1 00:00:03,360 --> 00:00:12,680 Speaker 1: Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keen 2 00:00:12,840 --> 00:00:16,239 Speaker 1: with David Gura. Daily we bring you insight from the 3 00:00:16,239 --> 00:00:21,640 Speaker 1: best of economics, finance, investment, and international relations. Find Bloomberg 4 00:00:21,720 --> 00:00:27,000 Speaker 1: Surveillance on Apple Podcasts, SoundCloud, Bloomberg dot Com, and of course, 5 00:00:27,320 --> 00:00:33,720 Speaker 1: on the Bloomberg Vince Rhinehart Choices. Now on our phone 6 00:00:33,760 --> 00:00:36,960 Speaker 1: line skis as I mentioned that cheap economist at standarsh, Melon, 7 00:00:37,080 --> 00:00:38,360 Speaker 1: It's great to have you with us once again. And 8 00:00:38,400 --> 00:00:40,920 Speaker 1: let me start by just asking you for some perspective 9 00:00:40,920 --> 00:00:42,879 Speaker 1: here on on what the president might be thinking as 10 00:00:42,880 --> 00:00:44,519 Speaker 1: he picks the next person to chair the FED, be 11 00:00:44,600 --> 00:00:48,040 Speaker 1: that Janet Yellen for another term or somebody else. What 12 00:00:48,120 --> 00:00:50,240 Speaker 1: indications do we have of the kind of person, the 13 00:00:50,320 --> 00:00:52,360 Speaker 1: kind of of of thinker when it comes to monetary 14 00:00:52,360 --> 00:00:58,520 Speaker 1: policy he's looking for. So you have to recognize that 15 00:00:58,600 --> 00:01:02,360 Speaker 1: the term that airman is obviously an extremely important pick 16 00:01:02,400 --> 00:01:04,560 Speaker 1: for the president, and the President is gonna want to 17 00:01:04,760 --> 00:01:08,240 Speaker 1: leave his stamp. That's why everybody is assuming that it 18 00:01:08,319 --> 00:01:11,240 Speaker 1: won't be Janet Yellen. Uh, that he's going to appoint 19 00:01:11,640 --> 00:01:15,080 Speaker 1: someone else, someone else on that short list. Uh, he 20 00:01:15,120 --> 00:01:20,320 Speaker 1: needs someone who is comfortable with markets Uh, comfortable with 21 00:01:20,520 --> 00:01:25,160 Speaker 1: economics and also knowledgeable with the institution. It's tough to 22 00:01:25,200 --> 00:01:28,959 Speaker 1: get somebody with all three attributes. But remember that they 23 00:01:29,000 --> 00:01:32,039 Speaker 1: also have the opportunity to name the vice chair of 24 00:01:32,040 --> 00:01:34,880 Speaker 1: the Federal Reserve Board and a couple of governors, and 25 00:01:34,959 --> 00:01:38,880 Speaker 1: so in some sense, don't overreact to the first pick. 26 00:01:39,560 --> 00:01:41,440 Speaker 1: Think about where we are in a month or two 27 00:01:41,600 --> 00:01:44,440 Speaker 1: when they filled out more of the team. It's let 28 00:01:44,520 --> 00:01:46,759 Speaker 1: me just ask you. You worked at the Federal were 29 00:01:47,400 --> 00:01:49,120 Speaker 1: attached to the f O m C. And I wonder 30 00:01:49,120 --> 00:01:51,800 Speaker 1: if you can give us your observations on how ow 31 00:01:51,840 --> 00:01:55,600 Speaker 1: a Fed chare evolves revolves into the position. Uh. One 32 00:01:55,640 --> 00:01:57,680 Speaker 1: can imagine what somebody would be like in that job, 33 00:01:57,720 --> 00:01:59,560 Speaker 1: but I imagine the job changes him or her. He 34 00:01:59,640 --> 00:02:02,559 Speaker 1: or she comes aware of the responsibilities of the position 35 00:02:02,600 --> 00:02:04,920 Speaker 1: all that it entails. What have you observed with with 36 00:02:04,960 --> 00:02:09,240 Speaker 1: how one grows into a job like that? So you 37 00:02:09,280 --> 00:02:15,080 Speaker 1: know two case studies. Alan Greenspan understood markets, was business 38 00:02:15,080 --> 00:02:18,359 Speaker 1: economists for a very long time and policy advisor, but 39 00:02:18,480 --> 00:02:21,200 Speaker 1: didn't have a lot of background in understanding the Fed 40 00:02:21,280 --> 00:02:25,799 Speaker 1: Reserve as an institution. So he relied on his administrative governors, 41 00:02:25,800 --> 00:02:30,200 Speaker 1: on his vice chair to help him figure out how 42 00:02:30,240 --> 00:02:34,440 Speaker 1: to run the place and also to to keep cohesion 43 00:02:34,520 --> 00:02:38,160 Speaker 1: among a monetary policy committee. Uh. He grew into that 44 00:02:38,320 --> 00:02:42,799 Speaker 1: job as he developed his relationships with the bank presidents 45 00:02:42,840 --> 00:02:45,960 Speaker 1: and importantly the boards of directors of the reserve banks. 46 00:02:46,840 --> 00:02:51,960 Speaker 1: Ben Bernankee and and Janet Yellen obviously uh knew the 47 00:02:52,040 --> 00:02:56,560 Speaker 1: institution and knew the economy. They were less comfortable on markets, 48 00:02:57,000 --> 00:03:00,919 Speaker 1: and so they relied on the people around whom were 49 00:03:00,919 --> 00:03:03,400 Speaker 1: familiar with markets. And also the Federals are a bank 50 00:03:03,440 --> 00:03:07,639 Speaker 1: in New York. Uh, so it is a team. Uh. 51 00:03:08,120 --> 00:03:11,440 Speaker 1: When you're thinking about the pick the president is going 52 00:03:11,480 --> 00:03:16,239 Speaker 1: to be making, also recognize no president wants an announcement 53 00:03:16,280 --> 00:03:19,840 Speaker 1: to go badly. Uh. Nobody Uh, just you know, plans 54 00:03:19,880 --> 00:03:24,000 Speaker 1: to fail. And so they're they're gonna be picking someone 55 00:03:24,480 --> 00:03:27,040 Speaker 1: constrained by the fact they want markets to receive it 56 00:03:27,080 --> 00:03:30,160 Speaker 1: pretty well. They also need the US Senate to receive 57 00:03:30,240 --> 00:03:33,200 Speaker 1: it well. I e. It's got to be somebody that 58 00:03:33,600 --> 00:03:39,160 Speaker 1: the Republican leadership is willing to bring up to the Hill. Uh. 59 00:03:39,240 --> 00:03:41,960 Speaker 1: The names on the shortlist or exactly on the shortlist. 60 00:03:42,000 --> 00:03:44,320 Speaker 1: For that reason, When you look at those names, how 61 00:03:44,360 --> 00:03:46,240 Speaker 1: confident are you that you can predict or at least 62 00:03:46,280 --> 00:03:48,760 Speaker 1: have a good sense of of what say A J. 63 00:03:48,880 --> 00:03:51,720 Speaker 1: Powell would be like as Fed sheer or a uh 64 00:03:51,760 --> 00:03:54,520 Speaker 1: A John Taylor do do we have a great sense 65 00:03:54,520 --> 00:03:57,760 Speaker 1: of how individual is going to act if appointed, if nominated, 66 00:03:57,760 --> 00:04:02,760 Speaker 1: if confirmed. I think jus a very good example that 67 00:04:02,880 --> 00:04:08,080 Speaker 1: market participants of Pigeon told him as dovish because he 68 00:04:08,120 --> 00:04:12,000 Speaker 1: has been supporting Janny Ellen's policy while as a Fed governor. 69 00:04:12,480 --> 00:04:14,920 Speaker 1: But the fact is his role is to be a 70 00:04:15,000 --> 00:04:19,719 Speaker 1: loyal governor. He's been doing administrative work for the Federal Reserve. 71 00:04:19,800 --> 00:04:23,159 Speaker 1: He's been he's been working on the plumbing of money markets, 72 00:04:23,720 --> 00:04:26,640 Speaker 1: has been been digging in and doing that detailed work. 73 00:04:27,440 --> 00:04:30,839 Speaker 1: If if that's your role as a governor, you basically 74 00:04:30,880 --> 00:04:34,400 Speaker 1: delegate your voice on monetary policy to your Federal Reserve chair. 75 00:04:34,560 --> 00:04:37,000 Speaker 1: You want you want to have her back? Uh? That 76 00:04:37,080 --> 00:04:40,039 Speaker 1: doesn't that What that means is what he's saying his 77 00:04:40,200 --> 00:04:47,000 Speaker 1: public is not necessarily revealing his uh unburnt. Uh you know, 78 00:04:47,160 --> 00:04:51,080 Speaker 1: his complete view on monetary policy. So I think j 79 00:04:51,279 --> 00:04:54,040 Speaker 1: Pal as a chair is different than J Pal as 80 00:04:54,040 --> 00:04:57,400 Speaker 1: a governor. Good morning, have you one time keen with 81 00:04:57,480 --> 00:04:59,720 Speaker 1: David Gurry in New York with his vincent Reynard's what 82 00:05:00,040 --> 00:05:03,280 Speaker 1: great conversation we've had over the morning on the future 83 00:05:03,320 --> 00:05:07,279 Speaker 1: of the Federal Reserve. I was thinking, Vince walking over 84 00:05:07,320 --> 00:05:10,839 Speaker 1: from television to a radio studios, how I have a 85 00:05:10,880 --> 00:05:13,560 Speaker 1: biases do a lot of other people, which is Taylor Taylor, 86 00:05:13,600 --> 00:05:16,800 Speaker 1: Taylor Taylor, because we know who the guy is. Do 87 00:05:17,000 --> 00:05:23,479 Speaker 1: you know Vince Reinhardt Powell economics? Uh so, I actually, 88 00:05:23,960 --> 00:05:28,320 Speaker 1: way back way back when J. Pale was in the 89 00:05:28,640 --> 00:05:34,120 Speaker 1: Bush Treasury uh he he uh fostered the work I 90 00:05:34,160 --> 00:05:37,480 Speaker 1: was doing at the Federal Reserve Board on redesigning US 91 00:05:37,520 --> 00:05:40,240 Speaker 1: the U. S Treasury auction and he let me do 92 00:05:40,320 --> 00:05:45,200 Speaker 1: an experiment in auction technique. I've known him when he 93 00:05:45,320 --> 00:05:48,799 Speaker 1: was at the Bipartisan Policy Center and his work on 94 00:05:48,800 --> 00:05:52,800 Speaker 1: on the debt ceiling. Um. I know more about his 95 00:05:52,880 --> 00:05:56,960 Speaker 1: views on market mechanics than monetary policy, to be sure, 96 00:05:57,040 --> 00:06:00,920 Speaker 1: but I think he's a centrist Republican. I mean with 97 00:06:01,040 --> 00:06:03,920 Speaker 1: it that where does the politics play and where will 98 00:06:03,960 --> 00:06:08,640 Speaker 1: this be? Going back to mc chesney, Martin, I mean, 99 00:06:08,839 --> 00:06:11,920 Speaker 1: is is the independence of the Fed at risk because 100 00:06:12,000 --> 00:06:14,640 Speaker 1: of a new veneer of politics? Or was it the 101 00:06:14,680 --> 00:06:18,960 Speaker 1: same way with the Democrats? Uh? You know when you 102 00:06:19,040 --> 00:06:22,560 Speaker 1: look back to mc chesney Martin. Remember he's the guy 103 00:06:22,600 --> 00:06:27,160 Speaker 1: who was Assistant Secretary of Treasury, negotiated the Fed Treasury Accord, 104 00:06:27,560 --> 00:06:30,040 Speaker 1: and then turned around six weeks later to become the 105 00:06:30,120 --> 00:06:33,880 Speaker 1: chairman of the Federal Reserve. Uh so um, I think that, 106 00:06:34,279 --> 00:06:38,040 Speaker 1: uh that that's an important date in Federal Reserve history, 107 00:06:38,080 --> 00:06:41,080 Speaker 1: but people don't always read it the right way. Look, 108 00:06:41,360 --> 00:06:44,120 Speaker 1: the Federal Reserve is within the government. There's a lot 109 00:06:44,160 --> 00:06:48,240 Speaker 1: of institutional controls that make it independent in some sense. 110 00:06:48,360 --> 00:06:52,640 Speaker 1: The most important institutional control has been strengthened, and that 111 00:06:52,880 --> 00:06:57,279 Speaker 1: is the other governors and the Federal Reserve Bank presidents 112 00:06:57,320 --> 00:07:01,520 Speaker 1: have found their voice and it will not take too 113 00:07:01,600 --> 00:07:04,240 Speaker 1: much time before they start complaining. And if they thought 114 00:07:04,560 --> 00:07:08,320 Speaker 1: they had a chair who was drifting in a manner 115 00:07:09,000 --> 00:07:12,560 Speaker 1: that suggested influenced by politics. Great piece on the Bloomberg 116 00:07:12,560 --> 00:07:14,960 Speaker 1: this morning by Creigtories from our Eco team, echoing some 117 00:07:15,000 --> 00:07:16,680 Speaker 1: of the things that you wrote about in a recent note. 118 00:07:17,080 --> 00:07:19,760 Speaker 1: It's It's It's headline is it's gonna stay a yelling 119 00:07:19,800 --> 00:07:21,240 Speaker 1: Fed no matter who gets the job. And I know 120 00:07:21,240 --> 00:07:22,960 Speaker 1: you've written Jennet Yellen has worked hard this year to 121 00:07:22,960 --> 00:07:25,880 Speaker 1: constrain the next church talk a bit about that if 122 00:07:25,920 --> 00:07:28,040 Speaker 1: you could. We've seen a lot of things put into 123 00:07:28,040 --> 00:07:30,080 Speaker 1: place here. How difficult will it be for the next 124 00:07:30,200 --> 00:07:32,720 Speaker 1: chair too? I don't know if scuttles the right word, 125 00:07:32,720 --> 00:07:35,040 Speaker 1: but but change the policies or the policy direction that's 126 00:07:35,040 --> 00:07:38,920 Speaker 1: been put in place here, Vincent, it will take a bit. 127 00:07:39,040 --> 00:07:41,760 Speaker 1: What Janet Yellen has been doing over the last year 128 00:07:41,840 --> 00:07:46,080 Speaker 1: is modeling good behavior as she sees it. I e. 129 00:07:46,720 --> 00:07:51,760 Speaker 1: The plan on slowing reinvestments of the portfolio is very gradual. 130 00:07:52,240 --> 00:07:56,400 Speaker 1: It is pre announced well in advance. The decision for 131 00:07:56,440 --> 00:08:00,200 Speaker 1: the next chair isn't gonna be speed up the program 132 00:08:00,200 --> 00:08:04,280 Speaker 1: because it's just so ingrained in market expectations. It's rather 133 00:08:04,360 --> 00:08:06,520 Speaker 1: do you let it last longer and run off the 134 00:08:06,520 --> 00:08:09,920 Speaker 1: balance sheet for longer. That means you're talking about whether 135 00:08:09,960 --> 00:08:16,400 Speaker 1: it ends in three or uh. Similarly, on interest rates, 136 00:08:17,440 --> 00:08:23,560 Speaker 1: I think that Janet Yellen, unconstrained, probably would have acted 137 00:08:23,680 --> 00:08:27,280 Speaker 1: like she did in two thousand, fifteen and sixteen, But 138 00:08:27,400 --> 00:08:31,560 Speaker 1: instead she's maneuvered her committee to tighten the funds rate 139 00:08:31,640 --> 00:08:35,320 Speaker 1: three times this year. What she's doing, she's modeling good 140 00:08:35,400 --> 00:08:39,319 Speaker 1: behavior that fed tightening can be gradual, and it also 141 00:08:39,400 --> 00:08:42,200 Speaker 1: means the next chair doesn't have to hurry up at 142 00:08:42,200 --> 00:08:45,560 Speaker 1: the beginning because she's done some of the workery noormalizing 143 00:08:45,600 --> 00:08:48,760 Speaker 1: monetary policy. This has been wonderful. Vincent Rayner, I really 144 00:08:48,800 --> 00:08:51,600 Speaker 1: appreciate the time you spent with us this morning. I'll 145 00:08:51,600 --> 00:08:53,679 Speaker 1: tell you, David, this is what surveillance is all about 146 00:08:54,320 --> 00:08:58,040 Speaker 1: to get this this kind of guest on with perspective 147 00:08:58,160 --> 00:09:01,559 Speaker 1: in the hallways and history the building, the conference room. 148 00:09:01,559 --> 00:09:04,400 Speaker 1: For sure, it's it's just so much beyond uh the 149 00:09:04,520 --> 00:09:19,000 Speaker 1: usual bladdering do we have had such an enjoyment this 150 00:09:19,080 --> 00:09:22,079 Speaker 1: morning speaking with Vincent Rynard as we just did lots 151 00:09:22,120 --> 00:09:25,840 Speaker 1: of FED discussion. But right now Nathan sheets with pejam 152 00:09:25,920 --> 00:09:29,920 Speaker 1: fixed income and to get off the FED derby Nathan 153 00:09:29,960 --> 00:09:36,000 Speaker 1: into your international economics, Uh, inflation vectors are to be 154 00:09:36,200 --> 00:09:42,120 Speaker 1: kind flat, are almost towards disinflation. I believe the word 155 00:09:42,120 --> 00:09:48,000 Speaker 1: of the moment is transitory. We're being transitory? Are we gonna? 156 00:09:48,080 --> 00:09:52,360 Speaker 1: Are we exiting transitory? And what is the evidence that 157 00:09:52,520 --> 00:09:56,440 Speaker 1: you or Bill Dudley or Chure Yelling will observe to 158 00:09:56,600 --> 00:10:02,160 Speaker 1: know it's not transitory anymore? Well, Uh, I've spent a 159 00:10:02,240 --> 00:10:08,439 Speaker 1: fair amount of time recently looking at global inflation performance 160 00:10:09,040 --> 00:10:12,520 Speaker 1: and thinking really hard about this question that you highly, 161 00:10:13,200 --> 00:10:17,080 Speaker 1: how do we understand what's been going on over the 162 00:10:17,120 --> 00:10:19,560 Speaker 1: last couple of years, and how much of it is 163 00:10:19,600 --> 00:10:23,400 Speaker 1: structural and how much of it is is temporary or 164 00:10:23,840 --> 00:10:29,920 Speaker 1: Jenny Yelling's lingo is transitory and the the analysis that 165 00:10:30,000 --> 00:10:34,600 Speaker 1: I've done suggests that what we're seeing here is something 166 00:10:35,320 --> 00:10:41,920 Speaker 1: pretty powerful and and fairly structural for the globe, and 167 00:10:41,960 --> 00:10:44,040 Speaker 1: I think there are actuis of that specifically in the 168 00:10:44,120 --> 00:10:48,320 Speaker 1: United States. Exactly what's going on, I think remains an 169 00:10:48,320 --> 00:10:52,000 Speaker 1: open issue. Maybe it has something to do with with demographics. 170 00:10:52,440 --> 00:10:55,360 Speaker 1: I think it certainly has to do with with global 171 00:10:55,400 --> 00:11:00,439 Speaker 1: integration and the increasing competition that the advanced to Cato's 172 00:11:00,520 --> 00:11:05,839 Speaker 1: face UH from emerging market economies like China. I think 173 00:11:05,840 --> 00:11:08,200 Speaker 1: it also has something to do with the fact that 174 00:11:08,280 --> 00:11:13,280 Speaker 1: maybe central banks and holding down inflation expectations may have 175 00:11:13,400 --> 00:11:18,320 Speaker 1: been more successful than they could have dreamed UH twenty 176 00:11:18,400 --> 00:11:22,160 Speaker 1: years ago, and UH the risks that we face uh 177 00:11:22,200 --> 00:11:26,520 Speaker 1: AN inflation now are much more balanced, and if anything 178 00:11:26,960 --> 00:11:31,200 Speaker 1: are to the downside. I never thought we'd dream I'd 179 00:11:31,200 --> 00:11:34,080 Speaker 1: never drawed twenty years ago that would be worried about 180 00:11:34,120 --> 00:11:36,560 Speaker 1: inflation being too low, but that's really where it is 181 00:11:36,600 --> 00:11:39,160 Speaker 1: in the United States and in most of the other 182 00:11:39,160 --> 00:11:42,520 Speaker 1: advanced economies. You mentioned China, and I wonder what you 183 00:11:42,520 --> 00:11:44,080 Speaker 1: can tell us about the role that it's playing when 184 00:11:44,120 --> 00:11:46,440 Speaker 1: it comes to global inflation now post crisis, as opposed 185 00:11:46,440 --> 00:11:50,319 Speaker 1: to what we saw before the financial crisis. Well, UH 186 00:11:50,600 --> 00:11:57,720 Speaker 1: in UH in so many sectors UH. China is UH 187 00:11:57,800 --> 00:12:03,640 Speaker 1: the international price center and UH wages are rising in China, 188 00:12:04,040 --> 00:12:08,880 Speaker 1: which cuts in one direction, but productivity is also rising 189 00:12:08,920 --> 00:12:12,120 Speaker 1: in China, which which cuts in the other direction. So 190 00:12:12,280 --> 00:12:18,440 Speaker 1: China is UH is a major force in the global 191 00:12:18,520 --> 00:12:21,920 Speaker 1: economy in terms of price setting, and I think relative 192 00:12:22,080 --> 00:12:24,960 Speaker 1: to the pre crisis period, it's just a much more 193 00:12:25,120 --> 00:12:30,880 Speaker 1: mature Chinese economy where the goods that it's producing are 194 00:12:31,600 --> 00:12:34,680 Speaker 1: more sophisticated than what's the case before. It's now more 195 00:12:34,720 --> 00:12:39,240 Speaker 1: than toys and basing manufacturers that are coming out of China. 196 00:12:39,360 --> 00:12:41,319 Speaker 1: What did you learn about the Chinese economy from the 197 00:12:41,320 --> 00:12:43,680 Speaker 1: Congress that just wrapped up this week? You you traveled 198 00:12:43,679 --> 00:12:45,199 Speaker 1: there a lot when you're Under Secretary of the Treachery 199 00:12:45,240 --> 00:12:47,000 Speaker 1: for International Affairs. Knew a lot of the principles that 200 00:12:47,040 --> 00:12:49,120 Speaker 1: we saw on stage there with the President over the 201 00:12:49,200 --> 00:12:52,720 Speaker 1: last week. What are these appointments? What is the dialogue 202 00:12:52,760 --> 00:12:55,000 Speaker 1: that we heard there in Beijing tell us about what's 203 00:12:55,040 --> 00:12:59,040 Speaker 1: to come for the Chinese economy? So uh, first and 204 00:12:59,320 --> 00:13:04,320 Speaker 1: form of this party congress was about President She President, 205 00:13:04,440 --> 00:13:09,720 Speaker 1: she solidified his power. Uh. President she extended his reach 206 00:13:10,400 --> 00:13:14,600 Speaker 1: and UH, you know, by many, by many metrics, it's 207 00:13:14,640 --> 00:13:17,960 Speaker 1: feeling like President she is setting himself up not only 208 00:13:18,000 --> 00:13:20,680 Speaker 1: for five years, but for ten years and maybe more 209 00:13:21,640 --> 00:13:26,359 Speaker 1: of rule. I'd say A second UH and related observation 210 00:13:26,640 --> 00:13:29,480 Speaker 1: is that there are a number of technocrats in the 211 00:13:29,520 --> 00:13:36,720 Speaker 1: top echelonce of of the Chinese government. Given this reorganization, 212 00:13:37,160 --> 00:13:40,600 Speaker 1: and my expectation is that we will continue to see 213 00:13:41,160 --> 00:13:46,880 Speaker 1: a very gradual kind of economic reform UH, gradual efforts 214 00:13:46,920 --> 00:13:52,560 Speaker 1: to address UH leverage and credit and debt uh in 215 00:13:52,640 --> 00:13:58,920 Speaker 1: the Chinese economy. UH. But UH, these these challenges that 216 00:13:59,000 --> 00:14:04,000 Speaker 1: they face are going to continue to be there uh 217 00:14:04,080 --> 00:14:07,160 Speaker 1: in the background, given the gradual nature of these reforms. 218 00:14:07,400 --> 00:14:10,280 Speaker 1: And then it just becomes a horse race between levels 219 00:14:10,320 --> 00:14:13,479 Speaker 1: of credit and and and and dad in the economy 220 00:14:13,760 --> 00:14:18,440 Speaker 1: in China on the one hand, versus the efforts, the 221 00:14:18,520 --> 00:14:22,200 Speaker 1: gradual efforts to reform and hopefully they're able to to 222 00:14:22,240 --> 00:14:26,120 Speaker 1: rebalance the economy sufficiently quickly. Nathan Chez, thanks for joining 223 00:14:26,200 --> 00:14:27,840 Speaker 1: us here in our studios in the Rork. That's Nathan 224 00:14:27,880 --> 00:14:29,960 Speaker 1: Che's's the chief economist responsible for the oversight of the 225 00:14:30,080 --> 00:14:45,560 Speaker 1: Peach and Fixton Comes Global Macroeconomic Research team. David, we're 226 00:14:45,640 --> 00:14:49,600 Speaker 1: unlocking our potential. We're unlocking our potential on a Friday morning, 227 00:14:50,040 --> 00:14:52,720 Speaker 1: let us unlock our potential. Carlie Furinga twins u here 228 00:14:52,760 --> 00:14:55,080 Speaker 1: in Bloomberg Levon three studios into your of course, from 229 00:14:55,080 --> 00:14:57,200 Speaker 1: we're CEO of HP. From we're candidate for the Republican 230 00:14:57,200 --> 00:14:59,480 Speaker 1: nomination for President Canada for vice president. I should say 231 00:14:59,640 --> 00:15:02,920 Speaker 1: as well, running alongside Senator Ted Cruz, now the founder 232 00:15:02,920 --> 00:15:05,880 Speaker 1: and chairman of Unlocking Potential, let's start there if we could. Uh, 233 00:15:05,920 --> 00:15:07,920 Speaker 1: this is a new foundation of yours. What's the goal 234 00:15:08,440 --> 00:15:09,800 Speaker 1: of it here? What have your set out set out 235 00:15:09,840 --> 00:15:13,160 Speaker 1: to do? Well? I know from almost thirty years of 236 00:15:13,240 --> 00:15:16,520 Speaker 1: experience that leaders are made, not born, that leadership has 237 00:15:16,560 --> 00:15:19,440 Speaker 1: nothing to do with your title, your position, and so 238 00:15:19,560 --> 00:15:22,240 Speaker 1: we are lifting up leaders all across this country. I 239 00:15:22,280 --> 00:15:25,960 Speaker 1: think that we need a strong civil society. The nonprofit 240 00:15:26,040 --> 00:15:31,160 Speaker 1: sector deals with really pressing problems and frequently there isn't 241 00:15:31,200 --> 00:15:34,120 Speaker 1: a lot of investment in leadership development. And so whether 242 00:15:34,160 --> 00:15:36,520 Speaker 1: it's wounded warriors or Easter Seals or a host of 243 00:15:36,960 --> 00:15:40,200 Speaker 1: nonprofits around the country, we are lifting leaders up wherever 244 00:15:40,240 --> 00:15:42,520 Speaker 1: they are so they can solve more problems. I ask 245 00:15:42,560 --> 00:15:45,720 Speaker 1: you about leadership in Washington today. Uh, many have said 246 00:15:45,720 --> 00:15:47,200 Speaker 1: there's a deficit of it. Where do you where do 247 00:15:47,240 --> 00:15:49,640 Speaker 1: you see it? As we've heard members of the Republican 248 00:15:49,680 --> 00:15:52,880 Speaker 1: Party talk about the future of it. Uh. Some who 249 00:15:52,920 --> 00:15:54,640 Speaker 1: you know, well, Sara John McCain, who you advised in 250 00:15:54,840 --> 00:15:57,520 Speaker 1: two thousand eight as he ran for president. Where do 251 00:15:57,560 --> 00:15:59,560 Speaker 1: you see the party headed? How important is party to 252 00:15:59,600 --> 00:16:02,640 Speaker 1: you at this point? Well? You know, I think as 253 00:16:02,680 --> 00:16:07,760 Speaker 1: a citizen and as a business person, UM, what I 254 00:16:07,840 --> 00:16:11,560 Speaker 1: believe is it's important to produce results for the American people. 255 00:16:11,800 --> 00:16:15,560 Speaker 1: And I think the reason Americans are so frustrated with 256 00:16:15,640 --> 00:16:20,160 Speaker 1: politicians of all stripes and of both parties is they 257 00:16:20,160 --> 00:16:22,800 Speaker 1: don't see a lot of results getting produced. And so 258 00:16:23,240 --> 00:16:26,840 Speaker 1: for me, that's what it's all about. Um. I think 259 00:16:26,920 --> 00:16:32,640 Speaker 1: politics for quite a long time has been about preserving 260 00:16:32,640 --> 00:16:36,080 Speaker 1: the system, running to win over and over and over. 261 00:16:36,520 --> 00:16:39,320 Speaker 1: It's been about hurling insults, on both sides. I mean 262 00:16:39,320 --> 00:16:42,680 Speaker 1: my goosiness. Democrats have engaged in character assassination for a 263 00:16:42,680 --> 00:16:45,600 Speaker 1: long time. Remember Binder's Full of women and John McCain 264 00:16:45,720 --> 00:16:47,640 Speaker 1: was a racist, and oh it goes on and on. 265 00:16:48,640 --> 00:16:54,480 Speaker 1: Uh So, I think we could use more leaders everywhere 266 00:16:55,160 --> 00:16:58,800 Speaker 1: to focus on their job, which is to produce results 267 00:16:58,800 --> 00:17:02,840 Speaker 1: for the American people. I give you major, major points 268 00:17:03,440 --> 00:17:07,320 Speaker 1: for choosing to run for public office, to hope for 269 00:17:07,400 --> 00:17:11,440 Speaker 1: public service in a state where there's like fourteen Republicans 270 00:17:11,520 --> 00:17:14,720 Speaker 1: north of Orange County and you know it was a 271 00:17:14,720 --> 00:17:17,280 Speaker 1: struggle and you went down in flames in California. Get 272 00:17:17,320 --> 00:17:22,480 Speaker 1: that there's twenty eight point nine percent registered Republicans in California. 273 00:17:22,680 --> 00:17:27,280 Speaker 1: Can your Republican Party in eighteen and twenty can they 274 00:17:27,320 --> 00:17:31,760 Speaker 1: find those independent voters? Well, that's a good question. Um. 275 00:17:31,800 --> 00:17:38,000 Speaker 1: I think, like many Republicans, um, I am uncertain where 276 00:17:38,040 --> 00:17:41,920 Speaker 1: the party is going. I've been very consistent in my 277 00:17:42,040 --> 00:17:45,159 Speaker 1: beliefs over many, many years. And I say that because, 278 00:17:45,200 --> 00:17:48,920 Speaker 1: for example, one of my metrics of success for any 279 00:17:48,960 --> 00:17:54,040 Speaker 1: government is does money move out of Washington? Does power 280 00:17:54,080 --> 00:17:57,160 Speaker 1: move out of Washington? Does decision making move out of Washington? 281 00:17:57,320 --> 00:18:00,800 Speaker 1: I think it's highly unlikely that any Republican win in 282 00:18:00,920 --> 00:18:06,560 Speaker 1: California in a national office connectional seats. Yet, how can 283 00:18:06,680 --> 00:18:11,879 Speaker 1: you find in California about independent voters? But in the 284 00:18:11,960 --> 00:18:15,440 Speaker 1: states that Secretary Clinton lost with a president one where 285 00:18:15,480 --> 00:18:18,520 Speaker 1: you've got to go redo that energy. Given the swirl 286 00:18:18,560 --> 00:18:23,000 Speaker 1: of the Republican Party, how do you sell to independent voters? 287 00:18:23,560 --> 00:18:29,879 Speaker 1: You see? I think what Democrats missed in is people 288 00:18:29,960 --> 00:18:33,800 Speaker 1: were focused on we need to try something different to 289 00:18:33,840 --> 00:18:39,600 Speaker 1: produce results. Hillary Clinton was seen as a continuation of 290 00:18:39,640 --> 00:18:43,520 Speaker 1: a politics of corruption and self interest that produced nothing. 291 00:18:44,160 --> 00:18:47,440 Speaker 1: And so I think the most important thing now is 292 00:18:47,680 --> 00:18:52,200 Speaker 1: for this administration to produce results. Let's start with tax reform. 293 00:18:52,240 --> 00:18:55,720 Speaker 1: If tax reform doesn't get done, then I think it's 294 00:18:55,720 --> 00:18:58,800 Speaker 1: going to be extremely difficult. But what the Democrats found 295 00:18:58,800 --> 00:19:01,800 Speaker 1: out in and what they've also found out so far 296 00:19:01,840 --> 00:19:05,800 Speaker 1: in twenty seventeen is criticizing Donald Trump. Although there's plenty 297 00:19:05,840 --> 00:19:10,159 Speaker 1: to criticize, criticizing Donald Trump isn't a program. It doesn't sell, 298 00:19:10,440 --> 00:19:14,440 Speaker 1: it doesn't produce results. And so while everyone's crying about, 299 00:19:14,480 --> 00:19:17,160 Speaker 1: you know, what's going on with the Republican Party, that's 300 00:19:17,400 --> 00:19:19,800 Speaker 1: I think that will be forgotten if the Republican Party 301 00:19:19,800 --> 00:19:23,320 Speaker 1: produces some result, and the Democrats need to get a program. 302 00:19:23,400 --> 00:19:25,840 Speaker 1: They don't have one other than they don't like Republicans, 303 00:19:25,840 --> 00:19:29,800 Speaker 1: and they don't like this particular Republican president in particular. 304 00:19:30,080 --> 00:19:32,040 Speaker 1: It's not a program. Had you've been elected, you would 305 00:19:32,040 --> 00:19:33,840 Speaker 1: have come to the office as an outsider, much like 306 00:19:34,160 --> 00:19:36,959 Speaker 1: President Trump. And we've seen how he struggled over these 307 00:19:37,040 --> 00:19:39,960 Speaker 1: last few months to work within the constricts of Washington, 308 00:19:40,040 --> 00:19:43,560 Speaker 1: d C. With Congress through all of these legislative rules. 309 00:19:43,640 --> 00:19:46,240 Speaker 1: As you've watched that unfold, as you've seen those difficulties, 310 00:19:46,280 --> 00:19:48,240 Speaker 1: I think every would say that there have been difficulties. 311 00:19:48,680 --> 00:19:50,320 Speaker 1: What would you advise him to do differently? How would 312 00:19:50,320 --> 00:19:52,520 Speaker 1: you have approached that differently when it comes to getting 313 00:19:52,520 --> 00:19:55,080 Speaker 1: healthcare form through working on tax and I think there 314 00:19:55,080 --> 00:19:56,679 Speaker 1: are a lot of people who would quibble with the 315 00:19:56,680 --> 00:19:59,439 Speaker 1: way this process has played out. You talked about getting results. 316 00:19:59,480 --> 00:20:02,200 Speaker 1: I think they're probably people across America who just wonder 317 00:20:02,440 --> 00:20:04,560 Speaker 1: why this has to happen in such a compressed timeframe, 318 00:20:04,600 --> 00:20:07,200 Speaker 1: Why there is, if not secrecy, just so much uncertainty 319 00:20:07,200 --> 00:20:09,480 Speaker 1: surrounding what's happened at a given time. I think those 320 00:20:09,520 --> 00:20:11,960 Speaker 1: are legitimate concerns. I'm one of the things that I 321 00:20:12,040 --> 00:20:15,680 Speaker 1: criticized the Republican Party for is they undertook health care reform. 322 00:20:15,800 --> 00:20:19,240 Speaker 1: Is nobody knew what they were trying to get past. 323 00:20:19,320 --> 00:20:21,840 Speaker 1: If the American people don't know, they can't support it. 324 00:20:21,880 --> 00:20:24,240 Speaker 1: And I also criticize them for doing it on a 325 00:20:24,320 --> 00:20:27,679 Speaker 1: purely partisan basis. That was the Democrat's mistake and it 326 00:20:27,800 --> 00:20:31,879 Speaker 1: was the Republican's mistake. I think Trump, like any leader, 327 00:20:32,480 --> 00:20:35,000 Speaker 1: needs to realize that how you get things done is 328 00:20:35,040 --> 00:20:38,800 Speaker 1: as important as what you get done. Leaders build support 329 00:20:39,040 --> 00:20:42,880 Speaker 1: for what they're doing, and they're also clear and predictable 330 00:20:43,560 --> 00:20:46,359 Speaker 1: on what they want to get done, and they follow 331 00:20:46,400 --> 00:20:50,080 Speaker 1: through curli fearing whatever anybody in the critics that HP 332 00:20:50,200 --> 00:20:52,560 Speaker 1: would say about you. You had a storied career up 333 00:20:52,640 --> 00:20:55,199 Speaker 1: the ladder. We're going to have this discussion for a 334 00:20:55,240 --> 00:20:59,480 Speaker 1: few minutes without mentioning any names at all. Every single CEO, 335 00:21:00,200 --> 00:21:03,919 Speaker 1: every single corporate officer with their general counsel this morning 336 00:21:04,400 --> 00:21:09,600 Speaker 1: is talking about male and female relationships within corporations. I'm 337 00:21:09,600 --> 00:21:14,000 Speaker 1: sure you've had these conversations tens, if not hundreds of times. 338 00:21:14,119 --> 00:21:19,040 Speaker 1: Where will the new American corporation be as good people 339 00:21:19,440 --> 00:21:23,520 Speaker 1: men and women try to address the shock of these 340 00:21:23,560 --> 00:21:26,880 Speaker 1: harassment issues of the last number of weeks, what are 341 00:21:26,920 --> 00:21:30,719 Speaker 1: corporate officers to do. Well, let's just start with the truth. 342 00:21:31,320 --> 00:21:35,199 Speaker 1: Nobody shocked about this, Nobody shocked about people know it 343 00:21:35,240 --> 00:21:37,520 Speaker 1: goes on. Men know what goes on, and women goes no, 344 00:21:37,720 --> 00:21:40,959 Speaker 1: it goes on. Let me also say that the vast 345 00:21:41,160 --> 00:21:46,920 Speaker 1: majority of men are good men, that this is not 346 00:21:47,880 --> 00:21:52,879 Speaker 1: normal behavior, but it is known behavior, and so I 347 00:21:52,920 --> 00:21:56,600 Speaker 1: think the most important thing is that people are talking 348 00:21:56,600 --> 00:21:59,680 Speaker 1: about it. What we shouldn't do is and what I 349 00:21:59,720 --> 00:22:04,359 Speaker 1: fear sometimes people tend to do is overcorrect and say, well, 350 00:22:04,640 --> 00:22:07,920 Speaker 1: every man is bad, every situation is harassment. It's not. 351 00:22:09,440 --> 00:22:14,120 Speaker 1: Politically speaking, Democrats have always wanted to say that all 352 00:22:14,200 --> 00:22:18,760 Speaker 1: women are victims. That's untrue. Politically speaking, Republicans have always 353 00:22:18,800 --> 00:22:21,760 Speaker 1: wanted to say there is no issue here. That isn't 354 00:22:21,760 --> 00:22:25,760 Speaker 1: true either. There is a real issue. I've been subjected 355 00:22:25,800 --> 00:22:30,040 Speaker 1: to it myself at all levels, at all levels of 356 00:22:30,080 --> 00:22:33,720 Speaker 1: a corporation, at all levels of public life and politics, 357 00:22:33,720 --> 00:22:36,560 Speaker 1: as well as in business. So let's quit pretending to 358 00:22:36,600 --> 00:22:40,080 Speaker 1: be shocked. It goes on a lot. Let's acknowledge it 359 00:22:40,119 --> 00:22:43,320 Speaker 1: when it does. But let's also recognize that most men 360 00:22:43,400 --> 00:22:47,840 Speaker 1: are not predators in unfortunately forty seconds. Does the government 361 00:22:47,960 --> 00:22:53,159 Speaker 1: have to step in with study, analysis or legislation on 362 00:22:53,240 --> 00:22:58,159 Speaker 1: this sensitive issue. Well, I certainly hope not, because I 363 00:22:58,200 --> 00:23:02,280 Speaker 1: think there's plenty of legislation that can deal with this. 364 00:23:02,600 --> 00:23:06,960 Speaker 1: What's going on is a violation of virtually every company's 365 00:23:07,000 --> 00:23:10,280 Speaker 1: code of conduct. In many cases it is a violation 366 00:23:10,480 --> 00:23:14,320 Speaker 1: of the law. We've got plenty of laws here. What's happened, 367 00:23:14,400 --> 00:23:18,240 Speaker 1: Let's get real. What's happened is people have covered it 368 00:23:18,359 --> 00:23:21,320 Speaker 1: up and shoved it under the rug. Why because the 369 00:23:21,320 --> 00:23:24,840 Speaker 1: people who were doing it were powerful, they were making money. 370 00:23:25,280 --> 00:23:28,720 Speaker 1: You know, everybody benefited as long as everybody kept quiet. 371 00:23:29,000 --> 00:23:31,760 Speaker 1: That's why. Thank you so much. Carlie Farina with us 372 00:23:32,119 --> 00:23:35,439 Speaker 1: this morning on any number of themes here, including the 373 00:23:35,480 --> 00:23:51,879 Speaker 1: future of her Republican party, on heroin and opioid. What 374 00:23:52,000 --> 00:23:55,280 Speaker 1: we know is a tort is a wrong and going 375 00:23:55,320 --> 00:23:57,560 Speaker 1: back to the nation's law, and I would particularly point 376 00:23:57,600 --> 00:24:01,119 Speaker 1: out Oliver Wendell Holmes Jr. The is an idea of 377 00:24:01,200 --> 00:24:05,560 Speaker 1: people fighting for certain issues. David Gura, our next guest, 378 00:24:05,600 --> 00:24:09,879 Speaker 1: Paul Handley, has been absolutely at the forefront of not 379 00:24:10,000 --> 00:24:13,600 Speaker 1: what is the movies, but is the reality of years 380 00:24:13,840 --> 00:24:18,640 Speaker 1: and years in years of litigation on any number of topics. 381 00:24:18,680 --> 00:24:22,040 Speaker 1: Take asbestos as a choice. And Mr Handley has now 382 00:24:22,080 --> 00:24:25,000 Speaker 1: taken on heroin and opioid. Why don't you bring him 383 00:24:25,040 --> 00:24:27,480 Speaker 1: in there? He now representing fifteen communities in New York 384 00:24:27,720 --> 00:24:30,000 Speaker 1: that have seen upticks and costs related to the the 385 00:24:30,040 --> 00:24:32,719 Speaker 1: opioid crisis here in the in the US, he joins us, 386 00:24:32,720 --> 00:24:34,720 Speaker 1: now on our phone lines, let's get into the legal 387 00:24:34,800 --> 00:24:36,399 Speaker 1: argument you're making here just a few minutes. Let me 388 00:24:36,400 --> 00:24:37,959 Speaker 1: ask you, first of all, though, to react to what 389 00:24:38,000 --> 00:24:40,240 Speaker 1: we heard yesterday from the President United States. For a 390 00:24:40,320 --> 00:24:43,160 Speaker 1: long time he talked about declaring this a national emergency 391 00:24:43,160 --> 00:24:45,119 Speaker 1: of some sort. He didn't go that far. Yesterday he 392 00:24:45,160 --> 00:24:47,679 Speaker 1: declared it a national public health emergency. What did you 393 00:24:47,720 --> 00:24:50,280 Speaker 1: make of what he had to say? And is a 394 00:24:50,280 --> 00:24:52,120 Speaker 1: decision to do that? Do you see this is as 395 00:24:52,119 --> 00:24:54,600 Speaker 1: incremental a step in the right direction or do you 396 00:24:54,600 --> 00:24:58,000 Speaker 1: wish that he had done more? Uh? Well, David, I 397 00:24:58,040 --> 00:25:00,600 Speaker 1: wish that he had done more. As as you indicated, 398 00:25:00,640 --> 00:25:04,919 Speaker 1: the declaration that the President did make does not, unfortunately 399 00:25:05,160 --> 00:25:09,199 Speaker 1: free up the very substantial amount of federal funds that 400 00:25:09,440 --> 00:25:14,440 Speaker 1: a national emergency declaration would and and it's and it's 401 00:25:14,560 --> 00:25:18,640 Speaker 1: money that is needed in the various communities across our country, 402 00:25:19,080 --> 00:25:22,320 Speaker 1: UH to deal with this terrible problem. The second, the 403 00:25:22,440 --> 00:25:27,760 Speaker 1: second disappointment, if you will, in the President's speech was 404 00:25:27,960 --> 00:25:33,080 Speaker 1: there was so much focus on the illegal user of 405 00:25:33,080 --> 00:25:39,560 Speaker 1: of drugs, the casual user taking drugs which were unlawfully obtained, 406 00:25:39,600 --> 00:25:43,760 Speaker 1: and the President referenced drugs flowing across the border. That's 407 00:25:43,760 --> 00:25:48,199 Speaker 1: a complete misconception concerning the genesis of this epidemic. This 408 00:25:48,280 --> 00:25:53,440 Speaker 1: epidemic began because the pharmaceutical UH industry in the opioid 409 00:25:53,480 --> 00:26:00,560 Speaker 1: space UH commenced a decades long conspiracy to mislead public 410 00:26:00,640 --> 00:26:03,960 Speaker 1: health authorities and positions about the day. The word conspiracy 411 00:26:04,000 --> 00:26:06,600 Speaker 1: mean to a tort lawyer, Conspiracy for you, isn't that 412 00:26:06,920 --> 00:26:09,399 Speaker 1: I have a conspiracy that there are children in my house? 413 00:26:09,880 --> 00:26:13,880 Speaker 1: You know, what does conspiracy? What does conspiracy? What does 414 00:26:13,880 --> 00:26:18,119 Speaker 1: conspiracy mean to a pro like you, Paul Uh? Well, well, Tom, 415 00:26:18,119 --> 00:26:22,240 Speaker 1: it it means an illegal agreement to do something that's 416 00:26:22,320 --> 00:26:27,280 Speaker 1: fraudulent or unlawful, and and that, unfortunately is what happened 417 00:26:27,280 --> 00:26:30,960 Speaker 1: here with respect to certain of the members of the 418 00:26:31,600 --> 00:26:36,760 Speaker 1: farm pharmaceutical manufacturers. Let me get into sort of what 419 00:26:36,800 --> 00:26:38,720 Speaker 1: you're arguing, now, I know that the cost of this 420 00:26:38,800 --> 00:26:40,680 Speaker 1: crisis are huge. We've had Alan Krueger on the show 421 00:26:40,680 --> 00:26:42,520 Speaker 1: a couple of times talking about his work looking at 422 00:26:42,560 --> 00:26:45,000 Speaker 1: the effects that this crisis has had on the labor 423 00:26:45,000 --> 00:26:48,200 Speaker 1: economy in particular. Let's talk about the costs of treatment. First. 424 00:26:48,240 --> 00:26:50,520 Speaker 1: When you talk to to folks in the communities you represent, 425 00:26:50,560 --> 00:26:52,760 Speaker 1: what do they say about how much this is weighing 426 00:26:52,800 --> 00:26:56,480 Speaker 1: on them? Yes, psychically obviously, as as people succumb to 427 00:26:56,560 --> 00:26:59,080 Speaker 1: these addictions, but financially as well. What what kind of 428 00:26:59,119 --> 00:27:03,520 Speaker 1: burden is this on counties and communities you represent. Uh, David, 429 00:27:03,640 --> 00:27:06,400 Speaker 1: that's an excellent question. Let me just give you one 430 00:27:06,520 --> 00:27:12,119 Speaker 1: anecdote which I think is emblematic of the broader problem. Uh. 431 00:27:12,240 --> 00:27:15,520 Speaker 1: In in one particular county in New York that I'm 432 00:27:15,560 --> 00:27:19,320 Speaker 1: gonna not name for the moment, Uh, there were two 433 00:27:19,440 --> 00:27:24,960 Speaker 1: county employees in need of rehab for opioid addiction. They 434 00:27:25,000 --> 00:27:28,399 Speaker 1: contracted the addiction because they were injured on the on 435 00:27:28,440 --> 00:27:32,760 Speaker 1: the job. These were not illegal users, and two employees. 436 00:27:33,359 --> 00:27:38,760 Speaker 1: The cost for rehab was eight hundred thousand dollars. Now, 437 00:27:38,920 --> 00:27:43,560 Speaker 1: we have millions of county employees across the country. Many 438 00:27:43,640 --> 00:27:46,720 Speaker 1: of whom suffer injuries on the job. And uh, and 439 00:27:46,720 --> 00:27:49,719 Speaker 1: and take these drugs and get addicted and and and 440 00:27:49,800 --> 00:27:52,600 Speaker 1: need rehab well very quickly here, and we're going to 441 00:27:52,680 --> 00:27:55,080 Speaker 1: come back with Paul Hanley. This issue is so important 442 00:27:55,359 --> 00:27:59,200 Speaker 1: and heroin and opioid to use the Perry Mason phrase, Paul, 443 00:27:59,600 --> 00:28:02,119 Speaker 1: when do you go to court? Is it a couple 444 00:28:02,160 --> 00:28:04,720 Speaker 1: of years out or is this decades? Is this going 445 00:28:04,760 --> 00:28:08,399 Speaker 1: to be forever? Uh? Tom, I think we're going to 446 00:28:08,480 --> 00:28:11,320 Speaker 1: move these cases very quickly. And the reason for that 447 00:28:11,480 --> 00:28:17,440 Speaker 1: is that this is a bipartisan issue, a bipartisan problem. 448 00:28:17,560 --> 00:28:22,360 Speaker 1: There isn't a responsible person in our nation that doesn't 449 00:28:22,480 --> 00:28:27,080 Speaker 1: understand the need to take take these kinds of steps, 450 00:28:27,119 --> 00:28:30,040 Speaker 1: including the litigation steps. So I think these cases are 451 00:28:30,040 --> 00:28:32,600 Speaker 1: going to move very very quickly. Give us a sense 452 00:28:32,640 --> 00:28:36,640 Speaker 1: here of you've talked about conspiracy, allegations of conspiracy among 453 00:28:36,640 --> 00:28:40,000 Speaker 1: pharmaceutical companies. Have you detected a change in tone from 454 00:28:40,120 --> 00:28:42,800 Speaker 1: them as you listen to representative of the trade groups, 455 00:28:42,840 --> 00:28:44,880 Speaker 1: as you listen to the companies themselves. Is there is 456 00:28:44,920 --> 00:28:49,200 Speaker 1: there some regret or or some change in policy attach 457 00:28:49,280 --> 00:28:52,880 Speaker 1: from them that you've you've seen here, Paul, I don't 458 00:28:52,880 --> 00:28:58,560 Speaker 1: really see much change, David. They continue to blame uh 459 00:28:58,920 --> 00:29:03,520 Speaker 1: corrupt physician for over prescribing. They continue to blame uh 460 00:29:03,680 --> 00:29:09,360 Speaker 1: drug dealers for unlawfully obtaining uh these these drugs uh. 461 00:29:09,400 --> 00:29:14,480 Speaker 1: And and what they always avoid is is accepting any 462 00:29:14,520 --> 00:29:20,320 Speaker 1: blame for creating a marketplace uh in which physicians were 463 00:29:20,440 --> 00:29:24,520 Speaker 1: taught by these companies that it was okay to prescribe 464 00:29:24,840 --> 00:29:27,960 Speaker 1: these very powerful drugs. Doctors could have said, no, that's 465 00:29:27,960 --> 00:29:31,160 Speaker 1: what they're you know, the different pharmaceutical companies. Attorney are 466 00:29:31,160 --> 00:29:33,040 Speaker 1: gonna say, wait a minute, these are adults. They could 467 00:29:33,080 --> 00:29:36,640 Speaker 1: have said no. Why didn't the doctors say no? Well, 468 00:29:36,680 --> 00:29:42,200 Speaker 1: because Tom, the the pharmaceutical companies did a very effective 469 00:29:42,280 --> 00:29:47,920 Speaker 1: job of spreading disinformation or misinformation. Uh. They cited studies 470 00:29:47,920 --> 00:29:51,760 Speaker 1: that were fraudulently put together. They cited data that was 471 00:29:52,000 --> 00:29:55,000 Speaker 1: cooked up, UH that said if you were taking these 472 00:29:55,040 --> 00:29:58,360 Speaker 1: drugs for pain, you could not become addicted. And and 473 00:29:58,440 --> 00:30:02,640 Speaker 1: physicians bought into that. And I've I've spoken to hundreds 474 00:30:02,720 --> 00:30:05,000 Speaker 1: of physicians around the country and they said, you know, 475 00:30:05,160 --> 00:30:07,920 Speaker 1: we believe this stuff. We believe these papers that these 476 00:30:08,000 --> 00:30:11,760 Speaker 1: drug reps would give us, and and and these conclusions 477 00:30:11,760 --> 00:30:14,600 Speaker 1: that these drugs were not effective. So uh so, So 478 00:30:14,680 --> 00:30:18,560 Speaker 1: that's my counter to to the pharmaceutical companies pointing the 479 00:30:18,720 --> 00:30:22,840 Speaker 1: finger at everybody but themselves. Give us a sense, if 480 00:30:22,880 --> 00:30:25,680 Speaker 1: you would, pall of of the momentum at this point. 481 00:30:25,680 --> 00:30:28,160 Speaker 1: It took a long while, longer than many hoped or 482 00:30:28,200 --> 00:30:29,760 Speaker 1: wanted for the President to address this in the way 483 00:30:29,800 --> 00:30:32,040 Speaker 1: in which he did yesterday when he spoke at the 484 00:30:32,040 --> 00:30:35,000 Speaker 1: White House. You're pursuing your cases. Others are doing this 485 00:30:35,200 --> 00:30:37,920 Speaker 1: in concert with you or in parallel with what you're doing. 486 00:30:38,640 --> 00:30:40,920 Speaker 1: I suppose a huge hurdle to overcome here is just 487 00:30:40,960 --> 00:30:44,360 Speaker 1: awareness of this as an issue. Are you satisfied with 488 00:30:44,360 --> 00:30:46,600 Speaker 1: with that of the spotlight that's being shown on the 489 00:30:46,640 --> 00:30:50,240 Speaker 1: opioid crisis in the country right now? Well, I'm actually 490 00:30:50,320 --> 00:30:54,760 Speaker 1: quite uh pleased, David, with the response of the of 491 00:30:54,840 --> 00:30:58,960 Speaker 1: the media, including organizations of course like yours, um that 492 00:30:59,040 --> 00:31:02,240 Speaker 1: are taking this very very seriously. I mean you, as 493 00:31:02,280 --> 00:31:05,040 Speaker 1: you know, you can't go online any morning or or 494 00:31:05,080 --> 00:31:08,200 Speaker 1: pick up the New York Times or the Journal without 495 00:31:08,280 --> 00:31:11,960 Speaker 1: seeing a story about the terrible things that are happening. 496 00:31:12,240 --> 00:31:14,680 Speaker 1: So I think, uh, I think the media has actually 497 00:31:14,720 --> 00:31:18,800 Speaker 1: done a stellar job in this area, and all aspects 498 00:31:18,840 --> 00:31:20,960 Speaker 1: of the of the media, you know, the sort of 499 00:31:21,280 --> 00:31:25,800 Speaker 1: human interest stories to the financial stories that organizations like 500 00:31:25,840 --> 00:31:30,360 Speaker 1: Bloomberg are writing. What it comes to to paying for this, 501 00:31:30,840 --> 00:31:32,440 Speaker 1: Where do you think that the bulk of the funds 502 00:31:32,480 --> 00:31:33,520 Speaker 1: are going to come from? I think a lot of 503 00:31:33,520 --> 00:31:36,120 Speaker 1: dissatisfaction what the President outlined yesterday was that there weren't 504 00:31:36,120 --> 00:31:38,800 Speaker 1: a lot of funds attributed to what he introduced. Is 505 00:31:38,800 --> 00:31:40,360 Speaker 1: it going to come from the federal government? Is it 506 00:31:40,360 --> 00:31:42,040 Speaker 1: going to come from companies like the ones that you're 507 00:31:42,080 --> 00:31:46,800 Speaker 1: you're targeting. How do you see this crisis being paid for? Well, David, 508 00:31:46,840 --> 00:31:49,280 Speaker 1: I think it's gonna I think it's going to end 509 00:31:49,360 --> 00:31:52,160 Speaker 1: up very similar to the way in which the tobacco 510 00:31:52,320 --> 00:31:55,920 Speaker 1: crisis and UH litigation ended up. I think there's going 511 00:31:55,960 --> 00:31:58,680 Speaker 1: to be some sort of a national settlement that will 512 00:31:58,720 --> 00:32:03,440 Speaker 1: involve the federal government, the state's individual counties such as 513 00:32:03,480 --> 00:32:07,719 Speaker 1: I represent UM, and there will have to be a 514 00:32:07,800 --> 00:32:11,200 Speaker 1: very large table to which people will come to negotiate, 515 00:32:11,520 --> 00:32:14,160 Speaker 1: and there will have to be a very very substantial 516 00:32:14,640 --> 00:32:18,880 Speaker 1: pot of money allah the funds that UH we're paid 517 00:32:18,920 --> 00:32:21,840 Speaker 1: out in tobacco two d and forty billion dollars. Where's 518 00:32:21,840 --> 00:32:23,880 Speaker 1: the pot of money going to come from our people 519 00:32:23,920 --> 00:32:26,440 Speaker 1: that did not do opioids going to be writing a 520 00:32:26,480 --> 00:32:29,280 Speaker 1: tax dollar check. You know that, you know what the 521 00:32:29,320 --> 00:32:31,800 Speaker 1: tone is going to be. I don't say this with 522 00:32:31,800 --> 00:32:34,960 Speaker 1: with with with any disrespect to anyone, but to that 523 00:32:35,120 --> 00:32:38,479 Speaker 1: person in whatever state that did opioids. Am I right 524 00:32:38,520 --> 00:32:41,800 Speaker 1: in the check for them? Uh? No, Tom, I mean 525 00:32:42,080 --> 00:32:45,000 Speaker 1: the way we're looking at it is is, uh these 526 00:32:45,040 --> 00:32:48,959 Speaker 1: funds are going to come from the pharmaceutical companies that 527 00:32:49,040 --> 00:32:51,600 Speaker 1: created this mess to begin with. And so you know 528 00:32:51,640 --> 00:32:53,840 Speaker 1: we're looking at some of the as you well know, 529 00:32:53,960 --> 00:32:58,720 Speaker 1: some of the largest companies that you that you tracked. Paul, 530 00:32:58,800 --> 00:33:01,320 Speaker 1: I gotta leave it there, Paul Hanley, thank you so much. 531 00:33:01,480 --> 00:33:18,480 Speaker 1: This is Bloomberg. Brian Weezer Desserts mentioned because he is textbook, 532 00:33:19,400 --> 00:33:22,600 Speaker 1: David Gurrow, what a top analyst does. I can't convey 533 00:33:22,640 --> 00:33:25,760 Speaker 1: this enough. It's not what they do, it's what they 534 00:33:25,840 --> 00:33:29,160 Speaker 1: don't do. And Brian Weezer is Briton brilliant on that 535 00:33:29,880 --> 00:33:32,959 Speaker 1: with Facebook, but with many others. Is well, he's been 536 00:33:33,000 --> 00:33:37,680 Speaker 1: a real voice of calm and quiet within the tech hysteria. David, 537 00:33:38,040 --> 00:33:39,600 Speaker 1: Brian Weezer with us now, of course, he's a senior 538 00:33:39,640 --> 00:33:41,840 Speaker 1: analyst at Pivotal joining us on our phone line sponsored 539 00:33:41,840 --> 00:33:44,840 Speaker 1: by Spectrum Enterprise, your nationwide provider of scalable fiber network 540 00:33:44,880 --> 00:33:47,480 Speaker 1: services and managed cloud solutions. Brian, great to speak with 541 00:33:47,480 --> 00:33:49,200 Speaker 1: you again. Any number of directions we could go in here, 542 00:33:49,200 --> 00:33:51,600 Speaker 1: but let's start with a Twitter Twitter reporting. What did 543 00:33:51,640 --> 00:33:55,320 Speaker 1: you learn about who's advertising on Twitter? The advertising spend 544 00:33:56,000 --> 00:33:59,520 Speaker 1: with Twitter? From the report that we got, yeah, you know, 545 00:33:59,600 --> 00:34:03,600 Speaker 1: I thought that there are a lot of um positive things. 546 00:34:03,600 --> 00:34:06,800 Speaker 1: When could infer from what they said about first of all, 547 00:34:07,040 --> 00:34:11,399 Speaker 1: the largest advertisers, their top hundred advertisers are increasing. They're 548 00:34:11,440 --> 00:34:16,000 Speaker 1: spent right year of year globally, so we're sent domestically UM. 549 00:34:16,160 --> 00:34:18,760 Speaker 1: And you know the problem that a lot of people 550 00:34:18,760 --> 00:34:21,879 Speaker 1: don't understand what Twitter is that they suffer from bright 551 00:34:21,880 --> 00:34:26,239 Speaker 1: shiny objects syndrome UM where they did arguably too good 552 00:34:26,239 --> 00:34:30,480 Speaker 1: a job in the years twenty you know, twelve and 553 00:34:30,600 --> 00:34:34,640 Speaker 1: selling UH through to large brands when you had marketers 554 00:34:34,680 --> 00:34:37,360 Speaker 1: who didn't really know what they were doing. But boy, Twitter, 555 00:34:37,520 --> 00:34:40,919 Speaker 1: Twitter Shore sounded good, UH, and so they were able 556 00:34:40,920 --> 00:34:43,840 Speaker 1: to collect money from marketers who would send a dictat 557 00:34:43,920 --> 00:34:46,239 Speaker 1: down five levels below, go spend some money and figure 558 00:34:46,239 --> 00:34:49,320 Speaker 1: out what to do with it. To Twitter's discredit. They 559 00:34:49,480 --> 00:34:52,440 Speaker 1: couldn't figure out how to justify the spent um. But 560 00:34:52,680 --> 00:34:55,439 Speaker 1: for a lot of marketers that you know, they realized, Okay, 561 00:34:55,440 --> 00:34:57,919 Speaker 1: we gotta we can't justify that spending, so we're gonna 562 00:34:57,920 --> 00:35:01,520 Speaker 1: stop it. And that's the money that's gone away, right. Um. 563 00:35:01,600 --> 00:35:04,440 Speaker 1: The money that's there is coming from marketers who actually, 564 00:35:04,880 --> 00:35:06,719 Speaker 1: you know, have a sense of you know, how to 565 00:35:06,760 --> 00:35:09,400 Speaker 1: make use of Twitter as a communications platform. So that's 566 00:35:09,200 --> 00:35:12,480 Speaker 1: that's something we learned that Again, they are seeing this 567 00:35:12,640 --> 00:35:16,240 Speaker 1: growth from the the like for like advertiser that actually 568 00:35:16,280 --> 00:35:19,480 Speaker 1: seems to want to use Twitter, um self service advertiser 569 00:35:19,600 --> 00:35:24,680 Speaker 1: that's getting super served um with some extra support. I mean, 570 00:35:24,840 --> 00:35:28,040 Speaker 1: that group of clients is growing. Um. You know. So 571 00:35:28,080 --> 00:35:31,640 Speaker 1: there's some positive elements to the to the Twitter story 572 00:35:31,719 --> 00:35:33,640 Speaker 1: that we heard yesterday, and now I should clarify. I mean, 573 00:35:33,640 --> 00:35:36,480 Speaker 1: I have a no nineteen dollar price target. And I'm 574 00:35:36,480 --> 00:35:39,839 Speaker 1: not saying it's, uh, you know, let's let's go crazy 575 00:35:39,920 --> 00:35:43,840 Speaker 1: or anything, but it was there are positive signs of life, 576 00:35:43,120 --> 00:35:46,200 Speaker 1: uh company. Brian in a broader view, in the short 577 00:35:46,239 --> 00:35:48,440 Speaker 1: time we've got with you today, too short a time. 578 00:35:48,960 --> 00:35:52,640 Speaker 1: Do you just model these tech juggernauts the fangs whatever 579 00:35:52,680 --> 00:35:58,120 Speaker 1: you want to label them as. Plus revenue grow growers 580 00:35:58,120 --> 00:36:02,839 Speaker 1: out into the distance. No, yeah, uh yeah. I get 581 00:36:02,840 --> 00:36:04,880 Speaker 1: a lot of pushback on this. There's there there's a 582 00:36:04,960 --> 00:36:09,279 Speaker 1: view that says, because this advertising is necessarily is more 583 00:36:09,320 --> 00:36:12,920 Speaker 1: efficient than things which came before, it necessarily can grow, 584 00:36:14,120 --> 00:36:18,360 Speaker 1: you know, in perpetuity. And it's like, no, I mean, folks, 585 00:36:18,400 --> 00:36:22,520 Speaker 1: if you say the word perpetuity, you flung Yeah, exactly. 586 00:36:22,640 --> 00:36:26,840 Speaker 1: The growth. I mean, this is a fixed pie that 587 00:36:26,880 --> 00:36:29,120 Speaker 1: you're fighting for share over in any given year. And 588 00:36:29,120 --> 00:36:32,560 Speaker 1: the total advertising market can grow maybe three percent in 589 00:36:32,600 --> 00:36:35,600 Speaker 1: the United States, and globally you can add another percentage 590 00:36:35,640 --> 00:36:40,359 Speaker 1: point keeping and so when digital advertising is presently call 591 00:36:40,400 --> 00:36:44,240 Speaker 1: it forty percent of that total, and in some countries 592 00:36:44,280 --> 00:36:48,239 Speaker 1: it's much higher. View it's lower. Um, it's unrealistic to 593 00:36:48,280 --> 00:36:50,839 Speaker 1: assume if digital advertising kept growing at the same pace 594 00:36:50,840 --> 00:36:52,359 Speaker 1: it did in the last six years, in the next 595 00:36:52,360 --> 00:36:56,279 Speaker 1: six years, digital advertising would equal of all advertising, which 596 00:36:56,320 --> 00:36:59,359 Speaker 1: is utterly implausible. And you know, sorry, Tom David, I 597 00:36:59,360 --> 00:37:02,919 Speaker 1: mean you'reusness is gone. If he's all teeny's gone, Prince gone, 598 00:37:03,040 --> 00:37:08,480 Speaker 1: everything is gone. Not realistic, right, And so it has 599 00:37:08,520 --> 00:37:13,120 Speaker 1: too slow, it has to decelerate Alternately, if your Google 600 00:37:13,160 --> 00:37:16,239 Speaker 1: or Facebook you could keep growing. Hey, you could get 601 00:37:16,400 --> 00:37:18,840 Speaker 1: if they could get into the radio business by buying 602 00:37:19,120 --> 00:37:22,000 Speaker 1: radio stations, Let's say they could get into the TV 603 00:37:22,080 --> 00:37:26,360 Speaker 1: business by investing more heavily in premium content see NFL programming. 604 00:37:26,480 --> 00:37:28,040 Speaker 1: Or or you know what they've done in India that 605 00:37:28,160 --> 00:37:32,120 Speaker 1: that Facebook bid with livid six million dollars on digital 606 00:37:32,160 --> 00:37:35,280 Speaker 1: cricket rights for five years. Given how small the Indian market, 607 00:37:35,520 --> 00:37:41,279 Speaker 1: that's equivalent billion dollars NFL content the US. We're gonna 608 00:37:41,280 --> 00:37:43,399 Speaker 1: have to run margin. We're gonna have to run here. 609 00:37:43,520 --> 00:37:45,919 Speaker 1: Bryan Wes are too short of visit, and we'll catch 610 00:37:46,000 --> 00:37:48,360 Speaker 1: up as we see earnings continue in his space of 611 00:37:48,440 --> 00:37:53,279 Speaker 1: advertising media in the Internet. We go to Barcelona, we 612 00:37:53,360 --> 00:37:56,480 Speaker 1: go to Houston. We do that. Next, this is Bloomberg 613 00:38:09,360 --> 00:38:12,000 Speaker 1: Bot Moon just a moment ago, mentioning Bill Gates. Of course, 614 00:38:12,040 --> 00:38:14,520 Speaker 1: the first executive, first chief executive of Microsoft and now 615 00:38:14,560 --> 00:38:17,920 Speaker 1: the companies, went by Satiadella, somebody who was born in Hydrobad, India, 616 00:38:17,960 --> 00:38:20,000 Speaker 1: worked his way up the ranks within Microsoft after a 617 00:38:20,080 --> 00:38:22,959 Speaker 1: career its Sun Microsystems. Was named CEO, the third chief 618 00:38:23,000 --> 00:38:25,839 Speaker 1: executive of that company in two thousand fourteen, he's at 619 00:38:25,840 --> 00:38:28,000 Speaker 1: with an autobiography and sat down with David Rubinstein, the 620 00:38:28,040 --> 00:38:30,680 Speaker 1: co founder and co CEO of the Carlisle Group, also 621 00:38:30,719 --> 00:38:33,240 Speaker 1: host of the David Rubinstein Show, Peer to Peer Conversations, 622 00:38:33,280 --> 00:38:36,399 Speaker 1: which airs on Bloomberg Television at nine pm Eastern Time 623 00:38:36,400 --> 00:38:38,520 Speaker 1: on Wednesdays. You can also hear it on Bloomberg Radio 624 00:38:38,520 --> 00:38:42,440 Speaker 1: on Friday evenings at five pm and multiple times on Saturday. 625 00:38:42,520 --> 00:38:44,520 Speaker 1: David rubinstot, of course, the co founder and co CEO 626 00:38:44,520 --> 00:38:46,120 Speaker 1: of the Carlisle Group, and we're gonna talk about some 627 00:38:46,200 --> 00:38:48,600 Speaker 1: changes there in just a moment, but let's start with 628 00:38:48,640 --> 00:38:50,479 Speaker 1: the episode that airs this week. David, great to speak 629 00:38:50,520 --> 00:38:54,000 Speaker 1: with you once again. What did you say about taking 630 00:38:54,040 --> 00:38:57,040 Speaker 1: over this company that UH still relatively fairly young, has 631 00:38:57,040 --> 00:38:59,279 Speaker 1: had only two chief executives before him? What did he 632 00:38:59,360 --> 00:39:01,560 Speaker 1: learn from Old Gates and from Steve Bomber when he 633 00:39:01,560 --> 00:39:04,440 Speaker 1: assumed that job. Well, both of them said that that 634 00:39:04,600 --> 00:39:07,080 Speaker 1: he should be his own person, He shouldn't just do 635 00:39:07,160 --> 00:39:10,080 Speaker 1: what they wanted him to do. And so he very 636 00:39:10,160 --> 00:39:13,360 Speaker 1: much UH began to change the culture of the organization, 637 00:39:13,400 --> 00:39:16,120 Speaker 1: made it much more of a collaborative organization, much more 638 00:39:16,160 --> 00:39:19,160 Speaker 1: cooperative with partners on the outside and inside the various 639 00:39:19,160 --> 00:39:23,120 Speaker 1: silos that Microsoft had, and the result has been two 640 00:39:23,200 --> 00:39:26,439 Speaker 1: hundred and fifty billion dollars of increased market cap since 641 00:39:26,440 --> 00:39:29,000 Speaker 1: he's taken over. It's really astounding, you know. We we 642 00:39:29,000 --> 00:39:30,600 Speaker 1: we tend to talk a lot about the culture to 643 00:39:30,640 --> 00:39:33,160 Speaker 1: company like Apple or a company like Facebook. For a 644 00:39:33,160 --> 00:39:35,719 Speaker 1: long time, we didn't talk about the culture at Microsoft. 645 00:39:35,760 --> 00:39:37,800 Speaker 1: What was it like and and how did he change it? 646 00:39:37,840 --> 00:39:39,759 Speaker 1: How is it different today than it was under, say 647 00:39:39,840 --> 00:39:43,480 Speaker 1: Mr Palmer? The culture was one apparently I didn't work there, 648 00:39:43,480 --> 00:39:45,560 Speaker 1: but from talking to him and others, it was one 649 00:39:45,680 --> 00:39:48,160 Speaker 1: of silos. There were many different people working on things, 650 00:39:48,200 --> 00:39:50,520 Speaker 1: and they didn't collaborate with each other. It was also 651 00:39:50,560 --> 00:39:53,399 Speaker 1: a culture where people didn't tell each other what they 652 00:39:53,400 --> 00:39:55,879 Speaker 1: were doing. And also it was a culture where they 653 00:39:56,000 --> 00:39:59,160 Speaker 1: depended on a cash cow, really windows and office products 654 00:39:59,360 --> 00:40:02,400 Speaker 1: and nearly every thing else was not that important relatively speaking. 655 00:40:02,719 --> 00:40:05,160 Speaker 1: He changed that. He made other things more important to 656 00:40:05,200 --> 00:40:08,640 Speaker 1: the to the company's bottom line. He also made people 657 00:40:08,680 --> 00:40:11,400 Speaker 1: cooperate with each other, talk to each other. Did he 658 00:40:11,560 --> 00:40:15,360 Speaker 1: speak to you, David about not so much the breakup 659 00:40:15,520 --> 00:40:19,440 Speaker 1: of the company, but a careful analysis of use of 660 00:40:19,560 --> 00:40:25,600 Speaker 1: capital and what you do with the various shades of Microsoft. Yes, Um, 661 00:40:25,680 --> 00:40:28,920 Speaker 1: he did make some very large acquisitions. The principal one 662 00:40:29,000 --> 00:40:31,640 Speaker 1: is linked In, which gives them exposure to about five 663 00:40:31,719 --> 00:40:34,520 Speaker 1: hundred thousand potential customers, because I guess that's how many 664 00:40:34,560 --> 00:40:36,919 Speaker 1: people are used the linked In service. And he did 665 00:40:37,000 --> 00:40:40,319 Speaker 1: close down. Uh, the largest acquisition had been made before that, 666 00:40:40,400 --> 00:40:43,400 Speaker 1: which was no Kia, and that one didn't work in 667 00:40:43,480 --> 00:40:46,600 Speaker 1: his view. Um, he Microsoft has a great deal of 668 00:40:46,719 --> 00:40:50,760 Speaker 1: cash like Amazon does and Apple and Facebook and Google, 669 00:40:51,120 --> 00:40:53,719 Speaker 1: but he's used it pretty judiciously. I just thought of 670 00:40:53,760 --> 00:40:58,359 Speaker 1: an idea, David David Rubenstein on LinkedIn, and that would 671 00:40:58,360 --> 00:41:02,640 Speaker 1: be about you on it? Are you on it? I 672 00:41:02,680 --> 00:41:05,120 Speaker 1: am not on it, but uh, maybe I should get 673 00:41:05,160 --> 00:41:06,480 Speaker 1: on it soon. I don't know. There you go, right, 674 00:41:06,520 --> 00:41:08,440 Speaker 1: Dalio with us yesterday. I know he uses the platform 675 00:41:08,480 --> 00:41:11,239 Speaker 1: often to to deliver his his commentary. Let me ask 676 00:41:11,239 --> 00:41:13,360 Speaker 1: you just about him as a person. You talk a 677 00:41:13,360 --> 00:41:15,880 Speaker 1: lot about empathy and how he developed empathy. I mentioned 678 00:41:15,920 --> 00:41:17,520 Speaker 1: he was born in Hyderabad, moved to the to the 679 00:41:17,600 --> 00:41:19,440 Speaker 1: U S. What did what did you learn about his 680 00:41:19,480 --> 00:41:21,279 Speaker 1: life story, how he got to where he is and 681 00:41:21,320 --> 00:41:24,600 Speaker 1: how he was shaped as an individual. Well, his father 682 00:41:24,760 --> 00:41:27,520 Speaker 1: was fairly demanding and uh as was his mother. They're 683 00:41:27,560 --> 00:41:30,719 Speaker 1: both very well educated people. But he really can to 684 00:41:30,719 --> 00:41:32,959 Speaker 1: the United States and really both a career on his own, 685 00:41:33,600 --> 00:41:35,560 Speaker 1: and his original goal was to be a cricket player, 686 00:41:35,560 --> 00:41:38,040 Speaker 1: but he realized that wasn't going to work. I think 687 00:41:38,080 --> 00:41:43,520 Speaker 1: empathy was increased when he realized the personal situation he faced. 688 00:41:43,600 --> 00:41:47,799 Speaker 1: His first son was born with cerebral palsy, and his 689 00:41:47,880 --> 00:41:50,319 Speaker 1: son has been a quadriplegic for his entire wife. He's 690 00:41:50,320 --> 00:41:52,239 Speaker 1: now twenty one years old and always lived at home. 691 00:41:52,600 --> 00:41:55,440 Speaker 1: He and his wife always taking care of their their child, 692 00:41:55,920 --> 00:41:59,640 Speaker 1: and um, I think that produced a great deal of empathy. David, 693 00:42:00,280 --> 00:42:02,560 Speaker 1: If you and Lloyd blankly I never talked about the 694 00:42:02,680 --> 00:42:06,120 Speaker 1: US Post Office, did both of you had fathers who 695 00:42:06,120 --> 00:42:08,480 Speaker 1: were in the posts we did? If you ever did 696 00:42:08,560 --> 00:42:11,960 Speaker 1: a Lloyd about that, I did in my interview with him, 697 00:42:12,200 --> 00:42:14,000 Speaker 1: which was one of the first interviews I did on 698 00:42:14,040 --> 00:42:17,200 Speaker 1: the show I did. But her father's were not mail carriers. 699 00:42:17,200 --> 00:42:20,680 Speaker 1: There were clerks who filed the mail and very sympathetic 700 00:42:21,160 --> 00:42:24,680 Speaker 1: to his situation. People, I don't think, no your path 701 00:42:24,840 --> 00:42:28,359 Speaker 1: in your philanthropy. What is the emotion that David Rubinstein 702 00:42:28,440 --> 00:42:31,759 Speaker 1: has the important announcements this week of a changing of 703 00:42:31,800 --> 00:42:36,040 Speaker 1: the guard at your shop. Well, when you start any company, 704 00:42:36,520 --> 00:42:39,759 Speaker 1: you obviously wanted to succeed. When it does succeed, you 705 00:42:39,840 --> 00:42:43,120 Speaker 1: take pride in it um. You know, I didn't feel 706 00:42:43,280 --> 00:42:46,960 Speaker 1: that I wanted to die in the same job, and 707 00:42:47,040 --> 00:42:49,920 Speaker 1: so I thought an appropriate age my co CEO and 708 00:42:49,960 --> 00:42:53,120 Speaker 1: I Bill Conway, would step back and become co executive 709 00:42:53,160 --> 00:42:55,360 Speaker 1: chairs who were very involved. We're still the largest shareholders 710 00:42:55,360 --> 00:42:58,160 Speaker 1: in the firm and very large investors in the firm, 711 00:42:58,239 --> 00:43:00,319 Speaker 1: but we have the ability to do some other things 712 00:43:00,360 --> 00:43:03,040 Speaker 1: now and that will be helpful. The advantage of doing 713 00:43:03,040 --> 00:43:05,040 Speaker 1: this one you're at our age is you get to 714 00:43:05,040 --> 00:43:07,680 Speaker 1: see your obituary while you're alive. Because I've been reading 715 00:43:07,680 --> 00:43:09,880 Speaker 1: the articles today and I now what people are going 716 00:43:09,960 --> 00:43:12,279 Speaker 1: to say about me before when I die, And now 717 00:43:12,280 --> 00:43:14,480 Speaker 1: I've a kind of chance. I already see it. David, 718 00:43:14,520 --> 00:43:17,920 Speaker 1: What is this about the prefix CO? I love that 719 00:43:17,960 --> 00:43:20,279 Speaker 1: as well, the prefix CO in private equity. I look 720 00:43:20,280 --> 00:43:22,239 Speaker 1: at so many of of your competitors. I look at 721 00:43:22,239 --> 00:43:24,440 Speaker 1: Carlisle and it seems like this has been the model 722 00:43:24,440 --> 00:43:26,920 Speaker 1: that's been implemented and used successfully. What why does that 723 00:43:27,160 --> 00:43:30,560 Speaker 1: dual model works so well in private equity in particular, Well, 724 00:43:30,600 --> 00:43:33,680 Speaker 1: let's work because they have really two major task in 725 00:43:33,719 --> 00:43:36,480 Speaker 1: private equity. One is investing in overseeing the assets and 726 00:43:36,520 --> 00:43:39,439 Speaker 1: the other is administering the firm, raising the money, dealing 727 00:43:39,520 --> 00:43:42,280 Speaker 1: with all the administrative issues. And so it has seemed 728 00:43:42,280 --> 00:43:44,160 Speaker 1: to work pretty well. So you have cos and many 729 00:43:44,160 --> 00:43:46,760 Speaker 1: of the large firms, and I think it's worked pretty well. 730 00:43:47,719 --> 00:43:51,279 Speaker 1: It's it's sort of the way that your firm evolved organically. 731 00:43:51,480 --> 00:43:53,400 Speaker 1: And I wondered now that you you look back on 732 00:43:53,400 --> 00:43:55,320 Speaker 1: what you've done thus far, and certainly not not writing 733 00:43:55,320 --> 00:43:58,080 Speaker 1: an obituary here for your professional career, what do you 734 00:43:58,120 --> 00:44:00,440 Speaker 1: make of of how far this company is come and 735 00:44:00,920 --> 00:44:03,839 Speaker 1: what you thought it might be when you were starting out. Well, 736 00:44:03,840 --> 00:44:06,239 Speaker 1: if you go back and look at the companies that 737 00:44:06,280 --> 00:44:11,440 Speaker 1: are the great companies today, Amazon, Apple, Microsoft, Facebook, Google 738 00:44:11,480 --> 00:44:14,160 Speaker 1: and so forth, I wouldn't compare the private refirms to them, 739 00:44:14,360 --> 00:44:16,120 Speaker 1: But if you go back and look what the founders 740 00:44:16,120 --> 00:44:18,080 Speaker 1: thought they were going to create, it was very modest 741 00:44:18,080 --> 00:44:20,279 Speaker 1: compared to what actually they turned out to be, the 742 00:44:20,320 --> 00:44:22,440 Speaker 1: same is true of our firm or other private confirms. 743 00:44:22,640 --> 00:44:25,040 Speaker 1: We all had very modest ambitions and as the world 744 00:44:25,040 --> 00:44:27,400 Speaker 1: of privately grew, We grew with it and perhaps let it. 745 00:44:27,760 --> 00:44:29,439 Speaker 1: But so none of us thought we would have these 746 00:44:29,719 --> 00:44:33,160 Speaker 1: global behemous but but it's worked out that way. How 747 00:44:33,200 --> 00:44:37,719 Speaker 1: did you get from forget about the stop at corporate law? 748 00:44:37,920 --> 00:44:41,480 Speaker 1: How did you get from writing the problem of delay 749 00:44:41,600 --> 00:44:47,520 Speaker 1: in torte recovery of British interim payment Scheme's Chicago law 750 00:44:48,320 --> 00:44:52,799 Speaker 1: to Carlisle? What was that path? Well, I wasn't very 751 00:44:52,840 --> 00:44:55,080 Speaker 1: good at the other things I tried to do. Um, 752 00:44:55,440 --> 00:44:58,200 Speaker 1: you've done very good research on my law review article 753 00:44:58,239 --> 00:45:00,680 Speaker 1: at the University of Chicago. M I think you're the 754 00:45:00,719 --> 00:45:02,719 Speaker 1: first person that has read it or heard about it 755 00:45:02,719 --> 00:45:08,000 Speaker 1: in the last careful read it. But well, I can't 756 00:45:08,000 --> 00:45:10,799 Speaker 1: put you to sleep. But basically, I wasn't that good 757 00:45:10,800 --> 00:45:12,360 Speaker 1: as a lawyer. To be honest, I didn't have the 758 00:45:12,400 --> 00:45:14,359 Speaker 1: skill set that maybe a great lawyer. When I worked 759 00:45:14,360 --> 00:45:17,400 Speaker 1: in government, I managed to get inflation to ninetent, nobody 760 00:45:17,480 --> 00:45:19,920 Speaker 1: really wanted me to stay and so I had to 761 00:45:19,960 --> 00:45:22,640 Speaker 1: do something else. And the truth is all kidding aside, 762 00:45:22,840 --> 00:45:25,040 Speaker 1: if you're really great at something, you'll probably keep doing it. 763 00:45:25,080 --> 00:45:27,239 Speaker 1: I wasn't that great at it at the things I 764 00:45:27,280 --> 00:45:29,160 Speaker 1: was doing, so I had a chance to do other things, 765 00:45:29,320 --> 00:45:31,480 Speaker 1: and that worked out well for me. I mentioned Ray 766 00:45:31,520 --> 00:45:32,840 Speaker 1: dally a moment to go. Let me ask you a 767 00:45:32,880 --> 00:45:35,799 Speaker 1: question about Carlyle culture. As he moved onto this this 768 00:45:35,840 --> 00:45:37,720 Speaker 1: new position, he talked a lot about how he shaped 769 00:45:37,719 --> 00:45:40,359 Speaker 1: that company and his principles into prints so that they 770 00:45:40,360 --> 00:45:43,239 Speaker 1: can continue as you move into this new position. Is 771 00:45:43,239 --> 00:45:45,279 Speaker 1: the flavor of Carlisle going to remain the same? Do 772 00:45:45,320 --> 00:45:48,319 Speaker 1: you think, Well, we didn't bring in outsiders, so we 773 00:45:48,360 --> 00:45:50,560 Speaker 1: really have people in the firm who have our culture, 774 00:45:50,600 --> 00:45:54,000 Speaker 1: and it's important to maintain the culture. The trick in 775 00:45:54,040 --> 00:45:56,960 Speaker 1: any great organization, one that really survives is whether the 776 00:45:57,040 --> 00:46:00,560 Speaker 1: culture that was established by the founders can be continued. 777 00:46:00,600 --> 00:46:03,719 Speaker 1: Though with some modifications, we think the culture will be continued. 778 00:46:03,880 --> 00:46:06,839 Speaker 1: Our culture has been cooperative, work with each other, put 779 00:46:06,840 --> 00:46:09,640 Speaker 1: the investors first, and make certain that in the end 780 00:46:09,800 --> 00:46:12,720 Speaker 1: we're doing something useful for society. David, always a pleasure. 781 00:46:12,719 --> 00:46:14,840 Speaker 1: Thank you very much, David Rubinstein. They're the co CEO, 782 00:46:14,880 --> 00:46:16,520 Speaker 1: co founder of the Carlisle Group. Of course, host of 783 00:46:16,560 --> 00:46:19,279 Speaker 1: David Rubinstein Show Peer to Peer Conversations, which airs on 784 00:46:19,280 --> 00:46:21,800 Speaker 1: Bloomberg Television Wednesday nights at nine pm and airs on 785 00:46:21,840 --> 00:46:33,880 Speaker 1: Bloomberg Radio at five pm Friday. Thanks for listening to 786 00:46:33,960 --> 00:46:38,719 Speaker 1: the Bloomberg Surveillance podcast. Subscribe and listen to interviews on 787 00:46:38,840 --> 00:46:44,439 Speaker 1: Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. I'm 788 00:46:44,480 --> 00:46:48,240 Speaker 1: on Twitter at Tom Keene David Gura. Is that David Gura? 789 00:46:48,680 --> 00:46:52,600 Speaker 1: Before the podcast? You can always catch us worldwide. I'm 790 00:46:52,640 --> 00:46:53,479 Speaker 1: Bloomberg Radio