rate this year, a full percentage point 0:20:45.080 --> 0:20:48.080 below the official target. There's a wide range of forecasts, 0:20:48.080 --> 0:20:51.359 though Bank America says in the worst case scenario, were 0:20:51.359 --> 0:20:55.040 there to be, for example, citywide lockdowns beyond Beijing, growth 0:20:55.040 --> 0:20:57.600 would weaken to two and a half percent. I chatted 0:20:57.640 --> 0:21:00.840 with Tim Colpen, who lives in Taipeidi on to weigh 0:21:00.880 --> 0:21:03.840 the pluses and minuses. So, Tim, the Chinese government has 0:21:03.840 --> 0:21:06.159 come under a lot of fire for its COVID zero policy, 0:21:06.240 --> 0:21:08.840 and clearly there's a lot of suffering in China because 0:21:08.920 --> 0:21:10.720 of it. At the same time, as far as we know, 0:21:10.800 --> 0:21:13.200 there are far fewer deaths than there have been around 0:21:13.200 --> 0:21:16.560 the world. How do we measure how good or bad 0:21:16.640 --> 0:21:20.880 the policy is? You know what one of the toughest 0:21:20.920 --> 0:21:24.159 things for any national leader, whether it's in in China 0:21:24.440 --> 0:21:27.480 or the US, or in Australia, in England or Taiwan, 0:21:27.640 --> 0:21:31.480 is that nobody's really appreciated for the efforts they've done. 0:21:32.119 --> 0:21:36.920 And you also, now in kind of mid two, you 0:21:37.000 --> 0:21:41.480 have to look at COVID very differently to early We 0:21:41.560 --> 0:21:44.840